Impact of Unethical Behavior on Boeing's Reputation and Revenue

This report analyzes the impact of unethical behavior on Boeing's reputation, revenue, shareholders, and customers. It recommends allowing the company to continue operating while implementing ethical reforms.

Academic and
Professional skills

EXECUTIVE SUMMARY
This report if prepared for Boeing business which is an American aircraft manufacturing
company. They faced an issue of their plane crash due to which their aircrafts were banned for
sometime as they were charged as such accidents took place due to inefficiency of the software
in the planes. The aim of the report is to determine the extent to which it has affected the image
of the company. In this reports the analysis of the impact of unethical conduct of the Boring on
various factors such as revenue, customers, reputation and shareholders are taken into
consideration. On the basis of such analysis various recommendation are provided to the
company as the company must allowed to operate their business with the help of this only they
can regain their reputation and can increase the value for the shareholders by improving their
revenues etc.

Table of Contents
EXECUTIVE SUMMARY.............................................................................................................2
INTRODUCTION...........................................................................................................................4
ANALYSIS......................................................................................................................................4
Short introductory paragraph with the aim of the report........................................................4
Identification and selection of distinct aspects.......................................................................4
CONCLUSION................................................................................................................................7
RECOMMENDATIONS.................................................................................................................7
REFERENCES................................................................................................................................9

INTRODUCTION
Ethics are the moral principles which defines what is good or what is bad. Ethics in business
defines the appropriateness in the policies and practices of the business for various controversial
subjects of the business such as corporate governance, bribery, insiders trading, corporate social
responsibility etc. With help of this various rules are set for the business which regulates and
governs their operations, decides how the decisions are taken by the company and people within
the organisation are treated (Garefalakis and et. al., 2016). In this report the case of Boeing
business is taken into consideration. Various jets of the company met with the accidents and it
was blamed that they occurred due to laws in the software and the system in the sensors installed
in the jets. But the company refuses to accept it and said that it was because of the carelessness
of the pilots. Due to this the Federal Aviation Administration banned the jets. For an organisation
of aviation industry it is important to have better reputation as it is pre-requisite for the success
of the company. Better reputation of the organisation facilitate them to attract better staff, better
share prices and better airlines to have their Boeing jet. This enables the organisation to offers
the customers high profile services and to get competitive advantage over other competitors. This
report aim to consider the moral issue that whether the company Boeing was focussing on profits
or on safety. The statement that can summarise the aim of the report: an evaluation to the extent
to which this moral issue can affect the reputation of the company.
ANALYSIS
Short introductory paragraph with the aim of the report
In this report the issue which is faced by the Boeing business is discussed due to which the
company has to face an issue related to the ban of their jet. Also this influenced the reputation of
the company and thus their revenue and profitability. In this report the impact of various
unethical behaviour of Boeing on different factors such as revenue, reputation, shareholders and
customers (Hoppe, 2018). For this report the statement that can be used is ‘an evaluation to the
extent to which this moral issue can affect the reputation of the company’.
Identification and selection of distinct aspects
Impact of unethical behaviour on Boeing’s reputation and whether the company should be
allowed to continue to operate

Due to the unethical behaviour Boeing has faced a downfall in its reputation in the
market which can affect the company’s market and its ability to gain the trust of customers after
the two accidents which happened when the Boeing 737 Max went into a crash killing more than
150 people in both the. This has affected its reputation with questions being put on its softwares
that led to the failure. Due to the unethical behaviour The Federal Aviation Administration has
temporarily banned its jets which have affected its business leading to tremendous loss to the
company. It is thus important that the companies must operate ethically in the market which can
help in maximising the interest of all its stakeholders which is important for the growth of
company in the competitive market. The banning of Boeing aircrafts has also affected the travel
and tourism industry as the people have started fearing to book flight tickets affecting the aircraft
industry (Ermasova, Wagner and Nguyen, 2017). Also the social media has further affected the
reputation of Boeing by introducing a filter that can help the travellers in selecting the specific
types of aircrafts while avoiding the others. It is essential that companies behave ethically in the
market that can help them in gaining the trust of all their stakeholders i.e. customers, suppliers,
employees, government, society etc. This is also essential in building a strong brand image in
market and attracting customers. Boeing must be given a chance to improve its software so that it
can provide its services to the customers in an ethical manner which can help in building the trust
of its customers and regaining its reputation in the market.
Impact of unethical behaviour on Boeing’s revenue and whether the company should be
allowed to continue to operate
The unethical behaviour of Boeing apart from impacting its reputation has also affected
the revenue of company drastically as after the incidents of two accidents killing over 150 people
in each has led to its getting banned by The Federal Aviation Administration. This has created a
negative impact on the revenue of the company leading to a loss of over $636 million as
compared to its profit of $10.46 million in 2018. The sales of company has also reduced by 24%
to $76.6 billion. Further the company will face a large cost including $8.3 billion in
compensation to its customers and other $6.3 billion in order to build its jets. Thus it can be seen
that the company has faced a large amount of damage due to the unethical practices (Koehn,
2019). It is thus important that companies follow ethical practices while operating in the market
so that they can gain a high reputation in market that can help in increasing the number of
customers in market. It also help in increasing the trust of government in the company so that

they can continue to run and operate in the market. Boeing must however be allowed to operate
in the market after rebuilding its software so that safety of customers can be ensured. The
software upgrades can not only help in ensuring safety of travellers but will also enhance their
experience by increasing the speed of the aircraft making them further better for travellers
(Douglas and Swartz, 2017).
Impact of unethical behaviour on Boeing’s shareholders and whether the company should
be allowed to continue to operate
The inefficiency of the aircraft of the company lead to the accident such as Boeing 737 Max
Lion Air flight in Indonesia crashed and Boeing 737 Max Ethiopian Airlines flight nosedived
into the countryside. Because of these accidents many people lost their life and their jet were
banned as they were blamed for their inefficient aircraft. Due to this their orders were cancelled
by various companies that adversely affected their revenue and thus the income to the
shareholders of the company. Also this unethical behaviour of the company leads to fall in their
share prices that affected the shareholders adversely (Duska, Duska and Kury, 2018). But the
investors had the belief that the company can easily revive this phase as they have capability of
doing so for the long run. The need to understand what went wrong for the company and the
shareholders is crucial as with the help of this only they can determine the actions. Focusing on
the cultural management and the mission of the company which is “Connect, Protect, Explore
and Inspire the World through Aerospace Innovation” can facilitate them to regain trust of the
shareholders. On these grounds the company must be allowed to operate as with their improved
operations they can improve the profitability of the company. But they must be given warnings
by the shareholders to adopt all the ethical means which can facilitate them to protect the image
of the company as well as the lives of the people.
Impact of unethical behaviour on Boeing’s customers and whether the company should be
allowed to continue to operate
Due to these two accidents so many people lost their life and this make the company to face with
various inquires and investigations so that the actual reason can be determined. The ethical
dimension of the company was also taken into consideration. This case of Boeing is considered
to be an example for the students on how the business decisions and ethics can be intertwined.
The management of Boeing accepted all the charges on the company after investigation and
made changes in their organisational structure (Kagan, 2018). This is with the aim to recapture

their image among their customers and clients of the safe aircrafts. These two accidents lead to
an adverse impact on the image of the company among their customers. Their orders from
various airlines and other partners get cancelled. But they however can be allowed to operate as
the CEO of the company has taken necessary steps for improving the performance of the planes
such as they will have a rigorous ethical code for the company that has to be complied by the
employees, they conveyed their message that how committed they are for reforming their
practices and starting fresh. The opportunity will enable them to take all the necessary actions to
ensure the safety of the customers.
CONCLUSION
On the basis of the analysis it is analysed that the company must be allowed to operate as
with the help of this only they can reduce the impact of these accidents on various stakeholders
of the company. The company has taken various steps for improving the quality of the aircrafts
that they have been manufacturing by adopting various technologies. It will enable the Boeing to
regain their reputation with the help of better policies and commitment of the company. For
gaining the trust of the customers, clients, shareholders various strict reforms has been adopted
by the company such as they have develop better code of ethics and better policies. With the
improved policies and reputation they can enhance their revenue in sometime which will enable
them to enhance their profitability and thus to improve the income and returns to the
shareholders.
RECOMMENDATIONS
The introductory statement that is taken into consideration for this report is ‘an evaluation of
the extent to which the moral issue can affect the reputation of the company’. On the basis of the
analysis of this report it can be analysed that the reputation of the company get damaged to a
greater extent as their jet were banned for a period of time (Remak, 2017). This had affected
their relations with various clients of the company, shareholders and customers. Boeing must be
allowed to operate as they will be using better technology for ensuring the safety of the
passengers, pilots and others with various updated software, regular up gradations in their jets
etc. Various recommendations are made to the company with the help of which they can ensure
ethical standards within the company.

 Decisions of the organisation must involve various determinations such as systematizing,
defending and recommending in the process of the manufacturing of the jets. This will
enable them to also ensure the concept of rights and wrong of different aspects of ethics.
 Various people from outside the organisation and even the shareholders must be involved
in the decisions of finalizing the planes on all grounds such as safety and security. This
will ensure that ethical decision and favourable decision is taken without any chances of
misconduct (Gray, Walker and Terrell, 2016).
 Code of conduct must be prepared by the Boeing which must compulsorily be adopted by
each and every person associated with the company must be followed. This will ensure
that trust for Boeing among their customers, clients and even the shareholders. Such code
of conduct establishes out the procedure for the company which will ensure specific
ethical situation that will motivate their employees to follow the path effectively.

REFERENCES
Books & Journals
Kagan, S., 2018. Normative ethics. Routledge.
Duska, R.F., Duska, B.S. and Kury, K.W., 2018. Accounting ethics. John Wiley & Sons.
Koehn, D., 2019. How Would Confucian Virtue Ethics for Business Differ from Aristotelian
Virtue Ethics?. Journal of Business Ethics, pp.1-15.
Ermasova, N., Wagner, S. and Nguyen, L.D., 2017. The impact of education, diversity,
professional development and age on personal business ethics of business students in
Russia. Journal of Management Development.
Hoppe, E.A. ed., 2018. Ethical issues in aviation. Routledge.
Garefalakis, A., and et. al., 2016. Determinants of profitability in aviation industry of Europe and
America. International Journal of Supply Chain Management. 5(2). pp.131-137.
Douglas, M.A. and Swartz, S.M., 2017. Knights of the road: Safety, ethics, and the professional
truck driver. Journal of Business Ethics. 142(3). pp.567-588.
Gray, C., Walker, E.R. and Terrell, K.P., 2016. A Case Study on the Effects of Program
Accounting: Boeing vs. Airbus. The CPA Journal. 86(11). pp.42-47.
Remak, J., 2017. Boeing B-52 Stratofortress: Warrior Queen of the USAF. Fonthill Media.