Impact of Unethical Behavior on Boeing and its Stakeholders

This report discusses the impact of unethical behavior on Boeing and its stakeholders, including the company's reputation, revenue, shareholders, and customers. Recommendations for improvement are also provided.

ACADEMIC AND
PROFESSIONAL SKILLS

EXECUTIVE SUMMARY
The current report stated that ethics and use of moral values within the business is very necessary
for the success. This is basically because of the reason that these ethics guide the principles in
which the company and its employees will work in accordance with those principles only. The
report has discussed about the impact of the unethical behavior of Boeing over the different
stakeholder and the revenue and reputation of the company. Also, in the end some of the
recommendation was discussed like training to the employees, use of digital technology for the
marketing to develop and regain the position within the market.

Table of Contents
INTRODUCTION...........................................................................................................................4
ANALYSIS......................................................................................................................................4
Boeing reputation.........................................................................................................................5
Boeing revenue............................................................................................................................6
Boeing shareholders.....................................................................................................................7
Boeing customers.........................................................................................................................7
CONCLUSION................................................................................................................................8
RECOMMENDATIONS.................................................................................................................8
REFERENCES..............................................................................................................................10

INTRODUCTION
Ethics is defined as the moral principles which states the way a person need to deal in the
working environment and the business. The business ethics are the principles which states that
how the business must run in the effective and successful manner (Lawrence and Thornton,
2017). The present report is based on the case of Boeing business which is an American
multinational company for manufacturing and selling of aircraft and related equipment and
product. The current study states that in the year 2018 around 189 were killed in the flight
Boeing 737 Max Lion air flight in Indonesia. Also, in the year2019 157 people were more killed
by the flight. For both the cases the blame was on the software issue and the flaws in the sensor
that is MACS which was designed for keeping the flight stable.
Other than this the airspeed issue was another concern for the crash of the flight. Also, a
part of the wing was found susceptible to fracture. As a result of these crashes and heavy loss the
Federal Aviation Administration has banned the jets of Boeing for temporary basis. As a result of
this company is thinking of upgrading their software so that all the issues can be detected and the
operation of company can be soon started again. For Boeing it is very crucial to maintain the
reputation within the aviation industry. This is majorly because of the fact that the competition
within the industry is very high and to maintain the consumer it is very necessary for Boeing to
manage their reputation. Due to the two cases the reputation of the company has decreased to a
great extent.
Hence, the current report will start by outlining the analysis of the issues being faced by the
company and which are the stakeholder which got affected with this unethical behavior of the
company. Also, in the end some of the recommendation for the improvement of the status of
company was made.
ANALYSIS
For becoming successful the business need to work in proper and ethical manner because
if the company will not work in effective and correct way then the consumers will not work in
effective manner (Woodliff, Scully and Koh, 2018). Hence, for this the proper analysis of the
business needs to be done so that it can be checked that whether the business is working on

moral principles and ethics or not (Scheiner and et.al., 2018). In case of Boeing it was assumed
that the company was keeping profit over the safety of the people. Thus, this was treated as the
unethical behavior of the company as they were not much bothered relating to the safety of
people rather the company was only aimed to increase the profit. This increment in the profit was
made on the verge of safety of people as Boeing was not keeping its software upgrade and this
resulted in the crashing of the flight. All this unethical behavior impacted every stakeholder of
the company to a great extent. Also, it was analyzed that the unethical behavior had a great
impact over the reputation of the company. This is pertaining to the fact that the when company
gives more preference to the profit then the reputation of the company is decreased and is
negatively impacted. Another major impact of unethical behavior is on the consumers as the
number of consumer decreases when the company keeps on exercising unethical behavior (After
two fatal Boeing plane crashes, the world turned on the US, 2020). In the same manner as the
consumers are decreased so dies the revenue of the company also decreases. This is because if
the consumer will be less than the income from the consumer will also be decreasing. In the end,
the shareholders are also impacted. This is because of the reason that when the revenue is
decreased then the income of shareholders is also decreased and because of this the wealth of
shareholder decreases.
Boeing reputation
The reputation is the place of company which the company is holding within the highly
competitive world. In this global business world where the competition is very high the
consumer can differentiate the company only on the basis of the reputation which it is having
within the market. This unethical behavior had a very negative impact over the reputation and
goodwill of the company to a great extent. This is majorly because of the fact that the two
incidents resulted in the death of many people who were in the flight. Thus, this created a far in
the eyes of the consumers and they did not wish to travel in the flights of Boeing.
Thus, this reduces the brand name and image of the company in the market and among
the consumers (Feltovich, 2019). But the company need to improve its state as if the company
will work in same condition then it may be possible that the consumer lose trust over the
company and its operation and this may result in the closure of the company. Hence, it is very

necessary for Boeing to manage the work and try to stop the unethical behavior so that it regains
the position within the market. This is very necessary for the survival of the company as if the
reputation will not be good then nobody will like to travel in the flights and will result in
shutdown of the company (Tarkiainen and et.al., 2017).
Earlier before the crash the reputation of the goodwill of the company was very good.
The plane 737 Max was very popular because this was the fast selling aircraft. This plane has
more than 4500 orders from more than 100 different operators all over the world. Thus, before
the crash the reputation was much good and then after the two crashes the reputation of the
company also decreased.
Boeing revenue
The revenue is the income for which the company is working. This is the main objective r
the aim for which the company works and operates. Hence, for the success of the company the
revenue is the only criteria which can state that whether the company is successful or not. Also,
this revenue is a benchmark which can help the company in comparing its position in the market
among the competitor in order to analyze the competitive position within the market (Ishak,
Haron and Ismail, 2019). The unethical behavior of Boeing of not keeping the passenger safe and
try to divert all its working towards the profit earning resulted in heavy loss.
This unethical behavior a great impact over the revenues of the company as the revenue
converted in heavy losses. The major reason underlying this fact was that crash resulted in heavy
losses and also company had to pay huge amount to people who suffered during the crash. Even
the reviving and evacuation of the people during the crash involved high cost. Also, after the
crash the jets of the company were banned and for that time company was not able to perform
any operation hence there was no income for the company. Also, the consumer trust and faith for
the company reduced and this resulted in high investment in the marketing of the company. This
was done in order to attract more of the consumer so that they travel through Boeing flights and
the revenue of company starts again (Fairchild and Marnet, 2018). Hence, the company is not
allowed to use the same unethical practices rather the company must invest in some good and
effective strategies which help the company in regaining its old position within the highly
competitive market.

Boeing shareholders
The shareholders are the people who invest within the company and that money is
applied in the operations of the company. This money is invested in order to earn money from it
and then again it is reinvested and the working of company is continued. The shareholders are
much interested in the operations of the company because if the company will not operate in
good manner then the shareholders will not be able to earn income. This is majorly pertaining to
the fact that shareholder gets the income after paying for all the other expenses. Hence, the
shareholder are interested in effective working of company as if the working will be good then
income will be good. But the unethical behavior of the company resulted in total loss and this
loss is also barred by the shareholders as well. Hence, the impact of the unethical over the
shareholder is not good and effective as they have to face losses and their income also decreases
(Rossiter and Gardiner, 2019).
Hence, the company should not be allowed to operate in the unethical manner and they
must change the way of working. This is majorly pertaining to the fact that is the company will
work by considering all the ethical principles and policies then the consumers will like it. Thus,
they will start using the facilities of Boeing and this will add to the income of the company and
ultimately the shareholders will get high income. Before the crash the shares of company were at
high but after the crash and banning of aircraft the price of shares decreased to a great extent.
The shareholders of company lost around $19 billion after the crash (Boeing boss rejects
accusations about 737 Max jets that crashed, 2019).
Boeing customers
The consumers are the people who consume the goods and services being manufactured
or provided by the company. In case of Boeing the consumers are the most important
stakeholders as if the consumer will not be there then nobody will consume the facilities
provided by the company and this will result in heavy losses to the company. Hence, it is very
crucial and important for the companies to keep the consumers satisfied by providing them
quality services and product. But this was not in case of Boeing as the company was not able to
keep the consumers happy and satisfied because of their unethical behavior. Under this unethical

behavior the company focused more on earning the profit and this resulted in ignorance to the
consumer and their safety thus, this resulted in loss for the company.
Hence, the company lost its goodwill in the market and among the consumers and also
the flights of company were banned (Beagon and Bowe, 2019). Thus, this unethical behavior
need to be stopped as the company was not able to manage the working in effective manner.
Thus, there is a need for the company to stop this unethical behavior and the company must not
be allowed to continue to keep these practices as this will result in more loss. Also this can result
in the closedown of the company as well. This is majorly because of the fact that if the consumer
will not be happy and satisfied then the market share of the will reduce and also the trust of the
consumer will decrease. All these things will result in the close down of the company and also
this can be resulted in the failure of the company.
The Boeing consumer is generally the high class people and people belonging to business
world class who travel frequently for their business meetings (Boeing grounded: what it means
for air travel, 2019). Thus, after the crash the consumer started losing trust form the company
and they switched to other airline companies.
CONCLUSION
From the above discussion it is concluded that for the company to work in effective
manner the most important thing is that the company must work using proper moral principles
and values. This is necessary because of the reason that if the principles of moral values are not
attained then the consumers will not like the working and will not use the services of company.
The current report stated that the unethical behavior of the company has many issues over the
different stakeholders of the company. These impacts were on stakeholder like consumers,
shareholders, revenue and many there different factors. In the end some recommendation like
proper training and development was outlined for improving the state of country.
RECOMMENDATIONS
With the above discussion and analysis it was outlined that there is a great need for the
company to manage the ethics and its application within the company. Thus, for this some of the
recommendation for Boeing is as follows-

The first and foremost recommendation is to train the employees and workers and other
staff to properly use and apply all the principles and values of ethics in to the business. This
training can be provided by hiring some professional to train the employees to work in ethical
manner.
Another major recommendation is to increase the consumer base by marketing in proper
and effective manner. For this Boeing can use the digital marketing that is marketing with help
of social media platforms. This is very helpful for the company because this covers the market
and consumers to a great extent with less time and money. Also, this will help company in
spreading awareness relating to the changes and up gradation of software of the flight and that
flight is safe to be used.
One more recommendation for the company is that they must use the stakeholder analysis
and to apply it within the business. This stakeholder analysis will help the company in analyzing
the fact that which stakeholder are the most important priority and the need of which stakeholder
is less important for the company. This will help the company in prioritizing the work of the
important stakeholder at first and then to cater to the need of rest of the stakeholders.

REFERENCES
Books and Journals
Fairchild, R.J. and Marnet, O., 2018. Fraud-Perception, Superegos, and Cultural Spread of
Unethical Behaviour: Theory and Evidence from Enron. Available at SSRN 3283883.
Feltovich, N., 2019. The interaction between competition and unethical behaviour. Experimental
Economics. 22(1). pp.101-130.
Ishak, N.K., Haron, H. and Ismail, I., 2019. Ethical Leadership, Ethical Climate and Unethical
Behaviour in Institutions of Higher Learning. KnE Social Sciences, pp.408-422.
Lawrence, P.K. and Thornton, D.W., 2017. Deep stall: the turbulent story of Boeing commercial
airplanes. Routledge.
Scheiner, C.W., and et.al., 2018. Participation motives, moral disengagement, and unethical
behaviour in idea competitions. International Journal of Innovation Management. 22(06).
p.1850043.
Tarkiainen, A., and et.al., 2017. The Road to Hell is Paved with Good Intentions: The Paradox of
Unethical Sales Behaviour. In The Customer is NOT Always Right? Marketing
Orientationsin a Dynamic Business World (pp. 309-312). Springer, Cham.
Woodliff, D.R., Scully, G. and Koh, H.P., 2018. Can Anticipating Time Pressure Reduce the
Likelihood of Unethical Behaviour Occurring?.
Online
After two fatal Boeing plane crashes, the world turned on the US. 2020. [Online]. Available
through: <https://www.cnbc.com/2019/03/17/two-boeing-737-fatal-plane-crashes-the-
world-turns-on-the-faa.html>
Boeing boss rejects accusations about 737 Max jets that crashed. 2019. [Online]. Available
through: <https://www.theguardian.com/business/2019/apr/29/boeing-boss-rejects-
accusations-about-737-max-jets-that-crashed>
Boeing grounded: what it means for air travel. 2019. [Online]. Available through:
<https://www.bbc.com/news/business-47549327>