Friday, January 13, 2017

Find A Better Solution Instead Of Searching For A Way To Cheat The System

Working for a university has certainly shed light on the educational process at the post-high school level for me.  What never ceases to amaze me is the choices that students make in their effort toward achieving a good grade in a given class.  Rather than studying and working problems, a certain fraction of students will actually spend a large amount of time trying to figure a way to cheat in the course.  Of course, this does not apply to all students.  This begs the following questions:

1) What happens to these students in life?

2) What type of jobs do they pursue in life?

I will not pretend to have the answer to either.  Can I offer suggestions based on history?  Why not?  In the paragraphs below, I offer a couple of different routes taken by such students.  First, let me say that I do not believe these types of students are not above average students per se.  Alternatively, the students might be a bit misguided in their efforts.  Maybe that is by choice?  If so, that behavior will translate throughout their lives.

Cheating The System

Most of us know that to go down the path of 'cheating the system' is wrong and not stood for by most in the community.  When you look at large companies like Takata airbags or Volkswagen -- which both have been involved in scandals with the automobile, one cannot help what is the root of the problem.

Why do I mention this now?

Recently, I was reading an open letter by the famous activist lawyer Ralph Nader to Attorney General Loretta Lynch titled "Prosecution or Guilty Pleas for Corporate Crime".  The essence of the letter is centered around holding car automobile companies and other large corporate CEO's and upper management held accountable for crimes committed.


Ditlow called the Volkswagen diesel case one of the most egregious corporate crime cases in history.

“This is one of the most egregious corporate crimes I have ever seen,” Mr. Ditlow said. “When the Environmental Protection Agency set tough new standards for diesel engines, Volkswagen quickly discovered that its technology wouldn’t meet the new standards. But, what they did is, instead of sending their engineers to work, designing a new system to clean up the diesel, they sent their engineers to work developing a computer program that would instruct the diesel engine to only work the emission controls during the test procedure. And, when the diesel is out in the real world on the highway, to turn off the emission controls. So, in order to do this you have to have engineers who deliberately programmed into the computer system a cheat device, which would turn off the emission controls. Clear knowledge. Clear intent. And they got caught.”

Ditlow said that “in the U.S. there are nearly 500,000 of these diesels with the cheat devices on them.”

“Across the world there are many millions, as many as 11 million vehicles in every country, polluting the atmosphere, causing adverse health effects. And, one study here in the U.S. said that there be as many as 60 deaths due to this corporate crime by Volkswagen.”

If that was not a corporate crime then I do not know what is.

Takata Air Bag:

On Takata, Mr. Ditlow said this: “Up through the year 2000, almost every airbag inflator made worldwide, including by Takata, used sodium azide as a propellant. Very stable. If it broke down it just simply degraded and there were no adverse effects. If you had to replace it, you had to replace it. But, what Takata did in the beginning of 2001 was to change the propellant to ammonium nitrate, an incredibly powerful explosive. It’s what Terry McVeigh used to bring down the government office building in Oklahoma City. It’s what a lot of terrorists in the Mideast are using in the improvised explosive devises. And so, yet this propellant that Takata used, it was known to degrade, known to explode, they put it into the airbag inflator to save, once again, a few pennies per inflator. And so, they knew immediately, once these inflators were put into production that they were failing, they were exploding, and when they exploded they sent the shrapnel of the housing into the occupant compartment. And, if you’re behind the steering wheel and you had no other choice at that time, you are very likely to be killed or seriously injured.”


In either case, the decision to cheat the system was not made at the engineering level as we have found out as these two scandals have carried out in the popular news.  Ralph Nader includes this fact in his open letter:

“The government in the U.S. the governments throughout Europe and the rest of the world  …  send the responsible executives to jail,” Ditlow said. “This is not something that a rogue engineer did. This is something that management approved, because, you cannot sell a car unless you get it certified by EPA. And, top management always looks at that. Because, if it can’t sell the car, you’re not going to make money. And, the way they made money this time was they cheated.”

These two incidents cause the public to view the corporate world with a large degree of skepticism in their practices.  When the corporations do not have the best interest in mind of  the consumer (as far as safety is concerned), then the confidence in the corporation is lost by the public and the bottom line of the company ultimately suffers.

One Bad Apple Is Unlikely ...

Furthermore, if one corporation has developed this technology to evade emissions testing in the United States, chances are the entire industry has followed suit.  Right about now, you may be thinking the following: "Mike, that is rather presumptuous to say don't you think?"

Yesterday, the Environmental Protection Agency (EPA) just release a statement accusing Fiat Chrysler of cheating on emissions testing too.  The article appeared in 'The Washington Post' under the title "EPA: Fiat Chrysler software enabled emissions cheating" contained a video shown below which is under 2 minutes in length and worth watching -- as parallels are drawn with Volkswagen.  Here the video below:

Another company cheating the system.  Imagine that?  Whenever I read an article like this on cheating the system, I wonder about the risk management personnel working at these companies.  The risk management employees have appeared over the decades referred to as "Bean Counters."   Bean Counters are defined by Merriam-Webster Online dictionary as:

a person involved in corporate or government financial decisions and especially one reluctant to spend money

The translation is a person who determines how to minimize risk or keep costs down dramatically.  One common calculation carried out over the years by bean counters is to determine the cost of a legal suit versus replacing the faulty part.  Meaning, considering accidents and potential deaths in a legal suit, is it cheaper to keep a faulty part on a car or change the part?  No company likes to admit that such calculations are ever carried out.  But, history shows that such calculations are carried out quite frequently.  Amazing.

Risk management is a field that the average person is not very familiar with.  An introduction to the field of 'risk management' is given below taken from the first two paragraphs of the 'Wikipedia' page:

Risk management is the identification, assessment, and prioritization of risks (defined in ISO 31000 as the effect of uncertainty on objectives) followed by coordinated and economical application of resources to minimize, monitor, and control the probability and/or impact of unfortunate events[1] or to maximize the realization of opportunities. Risk management’s objective is to assure uncertainty does not deflect the endeavor from the business goals.[2]
Risks can come from various sources including uncertainty in financial markets, threats from project failures (at any phase in design, development, production, or sustainment life-cycles), legal liabilities, credit risk, accidents, natural causes and disasters, deliberate attack from an adversary, or events of uncertain or unpredictable root-cause. There are two types of events i.e. negative events can be classified as risks while positive events are classified as opportunities. Several risk management standards have been developed including the Project Management Institute, the National Institute of Standards and Technology, actuarial societies, and ISO standards.[3][4] Methods, definitions and goals vary widely according to whether the risk management method is in the context of project management, security, engineering, industrial processes, financial portfolios, actuarial assessments, or public health and safety.

Is your head spinning after reading that paragraph?

If you are a visual person like myself, then the following example of 'risk management' will solidify the meaning in your mind.  Below is an example of the analysis done for the International Space Station by NASA taken from the 'Wikipedia' page for 'risk management':

Source: National Aeronautics and Space Administration (NASA):NASA Johnson Space CenterOrbital Debris Program Office - Orbital Debris Education Package

Shown above is a model of the International Space Station.  After the risk management team evaluated the structure, the resulting color coded model was generated.  The areas shaded in the color 'violet' are the areas with the lowest probability of impact.  Whereas, the areas shaded with the color 'red' indicate the points on the structure (space station) with the highest probability of impact.  

Models like the one generated by NASA above are generated by various industries for various products.  The decision comes down to changing the 'bottom line' (profit) for safety or absorbing the legal cost at a profit.  Whenever I think about a company caught up in a decision where consumer safety is pitted against profit, I would hope that consumer safety would win out.  Unfortunately, there are examples in history where this was not the case -- too many examples.

Furthermore, when one company engages in risky behavior, chances are others in the industry engage in the same type of fraud.  Again, from 'The Washington Post' article above:

“It is no surprise that the VW investigation has prompted enhanced focus on the automotive industry,” the University of Michigan law professor said. “When corporate misconduct occurs, it often reflects industry practice, not just the wrongdoing of a single company.”

The severe penalties levied against Volkswagen and, in particular, individual employees signals to companies that the Department of Justice intends to pursue and prosecute corporate decision-makers more intently than it has in years past, said Carl W. Tobias, a University of Richmond law professor. Deputy Attorney General Sally Q. Yates released a policy directive in September 2015 that said holding individual executives accountable is “one of the most effective ways to combat corporate misconduct.”

The first paragraph tends to confirm what has been said above.  Whereas the second paragraph tends to give us hope that more prosecutorial scrutiny in the decades to come will help minimize the bad actors (industry fraud).  With the current administration arriving in just over a week of President-elect Donald Trump, lets hope that we proceed forward with more restrictions to safeguard the consumers in our nation rather than turn back the clock.  It is up to each of us as consumers to keep a watch on any industry operating in the U.S. market.


Just like the students that spend more time in and out of class trying to cheat on homework and exams, there will be corporations engaging in the same behavior.  Is this just a human trait?  To take the easy way out?  Turns out that the easy way out is to actually take the route that is truthful.  Be honest with yourself and your work.  Work hard.  Play hard.

With regard to corporate wrong doing, we all have a responsibility to our fellow American to watch out for such abuses and to report them when visible.  No one wins when someone dies as a result of a faulty part.  No one wins when consumers are sickened or injured by a poisoned product.  No one wins when a patient takes a pill (or medication) made with compromised ingredients sourced from unknown sources which leads to mass illness.  Regulatory agencies exist to actually ensure safety in consumer products.

The issue facing the nation at the moment is the lack of funding for such agencies which are greatly understaffed and under resourced.  Corporate entities understand this and have financial backing to send lobbyists to Washington to counter any regulatory proceedings from occurring.  What you and I have in the game is the end product.  Although, we also have a voice.  We have the ability to call our local representative or write a letter like the one above written by Ralph Nader.  Each of us has a responsibility to ensure safety -- keep this in mind.

Until next time, Have a great day!

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