Case Study: Boeing
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Case Question 1
When Boeing successfully did away with the $92 million shareholder lawsuit in 2002, at the end of the day, the losses were incurred by the investors. Subsequent to the unfitting employment of Darleen Druyun, the loss of the contract by government cost the Boeing $1 billion in net sales and, therefore, was again beared by the investors. However, this time the employees also beared the loss as well, in that workers ended up losing their jobs during this turmoil. The rate of recurrence with which the corporation made changes in its management undoubtedly must have had something to do with its financial consequences. All together, the interested parties most affected by the turmoil within Boeing were the company’s shareholders and its workers. The welfare of stakeholders had ceased to be a priority to Boeing. CEOs only listened but never took seriously the complaints of various stakeholders. Due to this fact, they never took into consideration those complaints in their policymaking, and as a result all stakeholders were at risk because of unethical conduct. The affected stakeholders comprised of distributors, suppliers, workers, customers and shareholders. The major issue was the selfish nature of those CEOs whose intent was to fulfill their individual interests; and it evidently resulted in a collective catastrophe within thecorporation, as a few individuals began profiting from practicing unethical conduct. Most probably, it reinvigorated other executives and workers to have the same attitude.
Case Question 2
Under the management of Condit and Stonecipher, it seems that Boeing was applying the “obstructionist” method to deal with issues of social responsibility. In application of this method, the company characteristically repudiates or shuns away from responsibility. A common ground was reached in the lawsuit that Boeing faced against its own shareholders in the wake of the merger with McDonell-Douglas. However, Boeing did not admit to any fault in the matter. In the same way, the matter involving Darleen Druyun resulted in a court dispute. McNerney, being an outsider to Boeing, has no “baggage” in terms of a bad record, lawsuits or other issues that would affect his performance as a leader. I believe that there is a high probability that he will take a preemptive standpoint to corporate social responsibility accountability.
Case Question 3
There may be various opinions regarding whether McNerney’s actions will improve ethics or not. However, in my view it is possible that McNerney will be successful in sanitizing the moral code at Boeing. Firstt and foremost, he has never worked at Boeing before and, hence, has a clear record as far as Boeing is concerned.
The effectiveness and efficiency of the corporation together with its performance dwindled since, for example, the management was not able to take advantage of cost savings resourcefulness. Taking everything into account, it brought about a huge loss in terms of Boeing’s reputation, especially during the embarrassing ousting of Harry Stonecipher.
As unethical conduct was obvious from Harry Stonecipher, the previous CEO who had had an affair with a fellow employee during a retreat, other management executives and middle-level employees who were facing charges, it is clear that Boeing needs some major changes and reforms in regard to Corporate Social Responsibility.
Therefore, it is expected that McNerney would have the impartiality and neutrality that was lacking in previous CEO’s such as Stonecipher and Condit. Additionally, he seems to be dedicated to bring the major changes and reforms to the corporation. He asserts that there ought to be transparency, responsibility and accountability. He is setting out strategies to alter compensation procedures to make sure moral codes of conduct are adhered to. McNerney has put emphasis on the essentiality of changes in both in words and actions.
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