Ethics in Business

Question 1

Reduce production time strategy

Daniel Terris covers various unorthodox strategies done by Lockheed. First, Terris addresses the issue in the production of Starfighter (F-104). F-104 has various issues from its inception. Due to the rise of competition in the industry, Lockheed decided to reduce production costs to remain competitive in the market. Lockheed took some measures to save on production time, which resulted in many issues. It took Lockheed about four years to complete and commission the plane. However, Lockheed was grounded and they had to install a new motor (Terris, 2013). One pilot refused to fly the plane, citing safety issues. Second, Lockheed salespersons were making conducting shady deals to market the planes.

Unfair strategies like bribes and kickbacks

Lockheed Martins engaged in profit-based bribes on aeronautic equipment. The move led to a political issue, which almost resulted in the collapse of Lockheed. In 1950, Lockheed was involved in scandals regarding sales negotiations for planes in different countries across the globe, like Italy, Germany, and the Netherlands (Terris, 2013). In an attempt to maintain its competitiveness, Lockheed used a lot of money in the production of both commercial and fighter planes. After the production, the company learned that the sales were inadequate, forcing them to engage in uncontroversial strategies such as payoffs, bribes, and kickbacks to improve the sale of their planes using some government officials.

The top management of the company went to recoup costs spent on the completed aircraft. They moved to different markets across the world to persuade government officials to take some money in exchange for a contract to sell the planes. According to Terris, (2013), in countries across the globe, Lockheed found willing groups and intermediaries who were close to the government and could sway the decision for a cost. However, at that time, some of the transactions made by Lockheed to facilitate their market were unhealthy. Lockheed could have played fairly by producing quality aircraft to attract and retain clients.

Question 2

Unfair business practices by Lockheed and its business rivals could be seen as unethical acts. The ethical lines become blurred when unfair business practices are the norm in the market. However, a business organization needs to engage in ethical behavior. Lockheed management has an option not to use bribery, but the desire to remain competitive in the market controlled the situation (Terris, 2013). Most organizations are engaging in unfair business operations to achieve their anticipated sales targets. When an organization decides to take the route of using unfair practices for market relevance, they exploit the customers to get the benefits. The organization will make sure that the customers pay a lot to finance their operations.

I think a business organization should be guided by their moral codes as opposed to what competitors are doing. The situation contributed by back door deals is unlikely because it creates unhealthy competition and manipulation in the market. Even when other competitors in the market are involved in unethical business practices, it does not warrant Lockheed to join the park. For instance, the backdoor deals and bribery operations stopped after the plane become overpriced. Lockheed used a lot of money to finance its operations, including bribing the market for contracts (Terris, 2013). Thus, the outcome of the decisions to join competitors in unfair practices shows that it was not viable.

Question 3

The Defense Industry Initiative was vital for the success of Lockheed’s ethical program since the market was marked with long and uneasy past with all manner of corruption-based practices. The DII allowed the company to agree on business ethics throughout the world. The initiative aims to provide constant promotion and enhancement of an ethical culture in organizations that engage in business through a government contract. The Defense contractor such as Lockheed Martin usually has a competitive advantage; however, the DII promotes cohesion on policies in regards to competition (Terris, 2013). The initiative offers Lockheed with a platform to act ethically in government-related businesses. 

The Defense Industry Initiative (DII) motivated Lockheed to create compliance in ethical programs. The DII was so important because it created a platform for ethical compliance for different organizations. Daniel described the policy, which the DII was founded (Terris, 2013). First, organizations have to adhere to the six main principles. First, the organizations promised to create and follow ethics. Second, the organizations agreed to train and educate the employees regarding the codes. Third, organizations were to motivate internal audits on ethic-based violations. Fourth, they were to adapt to the system to check on compliance, contribute to the best ethical decisions with their business rivals, and create an open system.

The central role of the DII was to offer better management operations that would promise organizations would implement and apply to gain public trust. The position established by the DII was to monitor people, bring together the most efficient practice scenes, maintain the notion, and perform business operations that would be linked with the DII (Terris, 2013). The defense industry played a crucial role in making sure that an organization engages in fair practices without any situation that would indicate corruption or biases. The policies and regulations that were set by the organization were to be followed. The regulations promoted fair practices where other organizations would not benefit over other competitors. These regulations allowed Lockheed’s ethics initiative to thrive.

Question 4

Norman Augustine learned that the organization’s ethical program was not viable, especially in getting the ethical-based idea across the staff members. A new strategy would need to be adopted to prevent previous misconduct in the organization. In regards to this, Normal sought the services of Dilbert, who is a comic strip character. Dilbert led the organization in an ethic-based game to bring further discussion among staff members.  According to Terris (2013), “Through its format and its content, the game acknowledged that the ethics of business conduct involved difficult decisions, in a world where employees were under pressure to perform at a high level and maximum speed”. The strategy enabled the staff members to understand the challenges in making decisions.

The managers of the organization acted as the game directors, and other staff members were guided through the ethical-game to aid enhance discussion and tackle relevant ethical aspects known to Lockheed Martins. Norman and Dilbert led the employees in the ethical program through the decision-making process (Terris, 2013). The strategy applied involved identifying the challenges and solutions through discussions and collaborations. The ethic-based game allowed the staff to understand the relevance of ethics in a business organization. With the ethic-based game strategy, Lockheed had gone beyond the needed ethical training and has given the staff members a platform to understand ethical situations based on Dilbert’s game.


Terris, D. (2013). Ethics at work: Creating virtue at an American corporation. Waltham, MA: Brandeis University Press

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