Ethics homework
Ethics at Work Terris, Daniel
Published by Brandeis University Press
Terris, Daniel. Ethics at Work: Creating Virtue at an American Corporation. Brandeis University Press, 2013. Project MUSE. muse.jhu.edu/book/23072. https://muse.jhu.edu/.
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Introduction
In the Shadow of the Skunk Works
D s me at the entrance of the Lockheed Martin fa- cility in Palmdale, California, just outside the security office, the credit union, and the gift shop carrying toy models of U-s and Stealth fighters.1
An understated man in his fifties, Sanders is the site’s full-time ethics officer, one of eighty men and women throughout the corporation charged with communicating and implementing the company’s values. He greets me in the desert sunshine in shirtsleeves, and we spend a good part of the day touring the premises, stopping to chat with some of the employees on the line.
The Palmdale facility occupies dozens of acres of desert, in close proximity to the enormous expanse of Edwards Air Force Base. Once a manufacturing plant, Palmdale is now primarily a refitting facility, where Lockheed Martin installs up-to-date technology into some of its most venerable aircraft. In one enormous hangar, I climb into a C- cargo plane, now being retooled as a mobile, in-flight media station. Loaded with tons of new electronics, the plane will now be capable of flying halfway across the world to jam radio signals within a radius of hun- dreds of miles. The half-finished plane, with its crisscross of colorful wires, gleaming cables, and mysterious boxes, will one day have the mis- sion of carrying the American message of liberty and opportunity to drown out enemy voices in the far corners of the globe.
The sleek bodies of the famous U- planes, with their distinctive pointed noses, dot another hangar. Rechristened the TR- after the U-
became infamous, these planes, too, are being refitted with the latest space-age technology. After more than a year in Palmdale, they will emerge with even more sophisticated capacity to spy on earth from sixteen miles in the air, answering the call for better information, deliv- ered more quickly, more precisely, more secretly. Later that morning, a
flat, black, batlike craft glides through the desert haze and comes to rest on the tarmac. The Stealth fighter was one of Lockheed Martin’s tri- umphs, the first plane capable of disappearing in midair, its jet-black surface jumbling radar signals and baffling those who scan the skies.
I am not allowed to bring a camera or a tape recorder with me on these rounds, and there is one part of the facility that I cannot visit at all. An unassuming jumble of buildings at Palmdale houses the current iteration of the Skunk Works. The top-secret design facility was moved to Palmdale when Lockheed closed its original headquarters in Burbank. Off limits even to most of those who work in other parts of Palmdale, the Skunk Works retains its aura of mystery and its reputation for de- veloping the most sophisticated of the military’s top-secret projects. To enter the Skunk Works is to enter the “black” world of aircraft and weaponry, whose products may not be seen, deployed, or even acknowl- edged for decades to come. The gift shop at the entrance to the facility sells caps with the jaunty little skunk logo on the bill.
Standing near the Skunk Works barracks and the U- hangars, I am in the shadow of the nerve center for some of the most innovative engi- neering projects accomplished in human history. I am also standing in a principal outpost of one of the largest enterprises in the United States, the corporation that does the most business with the U.S. Department of Defense, running to more than $ billion in alone. Lockheed Martin is about big ideas, big products, and big business.
Amid the heavy machinery and the high-security fences, Dave Sanders moves comfortably, chatting casually with line employees and super- visors, moving in and out with ease, clearly a man known and liked and trusted in the facility. He has been in the ethics office for three years now, after a career in various aspects of human resource management. Ethics, he tells me, is not complicated. It’s a matter of helping people see that doing the right thing is just as easy as doing it wrong. Sanders introduces me to the men and women who work on these planes, and who do their part for Lockheed Martin and, as they see it, for the United States of America. Much of his time, he tells me, is spent simply troubleshooting: resolving problems between a line worker and his supervisor; helping an employee receive a benefit she is owed; advising an executive on how to handle a client’s gift. Sanders also oversees the annual ethics awareness program at Palmdale. Ethics awareness is a mandatory exercise for every
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Lockheed Martin employee; one year everyone had to play a board game based on the Dilbert comic strip. Sanders sees himself as a specialist in prevention. No issue is too small; if a worker thinks a problem is an ethics issue, then it is an ethics issue, as far as he is concerned. Yes, he pursues investigations of wrongdoing as well: labor time charged incorrectly, or an accusation of harassment, or a violation of safety regulations. But by Sanders’s lights, his facility is pretty clean. The expected dose of human frailty is contained and defused, he explains, by an ethics program that values the individual and rewards work done according to the company values.
Dave Sanders is the face of ethics at Lockheed Martin, and, in some ways, the face of corporate ethics in the United States today. Low-key, commonsense, and practical, Sanders also embodies a clear sense of mission, as he represents the corporation’s neatly packaged and scrupu- lously documented program. He is part of a conscious and sustained effort to make ethics an integral part of Lockheed Martin’s “value” as a corporation, crucial to its sales and recruiting efforts, as well as to its inner workings and its public image. Values and ethics now reinforce Lockheed Martin’s image of a noble enterprise; innovation in delivering goodness is presented hand in hand with innovation in delivering space- age engineering.
Between and , a series of dramatic scandals rocked corporate America. In their wake, writers and commentators rushed to examine “what went wrong” at Enron and WorldCom and Tyco and others. The tales of unbridled greed, the exposure of faulty systems of checks and bal- ances, and the charges of poor public oversight gave impetus to the rapid development of programs in ethics and business conduct in corporations across the United States. The accounts of failure made a compelling case for the reexamination of the fundamentals of American business.
This book takes a different tack. Instead of focusing on failure, it be- gins with the premise that there might be something to learn from a corporation that has made a sustained and public commitment to ethics and values going back over two decades. It is a portrait of how one American corporation—Lockheed Martin—responded to scandal and has since continued to develop an ethics and business conduct pro-
Introduction: In The Shadow of the Skunk Works :
gram that involves hundreds of thousands of hours and millions of dol- lars each year.
This work is intended to contribute some sense of vitality and detail to discussions of corporate ethics, and to complement the rich trove of writings on ethics in American business: philosophical works that tease out the theory behind applied ethics; cautionary works that narrate stories of waste, fraud, and abuse; and practical works that advise busi- ness leaders on how to integrate ethics into their organizations. By simply describing the power and the limitations of one company’s efforts, I hope to illustrate the complexities and challenges of developing and maintaining a corporate ethics program.
In conceiving this book, I have tried to address a series of straight- forward questions:
• What led Lockheed Martin to develop its ethics program, and how did the program come to take so prominent a role in the corporation’s public image?
• What does the corporation mean by “ethics,” and how does it conceive of the goals of its ethics program?
• What activities have been implemented under the ethics banner? • How well do those activities meet the goals it has set for itself in
this area? • Does the corporation’s ethics program match public expectations
of what it means to be a good corporate citizen in the United States?
In answering these questions, I have focused more on the design and execution of Lockheed Martin’s ethics program than on its results. Assessments of a corporation’s ethical performance are difficult and con- troversial, and they require much more access and data than I was granted as I conducted my research. The question of whether, in the largest sense, an extensive ethics program has made Lockheed Martin a more “ethical” corporation is, therefore, beyond the boundaries of this study. I am more interested, in any case, in the choices that the corpora- tion has made in defining ethics and in creating activities to promote ethics as a part of its culture. Some of these choices respond effectively and powerfully to the challenges that the company faces. Other choices—
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notably, the key questions that Lockheed Martin chooses to exclude from its ethics program—may leave the corporation vulnerable to future scandals and public disapprobation.
The defense industry has, to some people’s surprise, the broadest and most sustained set of ethics programs of any sector of American busi- ness today. Lockheed Martin has built and maintained an extensive for- mal ethics and business conduct program since the mega-corporation was formed through a merger in . The program builds on efforts first developed in the s in the corporation’s “heritage” companies— Lockheed, Martin Marietta, and parts of IBM, General Dynamics, and General Electric, among others. Defense contractors had responded to a series of crises—global scandals involving bribery, overcharging, and collusion—that severely undermined their public image and their standing with their biggest client, the U.S. government. Lockheed had been rocked by a sensational overseas bribery scandal in the s; its new management was particularly eager to change the corporation’s practice, image, and fortune. The company helped to found the Defense Industry Initiative, a consortium of companies that pledged to establish substantive programs to improve their integrity.
Defense contractors were among the first to initiate formal ethics programs in a big way, but a number of other developments stimulated attention to ethics throughout American business during the s. Perhaps the single biggest “stick” was the development of federal sen- tencing guidelines for wrongdoing involving organizations, first put into effect in and strengthened several times since. The guidelines have for the first time made senior executives personally and legally respon- sible for fraud and abuse committed by their companies during their tenure, and they also created a series of benchmarks by which American corporations would be judged. Organizations that took specific steps to shore up ethics efforts would be treated less harshly when problems did surface. The guidelines specified that punishments of organiza- tions found to be in violation of the law would be mitigated by the exis- tence of “an effective compliance and ethics program.” Of course there were positive incentives for attention to ethics as well. These included
Introduction: In The Shadow of the Skunk Works :
the benefits of an improved public image, the reciprocal goodwill of customers, and long-term efficiencies that came from eradicating waste and fraud.
The corporate scandals of the first years of the twenty-first century in- stigated additional federal measures that raised the bar for corporate ethics programs. In , Congress passed the Sarbanes-Oxley Act, which tightened regulations regarding financial disclosures and conflict of in- terest, and which also increased penalties for certain types of white-col- lar crime.2 Building on Sarbanes-Oxley, the U.S. Sentencing Commis- sion (USSC) issued new sets of revised guidelines in and . The guidelines dramatically increased the criminal penalties for execu- tives whose white collar crimes affected a large number of people or en- dangered the solvency of publicly-traded companies. A defendant who shredded a substantial number of documents could spend more than three years in prison; an executive whose actions defrauded more than employees or investors could face a sentence of more than ten years.
The USSC guidelines expanded and detailed the government’s requirements for corporate compliance and ethics programs. The origi- nal organizational guidelines had included benchmarks for such programs; the guidelines added detail and raised standards, by re- quiring corporations to promote an “organizational culture” to encour- age ethics and compliance with the law. That “organizational culture” would minimally require the knowledge and participation of the corp- oration’s board and senior officers in the ethics program, the identifi-
cation of specific individuals to operate the program, extensive training and communication about ethics throughout the workforce, and audit- ing and evaluation of the ethics and compliance efforts. In other words, it would no longer be sufficient simply to post the rules and regulations on a notice board, or to distribute an occasional memo about business conduct. Companies whose ethics programs were viewed as pro forma would be subject to more severe penalties than corporations that could credibly claim that they had woven ethics into the structure of their in- stitutional life.3
These developments, among other things, heightened attention to business conduct and helped to stimulate a new cottage industry in the United States: the work of the ethics consultant. Lockheed Martin is part of an intricate web of peers, clients, and providers who have made ethics
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into a big business within big business. Amid the complexities of legal requirements, government regulations, and public expectations, various subfields emerged. Some consultants specialized in “compliance” with the law. Others focused on “ethical standards” that went beyond legal requirements. Others promoted a “values” approach that emphasized in- ternal transformation rather than external pressures and incentives. Non- profits, for-profits, academics, philosophers, psychologists, marketers— the field was wide open to a variety of players who have helped reinvent and redefine ethics in the modern workplace. The cooperative arrange- ments between companies and consultants have put into place impor- tant new measures, but both parties also have sometimes had a vested interest in creating programs that place a premium on shiny surfaces rather than searching self-examination.
When the corporate ethics scandals made headlines, defense contrac- tors could take some comfort in being ahead of the curve. They already had in place the basics: codes of conduct, corporation-wide awareness programs, investigative teams, incentives for right-minded behavior. These efforts, however, do not mean that the defense industry has en- tirely quelled illegal and unethical behavior. Lockheed Martin’s own program was born on the heels of a settlement involving a bribery scandal, which had developed after Lockheed had begun its ethics ini- tiatives. (Note that “Lockheed” refers to the Lockheed Corporation be- fore its merger with Martin Marietta; the merged corporation is “Lockheed Martin.”) More recently, the Boeing Corporation was rocked by two simultaneous but unrelated scandals—one involving document theft (from Lockheed Martin, no less), and the other involving a high- ranking Air Force officer’s conflict of interest. Boeing’s chief financial officer, who was directly implicated, was summarily fired, and its chief executive officer resigned in December . During the Iraq War, alleged abuses at Halliburton, once run by Vice-President Dick Cheney, took center stage.
These particular incidents aside, the defense industry also raises spe- cial concerns as a sector whose products and business interests them- selves are controversial within American society. The sheer size of the industry invites exploitation and the misuse of power. The web of rela- tionships between corporate leaders and high-ranking government offi-
cials offers ample opportunity for foul play, as multi-billion-dollar deals
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are made and broken. And, of course, defense contractors make weapons, whose presence and use raise a host of questions about the morality of defense, warfare, and violence.
So what has been accomplished in fifteen years of persistent ethics initiatives at the defense giants? What difference does the work of an ethics officer like Dave Sanders make? What does “ethics” mean in this context anyway? I was curious to explore these questions in depth within a single organization, to try to make more sense of the promise and the perils of making a substantial commitment to an ethics program.
In , shortly after I became director of the International Center for Ethics, Justice, and Public Life at Brandeis University, my colleague Jerry Samet from the philosophy department dropped into my office. He was carrying a bright yellow board-game box, marked in bold letters with the words “Ethics Challenge.” He opened up the box and showed me a board with stations something like the old game of “Clue,” only there were brightly drawn characters from the comic strip Dilbert lurking by the “Cooler” and in the “Boss’s office.” Samet told me that he had chipped in some ideas for this game, which had been developed by some friends of his in the consulting business in downtown Boston, and he thought that people at a Brandeis center with some concern about ethics might be interested. The “Ethics Challenge,” he said, had been developed for the defense industry giant, Lockheed Martin. Each year, every one of the company’s , employees played the game.
The “Ethics Challenge” sat on my bookshelf for several years. We played the game at the center instead of having a staff meeting one week, and I tried it out in a couple of undergraduate classes. Visitors to my office would spy the bright yellow box, open it up, shuffle through the Dilbert cards, and chuckle appreciatively. Every so often, Jerry Samet would call me up and ask whether I had followed up with his friends who had developed the game.
Then the wave of corporate scandals hit the American business world. The spectacular implosions of Enron, WorldCom, Tyco, and a host of other giant concerns touched off inquiries and investigations that fo- cused on mismanagement and wrongdoing. These also brought renewed attention to the question of how American corporations had failed to
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address ethics effectively within their organizations. How had they ne- glected ethics so completely that billions of dollars went up in smoke?
I found myself interested in the opposite question: What were Amer- ican corporations doing to address ethics? In particular, I was interested in institutions that made a sustained and visible commitment to ethics and values as an integral part of their organizational culture. By “sus- tained,” I meant institutions that had been doing ethics seriously and consciously for at least a decade. By “visible,” I meant that an organiza- tion was confident enough about its program to stake its reputation on claims about its integrity. By “organizational culture,” I meant that the ethics effort was widely diffused, somehow touching the lives and work of individuals at every level of the institution. Now that the U.S. Sentenc- ing Commission guidelines had given the idea of “organizational cul- ture” such prominence, these questions were more compelling than ever.
As I was mulling these questions over, the “Ethics Challenge” game box caught my eye. I called Jerry Samet and told him that I was ready to follow up. I was ready to learn how a corporate giant like Lockheed Martin went about its ethics program.
My inquiry started in the downtown Boston offices of Convergent Learning, the successor to the consulting firm that had worked with Lockheed Martin to develop the original “Ethics Challenge.” There I met Steve Cohen, who in turn introduced me to Joe Kale, a senior Lockheed Martin ethics executive who soon went on to become the ethics business area director for the new Integrated Systems & Solutions (ISS) unit of the corporation. Kale is tall, lean, and neatly dressed, with the gentle manner of an understanding clergyman or the ideal coach for your son’s Little League team. He explains things patiently, but never pedantically. “Here’s a guy who lives and breathes ethics,” Steve Cohen told me. “This is a guy who plays the ‘Ethics Challenge’ at home with his kids . . . and his kids are five and three!”
Joe Kale sketched out the history of Lockheed Martin’s ethics efforts. Beginning in the s, many companies in the defense industry began ethics programs, under pressure from the U.S. government following a series of scandals. After a wave of mergers and acquisitions created Lockheed Martin as a single corporation in , the company invested heavily in consolidating and expanding those earlier efforts, so that ethics was not only central to the Lockheed Martin culture, but a crucial
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element in creating a common identity for a widely scattered organiza- tion. The new Lockheed Martin, after all, included divisions that manu- factured, repaired, and outfitted sophisticated aircraft, other divisions focused on information technology, and dozens of other types of ser- vices related to aircraft and modern weaponry. The “Ethics Challenge” was only one of many efforts undertaken by the corporation’s sixty-five ethics officers that attempted to bring a common sense of values to divi- sions and employees working in widely different circumstances. Kale invited me to take a closer look.
I traveled to Lockheed Martin’s headquarters in Bethesda, Maryland, where I negotiated permission for access to the company’s facilities and materials in order to conduct the research. Such inquiries are obviously a delicate matter, not only because any large corporation is sensitive about its image, but because so many of Lockheed Martin’s operations involve projects related to national security. Eventually I worked out a formal agreement that allowed me to conduct the research under the watchful eye of Brian Sears, the corporation’s “director of ethics aware- ness.” I could visit company facilities and conduct interviews with Sears’s permission and in his company, and the corporate ethics office would share the materials that it used as a part of its work. Lockheed Martin would have the right to review the manuscript to ensure that I was not disclosing proprietary information or compromising national security, but otherwise the company would have no control over the book’s con- tent. Naturally, I would have preferred to work with fewer restrictions, but I also appreciated Lockheed Martin’s willingness to cooperate at all. Keeping my options open, I had approached another defense industry giant, Raytheon, with a similar proposal. Raytheon turned me down, anxious about the uncertainties of exposing its operation to the scrutiny of an outsider. Unlike their competitors, the people involved with Lock- heed Martin’s ethics program had the courage and the confidence to let an outsider peer in.
My research at Lockheed Martin took me to a number of the com- pany’s facilities and activities in Maryland, Virginia, Florida, and Cali- fornia, as well as to the corporation’s annual ethics officer conference in Orlando, Florida. I have spoken with dozens of ethics officers, as well as employees who are the “customers,” so to speak, of the company’s ethics program. Joe Kale and Brian Sears have sent me boxes of ethics program
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materials, dating back to the earliest Lockheed Martin efforts in and , and I have had a chance to witness the annual ethics awareness program in action. Explaining my project, I told every Lockheed Martin employee I talked with that I would be trying to paint a fair and accurate portrait of the company’s ethics program, and that I would also be ask- ing tough questions about the ultimate value of the corporation’s ethics effort both to Lockheed Martin itself and to the larger world. I have tried to be faithful to that explanation in writing this book.
Two genres dominate the market of contemporary books about corporate ethics in America: narratives of scandal, and prescriptions for avoiding them. The tales of fraud and abuse focus, for the most part, on the ac- tions of corrupt corporate leaders. They portray organizations whose cultures have permitted a small number of individuals to perpetrate var- ious types of fraud on a hitherto unthinkable scale. The emphasis of these books, some by former insiders, is on greed in its crudest form: greed abetted by new technologies, by the speculative quality of the American economy, and by the laxity of colleagues. These are caution- ary tales; their moral, by and large, is the vulnerability of large-scale modern organizations to calculated deception by a small number of clever people determined to put their own interests ahead of every other stakeholder.4
At the same time, books and articles have been published with the in- tent of helping corporate leaders figure out how to implement ethics programs that will engender public confidence, avoid lawsuits, and create a sense of integrity throughout the enterprise. These books pay some attention to the excesses of individuals, but they are focused more closely on the culture of businesses as a whole. These prescriptive books take as their starting point a variety of disciplinary contexts—philosophy, management, economics, organizational behavior, to name a few—to provide vocabulary and strategies for heading off scandal while main- taining profits. Some of these works are intensely practical in nature, providing specific advice for companies looking to create or transform their ethics programs, and using contemporary companies as models.5
A particularly useful approach has identified the broad acceptance of the idea of a corporate “personality,” and suggests models for corporations
Introduction: In The Shadow of the Skunk Works :
to think of ethics and the long-term health of the company as symbiotic components of the corporate enterprise.6 These works differ greatly in their methodology and their prescriptions, but they share a common didactic purpose: to provide a clear road map for organizational leaders who wish to make ethics a central part of their institutional culture.
Tales of scandal and prescriptions for change are not the only types of books that have emerged in recent years. Some thinkers and researchers have focused more on the “experience” of work, and the quest for mean- ing within the life of an organization. These writings treat ethics as the outcome of “good work”: Individual and organizational character is strengthened if the mission of an organization is clear, if workers have maximum opportunity for growth, and if the larger social conditions allow corporations to thrive without resorting to underhanded tactics. Some have focused more on personal transformation, building on the idea that institutional ethics has to begin with the passion and commit- ment and investment of professionals and leaders within the organiza- tion.7 Other observers have focused their attention on the nature of work itself, from a conviction that the “alignment” of an organization with its mission is the most solid basis for the development of both an ethical and a productive institutional culture.8 These texts embrace an understanding of ethics that goes beyond adherence to principles and that includes an examination of the complete role that individuals play within an organizational setting.
Many of these books offer case studies as illustrations of a larger point. This book draws on some of the ideas that these authors have de- veloped, in the context of a focused, descriptive look at a single corpo- ration’s efforts. With these other works in mind, let me say a few things that this book is not.
This book is not an “authorized” account of Lockheed Martin’s ethics program. Yes, the corporation reserved the right to review the manu- script, but only to make sure that I was not disclosing any company or federal secrets. Many Lockheed Martin employees were generous with time and assistance, but without expectation that I would tell their story the way that it might be told on their own web site or by their own pub- lic relations department. When attending company events, I paid my own way, and I accepted no favors, other than the materials of the ethics and business conduct department itself.
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Moreover, this book is not connected to any consulting work done with Lockheed Martin or any other corporation. There is, as I have in- dicated, an extensive literature about applied ethics in American busi- nesses written by people who are themselves consultants to corporations on how to develop and improve their ethics programs. I am not in that business, nor is anyone connected with the center that I direct at Brandeis. (We do offer programs that encourage judges and other professionals to reflect on ethics and values, using literature as the basis of discussion.) I did not enter the project with a particular method to advance, nor do I offer one here.
This project, then, does not begin with a bias in favor of a particular approach to corporate ethics, but it also does not begin with an attitude of cynicism. Some critics of business and weapons makers begin with the premise that big corporations in the United States, or companies in the defense industry, are inherently corrupt. I began this project by accepting at face value the idea that an ethics program in an American defense giant could be developed and promoted in good faith.
Finally, this book is not focused on scandal. Many recent books have told the stories of corporate fraud and abuse on a massive scale. Lockheed Martin has avoided a major ethics scandal since . The ethics officers point to the success of their program. Critics of the company neverthe- less point to a series of lower profile allegations, lawsuits, and government investigations that have not made national headlines. In any case, I have not undertaken investigative work in search of dishonest practices. In- stead, I have focused on the ethics program as the company has designed it, so some questions about the ultimate impact of that program will have to be left to other investigators and to future historians.
This book is an attempt to present a fair but tough-minded look at what one major corporation actually does in its ethics program. I pre- sent the history of the corporation’s ethical lapses, and the measures that it has taken in recent years to redress them. I have tried to understand what Lockheed Martin believes that it is accomplishing in its ethics pro- gram. I do not accept all of the company’s premises about what an ethics program should achieve, but I have offered my ideas alongside the com- pany’s own perspective.
In this book, American history and culture serves as the backdrop and the screen against which my thoughts about Lockheed Martin are pro-
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jected. This account could just as easily rely on the study of ethics (the- oretical or applied) or organizational behavior or even sociology or anthropology. But I come to this project by way of an interest in how the currents of American history and literature continue to shape con- temporary life. One reason that I rely on history is because, although the vocabulary has changed many times, Americans have been concerned about business ethics since the first Europeans arrived in New England, and attention to corporate behavior has been a steady feature of Ameri- can life in the centuries since. Writers on corporate values sometimes construct a “pre-ethics” period in American life, when citizens and busi- ness leaders alike allegedly believed that business was an inherently amoral enterprise, that profit was the only motivating force, and that violations of the law or moral standards were greeted with a shrug. While it is true that brigands, outlaws, and robber barons in the business world operated with more impunity in earlier eras, it does not follow that Americans were indifferent to their behavior, nor does this mean that efforts to curtail fraud and greed in industry were negligible. In- deed, the complex interplay between business leaders, the government, the media, and the public over appropriate conduct in economic life has been a dominant theme since the middle of the nineteenth century, when industrialization began to change the American landscape. The arguments developed over the century and a half since then serve as the foundation for understanding of and response to contemporary condi- tions. I prefer to ground this book in the context of the ideals and ex- pectations of the culture in which one institution has thrived.
I have identified here strands of thought about the business ethics that have developed in the American context. I do so in order to try to distinguish among very different sets of ideas and priorities that Amer- icans have embraced with regard to these issues. My point is that one im- portant source for the principles and practice of business ethics in con- temporary American life is the traditions of the past. History is not by any means the only source; philosophy, the lived experience of corporate life, values embodied in religion or cultivated within families, and even common sense all play important roles. But the trajectory of time and memory exercises an important hold on contemporary attitudes, espe- cially among those who take pride in implementing ethics programs that work in practice, not just in theory.
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Essentially, I argue in this book that a group of decent, well-meaning people at Lockheed Martin has created an ethics program that is ambi- tious but incomplete. Few other institutions in American life have in- vested so much in ethics, and the program’s success in making ethics a part of the regular consciousness of tens of thousands of company employees is impressive. Discussion of issues like conflict of interest, pro- prietary information, and various forms of harassment is deeply in- grained in the corporation’s culture. Although it sometimes raises hackles of cynicism (or even provokes angry and violent reactions), the ethics program has been widely successful in promoting confidence in the company’s integrity.
Yet the program is also hollow, because it defines ethics so narrowly that it deliberately ignores some of the largest questions about the com- pany’s policies and practices. Major questions about company policies, employment practices, the nature of the corporation’s business, and fair- ness in the workplace are at the margins in Lockheed Martin’s ethics pro- gram. These strict boundaries mean that the program is focused more on ensuring the integrity of individual actors, rather than ensuring that the corporation as a whole refrains from doing harm. I make no judgments here about the ethical results of Lockheed Martin’s policies, products, and impact on the greater world. But I am concerned that by excluding these questions from its ethics program, Lockheed Martin may eventu- ally make itself vulnerable to new and unforeseen types of scandals. As Americans take an ever broader and more critical view of corporate ethics, companies that define ethics too narrowly will do so at their peril.
I begin in chapter by tracing several strands of thought about busi- ness ethics as they have developed over the course of the history of the United States. Americans have often talked at cross-purposes about the behavior of corporations, because their judgments have been informed by very different fundamental assumptions both about what exactly a right-minded company should do and about what exactly shapes a company’s actions. I examine the image of the American tycoon as it emerged in the nineteenth and early twentieth centuries, drawing on lit- erature to illustrate a national ambivalence about the magnetism and the greed of powerful leaders. Corporate ethics looks very different, however, when examined in the light of how businesses (as opposed to individuals) treat one another, or how companies treat their employees,
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or the impact of corporations on their communities. Each of these strands of thought has deep roots in the American past, and each leads to different conclusions and judgments about the present.
Chapter focuses on a different aspect of history: the story of Lock- heed Martin. The twenty-first-century mega-corporation is an amalga- mation of dozens of companies in the aircraft and defense industries. I focus particularly on the portion that was Lockheed itself, a company with an exciting history of innovation in air and space travel. Amelia Earhart and Charles Lindbergh, among other legendary pilots, made record-breaking flights in some of the company’s early models. The company’s top-secret “Skunk Works” laboratory designed some of the most famous planes of World War II and the postwar era, including the U- and the Stealth fighter. But Lockheed was also beset by scandals, beginning as early as the s, and by the s, it had developed a no- torious legacy of bribery, overcharging, and other shady business prac- tices. The company’s modern ethics program was born in the late s, as the entire defense industry struggled to revive its reputation. The ethics program’s scope broadened considerably when Lockheed and Martin Marietta merged in , on the heels of yet another overseas bribery scandal.
Chapter gives a detailed account of the various aspects of Lockheed Martin’s ethics program. I treat the company’s code of ethics, the role of its corps of ethics officers, the nature of internal ethics investigations, efforts to “sell” ethics to the employee community, and innovative pro- grams like the corporation’s annual “Ethics Film Festival.” I also describe how Lockheed Martin measures its own success in the ethics area, through a biennial survey, and the struggles of the ethics program to maintain credibility within a bottom-line environment. This chapter focuses on the strengths of Lockheed Martin’s ethics program, within the corporation’s own definition of the program’s mission.
Finally, in chapter , I raise a series of questions about Lockheed Mar- tin’s ethics program in the light of the very different ideas about busi- ness ethics that I describe earlier in the book. Lockheed Martin’s ethics program is, in a way, gloriously democratic, in that it focuses on the responsibility of each and every individual in the corporation for the ethical dimension of his or her actions. On the other hand, this focus on individual behavior and this focus on ethics across the corporation tend
: Ethics at Work
to divert attention from collective decision making. The program can tackle egregious ethical lapses (like bribery or giving away company se- crets) or minor breaches (like using company computers for entertain- ment or a personal business), but it seldom addresses the ramifications of decisions made by people in teams or policies set by senior managers and company leaders. As a result, Lockheed Martin’s ethics program is all but silent on some of the major issues that have rocked American in- dustry in recent years: accounting practices, fairness in employment poli- cies, executive compensation, and the global impact of a company’s core business. The company believes that these matters fall outside the scope of the ethics program, that they are dealt with in other venues. I argue, however, that the creation of strict boundaries around what constitutes an ethics issue inevitably dilutes the program, and may leave the corpora- tion vulnerable to scandal. The corporation asserts that it is contribut- ing to the common good by producing products that defend the Amer- ican way of life. Its ethics program, however, avoids searching questions about Lockheed Martin’s contributions to the common good, and so, in the end, I argue that it falls short of realizing its full potential to shape the corporation’s impact on the country and the world in which we live.
Introduction: In The Shadow of the Skunk Works :