Organizational wrongdoing and the network organization: the Volkswagen emissions scandal revisited in an inter-organizational perspective

This study aims at advancing research on organizational wrongdoing by identifying inter-organizational mechanisms of misconduct. We examine how the Volkswagen emissions scandal could be implemented only through Volkswagen’s network of suppliers, and illustrate how it inheres in entrenched inter-organizational relationships. Specifically, three mechanisms seem to diffuse wrongdoing across the boundaries of firms collaborating in new product development (NPD) projects: the lack of overview on the entire project; the lack of market-wise incentives to pursuing ethical behavior; the lack of legal-wise incentives to pursuing ethical behavior. Through this analysis, we contribute to research on organizational wrongdoing and the network organization, and develop portable insights for policy makers trying to eradicate organizational misconduct.