Is Fahrvergnügen in Trouble?

Fahrvergnügen was Volkswagen’s tagline from the nineties and just an all-around fun word to say. It has been a very long time since I have thought of the word, but the recent news articles and a request from a faithful blog reader brought it back into my life. Volkswagen is receiving a lot of negative press and the news media will continue their coverage because there are still many unanswered questions. I can’t address Volkswagen’s ethical environment, but with regard to this blog post, I can explain how easily ethical breakdowns happen within an organization. 

First, I want you to say the word, “Fahrvergnügen.” I am not German and probably don’t say it correctly, but this how I say it. Think about the football player, Brett Farve. Now, say his last name and add the words fig newton—“Farve fig newton.” Say it a few times. Does it make you smile? It’s a pretty cool word.

The following is an excerpt from a CNBC article that was published Tuesday:

What did Volkswagen do?

The company is said to have been caught cheating on American air pollution tests. Volkswagen installed sophisticated software known as "defeat devices" in the electronic control module of diesel vehicles issued between 2008 and 2015. This software was able to sense when emissions testing was in progress based on the position of the steering wheel, vehicle speed, the duration of the engine's operation and barometric pressure. Once the software picked up on these inputs, it went into a type of "test mode" when the front wheels of the car were on a dynamometer. This allowed emissions controls to run full-tilt during official testing, but emitted 10 to 40 times the legal amount while on the road.

The allegations were made by the U.S. Environmental Protection Agency on Sept. 18, after independent researchers raised questions about emissions levels, prompting government agencies to investigate further.

Once regulators demanded an explanation, the EPA said Volkswagen "admitted" their cars contained those defeat devices . . . . [1]

There are a lot of things in this report that I find disturbing, primarily, the timeframe that it spanned and the number of people involved. I am saddened by the news and look forward to Volkswagen doing the right thing as it moves forward.

Below are three examples of why ethical breakdowns happen within an organization:

1. The decision is a business decision. The thought process is that “it will take too long to do it that way” or “if we recall everything, it will cost too much money.” Essentially, it is the choice to do it the quick, cheap, or easy way versus the right way. Watch out because when it’s discovered, it will cost a lot more to correct the issue.
2. Group think can also be a contributor. You would think the more people involved in a decision, the more ethical people will behave. However, this isn’t the case with most organizations. As more people buy into a decision, the more everyone believes it is okay. Also, when people are discussing the issue, they begin to reconcile their thoughts to align with the strongest voices in the conversations, and sometimes the strongest voices in the room are not the most ethical ones or the group works together to figure out a solution, which may not be the most ethical one. The decision becomes a group decision and not a personal one thus distancing each individual’s ethical behavior from the final decision that is made. Then it is compounded when the tasks to implement the decision are delegated. As an example, an employee can easily separate their ethical behavior from an unethical decision by saying, “My manager told me to do it, so it must be okay.”
3. Unethical decisions can be reached easier when there isn’t an identifiable victim. In other words, a “wrong” decision can be reached if there isn’t a direct relationship to a negative outcome. The following are two examples:

• Wrong decision, without a direct tie to the outcome. If you choose to increase charitable donations on your tax return, thus reducing your tax liability. Who is the victim? You pay your fair share and the government has plenty of money. Everybody does it. There are many ways for people to justify their decisions. Cheating the government is oftentimes seen as a victimless crime.
• Right decision, with a direct tie to outcome. The worst outcome would be the loss of human life. Recently, Blue Bell Creameries made a very difficult decision, but in the end it was the “right” decision that probably prevented additional deaths. “Blue Bell's president and CEO Paul Kruse pulled all Blue Bell products off the market on April 20. By then it was known that 10 people in four states (Arizona, Oklahoma, Kansas and Texas) had contracted listeria, and three of them had died.”[2]

The following is an excerpt from a CNBC article related to the resignation of Volkswagen’s CEO:

. . . The crisis escalated Tuesday when Volkswagen revealed it had found significant emissions discrepancies in 11 million diesel vehicles worldwide.

[Martin] Winterkorn [Volkswagen’s CEO], an engineer and former head of Audi, said he was stunned by the scale of the misconduct, and was accepting responsibility to clear the way for a "fresh start" for the company.

[Winterkorn quote] "The process of clarification and transparency must continue. This is the only way to win back trust. I am convinced that the Volkswagen Group and its team will overcome this grave crisis."

The company's stock price has crashed, causing big losses for investors such as the Gulf state of Qatar. Trust has been severely shaken in a brand that is at the heart of German manufacturing and exports.

Winterkorn had apologized profusely, twice, and the company has set aside 6.5 billion euros ($7.3 billion) to cover the cost of recalls and other efforts to limit the damage, trashing its profit forecast for the year in the process . . . [3]

Wow! The impact of the Volkswagen emission investigation is staggering—$7.3 billion and the CEO’s resignation. The direct dollars lost are significant, but the impact to the brand will haunt them for a long time. To end on a high note, please say it with me, “Fahrvergnügen.”

[1] What you need to know about the Volkswagen scandal by Kalyeena Makortoff

[2] Blue Bell’s listeria problem is a sticky mess by Dianna Wray

[3] Volkswagen CEO quits over ‘grave crisis’ by Mark Thompson and Chris Liakos