As I sit here on Thanksgiving weekend, I am reflecting on the opportunities that sometimes come along to enrich ourselves at the expense of others. The coming months and years will no doubt provide a massive number of scholarly case studies and classroom lectures at business schools around the world dissecting the recent disclosure of VW’s cheating on government emission tests. Like most of us, I was taken completely by surprise at VW’s revelations. One can’t help wondering, just what they were thinking as they began and then continued down this course of deception on the world stage.
Before consciously committing a transgression (maybe we should call it cheating) contrary to the normal rules of the society in which we live; those tempted to do so evaluate the degree of benefit, the probability of being caught and the attendant consequences. The benefits can be for an individual, their tribe or company or even their country. The consequences can be individually personal, both financial and intangible right up to global societal. But what I can’t figure out is how anyone at VW did the math and came up thinking the benefits outweighed the risks. Maybe once for a day, or a year, you might get lucky, but year after year? Maybe it starts with a small cheat, but then the short term impact of confession is much greater than compounding the cheat by deferring the day of reckoning.
It is most fascinating to me that it was Americans who caught VW out on their breach of ethics. This is not to say that everyone knew what was happening, but there definitely would have been more than a handful of VW’s management and technical staff in the know. Despite a host of whistle blower events in the past 15 years, it would be interesting to understand if any of them wrestled with loyalty conflicts between employer versus society and the environment, particularly in a country whose roots with the Green Party date back so far. Apparently, not enough for anyone to mention a peep to the outside world. Then there were thousands more people working in the automotive industry globally who must have suspected. Engineering and physics are not art or magic. A specific set of conditions creates a repeatable set of results, and no one else could achieve VW’s EPA test results with similar inputs. Having once worked as an automotive engineer I know the major car companies all acquire and analyze each other’s designs to learn as much as they can. Everyone in the emissions industry had to wonder how one machine was achieving a result no one else could replicate, though many probably suspected the testing protocol was flawed versus gamed. Nobody wondered aloud outside the industry.
But, here is where I am going with this. America’s role as the global policeman has been said to be declining in recent years. Political and religious conflicts have been increasingly frequent and complex in many parts of the world, with America continually expected to step in as the lead power broker to restore order and civil behaviour. But with less support, or even agreement from remaining sophisticated powers, American desire and ability to always bear the cost and wrath for stepping in has declined. China as the next emerging world power may not have matured sufficiently on the world stage to play their part to the fullest, or it may be they are playing the long game for big returns and that involves allowing some collateral damage along the way. But I would argue that America continues to expand their role of global policeman for business practices even as their role as geo-political cop declines. While no longer flexing their muscles of war at every moral or political event around the world, the USA seems to be using and adding business muscle as time goes by.
It was the Americans who launched the FIFA investigations and caused criminal charges to be brought against the leadership of the international body. It is not as if everyone, even casual observers of the sport, could fail to note some questionable decisions being made with no explanations forthcoming. Leave it to the Americans to observe and finally ensnare some of those guilty of corruption. A few years earlier, it was Americans who blew open the IOC corruption, international bribery and scandal in the management of the world’s premier event for judging sport on merit alone. Just a little further back, we see the Americans introducing Sarbanes Oxley financial disclosure requirements for companies trading in the USA which included far more than just domestically headquartered enterprises. And just before that, Americans once again led the world in establishing anti-bribery practices regarding business ethics wherever a company operated. It was no longer acceptable to hide behind “That is the way that particular country expects business to be conducted,” instead you needed to act with one set of principles for your entire enterprise. Nor did it matter that dishonest Americans themselves were ensnared in the disclosures, they were happy to impose one set of rules (theirs) for everyone to follow.
So what do we have; America seeking to impose its own vision of “proper” business ethics and practices on the industrial powers around the world? Probably. America deliberately seeking to extend their foundation for the US dollar as the dominant global business currency? Probably. America filling a vacuum for the whole world to hold multi-national organizations accountable to behaviour standards that most people would reasonably expect of powerful global entities? Definitely!
Now you may not agree with all the rules for ethical practice as America choses to espouse them, but it seems no one else is even trying very hard to level the playing field! So I say bless the USA for doing what they do. I think that going forward, those who would attempt to pull the wool over the collective eyes of the world, will think first about the possibility the Americans will catch on and expose them. For those of us who are not the power brokers, perhaps we can believe the more egregious cheats will be called to account.
