Have you ever heard about a car brand named Volkswagen? The most popular of this compact car brand come from the type of Volkswagen Beetle. Usually, people know this car through the Disney films launched in 1960s, named HERBIE, had its share of misadventures, but things had a way of ending up happily for both car and its passangers.
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| Volkswagen Beetle Car |
Do you there is a few scandal raised regarding to the Volkswagen company? The German car maker's more recently has become embroiled in a scandal that cost it until billions of dollars. The EPA revealed in September that hidden software in some 11 million diesel-powered vehicles was designed to defeat American regulators measuring emissions testing, making the cars seem far clear and safer for the environmental than they actually were.
The prediction of the scandal :
Bad governance produces bad outcomes, and it was known by public that Volkswagen has serious governance problems. In previous 2009, the Financial Times published "VW Governance 'Worst' of German Blue-Chips." and ran other piece in 2012, " VW's Governance Regime Irks Investors." There were many kind of reports in hottest news.
Bad governance affects a company and makes bad things possible. Here a comment posted on the NY Times website by one reader in order to response to a news report regarding to the Volkswagen issue:
"I used to work on emissions control software for one of the Big Three. The engine control and emissions diagnostic software is incredibly complex. We had hundreds of software developers, calibrators, validation experts, etc., working on these efforts. If you worked on oxygen sensors or catalytic converters, or vehicle speed or really anything, the software would interface with dozens of other functional areas.. there is simply no way that this efforts by many individuals [emphasis added]."
It makes sense that deception on such a scale and for so long does not take place without an enabling culture, which in turn is nurtured by poor governance. Indeed, there were also those who minced no words in forewarning about the grave consequences of poor governance at Volkswagen. Back in March 2013, Olaf Storbeck wrote for Breakingviews :
"Management theory and history of other companies show that this [governance] structure is a recipe for disaster. VW's own story supports this case. In the early 1990s, it plunged into an existential crisis. A decade later, the company was rocked by a compliance scandal, involving prostitutes and luxury trips for the members of the workers's council."
I want to say that this Volkswagen issue had a serious issues with its governance. It was not possible to predict this particular scandal, but it was possible to judge that over the years, the governance issues at Volkswagen would cost its investors and would cost them large.
I think that's all from me. Thank you ! :)
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| Modern Model of Beetle Volkswagen |
- Saturday, October 03, 2015
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