Ethical Decision Making in Difficult Situations Discussion
Question 1
Lockheed created the starfighter jet in a hurry, upon Kelly Johnson visiting Korea. However, the production had cut so many corners, had so many technical difficulties, and by the time it was ready for the market, it was already fading into the mists of time as the plane had been created within the Korean War context (Terris, 2013). The company began to rapidly redesign the plane and seek for external market. This was a shady practice to hurry production of a plane, which would later cost the company and fail to deliver the competitive advantage it had hoped, considering the US government only bought 170 planes, out of the 2500 planes produced. Ethical Decision Making in Difficult Situations Discussion
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To save the company, one of the unorthodox strategies that the company used to seek external market was to approach American adversaries, Japan and Germany. For instance, in Japan, their middleman was Yoshio Kadama, a former war prisoner held captive by Americans for war crimes. Selling American products to their adversaries was unorthodox and unethical, considering the middleman used was an ultranationalist, which compromised the U.S government.
Other unorthodox strategies included acquiring the friendship of Prince Bernhardt, married into the Dutch royal family, and accepted bribes and payments through middlemen. In the Indonesian market, Lockheed contributed generously to Widows and Orphans Fund, which was close to the Indonesian Air Force (Terris, 2013). In Saudi Arabia, the company developed close ties with Adnan Khashoggi, and in Italy, a variety of political parties enjoyed the company’s largesse through bribes. Ethical Decision Making in Difficult Situations Discussion
Lastly, an unorthodox strategy to sell its product was to masquerade the jets as modern and with optimal technological capabilities, while in essence, the planes were somewhat substandard considering they were neither elegant jetfighters nor versatile cases of new technology. What facilitated this was willing partners and middlemen who could reach high government officials, for a price. Therefore, there were bribes issued on numerous fronts to keep business going.
Question 2
In a situation where underhanded and back-door deals are the way the game is played if everybody is on the same playing field, it is still unethical to continue with shady business deals. While Lockheed argued that these business deals and unethical practices helped prevent a financial disaster, there were other parties involved that were adversely affected by the lack of business ethics. First, even well into the 1970s, when the company once again found itself at the epicenter of corrupt deal charges, it was clear that American taxpayer money was being put into corrupt use. These are resources, when well invested, could enable the government continue to develop its sectors such as healthcare and education, that ultimately benefit the taxpayer. Ethical Decision Making in Difficult Situations Discussion
Additionally, selling their product to overseas markets; especially adversarial ones was risking American security and the integrity of its defense operations. It is important to note that Lockheed produced planes that were designed for wartime and had advanced technology to suppress an opponent (Terris, 2013). While the U.S government, for instance, only bought 300 starfighters, the company sold about 2,000 of the same products to other markets. In the event of a war, the U.S would be compromised because opponents would have similar aircraft technology that would reduce its competitive advantage.
Lastly, engaging in such unethical practices externally risks the practice of similar practices within the organization. Johnson argued that these practices were crucial in saving the company from financial disaster. However, since unethical practices are likely to become normalized, it is no wonder that in the 1970s, the company was once again in the spotlight for unethical practices that were draining financial resources (Terris, 2013). Therefore, the major risk of such practices is that they eventually seep into the organization and cause more financial damage because of embezzlement.
Question 3
The purpose of the Defense Industry Initiative on Business Ethics and Conduct in 1986 was to level the playing field and to make it easier for companies to ethically act since competitors in the American defense industry promised to do so. The DII was crucial for Lockheed because it was more comprehensive and had more detailed industrywide codes of ethics. It also allowed competitors to compare notes and share best practices on ethical codes and principles while conducting business. Ethical Decision Making in Difficult Situations Discussion
As such, as a result, Lockheed began to formalize its ethics program and inserted ethical language into its corporate cultures; which did not exist before. This program, based on the DII was also important for Lockheed because the codes were insistent on individual conduct as the beginning to creating an ethical corporate culture (Terris, 2013). The company subsequently developed a compliance department to train employees, supervisors, and trainers on ethical mandatory points. Therefore, it is safe to claim that the DII was instrumental in the eventual success of Lockheed ethics program because it created a standardized code for all industry players, and necessitated the incorporation of ethics into corporate culture through training and ensuring compliance within the organization and among the employees.
Question 4
A critical reason why Augustine and Dilbert helped Lockheed turn a corner in their ethics program was because Augustine’s personal agenda had always been being ethical and upholding integrity. These were his personal values ingrained in him, and ultimately, in his operations. Having a leader whose modus operandi is hinged upon ethics is likely to steer an organization into an ethical path that is intolerant towards actions such as unscrupulous deals and bribery (Zhang et al., 2018). Augustine also recognized the ethical program at Lockheed as boring, considering it only served the requirements of the federal government, but it was challenging to reach its more than 200,000 employees (Terris, 2013). The dull ethical program was counterproductive as it also led to resentment, hostility towards ethics, and cynicism. Augustine helped Lockheed by challenging Marshall, the company’s lawyer in charge of the ethics program, to develop a better ethical program. Ethical Decision Making in Difficult Situations Discussion
As such, the solution as to have an internal marketing campaign to illustrate the concept of corporate ethics on the comic strip Dilbert that was particularly popular with employees at Lockheed. The team working on this project also borrowed ideas from a board game named Gray Matters, and introduced it as Ethics Challenge that became a mandatory ethics awareness program in Lockheed Martin in 1997 (Terris, 2013). The game was played in a cascade-down fashion, which strengthened the leaders’ knowledge on corporate ethics. The training leaders would then organize teams of employees to play the game. The gaming activities were critical in fostering cohesion, increased knowledge and application of corporate ethics, and reducing the cynicism towards corporate ethics. The games also opened up discussions on corporate ethics, and helped employees understand ethics as a personal and individual responsibility. Ethical Decision Making in Difficult Situations Discussion
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References
Terris, D. (2013). Ethics at Work: Creating Virtue at an American Corporation. Brandeis University Press.
Zhang, Y., Zhou, F., & Mao, J. (2018). Ethical Leadership and Follower Moral Actions: Investigating an Emotional Linkage. Frontiers in psychology, 9, 1881. https://doi.org/10.3389/fpsyg.2018.01881 Ethical Decision Making in Difficult Situations Discussion
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