Business Ethics

I would like to discuss the normative ethics pertaining to the affair committed by Boeing corporate executive Mr. Stonecipher, and an unknown female executive, and whether he should have been forced to resign. Widespread corporate scandals of the last decade have heightened public awareness about self-dealing and other conflicts of interest in the corporate context. Congress responded by enacting federal legislation mandating corporate accountability and the formalization of policies governing business ethics in public companies. However, there are many circumstances that also give rise to conflicts of interest, only some of which are addressed by existing federal and state laws.

A conflict of interest is a divergence between different interests. In the employment context, conflicts of interest are commonplace and take many different forms, but generally arise when an employee's personal or private interests interfere or are likely to interfere with the employee's obligations to the employer. Such conflicts may arise from personal relationships (e.g., nepotism or romantic relationships), or from outside financial or professional relationships or interests (e.g., commitments to other employers, financial interest in a supplier). Conflicts can compromise, or be perceived as compromising, an employee's loyalty, objectivity, or other aspects of job performance. In addition, certain conflicts can result in legal liability or otherwise damage the employer's reputation with its employees and customers, and in the community.

There are business policies in place to prohibit employees from having affairs, Boeing had such a policy, and Mr. Stonecipher was in charge of enforcing these policies, but instead of following the company’s policy. He himself evidently didn’t think that this particular policy applied to him, he evidently felt that it only applied to all those employees under him (except of course the female executive he had the affair with). Both executives displayed ethical egoism to the highest degree. There were so many people that were going to be affected negatively by their behavior, but neither really cared about the effect their romance were going to have on others. Mr. Stonecipher was called out of retirement to head Boeing and to restore the company’s ethical and business reputation.

As chief executive of McDonnell Douglas, which merged with Boeing Mr. Stonecipher pulled the company out of the commercial aviation business and directed it more toward military orders, including many of the programs, like the F/A-18 Super Hornet and the C-17 transport, that have become Boeing's bread-and-butter products. What is unbelievable for me is that this executive knew that the company was trying to rebuild their reputation within the business community, after the scandal of Mr. Condit's, previous chief Executive Officer of Boeing, departure just a week after the company dismissed its chief financial officer, Michael M. Sears, and another senior executive who helped recruit from the Pentagon. Their business dealings had Boeing investigated for obtaining a proposed $20 billion contract to supply refueling tankers to the Air Force. The Pentagon also penalized Boeing's satellite operations after finding that the company had stolen documents from a competitor, the Lockheed Martin Corporation.

Yet Mr. Stonecipher and the female executive still engaged in this behavior and did not give much consideration to the company’s ultimate goal of restoring credibility to the company, nor to the risk of losing their contract