Question

n general, what can companies (and not just Volkswagen) do to prevent scandals such as the one Volkswagen faces? List and explain two specific actions that companies can take to avoid this type of problems. (Be specific – for example: don’t recommend “just be honest” as this lacks detail and it might not be as easy as it sounds, as evidenced by the many scandals in this industry)

Answer 1

Scandal of Volkswagen is an eye opener and shows how even the companies who are perceived to be ethical can have lapses in judgement. Such incidents can often be attributed to two key factors

• Personal value system
• Organizational check

In case of Volkswagen both these systems failed. The good part is that, for an ethical lapse to happen, both of these have to fail. Even if one of them is ethical then such scandals can be avoided or reduced to a great extent.

When it comes to personal value of individual employees, it is difficult to change the value system. However, they can be doctrine into the organization’s culture which may have high importance on ethics. This requires training, counselling and continuous monitoring of the employee actions. This seems like a lot of task but ethics needs to be part of the company culture and only then it will become part of the value of the individuals.

The second part is the organizational checks and bounds. An organization as large as Volkswagen has their hands full if they want to monitor everyone. However, they should conduct regular audits, surprise checks and implement systems that keep the entire operation by the books. These checks and controls system can keep people, team and divisions honest compared to not having them. Thus such regular audits should be part of the organizations.