Question 1: Identify why Boeing experienced this and possibly other unethical behaviours. Are these explanations reasonably accurate in your opinion? Are there any other causes that come to mind?

The first major core problem with the company is people are not willing to speak up when they know something is wrong. They are willing to turn a blind eye to the wrong doing due to a few reasons, they feared retaliation, they wanted to win a contract, they just didn’t want to cause trouble or there was no proper system in place in order to bring these issues to light. By people not voicing the wrong doing by one of these reasons it ultimately caused others in the company to continue or to begin unethical behaviour. Another problem with the company is that executives had allowed bureaucracy to consume them and they learned to hide in it. This ultimately created a non flexible and flawed system. One of the results that occurred from this flawed system was when Boeings former chief financial officer was caught holding illegal job negotiations with a senior pentagon official, furthermore a manager was stealing 25000 pages of proprietary documents from his former employer. If that was not bad enough the shocking truth that women were paid less than men also surfaced. (cleaning up Boeing 1) Furthermore many lapses of unethical behaviour were discovered on the structure of Boeings Company. Leaders were too busy on developing a bureaucratic system, while management itself was misbehaving in general ways. McNerney believes many changes in the structure of the company should be made quickly and drastically in order to save the company. Another major issued identified by McNerney was the parts of the company responsible for enforcing ethics did not work cohesively. The Boeing Company had suffered from some public ethical mistakes. Why do some large companies experience significant ethical escapes while others do not? (tutu ethics and 2). In order to answer this question Mc Nerney states “we should consider the culture and the character of the company.” When McNerney entered the company he soon realized that ethical issues as well as internal rivalries in combination with the three leadership divisions of the Boeing Company are one of the roots of the problem. There was no collaboration between the three divisions, an example about the lack of collaboration is that the Boeing Company currently buys 200 different kinds of safety glass and 80 different shades of white paper when they would only need to buy 1 type of each if they were working together. “A few years ago, Boeing was stunned to find itself among the companies that made headlines for some very high-profile ethical lapses. “We thought of ourselves as good and ethical people. Like many companies, we thought of “the ethics organization” as the centre piece of our ethics and compliance program. We thought we had done all the right things; we had an ethics leader, ethics advisor assigned around the company, and an anonymous ethics-line to report suspected violations. It wasn’t enough” McNerney says. (Turning ethics and compliance into a competitive advantage, 2)

What steps is McNerney taking to improve Boeings ethical conduct? In your opinion will these actions be affective? What other steps would you take if in McNerney situation to improve the company’s ethical conduct?
In order for people to raise a red flag when something is wrong, there are various steps that need to be taken. The first is people need to be convinced that they will not endure retaliation but will rather receive some type of reward for bringing unethical conduct to attention. A structure must also be added to the company that will allow people to voice such behaviours. As the current structures in place have lacked focus, have been scattered, too piecemeal and too marginal. (turning ethics and compliance into a competitive advantage.) However, in my opinion the fear does not exist only as reprisal from upper management but from colleagues. Thus, it is essential to get the message across that if someone found out about an unethical situation or failed to spot it when it was obvious to everyone. Those people who failed to speak up would suffer some type of penalty. This changes the social structure in the company that if they do not report such matters they too will face penalties. This method eliminates the “snitch” dilemma. By doing this we insure a fast and direct way to weed out unethical situations in the company. The key factor however is by changing the ethical standards of the company it aligns it with the ethics of the employees, if these two are in unison, employees will be happy with their jobs and therefore be more productive. In time employees will begin to feel a sense of pride for the company and by word of mouth begin to fix the image of the company. (info from business week articles) In order to have a more effective leadership, many things should change in the company. Executives should be paid consistently and be motivated by their salary and their bonuses (clean up Boeing 2). Managers should encourage employees to talk freely about ethical problems. Start modelling the behaviour of the employees and discuss ethical issues within their teams. (ethics and compl into a comp advent 3-4) A good leader can be developed through learning and through experience. He should know where to encourage and reward approved behaviours and should listen to others ideas and opinions. The best solution to this problem is knowing when a problem arises and what to do to solve it. A good leader should never look the other way. (ethics and compl into a comp advent 3-4). With ethics and compliance as with quality, it comes down to people and leadership. If leaders grow, companies grow (ethics and compl pg 5) James McNerny was hired to save the company from scandals and corruption. He adopted a totally different leadership system that has gained success quickly. He started by changing the name of the company from “world head quarters” into a more humane and modest name, “the corporate centre” (cleaning up boeing,3). By doing this major change, he wanted to show that the Boeing Company does not care only about profit and bureaucracy but rather people and quality. Other major changes in the structure of the company were also developed such as, a balkanized management team was developed, Boeings commercial aeroplane unit reached a record of 1002 aeroplane orders in 2005 because its new aircraft, were lined with performance, revamping pay was introduced, research and development were infinitely better and job operations were revised. (cleaning up Boeings 2,3,4) Major changes should be made in order to achieve efficiency and remove all the past experiences of the Boeing Company. “Leaders should learn from past experiences. While doing that would not commit the same mistakes, and give rise to a more prosperous company. what makes the difference between our company and another? Its people and how they view themselves and their jobs Leaders should know how they want their employees to behave, and teach that certain behaviour.” States McNerney (thuru ethics 4). First of all, people should have the freedom and the confidence to discuss about the problems that arise within the company. Only in this way they would be able to work together to achieve regularity and enforcement of ethical behaviour. Instead of just ignoring the problem and hoping it will go away. Employees or managers should collaborate to find solutions to fix the problem. They should start sharing information and not work in isolation (turu ethics 3). In 1997 Boeing merged with McDonnell Douglas corp. Ever since the merger the two companies didn’t really work together they amenity and rivalry sprung between the two. The issue here was that while a few individuals have chosen not to follow the proper process, certain cultural weaknesses had permitted the people(including leadership) who suspected a problem to, in effect (although they didn’t regard it this way) look the other way” (Turning ethics…,20). What McNerney had to do was to make the leadership of Boeing more central and unite the three divisions, encourage managers to exploit the giant manufacturer’s cost-cutting leverage and try to support managers to talk more freely about Boeing’s severe ethical lapses. The first step McNerney decided to look at is the internal processes, investigation procedures and most importantly company’s culture. (Turning ethics.., 2) So he came up with three major steps: 1. Committed and get aligned 2. Open up the culture and 3. Drive ethics and compliance through the core leadership model of the company. (Turning ethics…, 3) James F. Albaugh, CEO of Boeing Integrated Defense Systems stated that the different divisions negotiated separately for their own aluminium and titanium. What has to be done here is to bring together all three divisions to one team, cooperate and come out with the same decisions. Far from the individual decisions of the three divisions, another problem that came to surface is that the previous CEO’s didn’t ask the right questions. Thus the problems began to pile up so after many years they imploded. To avoid further problems to arise, there must be open communication, discussion of the everyday mistakes (even the insignificant ones) by all three divisions and common thought of how to solve each problem.