Sunday, February 17, 2013

Boeing Scandel - All for Themselves, January 2003 By Ryan Critelli, Based on Essay by James Ciejka and Keith Maynard.

By Ryan Critelli Based on a research paper by James Ciejka and Keith Maynard.

Boeing Company was established in 1916 by William E. Boeing in Seattle, Washington. Their main focus was aerospace and defense contracting and were considered to be the company surpassing all the others with ease. Seattle also was the birthplace of Boeing Company's first aircraft manufacturing plant. The first contract obtained by, who would be the largest aeronautical manufacturer of all time, Boeing was during the time of WWI for the United States Navy. Their reputation grew quickly after the Navy had only ordered two of their aircraft and slowly but surely they became known and when WWII struck they developed the B-52 bomber which is one of the most famous aircraft of all time. Along with military contracts, they diversified, and obtained contracts with NASA and specialized in space aeronautics. Next came more contracts with the military and consistently were building a solid reputation while being backed by the entire military for their engineering developments of military technologies and vehicles. Boeing has any wheres from 150,000 to 170,000 employees all with traits that their company values and wants to stay present. They created a program to help inspire engineers and other scientist to create new products and do so in an efficient manor. Other programs also were created mainly to help their public image. For example, programs were created to find different alternatives to jet fuel that would be much better to the environment. Overall, Boeing has become the world's leader in aeronautical developments and continues to grow everyday.

In January 2003, one of Boeing most prominent scandals broke out and had to be dealt with. Darleen Druyun, who was a Air Force procurement officer, was hired by Boeing and was named the Vice President of Boeing's defense missile systems. Her main flaw that also made her good at her job was the fact that she was an absolute perfectionist. This led to her scolding Lockheed Martin for "crappy designs" and "pitiful software". The main part of the scandal though was the hiring of family members into the company without having positions available and the contracts being won at an alarming rate. Mike Sears, CFO of Boeing Company, actually created these positions just so that Druyun was able to fill them will family members. Druyun's son-in-law and daughter both were hired by Boeing, both of which had positions created for them. Her daughter though had problems with the company and faced being fired because of poor performance. Druyun stepped in though and prevented this for obvious reasons. The only reason Druyun was able to do this was because she was granted a very high level position in return for Boeing's illegally obtained government contracts that were all approved and obtained by Druyun. She created position and filled them with family member and in return to Boeing approved and upgraded many of their illegal government contracts. Although this worked for a while, she was fired from Boeing Company along with Mike Sears who also contributed to the scandal. Sears used these scandals to get ahead of the CEO Phillip Condit because he was in a struggle against him for control of the company. Druyun plead guilty to conspiracy for negotiating for a job and spent 9 months in prison. Sears pleaded guilty and was convicted of aiding and abetting and spent 4 months in prison.
Boeing as a whole took a huge hit because of the choices made by them and ended up having to pay $1.1 billion in ethics settlements to the U.S. government. Government officials have also appointed two new task forces to investigate Druyun operations since 1992. Lastly, it hit the government because they had to pay hundreds of millions of dollars in restitution's for the cost of the illegal government bids won by Boeing. The stakeholder in this case were Mike Sears, Darleen Druyun, anyone involved at Boeing and also within the sector of the government where these contracts were given to Boeing.

Ethical theory consist of five main parts, Kantianism, Individualism, Utilitarianism, Social Contract theory, and lastly virtue theory. Individualism is defined as the moral emphasis of the individual. It is an ego based ethical theory that has right based restraints. Basically it is the ability to pursue ones own interests but do not make choices for others that alter their interest in anyway. In this case it could be seen as quick business decision by Sears and Druyun that made them millions and in Druyun's case jobs and futures for family members. Long-term though on the other hand the public view was terribly diminished and it crushed the economical standpoint of the company. As far as this theory goes, Sears and Druyun followed it to a tee. They acted completely out of one's own interest instead of society as a whole. They saw their own worth as more important than the value of the entire company's worth and acted based upon that principle. Utilitarianism states that you must maximize happiness for yourself and others. This clearly was violated in this case because it was all for themselves and nothing good came out of this scandal for the company. Stakeholders on each side of the scandal's happiness was not maximized in anyway therefore this theory would have to disagree with the actions by Sears and Druyun presented in this case. The company suffered a major set back by the amount of money they had to pay back to it's contracts and government, but more importantly lost the name it ha worked so hard to achieve. Sears and Druyun made millions with the scandal so at the time it seemed that their happiness was considered to be at almost the highest level possible, but when both were sentenced to lengthy prison sentences and hefty fines that took a dramatic change for the worst.  Kantianism consist of many principles but the main ones that apply to this case are to act rationally, respect people and their autonomy, and be motivated by good will. It also consist of the idea that good will only comes from doing an act out of duty instead of out of personal need and desire. A constant word used by Kant in his philosophies is universalise. All principles behind choosing an action must by universalise. In other words the formula for humanity is clearly derived as motivation for every action must be the good of humanity. Druyun and Sears clearly did not act ethically or follow any of the previous principles because they kept their deal going with each other which only benefited themselves. They completely shut out their company and only benefited themselves as a result of their actions. Kantianism clearly does not agree with the actions that took place in this scandal because their actions were not derived from the good of humanity. Virtue Theory has 4 main characteristics that are as follows; courage, honestly,Self control, Justice/Fairness.  All of the previously stated problems with this scandal violate every single characteristic of the Virtue Theory. There was absolutely no honesty and self control during the scandal but when they were found out and exposed the other two kicked in played their role to the fullest. For courage, they both openly admitted to their mistakes and faced the consequences professionally, and for justice they "got what they had coming to them". They deserved the jail time and extensive fines that they received. The last ethical theory is Social Contract, which states that " the view that persons' moral or political obligations are dependent upon a contract or agreement among them to form the society in which they live". Druyun's actions were not socially benefiting, they were self-benefiting. This also goes along with Boeing Company itself. They worried about ways to maximize profits instead of reasonable profits for their top grade company.

In the end, on major hit was the biggest one of all. Their brand name took a huge smack by the public for what they did. Here was this incredibly huge company that absolutely crushed the competition and they hurt themselves by being conceited and completely self centered. This can be fixed by educating employees on ethical decisions, monitoring top employees, and carrying out punishment to the fullest extent so an environment is created where ethics are displayed correctly.

This analysis is based on an original research paper by James Ciejka and Keith Maynard.

Boeing Reaches Settlement with US Government Over Druyun Scandal. (n.d.). Daily defense news for military procurement managers, contractors, policy makers. Retrieved from
Ciejka, James. Maynard, Keith. "Boeing PH 211." Diss. Western New England University, 2012. Print. 
CorpWatch : Boeing Scandal Part of Deeper Problems at Pentagon. (n.d.). CorpWatch : Index. Retrieved from
Guilty plea in Boeing hiring scandal - (n.d.). Seattle news, sports, events, entertainment | - Retrieved from
The Seattle Times. (n.d.). Retrieved from URL

No comments:

Post a Comment