Wednesday, February 13, 2013

Boeing in the Business of Bribery (2003)

Synopsis of a paper by Zachary Murphy
Written by Ryan Scott

        Boeing, a USA based aerospace and defense contractor, found itself in a lawsuit launched by the Federal Government in 2003 on the charge of Bribing a Government Official. Boeing Chief Financial Officer Micheal Sears is specifically mentioned, and is the primary focus of the government's case. Sears was found illegally recruiting a federal officer named Darleen Druyun, offering her a six figure salary in exchange for a $20 billion contract for building tanker refueling machines. This led to the sale of a fleet of defense aircraft to the US Air Force for $11 billion more than the planes usually cost. During the investigation, Boeing was also found in unlawful possession of some 30,000 pages of research data belonging to one of Boeing's competitors, Lockheed Martin. The jury found Boeing guilty of Bribing a Government Official and forced to pay $700 million to the Federal Government. 

         According to the four ethical theories of business used, the choice made by Boeing to bribe the defense department of the US government is unethical. In response from Individualism, the choice made by Boeing was unethical. Individualism does not believe it was unethical for Boeing to take steps to maximize profit; however, Boeing must do so within the bounds of the law. When Boeing committed bribery and illegally took possession of Lockheed Martin's research data, Boeing's actions to maximize profit are no longer ethical. If Boeing had increased its profit as much as it had without breaking the law, Individualism would see Boeing's move as ethical. 
         According to the Utilitarian Theory, Boeing's decisions were unethical. Those that make up the US Government are human beings capable of experiencing emotions of happiness, and according to Utilitarianism, it is Boeing's responsibility as a business to bring about happiness within its body of consumers, which include all of those who own and use commercial airliners, those who pay taxes to the United States Government, those who own one or more shares of the company, and those who are employed by Boeing. Boeing did not bring about happiness within its consumers because Boeing's decisions were deceptive and weighted to favor profit making as the number one priority. If Boeing were able to make as much profit as they did deceptively without being deceptive, Utilitarianism would view them as an ethical company. 
         According to the Kantian theory of business ethics, Boeing's decisions were unethical. Kantianism demands that all engaged in business practices treat each of the business's consumers and employees as rational beings capable of feeling emotion, and they should be given the opportunity to fully exercise their rational when making decisions to purchase and sell. Boeing was in violation of this teaching when making a hidden deal with a government official in order to steer contract decisions in Boeing's favor, as well as increasing the price on a good without being transparent with the consumer. This violates Kant's Formulation for Humanity by dismissing the opportunity entitled to the consumer to use their rational in return for just using the consumer as a means to make more profit. If Boeing had allowed all consumers involved to fully exercise their rational when making business choices, Boeing would not have been in the wrong despite how much money Boeing made off the decision. 
         According to the Aristotelian Virtue Theory, Boeing's move was unethical. Virtue Theory teaches that humans need to practice honesty, fairness , and judgement amongst other virtues in order to achieve a sense of a "well lived life". Boeing intentionally did not choose to practice honesty and fairness with the Department of Defense when going over these contracts. Boeing used deception and lying instead of honesty and fairness in order to achieve a higher level of profit for the company. In order to have been viewed as an ethical choice, Boeing would have had to made the profit they made without violating any of the virtues of importance to Aristotelians, and also choose not to violate them simply because that would be the wrong thing to do.
       Ultimately, those who are responsible for the choices made in this case was decided by the jury to be the CFO of Boeing, as well as all high ranking officers in the company who were aware of what was going on, as well as Darleen Druyun, who was willing to "stick it" to the government in return for a large salary with benefits from Boeing.

These facts and analysis are based on an original research paper written by Zachary Murphy “Boeing Bribery Case: The Bribery of Darleen Pruyun” (fall semester 2012)
Holmes, Stanly."Boeing: not out of Scandal's Clouds." Bloomsberg Business Week, 18 Feb.2005.Bus
"Boeing." Forbes.Forbes Magazine,20 Apr.2011.

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