Boeing Max Unethical Report

This project report analyzes the unethical behavior of Boeing 737 Max, where profit was prioritized over ethics. It examines the impact on the company's reputation, revenue, shareholders, and customers. The report concludes with recommendations to restore the company's reputation and prioritize ethical values.

BOEING MAX
UNETHICAL
REPORT

EXECUTIVE SUMMARY
This project report consists of case study of Boeing 737 Max; where CEO of the company put
profit before ethics. The introduction section will explain what ethics means, summary of case
study and main aims of the project report. The analysis part will show more detail analyses of
present problem face by Boeing Max which damaged the reputation of the organization.
Conclusion and recommendation will suggest the ways by which present problem could be short
out by the company. The main theme of this project report is based on ethical and unethical
practice by company and its impact on business reputations.

Table of Contents
EXECUTIVE SUMMARY.............................................................................................................2
INTRODUCTION...........................................................................................................................4
ANALYSIS......................................................................................................................................5
Points to consider.........................................................................................................................5
1. Impact of unethical behavior on Boeing’s reputation..........................................................5
2. Impact of unethical behavior on Boeing’s revenue.............................................................6
3. Impact of unethical behavior on Boeing’s shareholders......................................................6
4. Impact of unethical behavior on Boeing’s customers..........................................................7
CONCLUSION................................................................................................................................8
RECOMMENDATION...................................................................................................................8
REFERENCES..............................................................................................................................10

INTRODUCTION
Ethics at workplace is good conduct that brings positive thinking to the development of an
organization. If good ethical behavior is adopted at the workplace, healthy, honest, respectful
relationships can be established among the employees. Better cooperation, trust and socializing
can be established among employees and they can become duty bound. Ethics at work place
principles that set out the rules, ethics and values. People come from many backgrounds in an
organization, which have different characteristics. But before that it is necessary that the higher
officers of the organization themselves follow ethical conduct, so that the ideal can be set before
the employees. Better ethical behavior helps an employee join the list of good employees (Smit
and Wessels, 1996).
The business ethics examines ethical principles and ethical problems that arise in the business
environment and establishes certain standards in its context. It applies to all aspects related to the
conduct of business and is overall relevant to the conduct of individuals and business
organizations. The main objective of every business ethics should be priorities social benefit than
profit (Kotzé, H., 2000).
The case study of Boeing 737 Max Lion Air Flight shows that company had put profit before
safety due this around 346 people have lost their lives in two major crashes in Indonesia and
Addis Ababa. The reason behind these crashes detected by investigators is Maneuvering
Characteristics Augmentation System failure which is one type of sensors in aircraft, responsible
for balancing plane with the help of software. Due to cost cutting in updating this software and
maintenance of plane wings; this disaster happens. This shows unethical practice by CEO of the
company to raise profit for the year. Boeing 737 Max Lion has lost its reputation in the market,
as well as from social point of view. Currently government has sealed the aircraft and needs
explanation from the company. Hence the main aim of this report is to analyze and discuss the
unethical behavior of Boeing 737 Max from business as well as social perspective.

ANALYSIS
The main aim of the report is to find and analyze the reason behind disaster and argument against
unethical practice done by Chairman and CEO of Boeing 737 Max. It’s also aims to find out the
ways through which company can restore their lost reputation and list of recommendations
firm’s can adopt to make good image among public, media and society.
For the purpose of mapping the sentence following four points have been considered in the
report; Impact of unethical behavior on Boeing’s reputation and whether the
company should be allowed to continue to operate, Impact of unethical
behavior on Boeing’s revenue and whether the company should be allowed
to continue to operate, Impact of unethical behavior on Boeing’s
shareholders and whether the company should be allowed to continue to
operate; and Impact of unethical behavior on Boeing’s customers and
whether the company should be allowed to continue to operate.
Points to consider
There four major points from case study are considered to discuss and argument against the
unethical behavior of chairman and CEO of Boeing 737 Max Lion. These four points have been
discussed below:
1. Impact of unethical behavior on Boeing’s reputation
Commercial use of Boeing 737 Max-8 started in 2017 and the company also made big claims
regarding safety. There are also fears about the safety of this jumbo jet due to the crash of
Ethiopian Airlines shortly after takeoff. Companies consider Boeing 737 Max to be profitable
from the business point of view. It is a less wide aircraft, on which the cost of a seat is less than
other aircraft. It also eats less fuel. The 737 Max uses the automatic safety system in the 737
Max. 45 countries have banned Boeing 737 Max aircraft after the plane crash in Ethiopia on
Sunday.
Hence company should not allow continuing to operate because it has put profit first on safety.
Boeing 737 Max never learned from its mistakes and to increase the profit it again put the life of
the people at risk (Lion Air crash: Boeing 737 plane crashes in sea off Jakarta, 2018). After

analyses of the report; it was found company has adopted unethical practice which should be
punishable by law and sue some penalty on firm. It’s already clear that firm reputation all over
the world has already destroyed due to which company has bared huge loses. No country wants
to deal with Boeing till it proofs its ability to better ethical values for safety and public.
2. Impact of unethical behavior on Boeing’s revenue
After the accident, the company has suffered the biggest loss in any quarter. The company has
incurred losses due to the 737 MAX aircraft being taken out of operational services due to a
technical glitch. The company has warned that if it goes on for long, the company may have to
stop production of these aircraft altogether. Boeing's stock has fallen 12.76% in the US market.
The company's market cap has come down by $27.5 billion to $194 Billion. It was down by
5.3%; it lost 7.46% to trade at $ 370 and the stock was valued at $ 422.42. The company,
however, reported a profit of $ 2.2 billion in the same quarter last year. After two horrific
accidents involving Max planes, these aircraft have been taken out of operational services
worldwide. Since then, the airline has been facing difficulties because it had to set aside $ 5
billion to compensate customers (Ethics stance leads to a Boeing loss - Business - International
Herald Tribune, 2020).
On the other hand, the company's revenue also declined by 35.1 per cent to $ 15.8 billion in the
quarter under review due to halting of delivery of 737 MAX aircraft. The company blamed the
engine problem for the delay (In Boeing Lion Air Crash, Indonesians Learn What Took Their
Loved Ones, 2019). These engines were made by General Electric. Boeing Max has now realized
the importance of practicing ethical values and now it has promised that software’s will be
upgraded to avoid such situation in future. Boeing has also started worked on safety issues of
aircraft; especially on its wings. Company is facing huge losses and lot of money is stuck to
fulfillment of order; as out of 5000 only 370 planes delivered till now. After this incident the
chance of delivering rest of aircraft has decreased; due to safety issues raised by other countries.
3. Impact of unethical behavior on Boeing’s shareholders
There is a big disclosure about the flaws of the aircraft. According to documents released by US
federal investigators, the Boeing co-senior pilot expressed concern to a colleague about some of
the 737 Max Jet's systems in 2016 itself. According to reports, new evidence suggests that
Boeing pilots were aware of the 'serious flaws' of the 737 MAX jet aircraft three years ago.

However, federal investigators have not been informed of what these flaws were. The disclosure
is no less shocking for Boeing shareholders as they are confident that the 737 Max Jet can return
to operational again (Boeing mocked Lion Air for requesting extra 737 Max pilot training year
before crash, 2020). According to reports, Boeing's stock has fallen nine percent since flight
restrictions.
The entire shareholder’s having percentage of share more than 5% will get huge impact. Boeing
Max was going to deliver 5000 orders out which it has successfully delivered 370 aircrafts to
different countries. Shareholders were expected growth in share price and speculators also
invests lot of money to buy company’s shares. But due to this unexpectedly accident; investors
didn’t get chance to recover their income. This incident not only effect shareholder’s fund but
also impact global economy as well; additional to this it’s a record that insurance company has
settle that huge money. Hence, it also impacts shareholders of Insurance company also; due to
decline in profit at the end of the year.
4. Impact of unethical behavior on Boeing’s customers
Boeing Max has been restricted to further deliver its services till it tested positive on the basis of
safety measures and software up gradation. Customers of Boeing include Ryanair Holdings plc,
Southwest Airlines Corp, Turkish Airlines, American Airlines and China Eastern Airlines Group
Inc. Defense officials also came into customer list of the company; with different customizable
designs. So, far only commercial planes have shown the issues; no such problems rose with
defense jumbo jet planes. Now, the current situation is; existing customers of Boeing has
cancelled all future deals with the company and no other clients wants to deal with Boeing due to
bad reputation in the market after two times deadly accidents. Company has followed unethical
path to increase its profit through cutting cost on maintenance, security and safety issues and
software up gradation (Indonesia’s devastating final report blames Boeing 737 MAX design,
certification in Lion Air crash, 2019). To increase the flow of selling; Boeing didn’t test the
planes before delivery; even it tries to hide technical error like in wings and sensors.
Customers are not willing to take risk of lives; also any customer dealing with Boeing will face
bad reputation from social perspective. The unethical practice by 737 Max creates the situation
in front of company to stand alone. It takes huge time to attract new customers and retrieve
existing customers through ethical practice; as company already take step through start work on

software update. Boeing is in that situation, where further failure in quality could bankrupt and
shutdown the company. Boeing is working to update software and other systems on the aircraft
to convince regulators to fly again. However, Boeing has taken a long time. The latest batch of
internal Boeing documents were provided to the Federal Aviation Administration and Congress
last month and released on Thursday. The company said it is considering disciplinary action
against some employees.
CONCLUSION
After analyzing all facts and points to be considering it can be concluded that; Boeing 737 Max
has loss huge market share due to its two time failures in Indonesia and Addis Ababa. Its existing
customers also cancelled the deal with company due to increase in the risk of dysfunction of
sensors software and could impact their reputation in market. The viral news of crash clears that;
company should not be allowed to further operate until unless it successfully upgrades its
software’s and techniques. Additional to this; legally authority should also suit case against
company to teach a lesson to other new entrances about how important ethical values is. Boeing
Max has now realized the importance of practicing ethical values and now it has promised that
software’s will be upgraded to avoid such situation in future. The reason behind this
unsustainable failure is putting profit front of safety, which impacts in the form of lots of lives
lost in crash.
RECOMMENDATION
This part consists of suggestions which Boeing Max must implement to assure follow up of
ethical values while operating its business. A lot of similarities were seen between these two
accidents. Both planes crashed minutes after takeoff. According to the report, after flying in both
the cases, the pilot requested to return to the airport. The pilots said that there was a problem
with the control of the aircraft. Even both cases are being investigated. These similarities alerted
airlines and regulators. According to a report, another reason found was intense competition
between the two aircraft manufacturers Boeing and Airbus. The Boeing 737 Max was developed
in a hurry under the pressure of competition. Based on the analyses following recommendations
are suggested for company discussed below:

Safety should put first: It is strongly recommended that, safety should priorities first in the
place of profit. Boeing already faces huge losses not only in profit and shareholders loss but its
reputation in all over the world is totally ruined. It impacts the company to force backward years
ago and required lot of time to recover and built its old image (Mendonca, M., 2006). The main
thing in airline industry is trust of people that they will safely land to their destinations. No one
wants to danger their life at low cost; safety is the basic need of every person and if that not
properly delivered it can cost company.
Quality should not be compromised: It is also recommended that quality of service should not
put back for the cause of cost cutting. People are there who prefers quality service in business
class rather to economic section. Latest technique and updated software can help company to
make separate market segment (Mayes, 1991).
Staff and Pilot should be well treated: For any airline industry; quality of services and
customer satisfaction depends on its staff and crew members. Any dissatisfaction to them can
direct impact the services to customer. Additional training and proper test is recommended
before recruiting pilots at responsible positions. Disclosure of any technical issues also suggested
for the company to prepare in advance for the same (Avrenli and Dempsey, 2017).
All this recommendations are believe to be modulator to improve ethical standards within the
context of Boeing 737 Max Airlines.

REFERENCES
Books and Journals
Avrenli, K.A. and Dempsey, B.J., 2017. A kinematic methodology to optimize the landing
trajectory for the Boeing 737 jet undergoing total loss of thrust. Journal of
Transportation Safety & Security, 9(1), pp.82-104.
Kotzé, H., 2000. SHARED VALUES IN SOUTH AFRICA?: A SELECTION OF VALUE
ORIENTATIONS IN THE FIELD OF PERSONAL EHTICS. Scriptura: Journal for
Biblical, Theological and Contextual Hermeneutics, 75, pp.437-448.
Mayes, R.W., 1991. The toxicological examination of the victims of the British Air Tours
Boeing 737 accident at Manchester in 1985. Journal of Forensic Science, 36(1), pp.179-
184.
Mendonca, M., 2006. Ethical leadership. McGraw-Hill Education (UK).
Smit, D.J. and Wessels, F., 1996. AN EHTICS OF WRITING? ON WRITING AS A SOCIAL
ACTIVITY. Scriptura: Journal for Biblical, Theological and Contextual
Hermeneutics, 57, pp.125-138.
Online
Lion Air crash: Boeing 737 plane crashes in sea off Jakarta, 2018; Online Available through: <
https://www.bbc.com/news/world-asia-46014463>
In Boeing Lion Air Crash, Indonesians Learn What Took Their Loved Ones, 2019; Online
Available through: < https://www.nytimes.com/2019/10/23/world/asia/boeing-737-
max-lion-air-crash.html>
Boeing mocked Lion Air for requesting extra 737 Max pilot training year before crash, 2020;
Online available through: < https://fortune.com/2020/01/14/boeing-lion-air-extra-737-
max-pilot-training-simulator-crash/>
Indonesia’s devastating final report blames Boeing 737 MAX design, certification in Lion Air
crash, 2019; Online Available through: <
https://www.seattletimes.com/business/boeing-aerospace/indonesias-investigation-of-
lion-air-737-max-crash-faults-boeing-design-and-faa-certification-as-well-as-airlines-
maintenance-and-pilot-errors/>
Ethics stance leads to a Boeing loss - Business - International Herald Tribune, 2020; Online
available through: <
https://www.nytimes.com/2006/07/27/business/worldbusiness/27iht-
boeing.2308976.html >