Ethics under government contracts can be avery lucrative
Ethics in Business>From a business perspective, working under government contracts can be avery lucrative proposition.
In general, a stream of orders keep coming in,revenue increases and the company grows in the aggregate. The obviousdownfalls to working in this manner is both higher quality expected aswell as the extensive research and documentation required for governmentcontracts. If a part fails to perform correctly it can cause minorglitches as well as problems that can carry serious repercussions, such asin the National Semiconductor case. When both the culpable component andcompany are found, the question arises of how extensive theserepercussions should be.
Is the company as an entity liable or do you lookinto individual employees within that company? From an ethical perspectiveone would have to look at the mitigating factors of both the employees andtheir superiors along with the role of others in the failure of thesecomponents. Next you would have to analyze the final ruling from acorporate perspective and then we must examine the macro issue ofcorporate responsibility in order to attempt to find a resolution forcases like these.The first mitigating factor involved in the National Semiconductorcase is the uncertainty, on the part of the employees, on the duties thatthey were assigned. It is plausible that during the testing procedure, anemployee couldnt distinguish which parts they were to test undergovernment standards and commercial standards.
In some cases they mighthave even been misinformed on the final consumers of the products thatthey tested. In fact, ignorance on the part of the employees would fullyexcuse them from any moral responsibility for any damage that may resultfrom their work. Whether it is decided that an employees is fully excused,or is given some moral responsibility, would have to be looked at on anindividual basis.The second mitigating factor is the duress or threats that anemployee might suffer if they do not follow through with their assignment.
After the bogus testing was completed in the National Semiconductor labs,the documentation department also had to falsify documents stating thatthe parts had surpassed the governmental testing standards. From a legaland ethical standpoint, both the testers and the writers of the reportswere merely acting as agents on direct orders from a superior. This wasalso the case when the plant in Singapore refused to falsify the documentsand were later falsified by the employees at the have California plantbefore being submitted to the approval committees (Velazquez, 53). Thewriters of the reports were well aware of the situation yet they acted inthis manner on the instruction of a supervisor.
Acting in an ethicalmanner becomes a secondary priority in this type of environment. As statedby Alan Reder, . .
. if they the employees feel they will sufferretribution, if they report a problem, they arent too likely to open theirmouths. (113).
The workers knew that if the reports were not falsifiedthey would come under questioning and perhaps their employment would gointo jeopardy. Although working under these conditions does not fullyexcuse an employees from moral fault, it does start the divulging processfor determining the order of the chain of command of superiors and ithelps to narrow down the person or department that issued the originalrequest for the unethical acts.The third mitigating factor is one that perhaps encompasses themajority of the employees in the National Semiconductor case. We have tobalance the direct involvement that each employee had with the defectiveparts.
Thus, it has to be made clear that many of the employees did nothave a direct duty with the testing departments or with the parts thateventually failed. Even employees, or sub-contractors, that were directlyinvolved with the production were not aware of the incompetence on thepart of the testing department. For example, the electrical engineer thatdesigned the defective computer chip could act in good faith that it wouldbe tested to ensure that it did indeed meet the required governmentendurance tests. Also, for the employees that handled the part after thetesting process, they were dealing with what they believed to be acomponent that met every governmental standard.
If it was not testedproperly, and did eventually fail, isnt the testing department moremorally responsible than the designer or the assembly line worker that wasin charge of installing the chip? Plus, in large corporations there may beseveral testing departments and is some cases one may be held moreresponsible than another depending on their involvement. A process likethis can serve the dual purpose of finding irresponsible employees as wellas those that are morally excused.The fourth mitigating factor in cases of this nature is thegauging of the seriousness of the fault or error caused by this product.
Since National Semiconductor was repeatedly being reinstated to the listedof approved government contractors, one can safely assume that the levelof seriousness, in the opinion of For the contractor approval committees,is not of monumental importance. Yet one has to wonder how this casewould have been different if the lack of testing did cause the loss oflife in either a domestic or foreign military setting. Perhaps therepercussions would have come faster much more stringent. The fact thatNational Semiconductor did not cause a death does not make them a safecompany.
They are still to be held responsible for any errors that theirproducts cause, no matter the magnitude.As for the opposition to the delegating of moral responsibility,mitigating factors and excusing factors, they would argue that the entityof the corporation as a whole should be held responsible. The executiveswithin a corporation should not be forced to bring out all of theemployees responsible into a public forum. A company should be reprimandedand be left alone to carry out its own internal investigation andrepercussions. From a business law perspective this is the ideal casesince a corporation is defined as being a separate legal entity.Furthermore, the opposition would argue that this resolution would benefitboth the company and the government since it would not inconvenienceeither party.
The original resolution in the National Semiconductor casewas along these lines. The government permanently removed National fromits approved contractors list and then National set out to untangle theweb of culpability within its own confines. This allowed a relativelyquick resolution as well as the ideal scenario for National Semiconductor.In response, one could argue that the entity of a corporation hasno morals or even a concept of the word, it is only as moral and ethicalas the employees that work in that entity. All of the employees, includingtop ranking executives are working towards advancing the entity known astheir corporation (Capitman, 117). All employees, including thesub-contractors and assembly line workers, are in some part morallyresponsible because they should have been clear on their employment dutiesand they all should have been aware of which parts were intended forgovernment use. Ambiguity is not an excusing factor of moralresponsibility for the workers.
Also, the fact that some employees failedto act in an ethical manner gives even more moral responsibility to thatemployee. While some are definitely more morally responsible than others,every employee has some burden of weight in this case. In fact, when thegovernment reached a final resolution, they decided to further imposerepercussions and certain employees of National Semiconductor were bannedfrom future work in any government office (Velazquez, 54).Looking at the case from the standpoint of National Semiconductor,the outcome was favorable considering the alternate steps that thegovernment could taken. As explained before, it is ideal for a company tobe able to conduct its own investigation as well as its own punishments.After all, it would be best for a company to determine what specificdepartments are responsible rather than having a court of law impose aburden on every employee in its corporation. Yet, since there are ethicalissues of dishonesty and secrecy involved, National Semiconductor shouldhave conducted a thorough analysis of their employees as well as their ownpractices.
It is through efforts like these that a corporation can raisethe ethical standard of everyone in their organization. This case brings into light the whole issue of corporateresponsibility. The two sides that must ultimately be balanced are theself interests of the company, with main goal of maximum profit, and theimpacts that a corporation can cause on society (Sawyer, 78). To furtherstrengthen this need, one could argue that there are very few businessdecisions that do not affect society in way or another. In fact, with theplethora of corporations, society is being affected on various fronts;everything from water contamination to air bag safety is a concern. Thebiggest problem that all of us must contend with is that every decisionthat a business makes is gauged by the financial responsibility to theircorporation instead of their social responsibility to the local community,and in some cases, the international community.
This was pointed out onvarious occasions as the main reason why National Semiconductor falsifiedtheir reports. The cost that the full tests would incur did not outweightheir profit margins. Their business sense lead them to do what allcompanies want . . . maximum profit. In the opinion of the executives,they were acting in a sensible manner.
After all, no executive wants tothink of themselves as morally irresponsible. (Capitman, 118). The question that naturally arises, in debating corporateresponsibility, is what types of checks and balances can be employedwithin a company to ensure that a corporation and all of its agents act inan ethical manner.
Taking the example of the National Semiconductor case,one can notice many failures in moral responsibility. NationalSemiconductor would have to review its employees, particularly thesupervisors, for basic ethical values such as honesty. example, ultimatelyit was the widespread falsification of the testing documentation thatcaused the downfall of National Semiconductor, not the integrity of theircomponents.
In the synopsis of the case it is never mentioned that theemployees initiated this idea, it would seem that it was the supervisorsthat gave the order to falsify the documents. In order to accomplish this,the company executives would have to encourage their employees to voicetheir concerns in regards to the advancement of the company. Through opencommunication, a company can resolve a variety of its ethical dilemmas.
As for the financial aspects of the corporation, it has to decide whetherthe long term effects that a reprimand from the government can haveoutweighs their bottom line. In other words, corporations have to startmoving away from the thought of instant profit and start realizing boththe long term effects and benefits. These long term benefits can include astronger sense of ethics in the work force as well as a better overallsociety.
To conclude, I must say that I agree with the use of mitigatingfactors in determining moral responsibility. A company, as defined by law,is only a name on a piece of paper. The company acts and conducts itselfaccording to the employees that work in that entity. I use the wordemployee because in ethical thinking there should be no distinction ofrank within a company.
There are times when executives can be helddirectly responsible and at the same time, there are cases where employeesare acting unethically without the executives knowing. Neither title ofexecutive or employee equates to moral perfection. Therefore, when acompany has acted irresponsibly, its employees must be held liable in aproportionate amount. As for the future of ethics in business I wouldspeculate that if employees started to think more in long term benefitsand profits, many of the ethical dilemmas that we face today would begreatly reduced. As mentioned before, businesses today uses the measuringstick of profitability. There needs to be a shift to the thinking of totalutility for the social community in order to weigh business decisions. Opponents would argue that this is a long term plan that requiretoo many radical changes in the face of business.
Also, there is no waythat an industry wide standard can be set since there are too many typesof corporations. Plus, companies have different needs and every moral ruleis subjective according to the type of business that everyone conducts.In response, I would argue that although there are no industrystandards that are feasible, it is possible for every company to examinetheir practices as well as the attitude of their employees. There will becompanies that find that they are doing fine with employees that are awareof their moral values. Yet other companies will find that they do haveareas that need improvement.
It is steps like these that startimplementing changes. Once a few companies start to see the benefits ofchanges, it can help to encourage other companies to follow suit. Afterall, as seen in the case of National Semiconductor, mistakes in onedepartment can cause the deterioration of an entire corporation. When thecosts that are possible are taken into account, the changes required torectify this are small in comparison.BibliographyCapitman, William. 1973.
Panic In the Boardroom. New York:Anchor Press-DoubleDay PublishingHarris, Kathryn, Chips Maker Feels Attack on Four Sides Los Angeles TimesApril 4, 1982. Pg. B1Pava, Moses.
1995. Corporate Responsibility and Financial Performance.LondonQuorum BooksReder, Alan. 1944. In Pursuit of Principle and Profit. New York:G.
P. Putnams Sons PublishingSawyer, George. 1979. Business and Society: Managing Corporate SocialImpact. BostonHoughton Mifflin PublishingSchuyten, Peter.
To Clone A Computer. New York TimesFebruary 4, 1979. Pg. 1Velazquez, Manuel. 1992.
Business Ethics: Concepts and Cases. New JerseyPrentice Hall PublishingCategory: Business
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