Here's my two cents: VW knew they were cheating, but had they convinced themselves they were close enough to the letter of the law to get away with it? In my industry (totally unrelated to cars), there were two lawsuits a few years ago. The first was Company A had a project that touched a bit of one of Company B's assets. Company B sued, saying the agreement signed by everyone said they had to share the project. Company B won.

Maybe a year later, Company 1 had a project that touched a bit of one of Company 2's assets. Company 2 sued, saying the agreement signed by everyone said they had to share the project. Company 1 fought the lawsuit. They hired the best lawyers, the same lawyers Company A used. Guess who won?

I think it's easy at the corporate level to get some groupthink. Everyone might be sitting around thinking "wait a minute, we could get burned on this," but nobody is saying anything. Everyone assumes someone would say something, and when nobody says anything, they all assume everyone agrees it's ok when someone on the outside might be screaming "what is wrong with you idiots?"