Assignment 2 - Boeing PDF

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Executive Summary (134 words) The flaw of the Boeing 737 MAX design coupled with other factors ultimately led to the crashes of the 737 MAX planes. The launch of the 737 MAX in 2017 was a rushed release. It is to compete with its archrival Airbus on producing a plane with lower cost but increased fu...

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Executive Summary (134 words) The flaw of the Boeing 737 MAX design coupled with other factors ultimately led to the crashes of the 737 MAX planes. The launch of the 737 MAX in 2017 was a rushed release. It is to compete with its archrival Airbus on producing a plane with lower cost but increased fuel capacity. A new system–Maneuvering Characteristics Augmentation System (MCAS) was released along with the 737 MAX to aid with the different angle-of-attack (AoA) configuration (Ladkin 2019). As a rushed product, 737 MAX was marketed as a modified 737 rather than as a new aircraft. This meant that pilots did not have to undergo additional training to fly the plane, reducing cost and regulatory obstacles. To further keep costs low, less experienced pilots are hired by companies and the optional backup alert systems were opted out (McNulty & Marcus 2019). Introduction (198 words) It is inevitable for Boeing to be embroiled in a scandal regarding its decisions made surrounding the recent crashes of the Boeing 737 MAX planes. Thus, it is essential to look into Boeing’s knowledge of normative ethical theories and understand the way they deal with situations along with their decision-making strategies. This is extremely critical of an organisation as employees holding an upper management position–leaders have to make decisions all the time. The decisions made by them could make or break an organisation. Good decisions produce positive outcomes (Higgins 2000), benefitting the company and its stakeholders along with long-term sustainability. Higgins (2000) also emphasizes on achieving such outcomes ethically. It is effortless for an organisation to make better decisions deriving from ethical decisions when leaders are equipped with a better comprehension of ethical theories. Therefore, this report will be on the model of normative ethical theories, management morality, process involved in ethical decision-making and the significance in the creation of ethical organisation through leaderships and cultures. These will be analysed through examining different sources such as academic journals and books among others to better identify how ethical theories can influence companies to make better decisions. Analysis of Boeing (1378 words) With business decisions deemed to be unethical by a plethora of news articles, reports and people, Dennis A. Muilenburg the CEO of Boeing has led many to question his abilities. As promised by Dennis Muilenburg, the 737 MAX is “one of the safest airplanes ever to fly” but yet has lost trust worldwide for Boeing due to the recent 737 MAX plane crashes. People started to question if more could have been done to prevent the crashes resulting in the death of 346 people (Matthews & Choi 2019). This guides us to normative theories of a dogmatic approach comprising deontological and teleological theory (Trevino & Nelson 2006) where Hartman and DesJardins (2008) has further included virtue ethics. Deontological theory defines act based on the basis of moral values that is regardless of consequences (Hartman & DesJardins 2008). Teleological theory describes the rightfulness of an action based on the consequences it brings (De George 2006). Trevino and Nelson (2011), Hartman and DesJardins (2008) and Solomon (Frederick 1999, p. 30) found that a leader’s character and virtues forms virtue ethics instead of the consequences or the decisions made. Jones and Ryan (1998) defines the four stages of ethical decision-making as ‘recognition, moral judgement, intent and moral behaviour’. Knowledge of these theories allows in better understanding of moral judgement where leaders can reach a moral decision through moral

perception (Crane & Matten 2007). Moral judgement can be further elaborated by the identification of consequences–teleology, obligation–deontology and the consideration of an individuals’ integrity and character–virtue ethics. Leaders can make decisions based on the knowledge they know about moral behaviour. In the case study of Boeing, Boeing states that ethical business is the very core of their operation and deploys the use of ethical decision-making in all aspects of business (Boeing n.d.). However, a company’s true value is based not on what is in their annual report but on the daily life of an organisation. A company has to prioritise people rather than on numbers. Safety should be of utmost importance regardless of the short-term consequences for acts to be recognised and applauded (McNulty & Marcus 2019). Leaders of Boeing failed to have a strong moral compass and awareness surrounding the entirety of the 737 MAX planes, resulting in a variety of issues. The CEO of Boeing does not act as a moral agent nor have a high internal locus of control. The locus of control is the perception of how much control a person can exert over events in life. With a low internal locus of control, the CEO of Boeing does not think of the consequences of overpromising the schedule of 737 MAX being back on service and the impact it could have for different airlines. This makes him more susceptible to unethical actions (Rotter 1966) as by overpromising on the return, the loss would be lesser as the planes can be scheduled for takeoffs again. The consequences of such decisions only maximises the interests and benefits of the decision-maker (Hattingh & Woermann 2008; Casali 2011). It was also found that the new software system MCAS had a role in both crashes but Boeing and the Federal Aviation Administration (FAA) failed to inform pilots of the issue and poor safety regulations. Therefore, it could be said that Boeing failed to employ utilitarian theories as explained by Trevino and Nelson (2006), utilitarianism focuses on making ethical decisions and the benefits it brings to society while reducing harm. While Hartman and DesJardins (2008) and Trevino and Nelson (2006) mostly agree on utilitarian theories, they disagree that utilitarianism forms better practical thinkers. Decisions always depend on the consequences and hence, there is no straightforward right or wrong. Leaders who focus too much on the consequences of their actions may have a narrow view of situations. They may not be able to assess the consequences for those affected due to insufficient information (Trevino & Nelson 2006). Hartman and DesJardins (2008) agreed as there is no standard method to access the consequences. Therefore, a balance is needed for the management of Boeing to follow on focusing too much or too little on the consequences of their actions. Boeing also does not practice kantianism and is shown when Boeing did not prioritise safety. Kantian ethics is the act of goodwill based on the act of duty and intent behind a decision that focuses on making a decision good rather than the consequences (Bowie, cited in Frederick 1999, p.3; Rosenstand 2009). A decision must be made from the desire to do the right thing rather than rationalising the outcome (Shaw & Barry 2004). Even though the MAX 737 was an entirely new plane running on a new software system MCAS, a pilot only required 2.5 hours of iPad training to fly the plane. This ultimately became the selling point of the MAX 737 as any pilot who could fly the 737 model could fly the 737 MAX without undergoing recertification or require expensive training, leading to a huge profit for Boeing and its customers (Travis 2019). Thus, the leaders of Boeing viewed profit with higher importance than their own moral action by deceiving the world that the MAX 737 is a successor of the 737 rather than a new model.

To be consistently ethical in an organisation, the formal and informal system must work together (Trevino & Nelson 2011). With leadership being one of the most influential aspects in companies, it is important that more is done to protect a company’s culture formally and informally (Trevino & Nelson 2011). Thus, for companies to ethically prosper and make better decisions, it is important to hire and cultivate leaders that are moral managers and moral agents (Trevino, Hartman & Brown 2000; Trevino & Nelson 2011). One of the three models of management behaviour includes moral agents such as moral management are leaders that maintain a high standards of ethical performance. Financial success is only sought after within the boundaries of law (Carroll 2001). A moral manager is a role model for other employees. They have to be aware of and actively promote ethics throughout the organisation by their actions and communications (Trevino, Hartman & Brown 2000). Research by Mayer et al. (2009) shows that ethical leadership by the upper management channels through an organisation and ethical behaviours of employees can be influenced by them. It is therefore important for leaders to be skilled in virtue ethics and virtuous as Moore (2008) explains that without moral leaders, a company can quickly turn unethical. While top management at Boeing are supposed to be role models, Boeing’s top management focused only primarily on the ‘big-picture’. Ethical issues are not considered, leading them to become amoral agents (Caroll 1987). Carroll (1987) states that there are intentional and unintentional amoral management. Intentional amoral management is when leaders decide that management and ethics do not mix therefore decisions will be made without factoring in ethical considerations. Unintentional amoral management focuses on a leader’s carelessness in making ethical considerations and lacks ethical consciousness (Carroll 2001). Boeing’s staff are only given enough instructions to focus on a concentrated task and are kept in the dark about the big-picture. The top management actions are amoral, lacking in ethics and this unethical values spread through the organisation changing the mindset of others. Staff are sucked into a cycle of unethical doings without their own knowledge. When faced with potential problems, staff hesitate to act due to their opinions being disregarded by the management for the interest of time and fear the consequences of a dismissal (Cutler 2020). Management primary concern should be on safety but yet safety is sacrificed for their own personal benefits motivated by greed and selfishness. This led to many lives being lost due to the crashes. While the management is not seeking for such events to occur, the lack of corporate culture ultimately led to such problems as employees were too afraid to speak out despite frustrations by problems relating to safety (Cutler 2020). Boeing’s top management were laid-back and negligent in their ethical concerns and indulged in their own self-interest also known as egoism or selfishness by Shaw and Berry (2004), building the basis of their low moral awareness.

Recommendations While Boeing has enjoyed multiple successes prior to the crashes of 737 MAX, it is essential for Boeing to reflect on the way its management has been handling such situations. Under Mr. Muilenburg, Boeing’s public relations suffered. This is because after several mishaps faced by the company that included a botched Starliner mission, he emphasized that what they have done is still right. He has been overly optimistic in the face of the company’s challenges that led many to lose confidence in the company, ruining relationships with customers, regulators and other stakeholders (Gelles & Kitroeff 2019). The company should have someone who is more

experienced in handling such crises rather than making situations worse. Thus, the steps in getting a new CEO Mr. Calhoun proves to be a step into the right direction (Gelles & Kitroeff 2019). Boeing should also focus on the moral approbation contract, which is the desire for oneself to be moral in times of decision-making. To judge one’s moral approbation, four characteristics are taken into consideration such as the severity of consequences, moral certainty, degree of complicity and extent of pressure (Jones & Ryan 1998).

Figure 1 Rest’s Four-Component Model was appointed by organisations as a formal ethical decisionmaking model (Klinker & Hackmann 2020). This model helps to identify an ethical dilemma and a guide to behaving ethically as part of the moral judgement process (Krebs, Denton & Wark 2020). Finally, whistleblowing policies should also be in place for staff in the company to stand up against what is wrong without facing any consequences. With these steps in place, Boeing is a step closer to having a better work culture, with staff protected upon speaking against unethical decisions. Ethical decisions can be made more easily when an organisation displays a strong ethical culture. Kish-Gephart, Harrison and Trevino (2010) did a research supported by Trevino and Youngblood (1990) showing how organisations influence employees’ ethical choices through creating a social environment. Further elaborations by Trevino and Brown (2004) that unethical employees are a result of the environment of an organisation such as what their environment and expected behaviours through socialisation and internalisation (Trevino & Nelson 2011). Stricter fines and penalties should also be enforced on top management to ensure that they are not abusing any power while prioritising the safety of customers worldwide.

Conclusion (105 words) With knowledge of the numerous normative theories, leaders should use them as a guide as an exemplary role model in the company to ensure sustainability and that methods used are ethical. These methods help to improve the moral awareness of leaders while contributing to a better understanding of the ethical challenges faced by companies. These tools allow companies to analyse the diverse ethical situations they may face in the ever-changing business world (Trevino & Nelson 2011). Through the cultivation of ethical cultures and leadership in an organisation, leaders can remain ethical and make better decisions for the companies based on their knowledge of its theories.

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vol. 11, no. 2, pp. 367-368. Casali, G 2011, ‘Developing a Multidimensional Scale for Ethical Decision Making’, Journal of Business Ethics, December, vol. 104, no. 4, p. 489. Cutler, R 2020, ‘Boeing 737 MAX Not the Work of Monkeys or Clowns’, viewed 16 March 2020, . Hattingh, J & Woermann, M 2008, ‘They are all lies. Even Mother Theresa did it for herself’, African Journal of Business Ethics, January, vol. 3, no. 1, p. 15. Higgins, ET 2000, ‘Making a Good Decision: Value From Fit’, The American Psychologist, November, vol. 55, no. 11, pp. 1217-1218. Jones, T & Ryan, L 1998, ‘The Effect of Organizational Forces on Individual Morality: Judgment, Moral Approbation, and Behavior’, Business Ethics Quarterly, July, vol. 8, no. 3, pp. 433-434. Kish-Gephart, J, Harrison, D & Trevi;o, L 2010, ‘Bad Apples, Bad Cases, and Bad Barrels: MetaAnalytic Evidence About Sources of Unethical Decisions at Work’, Journal of Applied Psychology, January, vol. 95, no. 1, p. 21. Klinker, J & Hackmann, D 2020, ‘An Analysis of Principals’ Ethical Decision Making Using Rest’s Four Component Model of Moral Behavior’, Journal of School Leadership, vol. 14, no. 4, p. 453. Krebs, D, Denton, K & Wark, G 2020, ‘The Forms and Functions of Real-life Moral Decision-making’, Journal of Moral Education, vol. 26, no. 2, p.131. Matthews, M & Choi, C 2019, ‘Compass Course’, ASEE Prism, vol. 29, no. 4, pp. 26, 28. Moore, G 2008, ‘Re-imagining the morality of management: A modern virtue ethics approach’, Business Ethics Quarterly, vol. 18, no. 4, p. 483. Rotter, J 1966, ‘Generalized expectancies for internal versus external control of reinforcement’, Psychological Monographs, vol. 80, no. 1, p. 8. Trevino, L & Brown, M 2004, ‘Managing to be ethical: Debunking five business ethics myths’, The Academy of Management Executive, vol. 18, no. 2, p. 71. Trevi;o, L, Hartman, L, & Brown, M 2000, ‘Moral Person and Moral Manager: How Executives Develop a Reputation for Ethical Leadership’, California Management Review, vol. 42, no. 4, pp. 128-

129, 131. Trevino, L & Youngblood, S 1990, ‘Bad Apples in Bad Barrels: A Causal Analysis of Ethical DecisionMaking Behavior’, Journal of Applied Psychology, vol. 75, no. 4, p. 381. Others Boeing. n.d., Ethics And Compliance, viewed 13 March 2020, . Gelles, D & Kitroeff, N 2019, Boeing Fires C.E.O. Dennis Muilenburg, The New York Times, viewed 16 March 2020, . Ladkin, P 2019, IEEE Spectrum On Possible Software Involvement In Two Recent Airliner Crashes, The Abnormal Distribution, viewed 11 March 2020, . McNulty, E & Marcus, L 2019, Boeing Must Fix Its Moral Compass, And Its Culture, Industry Week, viewed 9 March 2020, . Travis, G 2019, How The Boeing 737 Max Disaster Looks To A Software Developer, IEEE Spectrum, viewed 15 March 2020, ....