An Evaluation of Lockheed Martin’s Ethical Program
Instructions: 1. What do you think about the notion presented by Terris that Lockheed’s ethics program does little to prevent ethical breaches at the highest level of the organization?
2. Are the efforts put forth—such as making sure higher level executives participate in training—enough to help executives navigate what Terris calls the ‘ethical minefield’ faced by leadership in such an organization?
3. What are some things that could be done to address the issue related to ethics at higher executive levels of the organization?
4. Terris points out that the company’s program is overly focused on individuals and that it doesn’t really address group dynamics that can impact ethical situations. For instance, there can be a tendency for groups to ‘go with the flow’ of the group decision making process and overlook ethical issues in the process. What would you recommend that Lockheed Martin do to address this situation?
An Evaluation of Lockheed Martin’s Ethical Program
Ethical Concerns at Lockheed Martin
Ethical issues in organization have been of concern especially those involving members of the organization at the highest levels. A number of ethical scandals in organization in the past decade have involved individuals at the top level of organizations. A good example of this is the recent scandal involving the international football governing body FIFA. This scandal involved the long-serving president of the organization. Closer home, other scandals involving individuals at the helm of organizations are such as the Enron scandal which involved executives of the firm. The involvement of members of organization at this level in ethical breaches underscores the need for robust programs that are capable of averting ethical breaches. It is for this reason that I am in agreement with Terris notion that Lockheed’s ethical program is insufficient in addressing ethical breaches at this level.
That members of organizations at higher levels are susceptible to engaging in ethical misconduct is no question. Terris puts forward good arguments to support his assertions concerning the vulnerability of Lockheed’s program. He points out that senior executives are under less scrutiny and have greater personal incentive to engage in ethical breaches. More importantly, however, is the lack of a safeguard against the risk posed by personal incentive. The Lockheed Martin’s code of ethics presumes that top executives will be bound by the same ethical standards without necessarily being subjected to any form of supervision. Consequently, it fails to put in place any checks and balances to counter these risks. A more important risk is that of top executives yielding to their own hubris. This risk is especially heightened by overconfidence amongst executives, which develops after they make several successful managerial decisions. If executives successfully incur risks and defy conventional thinking, they might be tempted to do the same in regard to ethical standards. This is to say they might be tempted to defy the conventional thinking about ethics, and in the process end up breaching the set codes of ethic. This punctuates the vulnerability of the Lockheed Martin’s ethical program.
The Lockheed martin’s program puts in place measures that are aimed at ensuring top executives prevail through the ‘ethical minefield’. Some of these measures include full participation in an annual ethics training, but also, the completion of a number of modules throughout the year. However, given the complex nature of the challenges that executives face, these measures do not appear sufficient in helping executives address them. One of the significant considerations underpinning this assertion is that the program relies too much on the personal integrity of those at the top. Yet it has been pointed out that top executives are susceptible to a number of factors that make them vulnerable to ethical breaches. The most important of this is hubris, or overconfidence, which would cause top executives to attempt to redefine the ethical boundaries. Executives may do so believing that departing from conventional thinking would lead them to new heights of success.
Hubris or overconfidence is an important bottleneck because it cannot be averted by a mere adherence to personal integrity. This is because not based on ethical misdemeanor and in fact, it is intrinsically not embedded in ethicality. Rather, it is based on the personal belief systems of the individual. Consequently, in deploying their decisions, the top executives may in fact be of the opinion that they are abiding by the set code of ethics and personal integrity. This is why it is necessary to have in place a structure that will provide checks and balances, and essentially safeguard against such erroneous decision-making by top executives. Terris exemplifies this risk using the case of the 2003 Boeing scandal.
While personal integrity is a good way of inculcating a sense of personal responsibility amongst members of the organization, it may not necessarily suffice to address ethical challenges at higher levels of the organization. This is because of the bottlenecks that have been discussed. To overcoming this shortcoming, Terris provides a number of recommendations. Firstly, Terris recommends the development of ethics programs that are tailored to target the specific set of complex challenges that top executives face. This is an important strategy since as it has been pointed out, top executives face a unique and complex set of challenges that generic ethical programs may not suffice to address. A second recommendation by Terris is that the organization should create a more formalized ethics office. Again this is a useful recommendation given that it would compel top executives to engage more with the ethics department. Empowering the ethics office is also an important step in helping to overcome ethical challenges associated with overconfidence amongst executives. Thirdly, Terris puts forward that individuals who are specifically professional experts in matters of ethics could be put on the board. Again, this is a powerful recommendation given that the board is one of the very few organs that provides oversight to top executives. By have a strong corporate leadership that is well informed on ethical matters, the board is better positioned to identify and avert ethical misdemeanors amongst executives. Terris, final recommendation is more openness in the organization’s discussions on ethical issues. The strength of this recommendation is that not only does it boost morale, but it could open up debate about other issues that may be affecting the organization but that members may not be willing to discuss. Moreover, this could also encourage executives to be more cautious, since they know that their decisions will be put to public scrutiny.
One of the thematic issues about Lockheed’s ethical program
that has been discussed is its individualized nature. Personal integrity is a
core element of Lockheed’s program. This makes the organization susceptible to
group dynamics. In order to avert such susceptibilities, Lockheed should
develop a code of ethics that deals with this paradigm. This involves the
development of ethical programs that directly address the issues of ethics that
pertain to groups (Terris, 2005). In this way, members are empowered to deal
with such challenges in the same strength that they are to deal with issues of
personal integrity. Terris (2005) points out that some of the trainings and
modules could be delivered to groups. Through its individualized delivery of
ethical modules, Lockheed is inadvertently fostering a culture of isolation in
addressing ethical issues. By delivering training and modules to groups of
employees, Lockheed would be able to reverse this trend. Another way of
addressing this problem would be to have a member of the ethics department
present within organizational groups and teams. Members of the ethics team
could be encouraged and empowered to play a more active role within groups,
thereby making ethical consideration an implicit component of group dynamics.
By placing a member of the ethical department within work groups and teams,
employees are subliminally made aware of the significance of ethics even at the
group level. This would likely cause them to evaluate group ethics with the
same weight of consideration that they do personal integrity. Terris also
points out that members of the ethics and business conduct division could be
more proactive in dissecting previous cases regarding collective ethics.
Essentially, the issue of group ethics is approached more proactively, then
solutions are more readily likely to be found.
Terris, Daniel. (2005) Ethics at Work: Creating Virtue at an American Corporation. Brandeis University Press. Waltham, MA