Scandal at Lockheed Martin and What the Company Did About It Essay

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Moving Toward an Ethical Workplace at Lockheed MartinDo What’s Right. – One of Lockheed Martin’s Corporate Values, 2022Founded on August 16, 1912 by Glenn L. Martin (Our history, 2022), the entity that would become Lockheed Martin (hereinafter alternatively “the company”) is currently a leading aerospace company headquartered in Bethesda, Maryland which employs about 114.000 at more than 370 facilities in the United States and around the world (About us, 2022). Although the company enjoys positive global brand recognition at present, Lockheed Martin experienced some significant fallout as a result of its sales strategies beginning in the 1950s that adversely affected its reputation. The purpose of this paper is to provide a description of some of the unorthodox strategies that were used by Lockheed Martin during the 1950s and 1960s and an analysis concerning whether the ethics of these strategies given their ubiquity at the time. In addition, an examination concerning why the Defense Industry Initiative was important to the eventual success of Lockheed Martin’s ethics program and a discussion about Norman Augustine\'s and Dilbert\'s contribution in helping Lockheed Martin turn the corner with its ethics program are followed by a summary of the research and significant findings concerning the company’s business strategies then and now in the conclusion.Description of some of the unorthodox strategies used by Lockheed Martin during the mid-20th centuryIn reality, the strategies that were used by the company during the mid-20th century were only “unorthodox” by modern standards because bribery was a ubiquitous and accepted part of doing business in many parts of the world at the time. In fact, Terris (2013) points out that not all of the business practices used by Lockheed Martin for its negotiations abroad during the mid-20th century were illegal under U.S. laws, but even those practices such as outright bribery that were illegal elsewhere were widely regarded as just “the cost of doing business” in these regions of the world. In this regard, Terris emphasizes that, “In the 1950s and 1960s, bribery overseas was not even illegal under American law; corporations doing business in other countries were presumed to be subject to the laws (or lack of laws) in those places” (p. 56).Likewise, some of the other strategies that the company used abroad to gain favor with powerful decision-makers appear to be taken right from a James Bond novel, replete with well-known but nefarious and even sinister actors as well as prominent politicians and even members of royal families such as German-born Dutch Prince Bernhardt of Lippe-Biesterfeld. For this purpose, the company enlisted the assistance of influential middlemen with intimate knowledge of the workings of local governments who also possessed good relations with the powerbrokers they needed to sell more Starfighters.

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In this regard, Terris reports that, “In countries around the world, they found willing partners, middlemen with access to the highest reaches of government, who were able to sway decisions for a price, and with access to a pool of funds that would not be tracked too closely” (pp. 55-56). In addition, the company also invested in multiple charitable initiatives in several nations, but it is reasonable to posit that these investments were directly linked to Lockheed…

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…a Supreme Court justice who opined, “Ethics is knowing the difference between what you have a right to do and what is the right thing to do” (as cited in Terris, p. 70). In response to the financial and reputational setbacks that the company suffered as a result of its earlier bribery practices abroad and over the objections of some of his top advisors, Augustine launched an organization-wide initiative that included a skillfully designed Monopoly-like board game featuring Scott Adams’ iconic character, “Dilbert” called “The Ethics Challenge” which became mandatory for company employees as part of wider ethics program. This initiative, together with the top-down emphasis on ethical business practices, helped transform the company’s image from being synonymous with corruption and bribery to a global brand with widespread recognition of its commitment to ethical conduct.ConclusionThe research was consistent in showing that Lockheed Martin engaged in many of the same unethical business practices that were characteristic of the global aerospace industry during the 1960s and 1970s as well as other “shady” practices that were not outright illegal but which were questionable by modern standards. Not surprisingly, the company suffered financially and reputationally when these unethical practices were discovered, an outcome that forced Lockheed Martin to take careful stock of what was needed to transform the company into a competitive yet ethical paragon. The research also showed that Norman Augustine’s inspired use of “Dilbert” in the company’s board game, “The Ethics Challenge” as part of its larger ethic program was highly effective, and the company emerged from its scandal-ridden past to become a global leader in the….....

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