I selected to review the article "Why Volkswagen Cheated," published in 2015 by Newsweek. 

In response to stricter emissions regulations instituted by the U.S. Environmental Protection Agency, Volkswagen vehicles came with "defeat devices" installed in their engine's software. These would share inaccurate readings of emission levels that met the EPA guidelines when their emissions were nearly forty times the legal limit. The EPA's policy, which went into effect in 2004, is an example of how the general environment is a force that can shape and affect many firms across industries.

In fact, this affected not only Volkswagen but also Mazda, Honda, Nissan, and Hyundai, who were all interested in bringing less environmentally friendly diesel vehicles into the U.S. market. The latter four automakers decided against exploiting the U.S. market, which seemed like an untapped region to grow diesel vehicle sales (50% of Europe is diesel, compared to only 5% in the U.S. at that time). However, Volkswagen persisted in its planned strategy, which worked...until it didn't.

When it was discovered that Volkswagen was cheating, the automaker did not immediately have a good answer as to who was to blame. It was even hypothesized that it was possible that a Volkswagen employee did not write the code and that a third party could have done it. If this were true, it would be an example of how companies would need to protect their trade secrets better. It would be poor management of inter-organizational structures and relationships. 

However, it wasn't a mischievous third-party contractor that slipped in a line of code. Volkswagen's culture was to blame. The company was structured as a highly centralized hierarchy that expects and incentivizes performance. If leadership objectives weren't met, employees would risk losing their jobs. Further, the company incentivized its employees individually and in groups (target of incentives) with financial bonuses. They were compensated through bonus-based and profit-sharing/profit-gaining systems. It was a very thought-out incentive structure. However, it placed employees in a compromised position when they felt pressure to deliver unattainable results. 

Below is a picture taken in 2018 of one of California's Volkswagen "boneyards." There were nearly 300,000 Volkwagens scattered in these boneyards across the United States.