Ethical or Unethical Behaviour at Boeing - Assignment Example

Ethical or Unethical Behaviour at Boeing Boeing is one of the largest global airline companies, which specifically deals with the services of providing aerospace products to military as well as industry buyers. It has been observed that with such vast range of operations, the company had to face certain challenges in terms of its compliance with ethical standards and code of conducts. When analysing the company’s recent performances and its operations, it was observed that Boeing have faced much criticism on the grounds of its unethical and illegal behaviour towards its stakeholders. It has been observed that following its merger with another company, Boeing was unable to integrate the cultural diversity aspects with efficiency which created conflicts within its organisational working environment and its overall operations which in turn affected the employees’ as well as the shareholders’ interests from its stakeholders’ group. Due to this reason the company incurred a loss of $2.6 billion as a compensation for a lawsuit filed by its shareholders against Boeing’s operations concerning the enclosure of its financial conditions. In order to settle the dispute entirely, the company further had to pay a total of around $92 million to its shareholders and employees. In this regard, it has been noted that these huge losses of the company, ultimately imposed greater degree of pressure on the investors; thus, the investors, as included in Boeing’s stakeholders’ group were also affected by its unethical behaviour (Griffin 111-112). Furthermore, the company also lost its order from Pentagon due to some issues of stolen documents, which if otherwise could have contributed to its profitability by a substantial extent. It has been observed that as a consequence from the cancellation of the order from Pentagon, the company had to bear an extra cost burden of more than $1 billion in its sales. Moreover, the firm was also banned from bidding in the federal contracts for around 20 months which in turn affected its shareholders, employees as well as investors by a large extent. Additionally, the company was also found to be frequently changing its CEO’s in quick succession which created confusions and cost burden as well as other leadership hazards within the internal business environment of the organisation. For instance, in 2002 the company was led by Philip Condit. After few years Condit was replaced by Harry Stonecipher, but he was also soon taken over by McNerny. Such frequent changes in the CEO’s of the company eventually affected its financial performances by a large extent. From the overall analysis, it could be concluded that the ethical or unethical practices of the company in the presence ultimately affected the stakeholders of Boeing including the investors, the employees and the shareholders among others (Griffin 111-112). Q.2. Which Organizational Approach To Social Responsibility Did Boeing Appear To Use Under The Leadership Of Condit And Stonecipher? How Do You Think the Approach Changed Under McNerney’s Leadership? Under the leadership of Philip Condit, Boeing was observed to be highly inclined towards mergers, both in the horizontal and vertical directions within the airlines industry as a strategy to obtain competitive advantages. It has been observed in this regard that the merger led by Philip Condit was not successful which rather gave rise to issues regarding the integration of the operations as well as the culture of the firms intended to be merged with Boeing. As a consequence from the failure of the merger, the company faced a loss of more than $2.6 billion in its operations. Furthermore, in order to settle the issue, the company had to spend a huge amount of $92 million. Apart from that in another issue of stolen documents from the rival company and thus practicing unethical competition, Boeing had to face cancellation of the already placed order form Pentagon and a ban of 20 months from bidding in federal contracts (Griffin 111-112). Therefore, it can be observed that Boeing, under the leadership of Condit was mostly focused on competitive positioning of the company owing to which it can be stated that the company followed a compliance-based approach towards its CSR initiatives, which however, resulted in a failure. After the leadership of Philip Condit was replaced by Harry Stonecipher, the company also had to deal with many such issues. In the year 2005, Pentagon further cancelled some of its deals with the company because of ethical issues that depicted discrimination against female workers with Boeing. The female workers also claimed that they were underpaid and filed a suit against the company. The company suffered a loss of billions of dollars from the cancellation of the Pentagon deal apart from spending almost $73 million in order to settle the suit filed by its female workers. Furthermore, Stonecipher was also under the scanner for his affair with one of the female subordinates of the company which fuelled the allegation of sexual harassment against him. As a result of such issues, Stonecipher was forced to resign from his position as the CEO of Boeing. From the analysis of both the leadership styles of the CEO’s in Boeing, it can be affirmed that the organisational approach to social responsibility was similar to obstructionist technique (Griffin 111-112; Sims 51-56). However, under the leadership of Jim McNerney a proactive (one who think for the welfare of the stakeholders and organization) social responsibility approach can be observed as he was an outsider and would not be afraid in making severe changes in the operations of the organization. Moreover, it has been learnt that McNerney was quite focused on the development of the employees unlike other CEO’s in Boeing, who were mostly concerned about the technical capabilities of the organisation. Thus, it could be concluded that a more responsible social approach is expected from the leadership of McNerney (Griffin 111-112; Sims 51-56). Q.3. Are the Actions McNerney is proposing likely to Improve Ethics in Boeing? If yes explain why and if No, Tell What Action McNerney could take that would be effective. As an outsider to the aerospace industry, McNerney would be able to inculcate innovative ideas and more critical approaches to CSR, making any kind of changes in the organization. In this regard, it can be stated that McNerney could be able to enhance the conduct of ethics in the organization. In order to explain the prospect in detail, a close analysis would be required on the steps or approaches considered by McNerney to revitalise the recent CSR operations of Boeing. In the initial stage, McNerney focused on developing and sharing a clear objective about what he would do as the CEO of the company, which was observed to be lacking in Boeing under the leadership of Condit as well as Stonecipher. Observing his capability to direct the organisation towards a planned CSR approach, it can be inferred that Boeing can effectively rely on the leadership of McNerny (Griffin 111-112). In the similar context, McNerney also deciphered his keenness to bring severe changes in the organization through shared values, keeping the management and the employees informed about his strategies and negative elements in the working culture which are harming its performance and thus, needs an immediate alteration. He also proposed that like in case of previous CEO’s, no issues would be hidden from the management of the company, therefore imbibing transparency within its organisational philanthropy. Apparently, McNerney seeks to improve both moral as well as legal behaviours of the employees. It could be observed from the CSR approach applied by McNerney that he seeks openness and accountability from the both ends of its stakeholders and the company officials ensuring maximum adherence to ethical conducts. From the overall discussion of the CSR approach taken by McNerney as the new CEO of the company, it can be concluded that his leadership style, his emphasis immediate and strong need for change to mitigate prior issues can contribute towards long-run sustainability of the organisation in future. The leadership approach adopted by McNerney will also be effective enough to ensure better stakeholder engagement and satisfaction for Boeing (Griffin 111-112). Works Cited Griffin, Ricky W. Management. U.S: Cengage Learning, 2008. Print. Sims, Ronald R. Ethics and Corporate Social Responsibility: Why Giants Fall. Greenwood Publishing Group, 2003. Print. Read More