Unorthodox Strategies by Lockheed, Business Ethics Essay Example

Published: 2022-03-25
Unorthodox Strategies by Lockheed, Business Ethics Essay Example
Type of paper:  Essay
Categories:  Air Force Business ethics
Pages: 5
Wordcount: 1274 words
11 min read

The onset of adoption of unorthodox strategies at Lockheed is associated with the period the company was transitioning from a small builder of airplanes into what resulted in being a bulwark of the U.S. defense establishment (Terris, 2005). Driven by a cutthroat engineering culture and increased zealousness about the cause the company had taken the company's number of employees increased to a point that it was not possible to continue manufacturing activities inside the hangars. Due to this, some of the staff had to complete their duties from the outside the company hangar. The need to develop a jet fighter for the U.S. Army that could outfly and outperform led the company head to gather a team of researchers who were not bounded by the regular rules of research ethics (Terris, 2005). The team was engaged in freewheeling experimentation and avoided opening themselves to public scrutiny even excluding their family and friends.

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For Lockheed to produce the F-104, the company failed all the necessary requirements of an aircraft with the goal of maximizing quick delivery of results (Terris, 2005). The new design could only support a light radar system that was inadequate. The company also jettisoned the pressurizing equipment to cut down weight making it necessary for the pilots to wear uncomfortable space suits during their operations. With the need to recoup the investment, Lockheed started selling the plane to other countries such as Japan and Germany without disclosing to them that the aircraft was not the elegant jet fighter everyone thought it was, but it had experienced some technological challenges.

After failing to convince the government to purchase the F-104, the company adopted unorthodox sales strategies. Lockheed's executives found willing partners who worked as the middlemen as they had access to higher level of decision-makers in the government and were in a position to sway the decisions on purchases. These middlemen were paid directly by the company for their marketing activities. For example, the company befriended persons married in the royal families to influence decisions, gave money to charitable organizations with ties to the government, funded political parties and worked close allies of senior government officials despite some having been jailed for various crimes.

When Lockheed ventured in the commercial airlines and produced the L-1011 TriStar, the company adopted the same sales strategies of using agents to persuade major airlines to purchase the plane. In this case, the pressure to recoup its own investment made Lockheed pay the company executives bribes for them to agree to make purchases.

Unethical Behavior when Everyone is Playing by the Same Shady Deals

The fact that everyone is doing it has been largely identified as one of the most cited justifications for businesses engaging in unethical behavior. The literature indicates that this kind of situation results from pluralistic ignorance where an individual holds a certain opinion but is mistaken in their belief that the other persons hold contrary beliefs (Crane & Matten, 2016). The result of the pluralistic ignorance is that persons who do not support the unethical behavior believe that a nor exists in favor of these practices. Individuals thus tend to believe that within their own organization and the competitors in the same industry, everyone is involved in unethical practice and hence it is acceptable to engage in it during business operations (Wang & Calvano, 2015).

Having acknowledged the role of pluralistic ignorance in unethical behavior, it, therefore, emerges that the perception that other persons are engaged in these activities is not an adequate justification. Secondly, the perceived level of acceptability of the unethical behavior could be raised in the imagination of the concerned persons as compared to what actually exists in the real world (Fryer, 2016). Thus, the personnel could be engaging in unethical behavior due to the assumption that other persons are doing it despite the perceived acceptance being inexistent. The literature also points out that the fact that one organization engages in unethical behavior, does not make it less of a crime and hence it is not justification enough to argue that since everyone is engaging in these practices it is thus acceptable (Abend, 2014).

The success of Lockheed Martin's Ethics Program

The Defense Industry Initiative (DII) was important to the eventual success of the Lockheed Martin's ethics program since its establishment was aimed at ensuring that all companies working with the American defense industry acted within the confines of business ethics as tier competitors were doing the same. The DII facilitate that meeting of the top contractors to agree on the fundamental principles that would guide their operations (Terris, 2005). Despite these codes being modest, they led to an extraordinary shift in thinking with the DII convening the various contractors each year to compare the notes on their progress, which led to increased public trust.

The DII set of principles were used to guide the various approaches that were adopted at Lockheed's ethics program alongside the right language that was to be used to establish the new culture. These changes in organizational culture were taking place at a time that was challenging for Lockheed since there was reduced contracting by the defense department resulting from the end of the war (Dierksmeier et al., 2016). The situation led to the merger of Lockheed with Martin Marietta following the companies short stint success during the Iraq war, creating the perception that corporate synergy had been established resulting in increased public trust.

Norman Augustine's and Dilbert's Contribution

As the CEO of Lockheed Martin, Norman Augustine made a significant contribution towards the organization's ethics program. In Norman Augustine's agenda, ethics was ranked highly as he had a special passion for personal integrity (Terris, 2005). He recognized that the company's ethics program was boring, counterproductive and it was hard to use to develop the prerequisite culture at Lockheed Martin which was an extensive organization with about two hundred thousand employees. When he instructed the company lawyer in charge of the ethics program to come up with a better plan, the idea to merge the undertakings with the comic-strip characters Dilbert and Dogbert was born (Terris, 2005).

The company then decided to revamp the ethics training program with Dilbert at its center after buying some of the rights to the comic character. The comic strip Dilbert was developed and used to address the foibles and other unethical practices that affect corporations. With the initial reviews of the staff and senior management incorporated, the company developed a Dilbert-based ethics awareness program which also incorporated ideas borrowed from an ethics board game (Weiss, 2014). From these undertakings, the 'The Ethics Challenge' was developed and positioned as a mandatory ethics awareness for all the staff members of the organization (Terris, 2005). As a result of the initiatives that emerged from the Dilbert comic, the employees were engaged in genuine discussions about ethics and personal choices creating a company-wide operation that seemed impossible at the onset.


Abend, G. (2014). The moral background: An inquiry into the history of business ethics. New Jersey: Princeton University Press.

Crane, A., & Matten, D. (2016). Business ethics: Managing corporate citizenship and sustainability in the age of globalization. Oxford: Oxford University Press.

Dierksmeier, C., Amann, W., Von Kimakowitz, E., Spitzeck, H., Pirson, M., & Von Kimakowitz, E. (Eds.). (2016). Humanistic ethics in the age of globality. New York: Springer.

Fryer, M. (2016). A role for ethics theory in speculative business ethics teaching. Journal of business ethics, 138(1), 79-90.

Terris, D. (2005). Ethics at work: Creating virtue in an American corporation. UPNE.

Wang, L. C., & Calvano, L. (2015). Is business ethics education effective? An analysis of gender, personal ethical perspectives, and moral judgment. Journal of Business Ethics, 126(4), 591-602.

Weiss, J. W. (2014). Business ethics: A stakeholder and issues management approach. Berrett-Koehler Publishers.

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