The Volkswagon Settlement: How Bad Management Leads to Big Punishment
Still, as striking as some of the details of the settlement are, the scandal shouldn’t have been surprising. For decades, Volkswagen has practiced a management style that imposes rigid goals and punishes middle- and lower-level employees who are unable to keep up with the pace. The origins of this approach, known as top-down control, date back more than a century, to the work of the industrial-efficiency guru Frederick Winslow Taylor. In its current iteration, the concept typically sees executives formulate bold strategic objectives and timelines for new products and services, with little input from others in the company. Although these aims are often presented as guidelines, not mandates, management rarely treats them as negotiable. In turn, rank-and-file employees, pressured by the expectations placed on them, try to deliver at all costs.
Although top-down culture is increasingly being discredited in favor of greater organizational coöperation and worker empowerment, it is still prevalent, embraced to varying degrees by big names like Apple, Nissan, General Electric, and Boeing. In some cases, it has been costly: while reporting a feature on Boeing for Portfolio magazine some years ago, I observed that the company’s difficulties in getting its vaunted Dreamliner off the ground were directly related to the “aggressive goals-fearful employee” dynamic.
.. few other companies apply top-down control so unremittingly, and that this was the likeliest explanation for why its engineers were willing to commit crimes and defraud the public to save their jobs. As one person who had worked closely with Volkswagen told me, the company “is fuelled by intimidation at every level, which creates a borderline, or sometimes over the borderline, unethical culture.”
.. “Everyone in that company was adversarial,” the consultant who worked with Volkswagen told me.