Impact of Unethical Behaviour on Boeing's Reputation and Business Performance

This report analyzes the impact of unethical behavior on Boeing's reputation and business performance, focusing on the 737 Max crashes and the company's response. It discusses the effects on reputation, revenue, shareholders, and customers, and recommends changes to regain trust and improve safety measures.

Academic and
Professional Skills

EXCUTIVE SUMMARY
This report is based upon Boeing which is an American multinational corporation which
design and manufacture as well as sell air planes and rockets. In October 2018, 189 people were
killed in Boeing 737 Max Lion air flight in Indonesia where the aeroplane went into sudden nose
dive and it crash into the sea 13 min after the take off. After the research this has been identified
that there were the software flaws and they also have problems with the sensor which resulted in
crash. As this cover about the impact of unethical behaviour of the company reputation. Apart
from this how it effect the business performance and there stakeholders.

Table of Contents
EXCUTIVE SUMMARY................................................................................................................2
INTRODUCTION...........................................................................................................................5
ANALYSIS......................................................................................................................................5
Impact of unethical behaviour of Boeing reputation and whether the company should carry
forward there operation activities................................................................................................6
Unethical behaviour on the company revenue and weather the company should allow to
continue to operate .....................................................................................................................7
Impact of unethical practises on Boeing shareholders and whether the company should
operate.........................................................................................................................................7
Impact of unethical practises on Boeing customer and whether the company should operate
the business.................................................................................................................................8
CONCLUSION................................................................................................................................8
RECOMMENDATION...................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Ethics is the study of appropriate business and the policies and practise which depend
upon the different subjects and they are consist of bribery, unethical practises and consumer
social responsibility(Anjum, 2020). The law often guide the business ethics and it provide the
guidelines through which business can follow and gain the public approval. In other words this
refers to the implementing the proper business policies as well as practises which must be
managed and used properly. The report is done on Boeing company which mainly deals in
aircraft and telecommunication. Firm also provide leasing and support services to there
customer. Company head office is located in Chicago Illinois.
The case study describe about the incident occur in October 2018, where 189 people
were killed in Boeing 737 Max Lion Air flight in Indonesia. This was figured out that there were
malfunction in software of Aeroplane which leads to death of people. In March 2019 , 157
people also lost there life in the plane. Both these accident occurs due to failure in the sensors
specifically and the Manoeuvring Characteristics Augmentation System (MACS) which was
used to design to keep the flight stable was malfunctioned which pushes down the nose of the
aircraft down. This override the action by the pilot and the chairman of Dennis Muilenburg
chairman and the Chief executive officer initially refused to admit that there were any flaws in
the software.
Recently the Federal Aviation Administration has temporarily banned the company to
produce any kind of jets in future. Furthermore this project emphasis on unethical behaviour of
the organisation which lead to reduce the image of the company. As this also impact the
organisation revenue as it is difficult to operate without earning profit. Beside this company have
figure out to sustain the shareholders as company have decrease there reputation by such
incident.

ANALYSIS
The aim of the report is identify whether the company have to operate there business as
they have used unethical practises which cause many life of people. Such kind of incident have
caused the company million of dollars and they have company reputation on stake. As this has
been estimated that the aircraft will fly soon in 2019 which tend to decrease the sales and
profitability of the company effectively. These kind of unethical practises have decrease the
brand image and reputation of the company. Apart from this also slow the revenue which make it
difficult for the company to operate for the longer time period (Azios and Bellon-Harn 2020).
However this also impact the customers as people will avoid such services where the company
use ethical practises and risk the life of person. So in this case firm have to focus on improving
there services and take effective measure to gain the trust of customer effectively. Here are some
points which must be focused on different aspect which must analyse below in detail manner:
Impact of unethical behaviour of Boeing reputation and whether the company should carry
forward there operation activities
This has been identified that the company have used unethical behaviour while making
the aircraft which leads to such incidents. This has bring down the image of the company and
there will be a challenge for organisation to operate there business. As the company should not
allow to run there business as people have lost the trust and faith in the company (Burchinal and
et., al., 2020). When the former Boeing chief executive Dennis Muilenburg appeared and provide
the statement and he refused that there were not any flaws in there software and stated that the
pilot did not follow the exact procedure which lead to the death of the people. This statement
which Boeing disclosed to the regulation and the congressional committees investigation which
cause the two fatal crashes of the 737 Max which bring down the company reputation at stake.
This shows that the Boeing employee must discussing to attempt to mislead the aviation
regulation while other are worried about that the company was choosing low cost supplier in
order to earn more profit. After all such incident the company market share and brand image
have decreased and the employees of the company said that they will not put there families on
the 737 Max. As company should not operate run there business as they have fail to gain the
trust of the customer. In order to for the company to carry forward there operational activities
firm have make changes such as bring new suppliers and take quality measure to avoid such kind
of incident in the future. Hence this will also create trust and also improve the brand reputation in

the minds of customer of the longer time period. Beside this firm have been criticised for rushing
to update the 737 rather than building new jet in order to avoid loosing the orders from the
Airbus. This has been found out that the company simulator training for the pilots because it
substantially increase the cost for the airlines. So company should improvise there quality
measure and make improve there market present effectively.
Unethical behaviour on the company revenue and weather the company should allow to continue
to operate
The Boeing profit is been slow down due to two fatal crashes of there top most selling
737 Max aircraft. Company which still expects the trouble 737 to bring into business and the
firm have to cut off the production of there aeroplane. This has bring the global trade tension as
it bring down the job from many people (Pianta and et., al., 2020). Apart from this, there were
different shareholders in the company who have invested money are taking back there money
which tend to reduce the profit earning for the company. Further the operation of the
organisation have put to halt and the overall revenue for the quarter have dropped by 20% .
The drop in the profit of the company have announced that the head of the commercial
jetliner have is to leave the company after the three years of Job. The company have to choose
another plane manufacture which increase the production rate for the company. As company
should not carry forward there business as they reduce the trust of the customer. Apart from this
firm have grounded various flight which increase the debt for the organisation. Hence to recover
the loss firm have to build there plan from the start and follow all the aviation standard to reduce
such kind of risk and uncertainty present in the market. Moreover the company is facing criminal
investigation and the several other air planes which are design by the firm. The crash have
already cost the company 8 billion dollars as per the Merrill Lynch . With the sales and the
deliveries of the Max plan nearly reduce to the minimum as this year. The enterprise biggest
rivals Airbus has captured the large market share after the Boring crash incident which makes
difficult for the company to earn the revenue for the longer time period.
Impact of unethical practises on Boeing shareholders and whether the company should operate
As the unethical practises done by Boeing company have create a major impact on the
minds of stakeholders. The crisis of 737 Max have lead to bring down the share of the company.
There has been huge downfall where the company have to develop other anger and frustration
for there shareholders. This is essential for the company to have clear prioritise and take the right

action as to overcome such problems. If the organisation wants to enter into the market then the
management have to change the organisational culture and and have to gain the trust of there
respective shareholders by increasing there quality in making planes.
Boeing management have announced that there will be new formation of board
committee which is monitor and regulate the policies and the process for the design as well as
development of their airplanes. Hence such method will help increasing the shareholders and can
easily operate effectively in the market. China, Indonesia and Ethiopia ordered to ground their
aeroplane for the second deadly crash which involves in the jet in just five month. As this have
put negative impact which leads to bring down the share of the company effectively.
Impact of unethical practises on Boeing customer and whether the company should operate the
business
As there is a huge impact on the customers after the most renowned plane company have
two deadly crash in the five month. All the people on board were died . The main reason behind
crash was the new flight system MCAS or Manoeuvring Characteristics Augmentation
System which can intervene to push the plane nose down automatically when it rises up in the
sky (White and et., al., 2020). As the people and the regular customer have lost the trust through
which company have to face problem to earn revenue for the longer time period. Recently the
company suspend all the aircraft after the US Federal Aviation administration impose a
temporary ban on such model.
The ban will be regulated on the organisation until the new software system is installed
for the customer safety. After this incident passenger have become more clear and people are
avoiding the Boeing plan which makes difficult for the company to sustain for the longer time
period. There has been increase in the cancellation of flight as customers have trust issues which
bring down the sales and profitability of organisation. The public can be remarkably forgiving
when a business in crisis handles it well, and strong leadership from the CEO makes all the
difference.
CONCLUSION
From the above stated report this has been analysed that the company must avoid
unethical practises as to operate business successfully. Due to earn more profit firm do not focus
on the software system which lead to death of 187 people. As this incident have impact the

business and have impact on the minds of customers. The revenue of the company have
decreased so company will face difficulty to operate successfully. Hence the company have to
stop operating the business or change all the policies and structure as to gain the trust of the
shareholders as well as customers.
RECOMMENDATION
For achieving success in the business firm have to avoid unethical practises as this tend to
develop sustainable business model as to run organisation for the longer time period. For the
company like Boeing the firm have to ensure all the factors which effect the expansion and
growth of the company. There are some recommendation for the company which is explained
down below in the detail manner:
 This is suggested to the company that they must avoid unethical practises because it help
in creating negative impact on the minds of the shareholders and also on there respective
passengers. Boeing management have to make changes in there safety concern procedure
and make changes to increase the brand image in the minds of customer. Apart from this
firm have to change there technical team and hire new expert as to make changes for the
company effectively.
 Further the company improvise the policies regarding the operation safety programmes to
raise the visibility and the transparency of all the safety and effective measure should be
taken as to avoid such kind of crash in future.
 Apart from this management of the company have to partner with commercial and
defence customers to ensure flight deck designs continue to anticipate the needs of future
pilot populations; and expand the role and reach of Boeing’s safety. As this help in
developing image of the company and there must standardize safety measure should be
taken to reduce risk and uncertainty in the future.

REFERENCES
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