Boeing Business Analysis: Unethical Behavior and Its Consequences

This report provides a comprehensive analysis of Boeing's unethical behavior, particularly focusing on the 737 MAX crashes and their repercussions. It examines the company's ethical failings, highlighting the prioritization of profit over safety, which led to significant loss of life. The report delves into the impact of these actions on Boeing's reputation, financial status, shareholders, and customers. It discusses the grounding of aircraft, lawsuits, and compensation demands, emphasizing the long-term consequences of unethical decision-making. The analysis covers the damage to the company's reputation, financial losses due to lawsuits and grounded planes, and the erosion of shareholder trust. The report concludes with recommendations, suggesting that while Boeing should be given a chance to rectify its mistakes, strict oversight and rectification of faults are essential before allowing the company to resume operations. The report emphasizes the importance of ethical business practices for long-term success and the need for companies to prioritize safety and ethical considerations over short-term profits. It provides valuable insights into the devastating consequences of unethical corporate behavior and its far-reaching impact on various stakeholders.

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Boeing Business

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Executive summary
Unethical behaviour of Boeing company is a thought-provoking example that shows how
avoiding ethics can cause several lives. The company’s concept of only-profit to run its
business resulted in loss of 346 lives, that represents its irresponsible and unethical
behaviour. It affected the company’s reputation, financial status and customers in a broad
manner. The disasters not only affected Boeing but also affected small industries, its
shareholders and its stakeholders in financial terms. As the planes of Boeing are grounded, its
customers are also bearing financial losses every day and this will be continued till the issues
in the plane are not found and rectified. The company is facing several issues including
lawsuits filed by families of victims and compensation demands from its customers. The
philosophy of ethics is neglected by Boeing to make short-term profit and experienced huge
financial and reputational loss with their planes banned and grounded. This shows importance
of practicing ethics and ethical decision-decision making.

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Contents
Introduction...........................................................................................................................................3
Analysis.................................................................................................................................................4
Impact of unethical behaviour on Boeing’s reputation......................................................................4
Impact of unethical behaviour on Boeing’s revenue..........................................................................5
Impact of unethical behaviour on Boeing shareholders.....................................................................6
Impact of unethical behaviour on Boeing’s customers......................................................................7
Conclusion.............................................................................................................................................8
Recommendation...................................................................................................................................8
Bibliography.........................................................................................................................................10

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Introduction
Ethics denotes a system of moral values and principles that helps in differentiating standards
of rights and wrongs. These principles are reflected in one’s activity and its behaviour. These
moral principles also include systematizing, defending, obligations and fairness. Ethics is the
system that defines concepts of bad and good, crime and justice, wrong and right, vice and
virtue (Singer, 2011). Big companies and government have the power to take strong decisions
and these decisions mostly affect other’s well-being. The decisions and actions taken by these
authorities or organisations may affect strong social consequences.
This discussion is about two Boeing 737 planes that crashed within few minutes after its take-
off in October 2018 and March 2019. The calamities cost 346 crews and passengers lives.
Both the disasters were blamed on errors of simple design and practice of bad engineering.
The software used in the plane was malfunctioning and pushing its nose downwards instead
of keeping it stable, overriding commands and actions of the pilot. Apart from the above
errors, airspeed issues and fractures in the components of the wings has been suspected. In
this case, the moral concern is that, whether the airplane company is considering profit more
than safety of passengers and its crew members.
A good business reputation is considered as vital for any company to grow and perform well.
Company’s reputation affects its customers and stakeholders, thus affects revenue of the
company (Crane, et al., 2019). Also, an organisation with good reputation has competitive
advantage in respective field. Companies practice ethical behaviour to ensure good business
reputation. Past deeds of individual or an organisation is the main factor that affects its
reputation (Rossouw & Vuuren, 2017). So, all the organisations try to maintain good
reputation to collect advantages that comes with it and neglect several issues (Yang, 2012).

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This report is done to discuss unethical activity and behaviour of Boeing company and to
clear, whether the company should be allowed to operate in the field again.
Analysis
This section of the report includes unethical behaviour of Boeing company and its impact on
several business factors. The two disasters that happened because of unethical behaviour of
the company can result in loss of stakeholder’s trust in it. The companies practicing unethical
behaviour may generate profits at starting stage of the business but for the long-term profit
generation, practice of ethics is vital (Arnold, et al., 2020).
Customers and crews lost their lives due to unethical practice of the company. It is one of the
thought-provoking examples of how ignoring ethical practice can cause loss of several lives.
The unethical behaviour of the company not only cause lives but also get the company
banned temporarily. As the disaster happened twice in a row, it can be said that the company
ignored the faults and not learned from its previous mistakes (Gelles, 2019).
Impact of unethical behaviour on Boeing’s reputation
Reputation of an organisation is the resultant of its past deeds and decisions. The consecutive
disaster directly affected stakeholder’s trust on the company and delivered massive blow to
the reputation of the company. Around 40 countries banned the airlines from their airspace
after two consecutive plane crash (Bussewitz, 2019). The best-selling airlines company has
lost their trust from all the sources represents massive blow in its reputation. The company’s
reputation is also damaged because the company itself not grounded the plane after the
massive disaster but pulled back from sky by different countries (Bussewitz, 2019). This also
shows unethical and irresponsible behaviour of the company. Companies mostly recover
from ordinary tragedies, but in this case, it is hard for the company to recover because of the
matter of life and death attached to it. The company’s reputation affects the growth of

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company for a long time as gaining trust of people again is a tough job and even more when
there is a risk of life (Johnston & Harris, 2019).
As the company is behaving unethical and irresponsible even after two crash in a row, it is
hard to say if the company should be allowed to restart its services. In this case, even if the
company rectify the product’s faults and manufacturing defects, still strict checking of the
rectification should be done by The Federal Aviation Administration before giving green flag
to the company.
Impact of unethical behaviour on Boeing’s revenue
In this section of the report, Boeing’s financial losses due to the plane crashes and the issues
related to that is discussed. Several lawsuits filed by the families of victims, caused heavy
financial loss to the company (Pontefract, 2019). As the company is responsible for bad usage
of engineering while manufacturing its plane, the claims of victim’s families stand strong.
Claims from airlines for compensation of their losses also affected the company’s financial
status. Missed plane deliveries with delayed revenue and the expenses done by the company
to rectify its mistakes by finding the defects cause financial hit to the company. It is
important to practice business ethics, so that the losses unethical behaviour causes can be
neglected (Su, 2014).
The Federal Aviation Administration temporarily banned the company and thousands of their
planes were grounded because of the uncertainty regarding safety in its airplane model. The
grounding of the planes marked a strong financial impact on the company as it impacted sales
of airplanes (Gelles, 2019). Heavy loss in commercial airline division faced by the company.
Around 4600 planes of the company kept in backlog and are banned till the company rectify
the issues and ban is lifted. This affected shares of the company by 11 percent (Bussewitz,
2019). It can be said that the company is bearing heavy loss due to its only-profit principle to

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run the business and ignorance of vital factors of ethics. Two consecutive crash affected
travellers and customers of airlines, thus impacted manufacturing company. No airlines will
purchase airplanes that they cannot operate because of grounding of the Boeing’s
manufactured planes. The two disasters cause sharp quarter falls in sales, profits and
deliveries of airplanes.
The company is facing far-reaching impact in its financial status (Cruz & Dias, 2020). As the
company is facing several issues at once because of ignoring safety, many other small
companies and stakeholders connected to the company are also getting affected. Allowing the
company to operate again can put wrong examples for the other companies in the field and it
will show ignorance of unethical practice. But, by only considering the loss of other
stakeholders and the people that believed in Boeing, strict test of the planes should be done
and one chance can be given to the company so that they can rectify their mistakes and take
some lessons from their huge mistake.
Impact of unethical behaviour on Boeing shareholders.
The company has lost billions because of their unethical behaviour. As the company is facing
decrement in its reputation and heavy financial loss, the shares of the company are also
getting down. The company get impacted from grounding of planes by around $2.5 billion
per month. People buy a company’s share with believes that the company will perform well
(Humphries & Johnson, 2019). The unethical activity done by the company disappointed its
shareholders in moral and financial manner. The company’s shares fell around 11% after the
plane crash and in market value the company lost around $29 billion (Bussewitz, 2019).
Shareholders lost their money and trust for the company. Shareholders often accusing the
company for securities fraud by filing lawsuits. The shareholders also accused the company
for defrauding by concealing deficiencies of safety in its plane before crashes. Many
shareholders bought share of the company in high price and lost their money by selling it in

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very low price. Shareholders demanding compensation of their loss from 8th January to 21st
March in the year of second crash (Stempel, 2019).
Unethical behaviour in businesses having risks of lives cannot be ignored and should be taken
strict action against the people and system responsible for the cause (Tota & Shehu, 2013).
Considering the massive loss in company’s shares and ultimate loss of the shareholders and
people that are connected with the company financially, the company should be given another
chance to rectify its deeds. The lives lost due to the disasters cannot be rectified but the
company can upgrade its services and correct all the faults. As the company is one of the
largest airplane manufacturers in the world, it has capability to rectify its mistakes and create
a better airplane without any faults.
Impact of unethical behaviour on Boeing’s customers
Boeing is a multinational corporation of America that manufactures airplanes, rotorcrafts,
satellites, missiles, rockets and equipment of telecommunications (Boeing, 2020). The
company’s customers segment is too big as it is among the largest airplane manufacturers and
seller around the world. The unethical and irresponsible behaviour of the company not only
affected airplanes customers of the company but also affected in all the segments the
company deals. After crash of Boeing airplanes, the company paused 737 max deliveries that
affected its financial status. As the planes of the company were banned to operate, customers
having the 737 Max planes were affected. The disasters that affected company’s and its
products reputations also caused its customer’s trust in the company. The unethical practice
of the company even affected its customer’s reputation, as travellers and airline’s service
consumers lost their believes in travelling with planes Boeing manufactures. Customers of
Boeing airplanes has to bear heavy loss as they cannot use the planes to serve their own
customers.

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The company is facing several problems including reputational issues. If everything goes
right after rectification of problems by the company, even then the company will experience
many difficulties to sell those upgraded planes because of their poor reputation (Konert,
2019). By considering the losses the customers of Boeing are facing, the company can be
allowed to exercise its business. It is Boeing’s responsibility according to ethics that the same
model planes they sold must be upgraded by them. And this can only be possible if the
company’s ban is removed and is allowed to serve. Permanent ban to the company’s airplane
section may cause heavy loss to its customers and that would not be an ethical practice.
Conclusion
According to the analysis it can be concluded that the company’s unethical behaviour
strongly affected its reputation. Also, reputation of any company is an important factor that
decides its long-term growth and profits. Mostly organisations practice high standard ethics
to ensure good reputation. Reputation of a company directly affect trust of stakeholders
towards the company, ultimately affect the financial status of the company. It can also be
concluded that because of the company’s unethical decisions, its customers and shareholders
bearing heavy financial losses. The company’s unethical act, created a situation of heavy
losses of lives, reputation and finance. The companies with responsibilities of lives, if
behaving unethical, a strict legal action should be taken against it. It is also concluded that,
complete ban of the Boeing will affect several small firms, its customers and shareholders
financially. By considering them one more chance can be given to the company so that the
faults can be rectified.
Recommendation
 Successful business operations in the airlines sector demands focus on critical
elements like safety must be taken precedence over profits.

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 The company should take full responsibility of the disaster and make sure that they
find the faults and rectify it.
 The companies that deals with many lives such as Boeing, they need to practice high
ethical standards.
 To make short-term profits, the company risk their reputation of many years and also
kept their business in stake. The company should not be only profit driven and must
consider safety of its customers first.
 The company should practice business ethics and consider long-term profit rather than
short-term profits with high risks.
 The decisions should be made by the company ensuring high standard ethics to
preserve long run public confidence and reputation.
 The company should test its products more carefully and with more focus.
 The company must solve the issues that lead to consecutive disasters, also the
company update the same to the airplanes the company and other airlines has of same
model.
 The company must work hard so that the losses shareholders and its customers are
bearing can be recovered.

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