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Fumigating the Criminal Bug: New Research on the Insulation of Volkswagen’s Middle Management
Oxford Business Law Blog (2016)
  • J.S. Nelson
New headlines each day reveal wide-spread misconduct and large-scale cheating at top international companies: Volkswagen’s emissions-defeat devices installed on over eleven million cars trace back to a manager’s PowerPoint from as early as 2006. Mitsubishi admits that it has been cheating on emissions standards for the eK and Dayz model cars for the past 25 years—even after a similar scandal almost wiped out the company 15 years ago. Takata’s US $70 million fine for covering up its exploding air bags in Honda, Ford, and other car brands could soon jump to US $200 million if a current Department of Justice probe discovers additional infractions. The government has ordered Takata’s recall of the air bags to more than doubleone out of every five cars on American roads may be affected. Now Daimler is conducting an internal investigation into potential irregularities in its exhaust compliance.
A recent case study of the 2015-16 Volkswagen (‘VW’) scandal pioneers a new way to look at these scandals by focusing on their common element: the growing insulation and entrenchment of middle management to coordinate such large-scale wrongdoing. ‘The Criminal Bug: Volkswagen’s Middle Management’ describes how VW’s top management put pressure on the rest of the company below it to achieve results without inquiring into the methods that the agents would use to achieve those results. The willing blindness of top executives to the methods of the agents below them is conscious and calculated. Despite disclosure-based regulation’s move to strict-liability prosecutions, the record of prosecutorial failure at trial against top executives in both the US and Germany demonstrates that assertions of plausible deniability succeed in protecting top executives from accountability for the pressure that they put on agents to commit wrongdoing.
  • Volkswagen,
  • Insulation,
  • Takata,
  • Mitsubishi,
  • Middle Management,
  • Entrenchment,
  • Accountability
Publication Date
May 5, 2016
Citation Information
J.S. Nelson. "Fumigating the Criminal Bug: New Research on the Insulation of Volkswagen’s Middle Management" Oxford Business Law Blog (2016)
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