Volkswagen Emissions Scandal.
"Moral leaders set and guide themselves with strong values and ethics. They create a healthier workplace culture and environment for change"
👏 Happy Friday!
On this day, October 13, 2015, the Volkswagen Group announced €1bn (£750m) of spending cuts at its core VW division to help pay for a product overhaul following the emissions testing scandal that rocked Europe’s biggest carmaker. Earlier in September, the United States Environmental Protection Agency (EPA) issued a Notice of Violation to Volkswagen after determining that the company had manufactured and installed software known as “defeat devices”. These devices enabled them to cheat emissions tests by adjusting engine performance to meet EPA standards during testing but emitting higher levels of pollutants during regular driving. These heavier nitrogen-oxide emissions (NOx), a smog-forming pollutant are linked to lung cancer and up to 40 times higher than the federal limit. In the test mode, the cars were fully compliant with all federal emissions levels, but when driving normally, the computer switched to a separate mode, significantly changing the fuel pressure, injection timing, exhaust-gas recirculation, etc. Volkswagen was accused of intentionally installing software to evade emissions testing on 11 million diesel cars worldwide. It reflected problematic aspects of Volkswagen’s culture that prized profits and expediency over integrity.
✅ CEO Martin Winterkorn resigned on September 23, 2015. He told us he was shocked by the events of the previous days, “Above all, I am stunned that misconduct on such a scale was possible in the Volkswagen group. As CEO, I accept responsibility for the irregularities.” He continued, “I am doing this in the interests of the company, even though I am not aware of any wrongdoing on my part.” Former executives described Winterkorn as a demanding boss who abhorred failure, his management style was authoritarian, and he intended to foster a climate of fear. Winterkorn also set ambitious goals for public growth, which included becoming the world’s largest carmaker. However, the likely consequences of this leadership style and behaviour typically create a culture where problems are hidden and people don’t raise issues. While setting aggressive growth targets for the organisation, we must always prioritise ethical business practices and the welfare of our customers and stakeholders. Moral Leadership Embedded in Business.
“Moral leaders set and guide themselves with strong values and ethics. They create a healthier workplace culture and environment for change"
👉 There is much research to indicate that organisational leaders who value morality outperform their unethical peers. While most employees believe moral leadership delivers better business results and more successful change, few believe that leaders demonstrate these qualities consistently. We are all too aware of organisations with low morality and the damage inflicted on society; they may even have suffered financially as a result. Moral leaders set and guide themselves with strong values and ethics. They create a healthier workplace culture and environment for change. Moral leaders excel at setting high standards and modelling the new skills and behaviours to enable employee change adoption.
Have a fantastic weekend with the ones you love and care for, enjoy some fresh air, exercise, eat, drink and be happy.
Further Reading: Change Management Leadership - Leadership of Change Volume 4
Peter consults, speaks, and writes on the Leadership of Change®.
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Peter F Gallagher is a Change Management Global Thought Leader, Guru, Expert, International Speaker, Author and Leadership Alignment Coach.
Listed #1 by leadersHum Top 40 Change Management Gurus You Should Follow in 2022 (Mar 2022).
Ranked #1 Change Management Global Thought Leader: Top 50 Global Thought Leaders and Influencers on Change Management (2023-2022-2021-2020) by Thinkers360.
Ranked #1 Business Strategy Global Thought Leader: Top 50 Global Thought Leaders and Influencers on Business Strategy (2022) by Thinkers360.
Ranked #2 Leadership Global Thought Leader: Top 50 Global Thought Leaders and Influencers on Leadership (Aug 2020) by Thinkers360.
Business Book Ranking
Change Management Behaviour - Leadership of Change® Volume 6, listed among the 50 Books from Thinkers360 Thought Leaders to read in 2022.
Change Management Adoption - Leadership of Change® Volume 5, listed among year-to-date’s (Jul 2021) most popular books on business and technology from Thinkers360 member thought leaders.
Change Management Handbook - Leadership of Change® Volume 3, listed among the 50 Business and Technology Books from Thinkers360 Thought Leaders to read in 2021.
Change Management Pocket Guide - Leadership of Change® Volume 2, ranked within the top 50 Business and Technology Books (Jan 2020) from Thinkers360 Thought Leaders.