Approach to VW Emission-Rigging Question

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In the computer chip manufacturing industry, there is a saying ‘we can fix it in software’ – VW may have taken this saying to an extreme. In early September 2015, VW signalled to the market that their 2-liter diesel engine cars had been fitted with software that effectively ‘cheated’ on strenuous US nitrogen oxide emissions standards. This admission by VW’s US CEO Michael Horn in late September 2015 was met with widespread condemnation, ultimately resulting in Horn effectively resigning in March 2016. The impact from the VW emission-rigging scandal is considerable. In the aftermath, VW’s market value dropped by over 30% or $25 billion, more than 11 million cars worldwide were impacted by the crisis, it is estimated the cost of recalling cars impacted by the crisis is in excessive of $9.5 billion, the removal of the ‘defeat’ devices mean that Nitrogen Oxide levels are going to be more than 40 times more than what VW has certified. 

Freidman (1971) once argued that the ‘business of business is to make as much money as possible without breaking the law’. The question remains in in light of the VW emission-rigging scandal whether there is an implicit social contract that supersedes the ‘business of business’ argument advanced by Friedman, even if adhering to the ‘social contract’ has a negative financial and human impact for the organisation.  

Your project is to answer the questions: 
•    Did the decision-making process within VW that led to the scandal constitute ethical/moral failures? 
•    In the context of VW were there pressures that VW faced in achieving financial / economic targets demanded by shareholders and institutional investors enough to justify potential ethical/moral transgressions. 

You may apply any ethics/moral frameworks when answering the question. You may use any publicly available sources to support any arguments advanced in your project. Some questions you might think about when formulating your approach to this project:

•    Is the VW emission-rigging scandal controversy reflective of Ethics failure, Decision-making failure or Board failure?
•    How would you describe the ethical/moral behaviour of VW’s current / previous CEO vis-à-vis the emission-rigging evidence?
•    Based on the available evidence – was the public vitriol of VW’s warranted?
•    How would you describe the position of VW’s leadership when challenged on the ethicality of their ‘deceptive’ practices?
•    How important is transparency, ethical/moral standards, social judgment in a leadership role?
•    How might issues such as the VW emission-rigging scandal issue be circumvented in future?
•    Is Business Ethics an oxymoron in the context of any profit taking business?