Ethical compliance and e-business integrity at Lockheed-Martin

E-Business Integrity at Lockheed-Martin

The intent of this memo is to discuss the many strategies Lockheed-Martin continues to take with regard to ensuring ethical business behavior, in addition to legal and regulatory compliance. Specifically focusing on the policies and procedures of the company to ensure the integrity and further development of best practices in ethical use of e-business activities, this memo highlights the steps Lockheed-Martin has taken to become a front-runner in these specific areas of compliance to ethical standards. In addition, the stance the company has taken on intellectual property rights and the ethical use of online data collected from employees' use of e-mail and Web browsing are also presented. Recommendations for improving these policies within Lockheed-Martin are also presented in the final section of this memo.

Lockheed-Martin's Defining Best Practices in Online Ethics

For many companies in the Aerospace and Defense (a&D) industry the ethical challenges of selling to foreign governments and winning contracts over competing vendors located in these host countries leads to bribery and unethical offers of assistance in an attempt to win new business. The many ethical lapses of Boeing including their many harassment scandals (Atkins 2006) have become common knowledge, with extensive U.S. government of the entire a&D industry occurring as a result. Lockheed-Martin has however been cited by researchers including Pollach (2003) for their open and upfront attitude to defining their ethical position online, and reinforcing it with their many online initiatives and communication strategies. Further, Lockheed-Martin has also created a series of best practices on the topic of compliance over and above the minimum requirements of the Sarbanes-Oxley Act (2002). This effort is described in detail by Brian Sears (2006, July), detailing how Lockheed-Martin specifically dedicates resources and time internally to seek out processes and procedures that could potentially lead to non-compliance and lack of adherence to their ethical guidelines, over and above SOX reporting requirements. Lockheed-Martin was one of the first companies to require intensive training for all associates, and is often recognized for creating one of the most comprehensive ethics training programs of all a&D companies. Lockheed-Martin requires all employees to attend annual ethics training courses, regularly audits ethical practices of online initiatives, and holds continual ethics training courses. The company also has multiple communication vehicles available to employees to report unethical behavior including e-mail, telephone and mail channels to communicate ethical violations. Those reporting do not have to identify themselves, and cannot be held back from reporting by their superiors either. These points are from a comparison article of ethical programs written by Charles Fombrun, Christopher Foss. (2004). In summary, the a&D industry has been plagued with many ethical violations over the last twenty years, yet Lockheed-Martin is clearly committed to leading best practices in terms of compliance.

Opportunities for Improvement

Lockheed-Martin has set the pace in many areas of ethics compliance, regulatory compliance to the Sarbanes-Oxley Act requirements, in addition to ensuring all employees have been trained on ethics processes and procedures once a year. With the best practices the company has pursued, there is room for improvement as well.

First, the company needs to actively pursue creating an employee portal that shows graphically how Lockheed-Martin is doing on compliance relative to its competitors, including having an Ethics Champions program to recognize those employees who have made recommendations to save the company money while also increasing compliance to the SOX Act and government reporting requirements. Recognizing exemplary performance over and above what is required from employees will also further drive ethical behavior into a core value for the company as well.