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Companies such as Volkswagen, Boeing and Purdue Pharma have more in common than they would like: their unbridled ambition led to public scandals. Professor of Law and Society Benjamin van Rooij has investigated the underlying causes. He explains how companies develop systemic misconduct, how regulation falls short and how we can bring about change.
Copyright: Merlijn Doomernik

In recent years, we have seen scandals involving companies such as Purdue Pharma, Volkswagen and Boeing. What do you find most worrying about these cases?

‘What strikes me most is that these organisations, which at first glance appear legitimate and even admirable, are capable of causing enormous harm on a scale that deeply affects society. Take Purdue Pharma, which fuelled the opioid crisis, or Volkswagen, whose emissions scandal undermined trust in environmental commitments. Boeing’s failures led to tragic air crashes and heightened fear of flying. What all these cases have in common is that the damage does not stem from deliberate criminal intent or incompetence, but from something far more systemic.’

‘Organisations are powerful entities. They bring people together, pool resources and align everyone towards shared goals. This makes them hugely successful, but the very same ability to multiply efforts also means that they can cause harm in ways that individuals – or even governments – often cannot. I want to understand how and why organisations, despite their legitimate goals, can still cause structural harm.’

We’re good at punishing misconduct as soon as it comes to light, but we rarely tackle the underlying structures.

How do organisations ultimately cause such great harm?

‘One of the biggest factors is the pursuit of unrealistic targets. These targets are often set with good intentions — ambition, growth, competition — but can push staff and systems beyond their limits. And that is precisely when misconduct becomes almost inevitable.’

‘Take Wells Fargo, for example. The bank set a target for staff to sell eight products per customer. On paper, that seems ambitious but achievable; in reality, however, it was completely unrealistic. Staff desperately tried to meet these expectations and ultimately opened three million unauthorised accounts. The problem was caused by a target the organisation had set for itself.’

‘Volkswagen is another example. The company wanted a small diesel engine that was both powerful and clean. Sounds good, but at the time, Volkswagen did not yet have such technology. Instead of acknowledging that the target was unachievable, the company committed fraud by installing software that manipulated the emissions tests.

And then there is Purdue Pharma, which aggressively promoted opioids due to sales targets that prioritised profit over safety. The pattern is clear: unrealistic targets combined with high pressure can create an environment in which harm is almost built into the system.’

Why do laws and regulations fail to tackle these root causes?

‘That is a crucial point. The legal frameworks we have focus primarily on addressing harm once it has occurred, rather than preventing it. We are good at punishing misconduct as soon as it comes to light, but we rarely tackle the underlying structures that create the conditions for harm. It is not just about catching companies that break the law – it is about understanding why companies feel compelled to break the law.’

What role does short-term thinking play in these problems?

‘It is a key factor, particularly when short-term priorities overshadow long-term responsibilities. Boeing is a textbook example. In the 1950s, Boeing was at the forefront of the aviation industry, not because it was the first to build commercial jet aircraft, but because it was the first to prioritise safety above all else. They understood that you have no future in aviation if your product is not safe.’

‘But by the late 1990s, the focus had shifted. Share price performance and quarterly results took precedence over the long-term outlook. Safety, until then the cornerstone of their success, became secondary. This shift ultimately led to the two 737 MAX crashes. The tragic thing is that these crashes were not isolated incidents — they were the result of systemic decisions that prioritised short-term profit over long-term safety and the trust of their customers.’

‘The lesson is clear: if organisations lose sight of their long-term goals in favour of short-term results, the consequences can be enormous. This is not just about bad decisions; it is about a fundamental shift in priorities that can even cost human lives.’

Ultimately, it is about creating a culture that rewards ethical behaviour and long-term thinking.

What can organisations do to balance ambition with responsibility?

‘Ambition itself is not the problem. It is about how that ambition is put into practice. Organisations must set challenging goals, without creating an environment where harmful behaviour becomes the path of least resistance. They must also look beyond short-term gains and ask themselves how their decisions will affect people, the environment and their reputation in the long term.’

‘Ultimately, it’s about creating a culture in which ethical behaviour and long-term thinking are rewarded. And that’s not just down to organisations, but also to regulators, policymakers and enforcement bodies. This is a systemic problem, and solving it requires systemic solutions.’

As a researcher, how do you collaborate with companies? Are they interested in your findings?

‘We do not work directly with companies. Instead, we use publicly available data, which means we select our cases carefully. We focus on cases where a vast amount of information is already available through investigative journalism, court reports and investigations by regulatory bodies. This enables us to reconstruct key decisions in detail. In the Volkswagen case, for example, the documentation allowed us to virtually be in the room where fifteen senior managers were discussing the engines.’

What do you hope to achieve with this project?

‘Firstly, simply to help people understand the real causes of corporate-related harm. If, after reading my book, readers start to question their own organisation, then that’s even better. That’s why, at the end of each chapter, we ask: “What questions should you be asking about your own company?” The aim is to encourage people to reflect on their own working environment and the pressures that exist there.’

Do you work directly with regulators?

‘I work with regulators in the Netherlands who are genuinely interested in organisational culture. They are open to discussion, share insights and are receptive to our perspectives. Regulators are under increasing media pressure to tackle corporate misconduct. Many of them are focusing increasingly on what they call ‘organisational culture’. By providing a better understanding of the underlying factors behind corporate misconduct and the influence of unrealistic targets and short-term thinking, I hope to offer practical tools for preventing future crises.’