Ethical Behavior of Boeing: Impact and Recommendations

This report analyzes the ethical behavior of Boeing in light of two major accidents and discusses whether organizations like Boeing engaging in unethical behavior should be allowed to continue to operate. It examines the impact of unethical behavior on Boeing's reputation, revenue, shareholders, and customers. The report concludes with recommendations for Boeing to ensure ethical standards are followed.

Academic and professional
skills
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Table of Contents
INTRODUCTION ..........................................................................................................................3
ANALYSIS......................................................................................................................................3
Introduction..................................................................................................................................3
Whether organizations like Boeing engaging in unethical behaviour should be allowed to
continue to operate.......................................................................................................................4
CONCLUSION ...............................................................................................................................6
RECOMMENDATION ..................................................................................................................7
REFERENCES................................................................................................................................8
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INTRODUCTION
Ethics is a branch of moral philosophy that focuses on ethical behaviour of an
organization or a person and also focuses on recommending concept of right and wrong conduct
(Trevino and Nelson, 2016). Ethics in business are extremely important as it helps organizations
in developing business policies and practises that can help organizations to maintain morale and
ethical principles within business. It further helps organizations to develop sense of
responsibility within their employees and attract more customers towards organizational products
and services. It further helps an organization to enhance their productivity, profitability, reduce
employee turnover and many more. For travel industry organizations like Boeing it is extremely
important to follow ethics as any kind of unethical behaviour can directly affect satisfaction and
trust of their customers within the organization. This report will lay emphasis on a case study of
Boeing Business who met with two major accidents: First accident occurred in October 2018 in
which 189 people were killed because aircraft went into sudden nose dive and crashed into the
sea just after 13 minutes after take-off. Second accident occurred in March 2019 in which
approximately 157 people died because one of their Airlines flights nose-dived into the
countryside outside Addis Ababa. Both the accidents were blamed on software flaws and issues
with the sensors especially MACS sensors. However, Boeing’s Chairman and Chief Executive
Office clearly refused to admit it and blamed it on pilots. This case arises a moral and ethical
issue i.e. whether company was putting profit before their customers safety or not. Due to these
two accidents reputation of Boeing was affected drastically. It is extremely important for Boeing
to maintain their reputation as it is world’s largest aerospace company and such kinds of
accidents can break their customer’s trust and confidence within the organization. This report
will focus on whether organisations like Boeing who ae engaged in unethical behaviour should
be allowed to continue to operate and things that can be done by organization to ensure ethical
standards.
ANALYSIS
Introduction
This section of analysis will majorly lay emphasis on a case study of Boeing who have
faced two accidents because of their software flaws and issues and because of these issues lots of
lives were lost. The main ethical issue comes into picture here is whether the organization was
putting their profit before safety of their passengers or not. In this analysis section analysis of
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Boeing business will be done and will be analysed that whether because of unethical behaviour
of Boeing they should be allowed to operate and it will also focus on what are the factors that
can be focused on to ensure ethical behaviour.
Whether organizations like Boeing engaging in unethical behaviour should be allowed to
continue to operate
Impact of unethical behaviour on Boeing’s reputation
Boeing is considered as world’s largest multinational aerospace company who
manufactures and sells airplanes, rotorcraft, rockets, satellites, telecommunications equipment,
and missiles worldwide. Both the accidents that occurred affected overall reputation of Boeing in
a drastic manner. They are world number one trusted manufacturers and issue or malfunction in
their aircrafts software’s damaged their reputation in a drastic manner. Due to both the incidents
various things were identified such as they were being careless in terms of designing of their
automated software systems because of which such drastic accidents occurred. Not only this,
they were not even ready to accept flaws within their systems even after two accidents that too in
a same manner which affected their reputation in a more drastic manner (Chen, Liu and Li,
2017). This had put a question mark on them that they were putting their profit before safety of
their customers. This clearly explains that they should not be allowed to continue to operate as
because of their carelessness they were putting lives of many people in danger.
Impact of unethical behaviour on Boeing’s revenue
Both the accidents directly impacted their overall revenue, their overall profitability was
reduced by more than half. These two deadly accidents affected their reputation because of
which their sales of aircrafts were reduced by more than 40 percent. they also had to focus on
bringing changes or upgradation within their software so that in future these kinds of losses can
be eliminated. This also affected manufacturing and sales of their new aircrafts or places and
were required to invest more in research and development and manufacturing of their products
because of which their revenue was affected at higher rare. Till they do not bring improvement
within their systems, software and do not ensure safety and security of their customers they
should not be allowed to operate.
Impact of unethical behaviour on Boeing’s shareholders
Shareholders of Boeing sue over 737 MAX crashes. Many lawsuits accused the company
of defrauding shareholders by concealing safety deficiencies in its 737 MAX planes before two
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fatal crashes led to their worldwide grounding (Baidzawi and et. al., 2019). This had impacted
their business especially sales of their products drastically. They were not only required to invest
in enhancing safety of their products but they were also required to compensate for these crashes.
This also explains another reason because of which they should not be allowed to operate till
proper investigation is conducted and it is ensured that their flights are safe for flying.
Impact of unethical behaviour on Boeing’s customers
But major impact of these two deadly accidents was seen on customers of Boeing. Their
trust, confidence on Boeing products, their safety was affected at a large scale (Bergstra, and
Burgess, 2020). Most of the aerospace companies did not want to buy Boeing aircrafts or planes.
Not only this many passengers also did to want to travel within Boeing planes. Their customer
loyalty within the company had fallen and perception of their customers for the organization had
also been affected. They not only were requiring to enhance safety of their products but they
were also required to win confidence of their customers for their products. Till Boeing does not
bring improvement within their products they should not be allowed be allowed to operate for
safety of their passengers.
By analysing the case study it is found that Boeing is required to maintain and follow
some ethical standards. This is because it will help in maintaining their reputation and allowing
them to continue operate in aviation industry. Moreover, they can generate more revenue and
satisfy shareholder. Besides, it has evaluated that ethics are useful in generating revenue and
gaining trust of people (Altman, 2020). Through it, organisation can sustain in tourism industry
for long term In case study it was found that due to malfunctioning of MACS software plane got
crashed. However, specific procedure was not followed by pilot. Also, there was some sensor
issues as well. In order to ensure that the ethical standards are followed, Boeing can take various
steps in it. They are defined as :
developing ethical standards- this is the first step that Boeing management can take. They can set
some ethical standards and code of ethics to be followed by all people and stakeholders as well.
For that they can form a policy and analyse what ethical issues rise due to it. So, on basis of it,
ethical standards can be formed. Beside that, strong relationship with stakeholders can be
developed to solve their concerns. It will ensure in giving commitment to them.
Providing training to pilots- here, Boeing can provide effective and proper training to pilots
regarding the use of MASC software. They can also ensure that all pilots follow ethical standards
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and work accordingly. In addition, it must be ensured that no pilot should break ethics. Other
than this, standards should be reinforced within training as well. Therefore, it will make sure that
all pilots are aware about their responsibility and behave in ethical manner (Gomez, Perez, and
Ariza, 2020).
Monitoring and accountability- in order to follow ethical standards Boeing can monitor it at
several stages. They must ensue that stakeholders as well as employees are effectively following
those standards or not. If not that proper action must be taken against them. The monitoring will
be useful in strictly following of ethics. For this Boeing can form a committee who will look
after this. The committee can give their feedback to management. Apart from it, management
should be accountable if there is any unethical practice followed. It helps in maintaining
compliance and taking disciplinary action whenever needed (Zappalà, and Toscano, 2020)
Building culture of integrity – Boeing can build a culture of integrity from top to bottom where
all ethical practices are followed strictly. If company has diligently built an ethics and
compliance program and applied into the daily operations of the organization, a strong ethics
culture is developed. For this leaders and manager can be appointed who are responsible to
implementing of ethics in Boeing. So, in every day working those ethics can be followed
(Aldous, and Soares, 2020) This also explains another reason because of which they should not
be allowed to operate till proper investigation is conducted and it is ensured that their flights are
safe for flying.Till Boeing does not bring improvement within their products they should not be
allowed be allowed to operate for safety of their passengers.
CONCLUSION
From above report it can be summarised that Boeing faced many ethical issues due to
failure of software. This highly impacted on their image. Moreover, due to unethical behaviour
public confidence was affected. Furthermore, company share prices went down. Also, it is stated
that if company follows unethical behaviour it will highly impact on its reputation. Apart from it,
they must be allowed by government to operate in tourism sector. This is because it will lead to
many other air crash and incidents as well. Furthermore, unethical behaviour will led to fall in
share price of Boeing and there will be negative impact on tourism industry. Many other
companies will also start working in unethical way. Hence, it will affect on customer mindset
and they will fear to buy products and services. There are several ways through which Boeing
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can ensure ethical standards are followed. They are training, building culture of integrity,
monitoring and accountability, etc.
RECOMMENDATION
There are some recommendations that can be followed by Boeing in order to work in
ethical way and minimise impact of unethical behaviour on their reputation. They are as follows :
the company should form an ethical policy in regard to customer safety and protection.
In that the procedure could be defined in proper way. Through policy software and entire aircraft
can be checked and verified. It will be helpful in re gaining trust of customers. Beside that, pilot
must be given effective training on how to use software in critical times. By this ethical
standards can be followed in effective way (Shamsudheen, and Rosly, 2020).
Another recommendation is Boeing Board of Director must take strict action against those pilots
who work in unethical way. Other than this, the managers and supervisors who show unethical
behaviour must be suspended or terminated from organisation. Thus, it will deliver a right
message to customers that unethical behaviour is not tolerated by anyone who is working with
Boeing. In this way, ethical standards can be effectively followed (Bench-Capon, 2020).
At last company can conduct a press conference and issue an apology letter to both government
and Federal administration regarding following of unethical behaviour. This will reflect a
positive image of company in front of customers as they have accepted their mistake. Thus, they
will be able to restore customer trust again. They can also make sure that in future no such
unethical behaviour will be shown and all standards will be properly followed and maintained.
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REFERENCES
Books and journals
Aldous, R. and Soares, A., 2020. Ethical purchasing behaviour in retail: Food versus
clothes. Journal of Research Studies in Business and Management, 3.
Altman, M., 2020. Why Ethical Behaviour Is Good for the Economy: Towards Growth,
Wellbeing and Freedom.
Baidzawi, I.J., and et. al., 2019, December. A review of accidents & incidents on Boeing and
Airbus commercial aircraft’s avionics-related system in two decades (1996-2015).
In IOP Conference Series: Materials Science and Engineering (Vol. 697, No. 1, p.
012031). IOP Publishing.
Bench-Capon, T.J.M., 2020. Ethical approaches and autonomous systems. Artificial
Intelligence, 281, p.103239.
Bergstra, J.A. and Burgess, M., 2020. Candidate Software Process Flaws for the Boeing 737
Max MCAS Algorithm and Risks for a Proposed Upgrade. arXiv preprint
arXiv:2001.05690.
Chen, S.W., Liu, H. and Li, F.H., 2017. Analysis of Boeing 737 aircraft towing
accidents. Engineering Failure Analysis. 80. pp.234-240.
Gomez, S.R., Perez, M.V.L. and Ariza, L.R., 2020. Factors in the acquisition of ethical
training. Education+ Training.
Shamsudheen, S.V. and Rosly, S.A., 2020. The impact of situational factors on ethical
choice. Journal of Islamic Accounting and Business Research.
Trevino, L.K. and Nelson, K.A., 2016. Managing business ethics: Straight talk about how to do it
right. John Wiley & Sons.
Zappalà, S. and Toscano, F., 2020. The Ethical Leadership Scale (ELS): Italian adaptation and
exploration of the nomological network in a healthcare setting. Journal of Nursing
Management.
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