Is there a “moral” to this story for you? What would that moral be? ”Volkswagen obfuscated, they denied, and they ultimately lied.”

These were the words of U.S. Attorney General Loretta Lynch, as she set out how the German carmaker would be punished for attempting to willfully mislead U.S. authorities over the emissions produced by its diesel cars. This indictment by the Attorney General capped a long investigation into Volkswagen’s (VW)

decision to find a way around U.S. emissions testing, opting, instead of redesigning its engines to run more efficiently, to “cook the books” by deliberately creating a system to cheat emissions testing. The story of the scandal represents a serious ethical violation that ran right through the organization, from the CEO down to its design engineers, who were asked to find ways to use unethical means to achieve VW’s goals.

The Volkswagen (VW) emissions scandal started in 2006, when VW engineers began designing a new diesel engine for the U.S. market. The U.S. government had been gradually tightening emissions standards, while simultaneously raising fuel economy requirements. The company’s supervisors in the engine department realized that they could not deliver an engine with more power while also complying with the governmental emission standards due to enter in force in 2007. Upper management considered their options and decided to ask their engineers to develop a unique software feature that they would bury in the VW’s 2.0-liter diesel engine software. The code would identify when the car was being tested in a laboratory, such as the controlled settings used to test engine performance, and turn on full emissions controls. In order to deliver a high-

performance ride, the code would then turn the emission controls off when the car was back out on the road, leading to higher pollutant emissions. The engines emitted nitrogen oxide pollutants up to 40 times above what is allowed in the U.S. In effect, the software identified the way the engine was being run and delivered two very different levels of engine and emissions performance accordingly.