On p. 83 Terris discusses the company’s ethics code. Why is the code considered important to the company’s ethics program? Discuss the importance of ethics training and employee involvement. What are some of the things Lockheed does to make the training process interesting and worthwhile? How does Lockheed measure success with respect to ethics in the workplace? What are some of the things Lockheed does at the operational level to make their ethics program work? Write a 3- to 4-page paper, not including title page or references page addressing the issue. The paper should be double-spaced and in 12-point type size. The paper should have a separate cover page and a separate reference page. Make sure you cite your sources. Page 83 is below: The Code Brian Sears, and every other ethics officer at Lockheed Martin, bases his work on a foundational document: Setting the Standard: The Lockheed Martin Code of Ethics and Business Conduct. First printed immediately following the merger in 1995, the code, updated every year or two, exists in the form of a spiral-bound, pocket-sized booklet, intended for handy reference. Its fifty-four pages are laid out more like a little marketing brochure than a dry legal document, complete with full-page color photos of Lockheed Martin people and products. On page 53 is the receipt and acknowledgment form; with each new edition, every Lockheed Martin employee agrees that I understand that each Lockheed Martin employee, member of the Board of Directors, agent, consultant or contract worker is responsible for knowing and adhering to the principles and standards of the Code. “In addition to English, the booklet is available in Arabic, Chinese (Mandarin and Traditional), French, German, Greek, Hebrew, Hungarian, Japanese, Korean, Portuguese, Russian, Spanish, and Turkish. Public and widely disseminated codes of ethics like Setting the Standard are a commonplace now in corporate America. For one thing, they are a basic requirement under the federal sentencing guidelines, SarbanesOxley, and other legislation aimed at promoting corporate accountability and responsibility. A written code is a starting point, the bare minimum for establishing standards. Companieseven small onesthat neglect to write and distribute a code do so at their peril, since the existence of the written document is the first (although minimal) line of defense against lawsuits or criminal investigations that hold top management accountable for illegal or unethical activity. With increasing scrutiny, the mere existence of a code of business conduct is no longer sufficient; the content and, indeed, the style of such codes have come to matter a great deal. Companies may be tempted to develop a long, dry, excruciatingly detailed list of rules, regulations, and donts, thinking that exhaustiveness can immunize them against every conceivable form of wrongdoing. But observers now pay attention not only to the content of the code, but also to its perceived accessibility. If a document is not readily available and easily read by the average worker, outsiders can charge that it is not an effective means of communicating the ethical bottom line. At the other end of the spectrum, a company that simply lists a few basic values is vulnerable to the charge that its code is no more than vague and empty rhetoric. Setting the Standard aims to fall between these two poles. Its most striking and insistent feature is that it places responsibility for ethical behavior and for the ethical performance of the corporation on each and every individual employee at Lockheed Martin. It begins with a letter from the Chief Executive Officer and the Chief Operating Officer of the corporation, addressed Dear Colleague, to suggest from the very first line a kind of parity between leadership, management, and line employees. What matters is the personal integrity of each of our employees and their commitment to the highest standards of personal and professional conduct. The development of an ethical culture at Lockheed Martin is based on individual integrity, although in a context that values teamwork, sets team goals, assumes collective responsibility for actions, embraces diversity, and shares leadership. The letter is intended both to send a message of top-down leadership on the development of this ethical culture, and to suggest that such a culture is in some sense democratic, built from the bottom of the company up. The letter spells out the six principles through which Lockheed Martins expects to set the standard for ethical behavior: Honesty: to be truthful in all our endeavors; to be honest and forthright with one another and with our customers, communities, suppliers, and shareholders Integrity: to say what we mean, to deliver what we promise, to fulfill our commitments, and to stand for what is right. Respect: to treat one another with dignity and fairness, appreciating the diversity of our work force and the uniqueness of each employee. Trust: to build confidence through teamwork and open, candid communication. Responsibility: to take responsibility for our actions, and to speak upwithout fear of retributionand report concerns in the workplace, including violations of laws, regulations, and company policies, and seek clarification and guidance whenever there is doubt. Citizenship: to obey all the laws of the United States and other countries in which we do business, and to do our part to make the communities in which we live and work better. The set of principles is carefully chosen to develop a certain style on which ethics is built, a style that places its signal emphasis on a concept of open communication. Ethics, in the Lockheed Martin conception, develops through the free flow of information honesty and forthrightness, saying what we mean, candid communication, and a willingness to speak up are the networks through which ethics is supposed to flow. The underlying assumption is that the temptation to bend the rules flourishes in isolation, in dark corners and in secrecy, and that frequent and unguarded communication is the best protection against misdeeds. The theory may be sound, but it also poses a particular challenge and strikes an odd chord in a corporate environment where national security concerns and the possibility of corporate espionage make secrecy a paramount necessity. The bulk of the code, following the opening letter and articulation of the principles, outlines the key topics of concern in maintaining ethics in the Lockheed Martin workplace. The obligation to Promote a positive work environment covers cultural diversity and the insistence that we will not tolerate harassment or discrimination of any kind. (Since 2001, the list of types of discrimination that Lockheed Martin will not tolerate has included sexual orientation and family structure, in addition to the more established categories. This change in a conservative company environment, was instituted in response to shareholder pressure at the companys 2000 annual meeting.) Keep Accurate and Complete Records, and Make Accurate Public Disclosures and “Record Cost Properly” make clear that no one should rationalize or even consider misrepresenting facts or falsifying records. “Avoid Illegal and Questionable Gifts or Favors provides precise detail about federal law and corporate custom on business courtesies. With federal employees, Lockheed Martin representatives can give coffee mugs or calendars, coffee and donuts, or a meal for less than $20; courtesies to nongovernment employees simply must be consistent with marketplace practices, infrequent in nature, and may not be lavish or extravagant, and no employee may give or receive a gift worth more than $100. Know the Law When Involved in International Business focuses less on ethical issues, but calls employees attention to the U.S. laws that have been enacted in the years since Lockheed was enmeshed in the overseas bribery scandals. Other sections of the code address political contributions (Follow the Law and Use Common Sense), conflicts of interest (Steer Clear), employment of former government officials (Know the Rules), company assets like computers and equipment (Use Wisely), and speculative and insider trading (Do Not Engage). At the back of the booklet are a list of Warning signs and a Quick Quiz. A Lockheed Martin employee learns there that You’re on Thin Ethical Ice When You Hear . . . such phrases as Well, maybe just this once, or, It doesnt matter how it gets done as long as it gets done, or, perhaps a bit more obviously, “We didnt have this conversation. Taking the quiz, employees are instructed, When in Doubt, Ask Yourself . . . questions like How will it look in the newspaper? and Will I sleep soundly tonight? But in case the message has seemed too soft, a section on accountability warns that Violations of the Code are cause for corrective action, which may result in disciplinary action up to and including dismissal. The booklet urges employees to ask and keep asking questions, and provides a list of company resources, including not only the ethics office and the general counsel but also a direct and ostensibly anonymous line of communication to the audit and ethics committee of Lockheed Martins board of directors. Personal responsibility and a well-developed conscience are the hallmarks of the standard that Lockheed Martin aspires to set. The document places a high level of responsibility on the individual employee both for knowing the guidelines and for acting on them. In one sense, this is inevitable, as any corporate entity ultimately depends on the actions and integrity of each flesh-and-blood human being who works for it. Yet in another sense, the emphasis on personal responsibility is misleading, especially in an environment where teamwork, the rapid flow of information, and the powerful pressure of deadlines mean that many key decisions are by their nature collective and improvised, rather than individual and carefully deliberated. Setting the Standard implicitly describes the ethics of a corporation as the sum total of millions of decisions made by individual actors. This approach brings to light one truth about human enterprise, and it promotes a healthy sense of personal investment in the corporations character. But the approach evades another truth about the nature of corporate life: Corporations make decisions in different ways from individuals, in a world where the rules are constantly changing. In the absence of a more rigorous process of self-examination, it is perfectly possible for an individual to sleep soundly and still participate in collective actions that violate the principles of ethics and fair play.
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