Paying The Price

Lessons From The Volkswagen Emissions Scandal For Moral Leadership

Abstract

All signs indicate that the VW emission scandal currently unfolding represents a colossal failure in moral leadership at managerial levels reaching all the way to the top. As more and more data become available the analysis suggests that senior managers not only ignored their own company codes but also broke fundamental moral and legal standards that they saw as hindrances on the way to quick profi t. In the end they incurred billions of dollars in fi nes, are personally embroiled in lawsuits and claims for compensation, ruined the company’s reputation, caused a sharp decline in car sales that resulted in workers’ lay-off s, and risked the company’s very existence.

T us h the VW emission scandal seems to have all the ingredients for becoming a test case in moral leadership studies. By starting off with its ethical analysis, major dimensions of moral leadership will reveal themselves even if only ex negativo. In the main part of the paper I will be claiming that genuine leadership in business cannot merely be derived from organizational authority and legal stipulations but is only sound when it is grounded in moral commitments and values rooted in universal moral and spiritual traditions. Its moral legitimacy extends beyond self-interest, and its commitment to ethics must not have merely instrumental, but intrinsic value. It is its moral dimension that gives leadership authenticity and companies true value.