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Critical Lessons from the Volkswagen Scandal

Ethical failings precipitated the auto giant’s reputation crisis.

Volkswagen has paid dearly for the ethical shortcomings that led to “Dieselgate.” But has VW learned from the scandal? With the FTC recently filing the final court summary on the case, Michael Toebe reflects on the crisis that leveled the company’s reputation.

Volkswagen’s good name has been tarnished regularly in the media in the last four years over its low-level decision-making and irresponsibility. Severe financial penalties have been meted out as punitive and corrective measures. There are lessons to be learned from VW’s errors.

In 2015, the company confessed to cheating emissions tests on 11 million vehicles across the globe. “Dieselgate,” as the scandal was called, was a punch to VW’s reputation. The financial hit, significant. The company has paid a whopping $9.5 billion in the last four years to American car owners.

That’s historical, with the Federal Trade Commission (FTC) calling it the “largest consumer redress program in U.S. history.”

The total penalties paid internationally has totaled $35 billion.

VW knew of the problems with its vehicles. As is common in developing scandals and the reputation crisis that accompany them, instead of responding ethically, leadership engaged in reckless decision-making. The needed corrections were deemed undesirable, and the financial incentives and temptation to cheat proved too great.

There is, however, another school of thought, says Bret Hood, Director of 21st Century Learning & Consulting and adjunct professor of Corporate Governance and Ethics at the University of Virginia. “Some have argued that VW actively contemplated the risk versus the reward, but I would bet that they approached the issue as did Ford with the Pinto. We take the issue and turn it into a cost-benefit analysis and, as we are taught, the lowest cost is the choice,” he says. “Where we are fallible is that we never do an objective evaluation, because our System 1 brains (automatic) are working in our subconscious to help us produce a predetermined outcome; in this case, sales volume.”

Hood sees another variable as very likely in play, as questionable a rationalization as it could seem to critics. “There are a number of ethical models, such as the Rest Model, Kohlberg’s stages of moral development and the Jones Moral Intensity model, but as Ann Tenbrunsel and Max Bazerman point out, most of the time, the decision-makers have not classified the dilemma as an ethical issue,” he says. “This idea is reinforced by (Daniel) Kahneman’s work on the System 1 (automatic) and System 2 (rational deliberation) thinking.”

It’s reasonable to suppose that moral courage was either insufficient at VW or absent altogether. In cases like these, governance and compliance will never be conducted as skillfully as necessary. As history proves repeatedly, scandal is far more likely.

Click to read more coverage and analysis of the Volkswagen scandal

Expectations mixed with unexpected developments, stress, psychology and intent are strong drivers of predictable behavior. “As we look at Wirecard, Enron, etc., the executive decision-makers are assisted in their deviation from the ethical path by both motivated blindness and indirect blindness,” Hood says. “With motivated blindness, ‘I am willing to overlook things because it is easy for me to overcome internal objections as I am motivated to succeed.’ When you get into large organizations such as these, it is easier to diffuse responsibility through psychological distance from the victims as well as the actual act of committing the fraud.”

This psychological distance is an important variable to understand and recognize as a driver of decision-making and behavior. It plays a role in acts and momentum that lead to a violation of principles, weak or failed governance and missing compliance.

“Indirect blindness comes in when I, the executive, do not actually participate in the unethical behavior but rather, someone on the lower rungs of the organization actually creates the transactions necessary for the unethical behavior to succeed,” Hood says.

This can be either a conscious act or a realization. Either way, both can end up being used as a defense by leadership in behavior and a response when wrongdoing is exposed and scandal is underway, even if considered unprofessional, unconvincing and a failed attempt at absolving oneself of responsibility.

“As an example, the CEO of VW did not sit in on the meetings talking about falsifying the codes, nor did he create the software code that accomplished the mission. This leads to indirect blindness since ‘I did not take part in the mechanics of the process,’” Hood says, as an example of how this works.

The cold and difficult truth is investigators, the law, the media and the public don’t buy this type of defense. The evidence trumps the corporate or legal spin.

“Despite this, the CEOs of all these organizations had an active hand in the unethical behavior by what they said or didn’t say,” Hood says. “In the VW case, an engineer went up to an executive and said, ‘We don’t have the technology to accomplish this.’ The executive responded by saying, ‘Maybe it is time I get another engineer.’ While there was no specific unethical message, there was clearly an implied message.”

The blame-shifting and attempt at exonerating oneself organizationally or individually is not just poor form; it is considered contemptuous to throw your team into the fire, given that the professionals are doing as expected – and uncertainty or fear is a very real component of psychological safety.

“Since people need their jobs, they interpret the exec as saying ‘do whatever it takes and I will tacitly approve,’” Hood says. Another factor is the competitive nature of business in general and the natural personality of leadership or a leadership team.

“Competition and rivalry can certainly lead to unethical behavior as the perception of rivalry creates in (and out) groups,” Hood says. “This usually leads to advantageous comparison wherein you look at yourself and say ‘what I am doing is not nearly as bad as what my competitor is doing’ or ‘I have to do this in order to make this a level playing field.’”

VW has survived its scandal and reputation crisis, but has VW learned from it? Or will the company repeat its errors, as other organizations do?

Are leaders in other organizations paying attention to and learning from this story and similar scandals – from the psychological errors, belief systems, natural competitive tendencies and compromise or failures of ethics, decision-making, governance and compliance?

Some, maybe. The wise ones. However, not all organizations and leaders will pay attention and correct the course they are currently traveling.

Scandals are not closely dissected and examined, but they really should be. Organizations that choose to do so – that regularly test and question their own mindset, practices and weaknesses and make critical adjustments – will be taking significant steps toward critical, protective improvements and risk management, therefore protecting mission, shareholders, reputation, the board and executive careers.

When coupled with humility and a growth mindset, intellectual honesty is a safety precaution critical to prevent embarrassing, costly and career-damaging scandals and to keep your organization from becoming the next cautionary tale.

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Volkswagen’s installation of a software “defeat device” in 11 million Volkswagen and Audi diesel vehicles sold worldwide has led to a massive vehicle recall in the United States and an official apology from the company’s now-ex CEO .

The clever and sneaky algorithm, installed in the emissions-control module, detects when the cars were undergoing emissions testing. It ran the engine cleanly during tests and switched off emissions control during normal driving conditions, allowing the car to spew up to 40 times the U.S. Environmental Protection Agency’s maximum allowed level of nitrogen oxides, air pollutants that cause respiratory problems and smog.

“This is shocking,” says Yotam Lurie , a senior lecturer of business ethics at Ben-Gurion University of the Negev in Israel. “It’s shocking that the software engineers of Volkswagen overlooked and neglected their fiduciary responsibility as professionals. Professionals who have a semi-regulatory responsibility within the organization to ensure safety, in this case environmental safety, even when this is less efficient or economical.”

Lurie’s recently published paper on Professional Ethics for Software Engineers touches on the heart of this matter. That Volkswagen chose a software device is not surprising because  software lends itself to special adoptions and is more difficult to discover then hardware changes, Lurie says. He compares the software engineers to the accountants in the Enron case who collaborated with the organization to create accounting loopholes and failed to protect the public by not providing proper auditing.

But while the news is dismaying and shocking, “I wish I could say I was completely surprised,” says Shannon Vallor , chair of the department of philosophy at Santa Clara University in California. “The expectation of corporate wrong doing has become normal.”

This can’t be the act of a few rogue engineers, she says. The implications go all the way up the corporate ladder. “We see how widespread among the product line this device was. It would have had to be tested and updated. This is serious, massive coporate maleficience that affects people’s health. There’s no question that everyone involved knew this was unethical.”

The case highlights the failures of a compliance mindset, Vallor adds. It shows that ethics are typically considered in terms of staying within certain externally enforced rules. Agencies like the EPA enforce rules and professionals pursue their jobs in any way they like as long as they don’t violate those rules. “It’s just a box you check off on a list of rules,” she says. “It implies that as long as you don’t get caught violating rules, there’s no harm.”

Of course there is no single solution to such a deep systemic problem. To prevent something like this from happening again would require an overhaul of the regulatory structure, business ethics, corporate culture, and also engineering education.

Laws and their enforcement need to be tightened so that people in the C-suite have something to fear, Vallor says. Business and corporate ethics programs could then more clearly outline consequences of ethics violations. Nearly all cases of corporate cheating lead to fines, but not criminal charges and prison sentences.

We could also be a doing a better job teaching engineering ethics . Ethics has only entered engineering curricula in the past few decades. ABET requires that graduates have “an understanding of professional and ethical responsibility.” Many engineering institutions don’t have ethics course requirements. In some that do, the requirement is a philosophy or religion class and not a specific engineering ethics course.

In some ways, this goes back to the compliance mindset, Vallor says. “It’s just a course that you check off on the requirements, and it’s value is very limited,” Valor says. “We need to move away from this compliance mindset and think about how ethics education could be integrated. A lot of times they’ll bring in someone like me to teach engineering ethics. But engineering professors are not expected or encouraged to introduce ethics into their curricula. Until that happens, things will be short of optimal.”

Prachi Patel is a freelance journalist based in Pittsburgh. She writes about energy, biotechnology, materials science, nanotechnology, and computing.

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The Volkswagen Emissions Scandal

By: Luann J. Lynch, Cameron Cutro, Elizabeth Bird

In September 2015, VW had admitted to United States regulators that it had deliberately installed "defeat devices" in many of its diesel cars, which enabled the cars to cheat on federal and state…

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In September 2015, VW had admitted to United States regulators that it had deliberately installed "defeat devices" in many of its diesel cars, which enabled the cars to cheat on federal and state emissions tests, making them able to pass the tests and hit ambitious mileage and performance targets while actually emitting up to 40 times more hazardous gases into the atmosphere than legally allowed. The discovery had prompted the U.S. Environmental Protection Agency (EPA) to halt final certification of VW's 2016 diesel models, and VW itself had halted sales of its 2015 models. As fallout from the defeat devices developed, VW posted its first quarterly loss in more than 15 years, and its stock plummeted. Top executives were replaced, and VW abandoned its goal of becoming the world's largest automaker. Stakeholders around the world had been asking since the scandal broke: "How could this have happened at Volkswagen?"

Jul 21, 2016 (Revised: Oct 30, 2018)

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Darden School of Business

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The Volkswagen Emissions Scandal: An Ethics Case Study

A Research Paper submitted to the Department of Engineering and Society

Presented to the Faculty of the School of Engineering and Applied Science University of Virginia • Charlottesville, Virginia

In Partial Fulfillment of the Requirements for the Degree Bachelor of Science, School of Engineering

Kelsi Loudenslager Spring 2020

On my honor as a University Student, I have neither given nor received unauthorized aid on this assignment as defined by the Honor Guidelines for Thesis-Related Assignments

Advisor Richard D. Jacques, Ph.D., Department of Engineering and Society

Introduction

In 2014, a study performed by West Virginia University revealed one of the largest scandals in automotive history. The study was designed to test the NOx emissions of several

Volkswagen diesel cars while driving on the highway. The results exposed the company’s deceit as the vehicles studied produced up to forty times the permitted amount of NOx gasses (Forsgren

2019). The purpose of this thesis is to determine why this scandal occurred. Additionally, this thesis will explore the role of company culture in making ethical decisions.

To examine this case, the events will be analyzed through the concept of normalized deviance.

The concept of normalized deviance was first coined by Diane Vaughan in her book analyzing the challenger explosion. Vaughan defined it as “a long incubation period with early warning signs that were either misinterpreted, ignored, or missed completely” (Vaughan, 1996).

Therefore, I will analyze the culture within the Volkswagen cooperation chronically from before scandal through to the company’s current practices. Through this analysis, I seek to display the missteps that lead to the largest mistake in the company’s history. Lastly, by exposing the company culture of Volkswagen I will argue that a scandal was only a matter of time.

Part I: Before the Scandal

In 2006, under the direction of CEO Bernd Pischetsrieder , VW created a 10-year plan to triple US sales. The plan relied on the sales of Clean Diesel vehicles (Parloff, 2018). Clean

Diesel was based on the fact that diesel engines produce little to no C02 and greenhouse gasses.

Therefore, the use of diesel engines may reduce the effects of climate change. However, diesel engines emit NOx which is one of the primary causes of smog (Forsgren, 2019). One method to clean diesel exhaust is to mix it with a substance called AdBlue. When the NOx and AdBlue

react nitrogen and water are formed. The tradeoff in the addition of AdBlue lies in the increased maintenance and weight of the vehicle. This tradeoff exists because an extra tank to contain the

AdBlue must be added to the car and can either be large to lessen the number of refills or smaller in order to cut down on size and weight (Flender, 2019). The ambitious plan developed by

Pischetsrieder sought to minimize this tradeoff and maximize sales.

Environmental Standards

The environmental standards throughout the world varied in both restriction and focus.

European emissions standards focused on reducing the effects of global warming by limiting greenhouse gasses. In these locations, a diesel engine seemed a perfect solution. In contrast, in the US environmental regulation focused on clean air. In particular the Environmental

Protection Agency’s Clean Air Act (CAA). The CAA required all light-duty vehicles to satisfy tailpipe emissions standards for air pollutants, including NOx (EPA, 2019). This standard set the bar high for VW engineers to create a diesel engine that was low maintenance, low weight, and clean. Even stricter standards existed within the California Air Resource Board (CARB) as

California sought to limit the smog in Los Angeles. These environmental standards exacerbated the need to find a middle ground between NOx emissions and maintenance requirements.

Employee Perspectives

In order to create a clean diesel vehicle, VW placed tremendous pressure on employees. In 2007,

Martin Winterkorn took over the company as CEO. Winterkorn has been described as a demanding boss who abhorred failure. Former executives have described his management style as authoritarian and aimed at fostering a climate of fear (Glazer, 2016). From these reports, one

can begin to see how the culture incubated the scandal. The culture of fear that existed limited the number of employees willing to step forward and act as whistleblowers.

However, it was not just executives who felt this growing pressure engineers faced the largest challenge. As early as 2007, Wolfgang Hatz, a high-level VW supervisor was captured on video saying, “The CARB is not realistic. We can do quite a bit, and we will do quite a bit. But the impossible we cannot do” (Parloff, 2018). This testimony displays the culture within the company made employees reluctant to speak out. Further, this quote encapsulates the seemingly impossible task the executives and marketing team placed on engineers. A former employee

Walter Groth said the pressure put on an engineer in such an environment can be enormous. He also mentioned that if one fails the expectation is to either be reprimanded by a manager or fired.

Further, it has been reported that VW had a code of conduct that requires employees to follow local and international laws and regulations. However, when VW engineers requested the addition of AdBlue tanks to lower NOx emissions their request was denied (Flender, 2019). The rejection of AdBlue tanks made the task of clean diesel impossible for the engineers tasked with living up to the promises of the CEO.

The Creation of the Defeat Device

The software later named the defeat device was created in order to cheat testing. The created software was extremely sophisticated; it monitored speed, engine operation, air pressure, and even the position of the steering wheel in order to determine if the vehicle was being tested.

If the program determined the car was in a testing scenario then it would enter a safety mode with decreased power and performance effectively decreasing NOx readings (Hotten, 2015).

News of the defeat device within the company reached Audi managers in 2008. Members of the

engineering team sent news of the software to the head of the group Zaccheo Pamio warning that the software was illegal and highly problematic in the US. However, no actions were taken to rectify the situation (Forsgren, 2019). The lack of action on the part of the managers suggests that cheating in such a way was not viewed as more important than the potential of increased sales. This culture was only reinforced by the authoritarian rule driven by Winterkorn.

Part II: The Scandal Breaks

The advertising of a Clean Diesel car achieved the original goal of tripling US sales. However, in

2014 West Virginia University published a study in which two models of diesel-powered VWs were studied in the lab and on the road. The results of this study displayed that on the road the vehicles emitted 35 times more NOx than in the lab (Forsgren, 2019). After this study was published, the EPA and CARB began pressuring VW.

Initial Response

When news of the WVU study reached VW executives they adamantly denied any wrongdoing. VW’s response to the crisis was led by Oliver Schmidt. At the time, Schmidt worked as the General Manager in charge of the Environmental and Engineering Office and his main responsibility was communicating and coordinating with the EPA and CARB. For more than a year, Schmidt dismissed concerns with promises of recalls and simple software fixes

(Forsgren, 2019). Schmidt was well aware of the defeat device but continued to hide it. This act suggests within VW the defeat device was not viewed in the same unethical light as it was outside the company. Additionally, Schmidt’s actions could imply that he was afraid to admit the truth of the discrepancies in the published study.

Further, Winterkorn encouraged Schmidt’s actions. When Winterkorn and Schmidt met in 2015,

Schmidt told Winterkorn in unmistakable terms that VW had been cheating. Instead of reporting this, Winterkorn told Schmidt to meet with the EPA and lie. In August of 2015, Schmidt met with EPA officials and recited a script crafted by high-level VW officials detailing upgrades and hiding all cheating. The continuation of blatant lying in response to the scandal further suggests the cultivation of a culture in which lying is not abnormal.

Stepping Forward

As meetings with the regulators continued, one VW engineer stepped forward. In a meeting between CARB and VW on August 19th, 2015 Stuart Johnson the head of VW’s

Engineering and Environment Office in the Auburn Hills revealed the existence of a defeat device (Vellequette, 2017). In this case, Johnson was the first whistleblower. It is clear from

Johnson’s actions that he was aware VW was using unethical means to advance so why did he wait so long? One explanation for the lack of immediate action comes from the fact that admitting the fault within the vehicles directly violated the orders Johnson received from his superiors. Further, the culture within the company promoted fear. From other employee perspectives, it seems VW employees were directly influenced to hide any wrongdoing. This culture of cheating and lying may have been seen as acceptable within the cooperation; however, when exposed to public VW employees felt uneasy. This suggests employees knew the vehicles they were producing contained illegal technology but did not blow the whistle until later when questioned about irregularities in emissions data. After Johnson’s admission, the news of the defeat device was released to the public on September 18th. Five days later, Winterkorn stepped down from the position CEO (Forsgren, 2019).

Schmidt’s Consequences

After news of the defeat device reached the general public, stock fell 1.9% (La Times, 2019).

Additionally, the EPA launched a full investigation accusing 39 individuals of fraud and 13 others of fraud and false advertising. Within the US, both Pamio Schmidt and were arrested.

Schmidt later pleaded guilty stating, “I’ve learned that my superiors that claimed to me to have not been involved earlier than me at VW knew about this for many, many years. I must say I feel misused by my own company” (Forsgren, 2019). After being sentenced to seven years imprisonment Schmidt said, “I accept responsibility for the wrongs I committed … I made bad decisions and for that I am sorry. For a time, I was in denial that I personally did something wrong. I justified my bad decisions by telling myself that I was obligated to stick to my superiors’ instructions (Forsgren, 2019). Schmidt’s testimony displays the result of a company culture that pushes its employees to compete in order to climb the corporate ladder. The hierarchical nature of VW’s led Schmidt to continue to work and lie in order to appeal to his superiors. Schmidt’s outcome can serve as a cautionary tale for those who chose to continue the unethical practices of the cooperation in which they operate.

Schmidt’s actions can be directly contrasted with Johnson who stepped forward. After coming clean, Johnson faced no legal repercussions while Schmidt was sentenced to seven years. This juxtaposition displays the need for VW to have a culture in which whistleblowing is protected. If such a policy existed the use of a defeat device may not have progressed as it did.

Corporate Consequences

Initially, Michael Horn America’s VW CEO asserted that the defeat device was created by a group of rogue engineers. However, the number of managers charged and investigated

suggests many more than a rogue group knew about the defeat device. This widespread knowledge further exposes the number of employees who did not expose the truth until faced with criminal charges.

On the corporate side, VW tried to appease the public by recalling the affected vehicles which totaled to about 11 million cars worldwide (Hotten, 2015). Within the US, consumers were given the option to trade in their car for cash to get another car. However, in Europe VW insisted the affected cars could simply have the software tweaked to meet the less rigorous emissions standards (Phys.org, 2018). Volkswagen reluctance to provide compensation to European consumers suggests they only sought to meet minimum requirements rather than truly create clean vehicles. This displays that the true reason VW created the so-called clean diesel engines was only for marketing purposes not advancing sustainable transportation. Therefore, VW intentions further created a company culture based on overtaking its main competitor Toyota rather than truly providing consumers with a clean vehicle.

In 2017, VW was charged by the US Department of Justice and plead guilty to 3 felony counts: Participating in a conspiracy to violate the Clean Air Act, Obstruction of justice for destroying documents related to the scheme, and Importing these cars into the US by means of false statements about vehicles’ compliance with emissions limits (Kennedy, 2017). In the aftermath of the scandal, it has been reported that VW has paid more than 26 billion euros in fines and is still under investigation in the UK, Italy, France, South Korea, Canada, and

Germany (Phys.org, 2018).

Further, the scandal had larger impacts on the diesel industry as a whole. Although still popular in Europe due to a favorable tax regime, the sales of diesels have plummeted.

Additionally, the product is now highly scrutinized (Kool, 2015). Additionally, the discovery of

VW's defeat device has encouraged further investigations into other makers' diesel vehicles. For example, France is now investigating Renault , Peugeot , and Fiat .

Part III: Change in Leadership

When Winterkorn stepped down, it became evident that a cultural change was needed within VW. Winterkorn left the company only five days after the scandal became public. Since the initial scandal broke, Winterkorn has been charged with fraud over, embezzlement, and violating competition law in both Germany and the US. Additionally, prosecutors alleged that

Winterkorn was aware of the data manipulation as early as 2014 (Kottasova, 2019). This accusation reinforces the employee testimonies stating Winterkorn was extremely authoritarian.

In order to move on from the scandal, the company needed to demolish the current culture. This establishment of a new culture fell to the new CEO Mattias Müller.

Whistleblower Policy

In 2015 after the initial scandal broke, VW launched an internal investigation. To encourage employees to come forward, an amnesty program was created. This program assured lower-level employees would not be punished for coming forward; however, this program did not apply to managers (Goodman, 2015). It is reported that roughly 50 employees came forward once this program was put into effect (Boston, Varnholt, and Sloat, 2015). This report further emphasized that the scandal was not the work of a handful of rogue engineers, but rather a larger portion of VW who did not speak up until after the scandal was exposed.

Additionally, the actions of these employees suggests that prior to the amnesty program they did not want to step forward. One reason for this hesitance could be because the employees did not feel like they would be heard. Another reason for this lack of action could be that the employees felt they would be fired if they revealed any information regarding the scandal. This fear created by VW supervisors and executives is another example of the harmful culture at the company.

Before the amnesty program was created, one VW employee tried to blow the whistle but was not protected. In early 2016, an employee in Michigan claimed that VW continues to retaliate against those who question the company’s actions. The man believes the company fired him because he threatened to expose that VW illegally deleted data shortly after the scandal broke (Kelton, 2016). This testimony displays that the culture within VW is rooted deeply and may not be as easy to deconstruct as it appears on paper. Further, the accused reactions of the company display the potential outcome for others who may have come forward sooner with evidence of the scandal.

There are multiple important lessons that can be learned through the VW emissions scandal. First, the importance of creating an ethical company culture should be a top priority.

Throughout the beginning stages of this case, it is clear that VW main focus was increasing sales in order to surpass Toyota. When the metrics required to a clean diesel vehicle could not be met

VW chose to cheat. This displays the true priorities of the company which was to sell an idea to consumers rather than a working product. Secondly, the need for open and free communication between management and engineers is a major concern. One reason for the scandal was CEO

Winterkorn continued to push an idea of clean diesel vehicles despite the engineers’ inability to make a vehicle that met all required standards. This scandal could have been avoided if the engineers had enough faith in the company to admit when they could not meet advertised metrics. Additionally, if upper management had communicated with the engineering department prior to advertising clean diesel vehicles the company may not have felt the need to cheat.

Another lesson that can be taken from this case is the importance of whistleblower protection. If employees within VW had enough confidence in their job security when they brought

wrongdoings to the attention of management then perhaps more employees would have stepped forward sooner. Lastly, this case displays the need for checks and balances within management.

From the employee testimonies discussed in this case study, it is clear a hierarchical system was in place. This system allowed unethical actions to continue under direct supervision. Therefore, one way to avoid the growth of these systems is to bring in outsiders. For example, when

Schmidt met with Winterkorn to discuss the EPA allegations Winterkorn encouraged Schmidt to lie. If another member of the cooperation who was not directly involved with this scandal was present at the initial meeting between Schmidt and Winterkorn, Schmidt may have faced a different outcome.

Part IV: Conclusion

Normalized deviance occurs when a company chooses to ignore early warning signs of a larger problem. In the case of the Volkswagen emissions scandal, it is clear from the beginning

VW ignored the signs of a toxic culture. The culture within the company promoted ruthless competition with little care for ethics. When a few employees did try to speak out they were silenced or simply ignored. Therefore, it is clear Volkswagen was operating in a deviant state from what was expected.

From this case study, important lessons in management and communication can be gained. In order to avoid future scandals companies in similar positions to VW need to encourage employees to ask questions when actions seem unethical. Additionally, companies need to promote communication through different management levels and through parallel levels. These parallel levels can then serve as checks and balances. Lastly, companies need to incentivize whistleblowing in order to check their operators.

Boston, W., Varnholt, H., & Sloat, S. (2015, December 10). Volkswagen Blames 'Chain of

Mistakes' for Emissions Scandal. Retrieved April 23, 2020, from https://www.wsj.com/articles/vw-shares-up-ahead-of-emissions-findings-1449740759

Five things to know about VW's 'dieselgate' scandal. (2018). Retrieved 28 October 2019, from https://phys.org/news/2018-06-vw-dieselgate-scandal.html

Flender, S. (2019). The lie of clean Diesel. Retrieved 5 December 2019, from https://medium.com/swlh/the-lie-of-clean-diesel-f55b75031066

Forsgren, R. (2019). Dieselgate: A Case Study in Engineering Ethics [Ebook]. NASA. Retrieved from https://appel.nasa.gov/wp-content/uploads/2019/05/508_Dieselgate_Study_04.pdf

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Please note you do not have access to teaching notes, “walking the environmental responsibility talk” in the automobile industry: an ethics case study of the volkswagen environmental scandal.

Corporate Communications: An International Journal

ISSN : 1356-3289

Article publication date: 7 September 2018

Issue publication date: 9 October 2018

The purpose of this paper is to discuss the corporate behavior of Volkswagen in its emissions scandal. It describes and analyzes a complex ethics dilemma within the purview of corporate social responsibility (CSR) and corporate sustainability (CS) and examines how this dilemma impacts critical stakeholders, thus offering several “opportunities to learn” for professionals.

Design/methodology/approach

The case takes a stakeholder perspective, applying Cavanagh et al. (1981) and Gao’s (2008) ethical judgement framework. It is situated within a qualitative approach to textual analysis. Social actors, topics and evaluative statements were identified and grouped into broader categories.

Six major stakeholders were directly affected by Volkswagen’s behavior: customers, investors and shareholders, the US Environmental Protection Agency, German authorities, European institutions and society-at-large. Stakeholder concerns were condensed into three dominant themes: economic, legal and environmental. According to the ethical judgment framework, Volkswagen corporate behavior showed ethical problems, theoretically demonstrating that under no ethical principle was Volkswagen’s actions justifiable, even under instrumental justifications.

Research limitations/implications

The analysis was primarily based on corporate material and news media reporting. Consequently, diverse managers’ prospectives and opinions are not entirely captured.

Practical implications

This paper offers several “opportunities to learn” for corporate communication professionals.

Originality/value

The focus on stakeholder perspectives allows professionals to take an outside-in approach when evaluating the impact of corporate actions on stakeholders’ interests. The case analysis through Cavanagh et al. (1981) and Gao’s (2008) ethical judgment framework provides a practical theoretical instrument to assess corporate behaviors that can be used both as pre- and post-evaluations of corporate actions on CSR and CS issues.

• Corporate social responsibility
• Automobile industry
• Corporate behaviours
• Environmental scandal

Valentini, C. and Kruckeberg, D. (2018), "“Walking the environmental responsibility talk” in the automobile industry: An ethics case study of the Volkswagen environmental scandal", Corporate Communications: An International Journal , Vol. 23 No. 4, pp. 528-543. https://doi.org/10.1108/CCIJ-04-2018-0045

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Volkswagen’s Emissions Evasion

Faced with an emissions test their vehicles could not pass, Volkswagen created a “defeat device” in their engines to sidestep regulations.

In 2015, the U.S. Environmental Protection Agency (EPA) issued a notice of violation to German automobile company Volkswagen. The company’s vehicles met emissions standards when tested in indoor lab environments but failed when tested outside of the lab. On roads, the vehicles’ emissions equipment reported 40 times above the permissible levels of dangerous gases as set by EPA standards. After the EPA presented evidence to Volkswagen, the company eventually admitted to using a “defeat device” in the software of the vehicles’ engines. This software detected when the automobiles were in lab environments and adjusted the level of power and performance to pass emissions requirements.

This was not the first violation Volkswagen faced for skirting emissions tests. In 1973, the company used temperature-sensing devices to deactivate vehicles’ emissions control systems. Volkswagen settled those charges with the EPA for $120,000 and admitted no wrongdoing.

Volkswagen began using the software-based defeat device in 2008 after finding that its engine could not pass the pollution standards set by many countries. This was a diesel-based engine newly developed at a high cost to the company. In the U.S., the company marketed new vehicles with this engine as environmentally responsible “clean diesel.”

In response to the EPA’s disclosure, Volkswagen CEO Martin Winterkorn stated, “I personally am deeply sorry that we have broken the trust of our customers and the public.” He blamed the deceptive practices on “the terrible mistakes of a few people.” Winterkorn soon resigned and was replaced by Matthias Mueller. Mueller stated, “My most urgent task is to win back trust for the Volkswagen Group—by leaving no stone unturned.” Volkswagen launched an internal investigation and recalled as many as 11 million cars worldwide, pledging €6.7 billion (approximately $7.3 billion at the time) for repairs. Volkswagen board member Olaf Lies stated, “Those people who allowed this to happen, or who made the decision to install this software—they acted criminally. They must take personal responsibility.”

Researchers and journalists have pointed out larger concerns in the ways emissions are regulated. Reporter Jack Ewing, who followed the case closely for The New York Times, pointed out inconsistencies between American and European standards and enforcement. He stated, “What emerged from this case was that America, first of all, has stricter emissions standards. And the U.S. enforces them. Even though Europe had a lot of the same rules on the books…they just weren’t enforced at all.” Researchers found that emissions tests could be gamed because the EPA’s tests were set up for manufacturers to pass. University of Denver research associate Gary Bishop noted, “One thing most people are not aware of is that manufacturers will have specific drivers who drive certain models because they can legally drive the test and produce the lowest emissions for that model.” Professor Donald Stedman, an associate of Bishop’s, pointed out the compromises in designing cars, “Drivers want optimum power, performance and fuel economy, the EPA wants passing the test… [These] goals are often not compatible.” Other automobile manufacturers have engaged in similar practices over the past several decades, including General Motors, Ford, Chrysler, Nissan, and Toyota.

In addition to Winterkorn’s resignation, the company shuffled around several other executives. In January 2017, Volkswagen pleaded guilty to criminal charges of defrauding the U.S. government and obstructing a federal investigation. The company agreed to pay a $2.8 billion criminal fine and $1.5 billion in civil penalties on top of a $15.3 billion settlement with U.S. regulators. This was the largest settlement in the history of automobile-related consumer class action cases in the United States.

Related Videos

Incentive Gaming

Incentive gaming, or “gaming the system,” refers to when we figure out ways to increase our rewards for performance without actually improving our performance.

Related Terms

Bounded Ethicality

Bounded Ethicality means that people are limited in their ability to make ethical choices.

Ethical Fading

Ethical Fading occurs when people focus on some other aspect of a decision so that the ethical dimensions of the choice fade from view.

Ethical Insight

Volkswagen (VW) spent millions on developing a new diesel-based engine. The company was obviously incentivized to sell as many cars as possible. But government regulations also required the cars to be environmentally-friendly, and engineers could not figure out how to design the VW engines to both meet environmental standards and performance standards. When Volkswagen found that their engine would not pass emissions standards, they developed a “defeat device” that would alter an engine’s performance in a lab environment to pass the test. This gaming of the system is more likely to happen when incentives are high and opportunities to evade detection are available. When VW marketed new cars with these engines in the United States, they described the technology as “clean diesel.” It was, in fact, anything but “clean.”

Economists often model people as being perfectly rational, although evidence from the real world makes it clear that for a variety of reasons people are only “boundedly rational.” They are largely rational, but far from perfectly so. Similarly, people are boundedly ethical. They generally act ethically, but a variety of social and organizational factors, cognitive biases, and even situational factors can cause people to make poor moral choices.

While the VW engineers who developed the defeat device were likely rational and (largely) ethical people, their bounded rationality and bounded ethicality influenced their actions. They wanted Volkwagen to succeed, and the ethics of developing the device for their company faded from view. Indeed, engineers and executives at VW seem to have become so focused upon meeting technical standards and maintaining the company’s profits and reputation as a leader in anti-pollution technology that the ethical ramifications of the defeat devices were not taken into account. While it may be argued that emissions tests were set up in a way that encouraged many automobile makers to game the system, for Volkswagen, gaming the emissions test with defeat devices ultimately proved to be an expensive misstep for the company.

Discussion Questions

1. What factors led Volkswagen’s managers to make the decision to try to cheat environmental tests via a “defeat device?” Explain how each of the following concepts was apparent in this decision: ethical fading, incentive gaming, framing, bounded ethicality, bounded rationality, obedience to authority, and conformity bias.

2. When the software-based defeat device was first used by Volkswagen in 2008, why do you think those involved decided to use the defeat device?

3. How did Volkswagen frame its goals? Do you think ethical considerations were in the managers’ frame of reference? Why or why not?

4. Did the fact that its profit goals seemed immediate and concrete while the victims of pollution seemed very distant impact the decision making of the company’s employees? Explain.

5. This was obviously an unethical strategy by Volkswagen. In retrospect, do you think it wise on financial grounds? Explain.

6. Engineers at Volkswagen complained that environmental standards were becoming impossibly strict. In what ways did emissions tests and regulation standards encourage automobile companies to game the system when testing their vehicles? How might these factors lead companies’ ethical frameworks to fade from view?

7. It has been suggested that engineers often focus their attention on solving problems (such as how to build a defeat device and not get caught), and do not pay attention to the ethical particulars of a situation. Do you think that was the case here? Do you think that it is the case generally? Why or why not? What behavioral biases or situational factors may have impacted the engineers’ involvement in developing the defeat device?

8. Are individuals more likely to cheat or engage in other wrongdoing if they think others are doing so? Why or why not?

9. At a minimum, scores of Volkswagen employees knew of the defeat devices. Why might none of them come forward? What was wrong with the company’s culture that no employee felt safe to blow the whistle? How can a company create a culture that would encourage employees to step forward to stop wrongdoing?

10. How might automobile companies guard against ethical fading? How might regulating bodies like the EPA support protections against incentive gaming?

11. Would knowing that Volkswagen cheated on the emissions testing affect your decision to purchase one of their vehicles? Why or why not? How could a brand regain trust with consumers? Explain.

Bibliography

Volkswagen’s Diesel Scandal Was 80 Years in the Making https://www.theatlantic.com/business/archive/2017/05/ewing-volkswagen-scandal/527835/

A mucky business https://www.economist.com/news/briefing/21667918-systematic-fraud-worlds-biggest-carmaker-threatens-engulf-entire-industry-and

As Volkswagen Pushed to Be No. 1, Ambitions Fueled a Scandal https://www.nytimes.com/2015/09/27/business/as-vw-pushed-to-be-no-1-ambitions-fueled-a-scandal.html

Volkswagen: The scandal explained http://www.bbc.com/news/business-34324772

Hoaxwagen http://fortune.com/inside-volkswagen-emissions-scandal/

Volkswagen’s emissions cheating scandal had a long, complicated history https://arstechnica.com/cars/2017/09/volkswagens-emissions-cheating-scandal-has-a-long-complicated-history/

Volkswagen Engine-Rigging Scheme Said to Have Begun in 2008 https://www.nytimes.com/2015/10/05/business/engine-shortfall-pushed-volkswagen-to-evade-emissions-testing.html

Volkswagen staff acted criminally, says board member http://www.bbc.com/news/business-34397426

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Home » Management Case Studies » Business Ethics Case Study: The Volkswagen Emissions Scandal

Business Ethics Case Study: The Volkswagen Emissions Scandal

Over the last few decades, there has been great concern regarding the sustainability and conservation of the environment. Environmental pollution and globalization have become the concern of most environmental protection agencies. The harmful and mortal effects of nitrogen oxide, which is a pollutant found in car exhaust have led the Environmental Protection Agency (EPA) to tighten emission control considering the attention paid to conservation and saving the green. These concerns have made the EPA constantly announce restrictions for standard emissions for all types of vehicles the sports car, heavy-duty trucks, automobiles, and other types of cars. These stringent measures are necessary considering that nitrogen gas emitted is harmful to human health and results in diseases such as asthma, premature death, bronchitis, and respiratory and cardiovascular.

In 2015, the scandal regarding diesel cheat damaged the image of the Volkswagen Company. In light of the discovery of the diesel dupe of Volkswagen in 2015, the mechanism’s aim was to alter the detection of nitrogen oxide gas in Volkswagen diesel engines. The test of the emission of nitrogen oxide in the lab was thirty-five times more on the road hence endangering the lives of the people. The leadership of Volkswagen decided to take a shortcut in the production of their internationally recognized brand. This rigging scandal has had a bad reputation for Volkswagen leading to a series of consequences for its direct and indirect stakeholders. The harmful and mortal effects of nitrogen oxide, which is a pollutant found in car exhaust have led the Environmental Protection Agency (EPA) to tighten emission control considering the attention paid to conservation and saving the green. The management decided to pursue short-term needs forgetting the future prospects of the company.  The leadership of the company made a complete gamble with the stakeholder’s trust and resources. The cheat was in line with the stringent measures initiated by the EPA. These stringent measures are necessary considering that nitrogen gas emitted is harmful to human health and results in diseases such as asthma, premature death, bronchitis, and respiratory and cardiovascular. The Volkswagen Company’s reputation was severely damaged by the scandal leading to low revenue and other effects including law suites.

The scandal clearly reflects corporate misbehavior on the part of Volkswagen. The automakers manufacturing fuel-efficient diesel cars in the United States faced hardships due to these new stringent emission regulations. Volkswagen is among the automobile makers in the United States market that were new stringent regulations. However, in the year 2015, the EPA announced that Volkswagen was a diesel dupe following its strategy to deceive the emission test. Volkswagen managed to deceive the test by showing less emission in its engines than what the engine emitted in the real sense. Therefore, this article is aimed at analyzing the extent to which this issue of diesel dupe has ruined the reputation of Volkswagen.

The Impact the Diesel Dupe had on Volkswagen

In the previous year before the rigging scandal, Volkswagen was among the leading automobile producer in the automobile industry just second after Toyota Company. However, Volkswagen’s admission of guilt in the scandal had a series of effects on it and its operations and the company. The scandal severely damaged the company’s reputation in the automobile industry. Building a reputation in the business world takes time but destroying it is often fast, therefore, this has led to the Volkswagen Company bringing in three public relations company companies to help manage the crisis from Germany, Britain, and the United States. The implications of this deceit by Volkswagen leave the company in a bad condition considering that it has to deal with different regulations since the company is an international brand.

The Role of the Managers

Good leadership has three pillars that support it which are commitment, character, and competencies . Therefore, if any of these three values is not present then there is bound to be problems for the stakeholders, the manager, and the entire organization. In any organization, corporate social responsibility and sustainability have proven too challenging. This follows as managers are faced with the challenge of the tradeoff between the long and short-term decisions. This tradeoff often poses decisions between the survival of the business and its annual compensation, between long-term environmental factors and quarterly profits, and between short-term and long-term goals. Business schools must learn a better way to teach students about these tradeoffs and ways of handling them not ignore them. Resilience is key to financial sustainability. Therefore, business is capable of surviving natural disasters or financial crises. Moreover, the manager’s relationship with the employees, the environment, and the community results in resilience. Therefore, it is important that businesses not work against the institutions that enable their long-term success. However, the antithesis of sustainability is what the Volkswagen Company showed in 2015 through diesel dupe. It does not make any sense for the managers of Volkswagen to create this shortcut and be comfortable thinking it would lead to long-term success. The deception played on the consumers and the regulators compromised the long-term needs and success of the company despite achieving the short-term needs.

The decision the managers made regarding the tradeoff between short and long-term was surely misguided. Volkswagen is a company surrounded by competent staff and the managers are well educated and have vast experience in the industry. Therefore, tabling an argument that there was a shortage of expertise would be wrong and misguided. The strong desire of the managers to succeed at whatever cost is what brought this predicament to the company. They did everything with a sense of urgency and approached the challenges faced by the company with passion and vigor. The decisions these managers made, it is a case of failure in leadership. Research has concluded that drive, temperance, courage, humanity, collaboration, humility, integrity, accountability, justice, transcendence, and judgment are all qualities of a good leader and must all work together since using overusing one trait may result in liability. These traits are essential considering they enable a leader to think things through before making a decision. Moreover, the trait of justice helps in knowing the importance of giving back to society that ensures the success of the business and not harming them like in the case of Volkswagen.

Threatening People’s Health

In case the scandal regarding the cheat device would not occur, sixty people would have died a premature death in the United States alone by the end of 2016 due to the additional pollution the Volkswagen cars produce. The 428,000 Volkswagen and Audi diesel cars manufactured produced more nitrogen oxide gas forty times more than the standard allowed by the Clean Air Act in the period between 2008 and 2015. Researchers have concluded that every six years the cars Volkswagen and Audi produce an excess of about 36.7 million kg of nitrogen oxide, which is very bad for the environment and the health of human beings considering diseases like cardiovascular diseases and other respiratory diseases are caused by this emission.

Moreover, the research also stated that sixty people between the age of 10-20 are endangered by these emissions. Additionally, the effects of these emissions would result in the United States spending about $450 million on people over six years in the period between 2008 and 2015. There would be 140 premature deaths in the event Volkswagen failed to recall vehicles manufactured from 2015 onwards. Moreover, the Volkswagen diesel cars would cost about $840 million in health costs. Finally, acid rains are caused as a result of nitrogen oxide production in the atmosphere which leads to the destruction of property, and natural resources and badly affects the health of humans.

Drop in Volkswagen Sale

A bad reputation ruins businesses beyond recovery. Just as expected, Volkswagen faced a severe decline in revenue since the diesel cheat scandal. The scandal resulted in customers switching to its competitors disabling the sales of Volkswagen vehicles. For the first time since the year 2002, Volkswagen sales plunged throughout the world due to a bad reputation. Furthermore, the scandal affected every aspect of the Volkswagen brand considering even the share values slumped. The slump in share value started declining immediately after the scandal was revealed resulting in a one-third drop. The decline in revenue was expected considering no one wants to be associated with a company facing a scandal and no customers would buy products that cause health problems.

In light of the diesel scandal discovery, it is clear it was an act of pure conmanship. The company decided to make profits at the cost of its customers and the environment. This scandal clearly created a complicated situation for the stakeholders of the company. The actions of Volkswagen management were unethical to the business world leaving a bad name for the company. The management decided to pursue short-term needs forgetting the future prospects of the company. The scandal left the company in a series of cases including a violation of the Clean Air Act and a series of international laws. The leadership of the company made a complete gamble with the stakeholder’s trust and resources. The company had already established itself worldwide hence such a scandal cost it a huge price considering it would take a long time for it to get back to its glory days. The leadership of an organization is vital as it plays a significant role within the organization and its decisions may make or break the organization, therefore, in this case, Volkswagen’s leadership made a grave mistake.

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Factors contributing to the high prevalence of multidrug-resistance/Rifampicin-resistance in patients with tuberculosis: an epidemiological cross sectional and qualitative study from Khabarovsk krai region of Russia.

Author information, affiliations.

• Bykov I 1, 3
• Dyachenko O 2
• Ratmanov P 3

ORCIDs linked to this article

• Ratmanov P | 0000-0002-6292-8758
• Bykov I | 0000-0003-2375-4625

BMC Infectious Diseases , 13 Jul 2022 , 22(1): 612 https://doi.org/10.1186/s12879-022-07598-7   PMID: 35831812  PMCID: PMC9281178

Abstract 

Conclusions, free full text .

Factors contributing to the high prevalence of multidrug-resistance/Rifampicin-resistance in patients with tuberculosis: an epidemiological cross sectional and qualitative study from Khabarovsk krai region of Russia

1 Health Management College, Social Medicine Department, Harbin Medical University, 157 Baojian Road, Nangang District, Harbin, Heilongjiang 10081 People’s Republic of China

2 Public Health and Health Care Department, Far Eastern State Medical University, Khabarovsk, Russia

Olga Dyachenko

3 Internal Diseases Department with the Course of Phthisiology, Far Eastern State Medical University, Khabarovsk, Russia

Pavel Ratmanov

• Associated Data

The datasets analyzed during the current study are under jurisdiction of corresponding authority body and are not publicly available but are available from the corresponding author on reasonable request due to need of corresponding authority body notification of data sharing with the third party.

Growing prevalence of multidrug-resistant/Rifampicin-resistant tuberculosis (MDR/RR-TB; resistance to Isoniazid and Rifampicin/Isolated resistance to Rifampicin) is putting in jeopardy the WHO End TB strategy. This study aimed to identify factors contributing to the high prevalence of MDR/RR-TB in Khabarovsk krai region of Russia.

A cross-sectional retrospective study was conducted, analyzing clinical, demographic, and drug susceptibility testing data on 1440 patients. As a source of raw data, the national electronic TB surveillance system was used. Anonymous data was collected on every patient diagnosed with TB in all healthcare facilities of the region from January 2018 to December 2019. Only patients with proven excretion of m. tuberculosis were included in the study. Factors associated with MDR/RR-TB were identified through logistic regression analysis, in conjunction with in-depth interviews with eight patients, five healthcare managers and five doctors.

Incarceration and treatment history, regardless of outcome, were identified as major factors influencing MDR/RR-TB prevalence. It is essential for the TB care system to eliminate legal loopholes, which deprive doctors of means to enforce quarantine procedures and epidemiological surveillance on infected patients, former and current inmates. Increasing people’s awareness of TB, early detection and appropriate treatment of patients with TB are needed for successfully combating MDR/RR-TB.

• Introduction

The continuous increase of multidrug-resistant/Rifampicin-resistant tuberculosis (MDR/RR-TB; resistance to Isoniazid and Rifampicin/Isolated resistance to Rifampicin) throughout the globe is a major public health issue. In 2020, the WHO reported that the global treatment success rate for MDR/RR-TB was only 59%. Treatment of MDR/RR-TB is more toxic to the patient, less effective, and it carries a much higher economic burden on the patients and the healthcare system, jeopardizing TB control efforts in developed and developing countries alike [ 1 – 4 ].

Russia carries one of the greatest burdens of MDR/RR-TB in the world. In 2018, MDR/RR-TB accounted for 35% of all new TB cases and 71% of all previously treated TB cases, with an MDR/RR-TB incidence of 27 per 100,000 and second highest in the world MDR/RR-TB prevalence rate [ 5 , 6 ].

Such situation develops despite what seems to be a well-designed TB care system, in which all aspects of TB care in Russia are free of charge to the public. The entire system was designed to provide universal, quality, and specialized care that is centralized in TB-designated facilities (TBDF), as depicted in Fig.  1 . All healthcare facilities and schools are participating in detection of asymptomatic TB by performing a mandatory annual chest x-ray in adults and Tuberculin Skin Testing (TST) in children. If TB is suspected, the healthcare facility is legally obliged to transfer such a patient to the TBDF, so the final diagnosis of suspected TB patients and provision of TB treatment are reserved only for TBDF [ 7 ]. The only exception to this system are penitentiary facilities, which screen, diagnose and treat inmates themselves. Such independence has been already proposed by researchers as a main reason for the high incidence of TB in Russian prisons, but little has been done to improve this situation [ 8 ].

Organization of TB care in Russia. PHF primary healthcare facility, HF healthcare facility, TBDF TB designated facility, DOT directly observed treatment, PCR polymerase chain reaction, TST tuberculin skin test, DST drug susceptibility testing, DST Diaskin skin test, CT computed tomography, MTB mycobacterium tuberculosis

High MDR/RR-TB incidence encourages the government of the Russian Federation and the Russian society of Phthisiatricians 1 have developed specific policies and guidelines to address the issues [ 9 ]. Joint TB control programs with international partners have been initiated, research funds have been extended, a centralized national electronic database of TB patients created, and new diagnostic techniques and policies implemented. However, the progress has been far from satisfactory, as despite the decrease in total TB incidence, the prevalence of MDR/RR-TB is continuing to rise [ 5 – 8 ].

It is crucial to identify the underlying reasons for such high MDR/RR-TB prevalence so that more feasible and cost-effective approaches can be developed to control this trend. International reviews, and some country-level studies, have identified that risk factors for MDR/RR-TB vary depending on country, region, or locality. Among the most prevalent are poor adherence to TB treatment on the part of patients, poor monitoring and management of TB treatment adverse events, poverty, overcrowding, HIV co-infection, diabetes, alcoholism, smoking, cavitary disease and young age [ 10 – 18 ].

This study was undertaken in Khabarovsk Krai, in the Far East of Russia, where the proportion of MDR-TB among newly diagnosed cases (38%) was estimated to be the third highest in the country, significantly higher than the national average of 29.3% in 2018 [ 19 ]. Unfortunately, there is a notable gap in research into MDR/RR-TB rates between high and low prevalence regions of Russia. Despite some studies carried out in low-prevalence regions, factors influencing MDR/RR-TB in high- prevalence regions have rarely been investigated [ 20 – 22 ].

Data collection

Khabarovsk Krai is a region in the Far East of the Russian Federation, and it considered one of its high-prevalence TB regions. The TB incidence there is 87.7 per 100,000 in 2019 (almost twice the national average) with a population of only 1.2 million. These figures relegate region to ninth place by total TB incidence out of all 85 regions of Russia [ 19 ].

The mixed epidemiological, cross-sectional, retrospective and a qualitative study was conducted in the central “Tuberculosis Hospital” of Khabarovsk Krai. This institution collects and processes information about all patients with tuberculosis in region and functions as a reference laboratory at the regional level.

The Federal Register of TB patients (FRTP) was used as a source of data, which is a subsystem of the digital Unified State Healthcare Information System (USHIS). FRTP stores data of TB patients in form of electronic medical records, which were accessed by the investigator in April 2021. Anonymous demographic and clinical characteristics of every patient that was diagnosed with TB from January 2018 to December 2019 was collected and summarized into single data set for further analysis. The surveillance covered all healthcare institutions in the region and strictly followed the guidelines developed by the WHO and the International Union against Tuberculosis and Lung Disease [ 23 , 24 ].

Diagnostic methods

In all patients with suspected TB in the region, an acid-fast bacilli sputum smear, culture (with both liquid and solid media), real-time PCR, and Drug Susceptibility Testing (DST) are routinely implemented as initial diagnostic tests.

Various DST techniques were employed to detect MDR/RR-TB in patients. A liquid and solid media sputum culture tested MTB resistance to the following agents: Isoniazid, Rifampicin, Ethambutol, Streptomycin, Linezolid, Capreomycin, Amikacin, Ofloxacin, Levofloxacin, Kanamycin, Ethionamide, Para-aminosalicylic acid and Cycloserine. DST in direct PCR was performed with Allele-specific polymerase chain reaction aimed to identify rpoB, katG, inhA, embB and gyrA genes mutations associated with resistance to Isoniazid, Rifampicin, Ethambutol and fluoroquinolones [ 25 ]. All DST strictly followed the procedures and methods set out by WHO and the International Union against Tuberculosis and Lung Disease [ 24 ].

A new patient was defined as a patient with TB who had never been treated for TB previously, or who had received anti-TB drugs treatment for less than 1 month. A re-treatment patient was defined as a patient who had received anti-TB drug treatment for more than 1 month [ 10 ].

Inclusion/Exclusion criteria

A patient whose sample tests positive for mycobacterium tuberculosis (MTB) in at least one of the four initial diagnostic tests was defined as having active pulmonary TB. Patients whose samples are negative for the MTB in all four initial diagnostic tests were defined as having non-active pulmonary TB. Such patients were excluded from the study. Patients with mono-resistance (resistance to one first-line anti-TB drug only), poly-resistance (resistance to more than one first-line anti-TB drug, other than both isoniazid and rifampicin) and extensive drug resistance (resistance to any fluoroquinolone, and at least one second-line injectable TB medication, in addition to multidrug resistance) were excluded from the study. Patients whose electronic medical records contained incomplete set of data were also excluded from the study.

In-depth interviews

The interviewees were purposely selected based on their roles and experience in TB control. A total of 8 re-treatment and newly diagnosed patients completed the interviews, including one with a history of incarceration. 10 healthcare workers involved with their treatment completed interviews, including 5 physicians and 5 health administrative officials. Patients with TB were asked to answer when, where, and why they had received TB services, how they were treated and what problems they faced. The administrative officials were asked to answer questions about the arrangement of treatment regimens and compliance of providers and patients. The physicians were asked to answer questions about their experiences and problems in treating TB patients. The interviews were digitally recorded, transcribed, and thematically coded. The final sample size was determined by a saturation of information when no new categories emerged .

Quantitative data analysis

Quantitative variables of demographic and clinical characteristics of the patients with MDR/RR-TB were compared with those without MDR/RR-TB. Three regression models were constructed for all cases combined—only new cases and only re-treatment cases, respectively. Tested in the regression analysis were the following independent variables: gender, age, social status, place of residence, living conditions, substances abuse, a history of imprisonment, partial or total permanent inability to work (further—disability), HIV status, a history of treatment with Rifampicin and Isoniazid, TB localization, cavitary disease, and circumstances of TB discovery. For the re-treatment patients, additional variables of previous therapy outcome and length of previous treatment with Rifampicin and Isoniazid were added.

Three separate binary logistic regression models were created. Chi square tests were used for testing the statistical significance of the models as a whole. Fitness of the models to the data were tested with the Hosmer & Lemeshow test. Regression coefficient, Odds ratio with 95% confidence interval (95% CI) for each variable category was calculated and Wald statistics method used to determine their statistical significance [ 26 ]. An analysis was performed using SPSS software V24.0.01.

Qualitative data analysis

The interview data was analyzed thematically, with the coding framework developed inductively from the data. The initial coding used open coding and theoretical coding. The initial codes were then refined to produce a smaller set of themes. The coding framework was subject to continuing revision with each iteration during analysis. Main objectives of the analysis were to receive clinical explanation for the results of quantitative data analysis, identify non-apparent factors influencing MDR/RR-TB incidence, determine features of the TB care system organization and limitations of the study. An analysis was performed using Nvivo software V11.0.

Characteristics of the study population

During the study period, in all healthcare institutions of the region, 2661 patients were diagnosed with TB, of which 1544 patients had an active pulmonary tuberculosis, and 101 patients were excluded from the study due to resistance types other then MDR/RR-TB, three patients were excluded due to an incomplete set of variables leaving 1440 patients for further analysis (Fig.  2 ).

Flow chart of patients enrollment. PCR polymerase chain reaction, DST drug susceptibility testing, MDR/RR-TB multidrug-resistant/Rifampicin-resistant tuberculosis

Demographical and clinical characteristics of the recruited patients:

HIV human immunodeficiency virus, TB tuberculosis, MDR/RR multidrug resistance/Rifampin resistance

Factors associated with MDR/RR-TB

HIV human immunodeficiency virus, TB tuberculosis, MDR/RR multidrug resistance/Rifampin resistance, AOR adjusted odds ratio

Interpretation of interviews

Healthcare providers confirmed that former inmates are the most problematic group of TB patients. TB care in penitentiary facilities is provided on site, by the often undertrained medical stuff with insufficient funding and equipment. This medical service is not controlled by the authorities of general TB care system and operates without supervision. Lack of centralized control in tandem with poor nutrition and living conditions, overcrowding, treatment regimen neglect by prisons’ medical staff and inmates, make prisons the clearest breeding ground for drug resistance. After being released, prisoners mostly disappear from epidemiological surveillance and, even if they show up for further treatment, they often fail to adhere to the regimen and follow-up procedures and there are no legal tools for healthcare providers to enforce surveillance on them.

Among interviewees, there was a consensus that the main obstacle toward achieving full patient’s compliance is the length of therapy. Patients become progressively tired as the treatment advances, especially those with drug resistance, whose regimens typically last for 24 months or more.

In these cases, all patients with MDR/RR-TB receive treatment in inpatient conditions for at least twelve months in TBDF. After that period, the patient can be transferred to an outpatient treatment regimen. This option is reserved for patients who have proven themselves trustworthy, showing full compliance during inpatient treatment, and not actively secreting TB mycobacterium so as not to be an ongoing source of infection to others. Patients who do not meet those criteria continue their treatment in inpatient conditions until the end of the course. Such prolonged treatment, combined with insufficient awareness about consequences of intermittent treatment, leads patients to forgo treatment, usually as soon as symptoms disappear.

Outpatients phase of regimens provide many opportunities for the patients to drop out due to various reasons. Local TBDF in collaboration with the Russian Red Cross NGO are trying to address this issue by more thoroughly educating patients about TB treatment, giving out free monthly food packages and reimbursement of travel expenses to fully compliant patients. According to physicians, this has been especially effective in encouraging economically disadvantaged patients to continue their treatment.

Neither patients nor healthcare providers reported adverse effects to be a significant issue in achieving full treatment adherence. During an inpatient stay, patients are closely monitored for occurrence of adverse effects, where they are also given medication for side effects prevention. Physicians stated that they are equipped with all the necessary medications for the effective management of adverse effects.

Monitoring the occurrence of the adverse events among outpatients is carried out through mandatory monthly examination. The only issue here, that during ambulatory phase of the treatment, patients pay out-of-pocket for drugs to combat minor side effects, but in event of adverse effects occurrence during this phase physicians try to hospitalize such patients in TBDF so they could receive free medication and avoid financial burden. Same couldn’t be said about medical service in penitentiary facilities, according to patients, monitoring procedures are next to non-existing and medications for combating adverse events are scarce there. So, it is common for the inmates to discontinue medications as soon as adverse event occurs.

Both physicians and healthcare managers reported that TBDF of the region are sufficiently supplied with quality anti-TB medication and all the necessary diagnostic equipment.

Healthcare providers stated that both outcome and history of previous treatment contributed to the resistance development contrary to our results that mere fact of previous treatment history is increasing risk of resistance presence regardless of its outcome. Same goes for social status and living conditions, which, according to our statistical data, do not influence resistance development, but from a clinical standpoint, socially disadvantaged patients (particularly homeless ones) display a greater tendency to acquire MDR/RR TB. Another substantial problem that was not supported by data but reported by interviewees, is a greater frequency of alcohol and substances abuse. MDR/RR–TB prevalence in those groups is significantly higher than average.

Physicians did not report any association between presence of disability and risk of MDR/RR-TB development but they stated that some patients purposely do not comply with treatment to worsen their condition and acquire disability status for receiving social security benefits.

Besides the TB mycobacterium’s major biological features leading to the prevalence of MDR/RR-TB, such as mutation potential [ 27 ], strains [ 28 ] and draft genome sequences [ 29 ], TB related service patterns, demographics and clinical factors also have a significant impact on the development of MDR/RR-TB. Based on the statistical analysis of 1440 TB patients, we identified several factors influencing incidence of MDR/RR-TB in the Khabarovsk region of Russia. Among them are incarceration and previous anti TB treatment history, cavitary disease, HIV co-infection, age, place of residence, retirement status, presence of disability, circumstance of TB discovery and social status. We also concluded that newly diagnosed patients and retreatment patients tend to have different risk factors for contracting and developing MDR/RR-TB. Qualitative survey showed that organization of the TB care system, features of TB treatment process, healthcare and social security legislation play important role in TB epidemiology and may influence incidence of MDR/RR-TB both directly and indirectly.

Findings of quantitative data analysis were partially supported by interviews with patients, health managers, and physicians. Incarceration history was identified as the strongest risk factor associated with MDR/RR-TB in all studied groups. In this data, a high prevalence of TB and its drug resistant forms can be seen in prisons all around the world, developed and developing countries alike [ 30 – 32 ].

In 2021, according to Birkbeck University of London, Russia occupied 5th place in the world in terms of total prison population [ 33 ]. Based on literature reports and the interpretation of interviews, we can conclude that persistent unhygienic incarceration conditions and low quality of medical care in penitentiary facilities cause high prevalence of MDR/RR among TB infected inmates [ 7 ]. This creates a substantial pool of hosts, carrying drug resistant TB in the general population. Contrary to all other healthcare facilities in Russia, penitentiary institutions’ medical service operates independently from the general TB care system (Fig.  1 ). Such demarcation deprives inmates of proper care and follow up, which they can receive in TBDF. Either a considerable reduction in the total prison population and/or inclusion of penitentiary facilities in the TB care system may address the problem.

This predicament of prisons is explained by a contradiction of Russian laws in the field of healthcare. No medical procedures can be instituted without a patient's consent, including hospitalization, so some patients simply leave TBDF at will. To ensure epidemiological surveillance, healthcare providers have to file a claim for forced hospitalization to the court, but there are no legal mechanisms to execute positive court decisions without a patient's written consent. Thereby, infectious TB patients can leave TBDF even with a court decision of forced hospitalization. In 2011 it was that 3500 out of 6000 lawsuits were satisfied in favor of forced hospitalization, and it took an average of 3 months to obtain a court decision and up to 30% of patients left TBDF after forced hospitalization [ 34 ].

To ensure proper TB surveillance, measures should be taken to eliminate such a loophole in the legal framework. For reducing the pool of former inmates with MDR/RR-TB, better treatment conditions and epidemiological surveillance in penitentiary facilities must be established. Such intervention of providing TB care for inmates in civil clinics has been implemented in the Tomsk oblast region of Russia from 2000 to 2002 [ 7 ], which consisted of two phases of DOTS-plus individualized MDR-TB treatment regimens. In first “intensive” inpatient phase, patients received a high calories and protein rich diet, a separate and better accommodation, and were closely monitored for occurrence of treatment’s side effects. In the second “continuation” ambulatory phase, a community-based approach was used to provide directly observed therapy in outpatient clinics. For avoiding treatment discontinuation, adverse effects were managed aggressively, alongside with provision of monthly food packages to fully compliant patients and reimbursement of travel expenses.

The results showed significant increase in compliance, reduction in adverse effects, decrease in mortality rate, and increased treatment efficiency among incarcerated patients. Listed interventions, contrary to penitentiary facilities, are common practice in civil TB designated clinics therefore success of this study supports the necessity of centralized TB care for all TB patients [ 8 ].

As it was reported by numerous studies, poor adherence to drug susceptible TB treatment and poor screening for MDR/RR-TB are the major threats to MDR/RR-TB spread. According to the WHO, in 2020 DST underwent 92% and 94% of all newly diagnosed and retreatment TB cases respectively [ 4 ]. Such large-scale testing combined with routine usage of direct PCR DST and culture-based DST methods in all TB suspected patients provide a reliable and effective system of monitoring and detection of MDR/RR-TB. This conclusion is supported by the results of healthcare providers’ interviews.

A much larger concern is the problem of the poor adherence to the TB treatment. Implementation of DOT and DOTS plus were beneficial but didn’t fully address this problem in Russia [ 7 , 34 ]. As was reported, the length of therapy seems to be a major factor affecting a patient’s drop-out rate. Because of Russian legislation, it is challenging to keep patients in hospitals against their will but attempts to overcome this obstacle are present. For example, a special mobile medical team may visit some infected patients daily in their homes to deliver DOT. Those patients are typically not from economically disadvantaged groups, and their living conditions are much better than those of inpatient TB designated facilities, so their compliance is much higher when they stay in conditions that can be compared to home confinement but not in inpatient facility. Another instance is that pediatric TBDF provides compulsory school education to children, so they don’t disrupt their studies during a hospital stay.

A study from Belarus performed in 2009 identified positive association between disability and MDR/RR-TB prevalence [ 35 ]. Concerning another type of social security policies, influence of retirement social status on the risk of MDR/RR-TB development is uncertain as both positive and negative relationships were reported in the literature [ 13 , 36 ]. A study conducted in Ethiopia revealed a tenfold increase in risk of MDR-TB for the military pensioners, explaining it as pensioners receive much fewer social benefits compared to the active military servicemen [ 13 ]. At the same time, researchers from Belarus describe a protective effect similar to results received in our study with a reported AOR of 0.6 [ 36 ]. Such consistency in results may be due to that Russia and Belarus, both being part former Soviet Union members, have similar social security policies regarding retirement benefits and benefits for people with permanent inability to work. There is a need for further investigation of that phenomenon in countries with and without such policies. Such studies may support disability status as a risk factor or reveal its connection to social security policies. It should be mentioned as limitation, that we had no data on whether disability was TB-related or determined by another disease, thus the full statistical meaning of this variable remains uncertain.

Our results concerning association between MDR/RR-TB with younger age, cavitary disease, and positive HIV status correspond with previous studies [ 28 , 37 , 38 ].

Regarding place of residency, city dwellers have better access to healthcare in general and have a far greater capacity to complete annual chest X-rays. Therefore, cities tend to see greater number of people diagnosed with TB than in rural areas. Likewise, the increased population density in cities provides more chances to contract MDR/RR–TB. This can explain an emerging trend observed by physicians—the increase in the prevalence of MDR / RR-TB among newly diagnosed patients.

Our study has several limitations. We failed to explain the significance of official employment status as a risk factor among re-treatment patients and insignificance of social status and living conditions, as these results contradict with previous studies [ 12 , 38 – 40 ]. Also, our data indicates that outcome of previous treatment does not influence risk of MDR/RR-TB development which contradicts with previous studies and healthcare providers’ interviews [ 38 ]. During patients selection process, gyrB mutation of m.tuberculosis in DST was not tested due to usage of premanufactured reagent in allele-specific PCR [ 25 ], but because of simultaneous use of cultural DST methods we are confident that no patient with fluoroquinolones resistance was enrolled in the study.

It should be stated that data on narcotics and alcohol use disorders was based on official records of seeking medical attention for such conditions. Because significantly few patients in Russia seek medical attention for addiction-related problems [ 41 ] based on this and interviewee reports of high prevalence of these conditions in TB patients and corresponding literature [ 19 ], we acknowledge that our data may not fully represent the overall prevalence of substance abuse in the studied population.

It is worth mentioning that, even so according to the healthcare professionals’ interviews, TBDF is sufficiently supplied with medications of proper quality, our quantitative data didn’t contain information about supply and quality of anti-TB drugs. Another piece of valuable information that has not been represented in the quantitative data set was the occurrence of adverse effects. But based on the in-depth interview results, we can conclude that adverse events don’t affect compliance of patients receiving TB care in TBDF. Contrary to the penitentiary institutions where treatment drop-out due to adverse events occurrence is a major problem [ 31 ].

Incarceration and treatment history, regardless of outcome, seems to be a major factor influencing MDR/RR-TB prevalence in Russia. It is essential for the TB care system to eliminate legal loopholes, which deprive doctors of means to enforce quarantine procedures and epidemiological surveillance on infected patients, former and current inmates, who seem to be the main source of MDR/RR-TB hosts in the general population. The last can be addressed by treating inmates in the facilities of the general TB care system. In the end, we want to say that further attempts to better patients’ education and public awareness about TB, with continuing coordinated and centralized care for patients with TB, in tandem with greater compliance by patients with TB treatment guidelines, are the keys to success in the battle against MDR/RR-TB globally.

• Acknowledgements

The authors thank the staff of central “Tuberculosis Hospital” of Khabarovsk Krai for their support, access to the data and help with this study as well as Kremer M. for the proofreading and editing of the paper.

• Author contributions

IB, QW, PR, LL, LH designed and planned this study; IB undertook data collection, performed statistical analysis, conducted interviews and wrote the manuscript draft; OD provided access to the data, follow up the study on data collection and interviews conduction as well as guidance and expert opinion on TB matters; IB, QW, PR, OD, LL, LH revised, proofread and edited the paper. All authors read and approved the final manuscript.

We received no funding from the third parties.

• Availability of data and materials
• Declarations

The informed consents were accepted and signed by all participants and legal guardians of the underage participants of the study. All methods used in the study were performed in accordance with the relevant guidelines and regulations. The Ethics Committees of Harbin Medical University (committee’s reference number: KY2017-269) and Far Eastern State Medical University (committee’s reference number: not applicable) approved the study.

Not applicable, as no identifiable information of the participants was revealed in the manuscript.

None declared.

1 Phthisiatrician—a medical specialist trained in the diagnosis and treatment of tuberculosis. In Russia, historically, it stands out as a separate medical specialization.

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The Potential of the Khabarovsk Krai, Jewish Autonomous Region and the Amur Oblast for Fluorite Mineralization

• Published: 02 August 2023
• Volume 17 , pages 364–376, ( 2023 )

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• A. A. Cherepanov 1 &
• N. V. Berdnikov 1  

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The available data on the fluorite potential of the Khabarovsk krai, the Jewish Autonomous Region and Amur oblast have been synthesized. Fluorite deposits and occurrences were ascribed to the rare-earth–fluorite, beryllium–fluorite, fluorite–tin-ore, base-metal–fluorite, and fluorite mineralization types. Fluorite also occurs in the ore and phosphorite deposits of the fluorite-bearing mineralization type. The features of their localization in different tectono-stratigraphic areas of the region are shown. Fluorite-bearing districts were identified and their economic potential was assessed. Most promising fluorite occurrences are located along the periphery of the Siberian platform and in the southern part of the Bureya massif. Inferred fluorite resources were calculated and the prospects for their industrial development were estimated.

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Cherepanov, A.A., Berdnikov, N.V. The Potential of the Khabarovsk Krai, Jewish Autonomous Region and the Amur Oblast for Fluorite Mineralization. Russ. J. of Pac. Geol. 17 , 364–376 (2023). https://doi.org/10.1134/S1819714023040024

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Received : 12 January 2023

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Accepted : 24 March 2023

Published : 02 August 2023

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DOI : https://doi.org/10.1134/S1819714023040024

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