The Organizational Culture and Leadership. The case of Volkswagen Emission Scandal

Abstract Purpose: The purpose of this research study is to analyse the impact of leadership on the culture of an organization, within the context of the Volkswagen (VW) and the recent emissions scandal. Specifically, this study aims to understand the interlinkages between the leadership styles/traits of VW’s leaders, the culture of the organization, and the factors that triggered the scandal. Finally, the study also aims to present an analysis of the steps taken by the organization to transform the legacy culture, and the current stage of recovery. Methodology: For the purpose of this study, the qualitative case study research methodology was employed. The study utilized secondary data sources like media reports, research articles, experts’ interviews, and website articles. Findings: Analysis of the evidence indicates that overambitious leaders create pressure on their subordinates to achieve unrealistic business goals, and in the absence of an open and democratic organizational culture, managers are forced to adopt unethical work-practices in order to meet their performance goals. Secondly, successful organizations tend to perpetuate the existing organizational culture. Once the culture is strongly entrenched, it is difficult to make changes and adapt to the shifting business landscape, unless the organization is faced with an event that challenges its very survival. Keywords: Volkswagen, organizational culture, business ethics, corporate governance, leadership