Organizational ethics: evaluating a company's code of ethics

¶ … company code of ethics for Boeing. In this document I will explore Boeing's code and attempt to reveal important items relevant to understanding how a functional code of ethics may be applied to a large organization. I will first describe a general background of the company to help provide context in this evaluation. Next, I will give an overview of the code of conduct and highlight important details that are worthy of discussion. This paper will also include how this code of ethics can be applied to the differing levels of responsibility and accountability within the company itself. I will also examine a recent specific case study of ethical violations within Boeing to help test the validity and quality of this company's attitude towards ethics. This specific case will help understand important factors on the stability and feasibility of their ethical codes and programs.

Background

Boeing's company website describes the company as " the world's largest aerospace company and leading manufacturer of commercial jetliners and defense, space and security systems. A top U.S. exporter, the company supports airlines and U.S. And allied government customers in 150 countries." Boeing is unique in many factors as this large company is closely aligned with many different governments and militaries. The serious nature of this type of commerce places much importance on Boeing's ethical conduct of business, and there interests are very important to many people around the world. War fighting is politically risky and appears extremely important that Boeing maintains an irreproachable stance on ethical behavior.

Boeing employs over 170,000 people in over 70 countries contributing to the challenging nature of developing a worthy ethics standard. A large labor force permits many opportunities for unethical behavior due to a large effort required to enforce this effort. Boeing, most likely to combat this problem, has integrated an ethics department to help manage and oversee the ethical guidelines policies. As part of this division, Boeing implemented communication lines dedicated to any employee questions regarding compliance to its standards. This seems to be a necessary solution to the aforementioned problems caused by the unique business model Boeing applies and the many risks it takes on as an organization.

Boeing's Code of Conduct

Boeing's company website reserves a spot for its proclamation of its ethics. The policy seems very much aligned with the duty-driven ethical system most likely to appear in synchronization with governments and militaries. The policy is broken down into six different categories: Code of Conduct, Corporate Values, Education and Awareness, Ethical Business Guidelines, Ethics Line and Policies and Procedures. These categories summarize Boeing's general approach towards ethics, yet each one could stand alone as an accurate snapshot of the ethical climate radiating from their organization. Three buzzwords are attached to this site "Communicate, Educate, Execute." This mantra appears to serve as the most three important ideals behind the business ethics model for the company.

The ' Code of Conduct' portion of the policy states a very general attitude towards ethics. The code both instructs the employees in how to be loyal to the company and simultaneously adhere to applicable laws, rules and regulations. The code stresses integrity and maintaining high standards of conduct. Furthermore this code guarantees that whistleblowers will not be retaliated against in hopes to provide a safe and welcoming environment for those with ethical questions.

The next part of the code highlights eight corporate values Boeing wishes to uphold. These include: leadership, integrity, quality, customer satisfaction, people working together, a diverse and involved team, good corporate citizenship and enhancing shareholder value. These value are important but it is equally important to point out the potential conflict of interests within these values. It is certain that the value of the shareholder will be in direct conflict with quality and customer satisfaction at some point. This is a problem not only for Boeing, but for all companies that have responsibility to shareholders. Shareholders, concern only about profit have less personal interest invested in the company compared to many decision makers and employees of the company. Unfortunately Boeing may have over reached in this instance.

The next part of the code states a few paragraphs citing the dedication to the ethical education of its employees and sub-contractors. This segment assures the reader that educational certification is being performed by all employees and stands as an important part of the workings within the company.

The next part of Boeing's ethical program is a 45-page booklet designed for employee reference. The original code of conduct is stated followed by examples for procedures of typical ethical problems that arise. These specific polices deal with, procurement integrity, export and import compliance, antitrust compliance, political contributions and equal opportunity employment. This booklet appears to have the most complete information regarding the totality of the program as it includes all recent policy change memos and other altered regulations.

Application of the Code of Conduct

In the last decade, Boeing's ethical reputation has come under criticism. This is mainly due to the 2003 resignation of its Chief Executive, Harry Stonecipher. Stoncipher was caught in a sexual liaison with one of his subordinates an absolute restricted relationship according to its code of ethics. Richman (2005) explained how this event actually strengthened the ethical climate at the company. By unmasking this problem he claimed that "a corrupt company, or a company worried about exposure, could very easily have crushed the investigation." This is a minor infraction compared to trading military secrets to terrorist organizations, however it does demonstrate the tolerance levels for this company.

Reeder & Hickey (2005) claimed that this exercise in ethics enforcement allowed for better changes within the organizational structure at the company. The article claimed that "before these assessments, Boeing's ethics organization was more decentralized, with 40 part-time ethics advisors who provided valuable service, but had other duties as well. Today, a centralized function with over 100 full-time ethics advisors who are no longer allocated or budgeted to individual business units, but rather, belong to Boeing's centralized Office of Internal Governance, with cognizance over import-export controls, government ethics, internal audits, and compliance."

Boeing in this case, has proved that even the top executive in the company is not immune to the high standards of behavior the code lays out for those to adhere. It seems as though Boeing was caught in a very tough place, as all important players within and without the organization are connected to the leadership of the company. This incident demonstrated to me that Boeing, has serious problems but they are getting better especially in the enforcement area of its programs. Such a poor leadership mistake however, demonstrates the vulnerability of its ethical climate and the need for many resources to ensure its enforcement.