Why is everyone corrupted these days

VW emissions test manipulation"Incentive systems corrupt companies morally"

Doris Simon: Volkswagen has obviously manipulated the emission test values ​​of diesel models in the USA. The scandal damages the image of the group and the top management of VW is increasingly coming into focus, because they either knew that test results had been embellished for years, or they did not notice that a decision was made at a higher level to target software for the manipulation to be built in. Ulrich Thielemann, director of the Berlin think tank for business ethics, is on the phone. Good evening.

Ulrich Thielemann: Good evening, Mrs. Simon.

Simon: Mr. Thielemann, can such a manipulation of test results take place without the top management knowing anything about it?

Thielemann: Yes, that's not just me asking myself. That is of course one of the central questions. I would say that I would be surprised because it would be so irrational, because the damage to the company is so immense and, by the way, not only for the company. "Made in Germany" and the German automotive industry has also fallen into disrepute because the criminal energy behind it leaves us all speechless. To be honest, I can't imagine it. I suspect something else behind it.

Simon: What do you suppose?

Thielemann: I suspect behind this, as in so many other cases, the incentive control systems that are nowadays established everywhere. Let's take a scenario: I imagine that the representatives of VW are sitting in the USA and are thinking about how we can increase sales and thus our bonus, which is measured in millions, and for that we do this manipulation once, and of course a lot of people have to be involved and none of them say that this is simply blatantly immoral, a brutal fraud. None of them say that because, I would say, so my assumption, they are all morally corrupted and are being affected by these incentive systems. Then there is no one in the company who asks whether they are allowed to do that. At best, one asks whether the risks, legal risks and reputational risks associated with them are greater than the opportunities that one would like to take advantage of. But moral integrity is actually no longer to be found there, so my guess, how such a company, not just VW, functions.

"That is systematically laid out"

Simon: What kind of corporate culture prevails - you have just mentioned the incentives - when you don't tackle a problem - it's obviously a problem of excessively high pollutant emissions - but instead manipulate the values ​​in advance, and if you do do you advertise at the same time with the image of clean diesel in the USA?

Thielemann: It is actually a non-existent specific corporate culture and a non-culture that focuses everything on shareholder value or, in this case, not on shareholder value, because it is actually irrational with regard to shareholder value, because that is also a complex field, No, it is based on its own bonus, on its own advantage, and it is not even the bad actors, but it is systemic in that one has established these incentive systems and that must be established because the shareholder demands them, and if you don't do that, shareholders will migrate.

Simon: How long do you think this scandal is damaging the Group's image? Does something like this have effects beyond the USA, for example in Germany?

Thielemann: In my impression: The consequences may not be that serious. But the criminal energy behind it is so serious - I couldn't imagine it and I think many are simply surprised at what is possible there - that it must and should have consequences. I am not calling for any resignations now, but I could make a suggestion. We need a disarmament of the corporations against each other, namely we tackle these incentive systems. These incentive systems corrupt companies morally.

Simon: Mr. Thielemann, the US authorities have tracked down the manipulation. Aren't the German and European authorities critical enough of the car manufacturers and, above all, of the car power Germany?

Thielemann: That can be of course. That can play a role too. But that is again speculation. Perhaps people don't look too hard. Even when it is whitewashed, competitiveness trumps everything else. It is definitely possible.

"Incentives should be at the core of compliance"

Simon: You say the incentive systems are wrong. On the contrary, can one also say that the pressure is so great today on, for example, internationally operating car companies that they may not have many options other than to operate sometimes on the edge of legality or, as in this case, illegally?

Thielemann: I wouldn't put it that way now. There is certainly also the possibility of not doing that, without serious consequences. But it's actually more than a temptation. As I said, these systems are being put in place because shareholders want them to be. This will continue to tighten the screw to be competitive, also and especially in the so-called Market for Corporate Control. That is the capital market. And that's why: I don't believe that there is a company-specific escape, but I believe that regulation needs to be regulated, and that would actually be in the interests of management and the employees of a company as a whole, if the employees and management wanted to act responsibly. Then it would be in his interest to have this regulation, we limit the bonuses. It has already happened a little at the banks. I think this is not just a banking problem.

Simon: You really believe that it would be through the incentives, not compliance, but the changes in incentives that stories like the one now at VW no longer happen?

Thielemann: Yes. But of course: the incentives should actually be the core of compliance. But it doesn't play a role at all. The incentives undermine the gentle compliance measures or the tough compliance measures. Then there are the employees who are laid off. Of course, the incentives have been established in such a way that whoever does not do so is left behind. No, the incentive systems are partly compliance and compliance itself, in turn, requires regulation.
But what is added is also a genuine cultural question, namely at universities, graduates, and above all business graduates, are taught that it is quite normal to only think in terms of opportunities and risks and not in terms of genuine responsibility for action. On this side, too, an unculture is being established that is highly questionable.

Simon: For the VW scandal over embellished test results for diesel vehicles in the USA, it was the business ethicist Ulrich Thielemann from the think tank Human Market Economy in Berlin. Mr. Thielemann, thank you very much.

Thielemann: Thank you very much.

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