Without much doubt, the Volkswagen emissions story is one of the greatestl corporate disasters in recent decades. As a proud VW owner, I’m shocked that a company of its size and reputation would have ever allowed itself to get into so much trouble.

The highly abridged story is as follows. An independent test revealed that some VW diesel cars contained software designed to trick emissions testers. If the software noticed that the car was undergoing an emissions test, it would change the engine settings to reduce nitrogen oxide output to the lowest possible level, thus tricking the testers. When the car was allowed back on the road, the engine settings would be reset, allowing emissions – up to 40 times higher than legally permitted – to be released. VW put code into their cars that was deliberately designed to break US environmental laws. It also breaches environmental regulations in many other countries. Up to 11 million cars are affected and we are awaiting news on exactly what these cars are.

It was a monumentally audacious trick. It’s beyond me how, with 11 million affected cars on the road, they didn’t imagine they would eventually be found out. Now that the fraud is in the open, VW face massive lawsuits from a whole raft of countries. They cannot sell any more diesel cars in the US – both for this year and next year. Switzerland has banned the sale of further diesel cars. Presumably more countries will follow. All owners of affected cars may be compelled to return their cars to their dealers, so that a software fix can be applied to the cars. If the cars are not as powerful after the remedial fix or if taxes are increased for these models, VW face massive class action lawsuits from millions of annoyed drivers around the world. VW’s reputation – indeed the reputation of the German motor industry – is badly tarnished, resulting in enormous job losses down the line. This may spell the end of diesel cars. People with breathing difficulties, such as cystic fibrosis or asthma, may well be encouraged to sue Volkwagen for putting their lives in danger.

Given the implications as described above, I cannot understand how VW’s legal team would ever countenance such a thing. Their job is to protect the company under all circumstances. Permitting such a fix to go through would have been idiocy of the highest level. My assumption, at this time, is that they simply didn’t know, which should imply that the CEO did not know either. However the same cannot be said for their head of engineering. To pull off this massive fraud, somebody wrote the code, other people tested the code and yet other people signed off on the code. Testing must have been quite sophisticated to ensure it worked in real world conditions, so we are talking about a lot of engineers and a considerable enough budget to pay for all this.

For this reason, I do not believe this was a massive conspiracy orchestrated from the top of VW. You could of course argue that “everybody is doing it” as an incentive to commit the fraud, but so far it appears that just one engine produced by Volkwagen is affected. It looks like a solo run by someone in engineering – someone far too clever for their own good. Whoever dreamed it up, signed up to this scheme or attempted to cover it up should face criminal charges.

Despite the bad news, there is a silver lining. Ironically this could be the best thing to happen to international business culture in quite a while. The incident means that corporations need to double down on their business conduct policies. No matter how good any corporation perceives itself to be, this story shows that a small number of people can do irreparable damage to the entire enterprise in pursuit of short term profitability objectives. It also perhaps signals a concerted move towards cleaner technologies. In the medium term, testing of diesel cars will be revamped. There have been significant issues with these tests for years, with the industry arguing vociferously against more regulation. They have now lost this argument. In a year or two, all diesel cars will be subjected to a far more stringent regime. This is good for all of us. In the longer term, it is likely that diesel will diminish in importance, though it could be argued that electric vehicles cannot match the power and durability of diesel engines. Either way, it will signal a major change in the industry.

Whatever the outcome, plenty of lessons have been learned.