What are the major causes of Volkswagen’s emissions cheating scandal?

Do you think the causes of the “cheat” were more intuitive and unconscious or analytical and conscious? Explain.

Do you think it is ethical for VW to offer amnesty only for employees covered by a collective bargaining agreement What about other employees? How will this decision affect employees coming forward?

Do you see any evidence that the decision – making styles of Winterkorn, or Horn contributed to the scandal?

What type of decision – making style would be most effective at helping to resolve the scandal? Provide your rationale.

Which of the common decision – making biases played a role in how this case unfolded?

What is your biggest takeaway from reading this case?

How did Making Contribute to Volkswagen’s Emission Cheating Scandal?

The top three global automobile manufacturers in 2015 were Toyota (10.23 million), Volkswagen (10.14 million units), and General Motors (9.92 million units). ¹⁹³ Interestingly, all three have been involved in recent automotive scandals involving 2.6 million cars (GM’s ignition switch defect) 8.1 million cars(Toyota’s unintended acceleration), and 11.0 million car (Volkswagen’s diesel emissions cheating). ¹⁹⁴

Preliminary investigations suggest that a purposeful effort to deceive was the root cause of the Volkswagen scandal. Let’s explore the case in more detail to determine the role of decision making, beginning with details of the cheating.

The process of cheating:

“Volkswagen installed emissions software on more than a half-million diesel cars in the U.S. . . . that allows them to sense the unique parameters of an emission drive cycle set by the Environmental Protection Agency.” These “so-called ;defeat devices; detect steering., throttle, and other inputs used in the test to switch between two distinct operating modes.”

“In the test mode, the cars are fully compliant with all federal emissions levels. But when driving normally, the computer switches to a separate model­­– significantly changing the fuel pressure, injection timing, exhaust-gas recirculation, and in models with AdBlue, the amount of urea fluid[cat pee] sprayed into the exhaust. While this mode likely delivers higher mileage and power, it also permits heavier nitrogen-oxide” emission (NOx)–a smog-forming pollutant linked to lung cancer­ that are up to 40 times higher than the federal limit.

It appears that Volkswagen used defeat devices because it could not satisfy the tough U.S. emission standards while trying to grow market share in the U.S. According to The Wall Street Journal, the origins of the “cheat” go back to 2012, when “EPA officials and California regulators were in touch with Europeans counterparts about high emissions in diesel vehicles. California regulators tested Volkswagen cars and continually found them to pollute more on the road than in the lab.” Volkswagen was informed about these irregularities at the time and executives concluded that they were the result of “technical glitches”.

Three years later, then CEO Winterkorn “acknowledged ‘misconduct’ on Volkswagen’s part while pledging ‘Everything will be put on the table at this time as quickly thoroughly and transparently as possible.

The role of vision, strategy and goals;

Volkswagen has pursued a goal of being the largest automobile manufacturer by 2018, selling 800,000 vehicles in the U>S alone. To achieve this goal, VW made a strategic decision to dominate the diesel market. Diesels were n riche market in the U.S. In themed 2000s, but they represented more than 50% of new car registrations in the European Union. The company thought diesel was the way to grow revenue because ”They were cheaper than hybrids and packed more muscle under hood yet still often got more than 40 miles to the gallon”.

To grow the diesel market, VW needed to invent a way to deal with the sooty exhaust produced by diesel engines. The company knew it had to meet tougher emission standards in the U.S. then Europe. . . . .