Sunday, 27 September 2015

Re Volkswagen: corporate culture is not enough

Well, this is absolutely a problem of neoliberalism (an idea I basically support, by the way). The whole thing with European regulators handing over emissions tests to the companies themselves, then not bothering to check them? Oosh. Classic abdication to market forces.

It is also absolutely a problem of corporate culture, and I expect to see a lot of talk from VW about culture, principles and values... probably a "value change" programme, et cetera.

The idea of corporate culture is that an organization can have its own inspiring values. This idea has a weakness: what happened at VW was probably not about employees being selfish. It was probably about people doing what they thought would benefit VW. (Mistakenly and short-sightedly, for certain, but that is hindsight.) Now it is possible to create a culture where cheating the company is frowned upon, but it seems hard to create a company culture which will consistently frown upon doing things that benefit the company. For, what incentive do the company and its employees have to maintain that culture?

A second weakness is that employees have already been socialized in ways that are hard to undo. Just as it is hard to learn a new language as an adult, it is also hard for adults to learn that cheating and lying are wrong, if they have not internalized that already. (Almost everyone knows by that age to say that cheating and lying are wrong, but that is not the same.)

So, a better way to improve corporate culture is to start outside the company, in schools and in families, and to ensure that we are bringing young people up right.

Which leads me back to my research on honesty in different countries. Here's the per cent of nationals from 15 countries who reported flipping a coin and getting heads. They were paid $3 to $5 for heads, but nothing for tails. The excess over 50% gives you an estimate of how many people in each country are lying.

GB Britain; ZA South Africa; PorTugal; GReece; CH Switzerland; DenmarK; TuRkey; US; ARgentina; RUssia; BRazil; INdia; K: South Korea; JaPan; ChiNa
Ordinary people in Britain – this is not a student sample, by the way – appear strikingly honest on average. I am not sure the same is true at higher echelons of society, but let's hope so. (No Germany, sorry! But this paper suggests that the Germans too are highly honest.)