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Lockheed Martin’s Ethics Program Implementation Case Study

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Updated: Jun 12th, 2020

Introduction

Business incentives often have a significant influence on the implementation of a company’s ethics program. Lockheed Martin Corporation is no exception. This company has a well-developed and detailed ethics program. In this work, four of the most beneficial initiatives had a serious effect on the company’s ethics program: the purchase of Sikorsky Aircraft, the collaboration with Exostar, the launch of a new strategic airlifter, and the contract with the Australian government that requires that the company train Australian military pilots. Among these initiatives, the latter is the most influential in the ethical aspect.

The Ethics Program of Lockheed Martin

Previously to studying the effect of Lockheed Martin’s business incentives on its ethics program, it is necessary to find out what exactly this ethics program implies.

Lockheed Martin has developed a detailed ethics program. According to the company’s statement, the leaders are convinced to consider the success of the organization relies on the commitment to integrity. The vision of the company requires it to be a universal leader in encouraging its customers to strengthen global security, fulfill citizen services, and promote scientific discovery. The values of the company include “doing what’s right, respecting others, and performing with excellence” (Lockheed Martin Corporation, 2014, p. 1).

The corporate social responsibility of Lockheed Martin involves efforts for the eradication of human trafficking and a responsible search for conflict minerals. An anti-corruption program is included in the ethics program. The company promotes a responsible attitude to the environment and politeness to the customers, as well as it strives to maintain employee commitment and satisfaction. The leaders of the company also struggle against retaliation in the working environment. The company strives to charge the work fairly, maintain accurate timekeeping, and ensure the accuracy of the customers’ records (Lockheed Martin Corporation, 2014).

The Effect of the Incentives on the Ethics Program

Some of the recent incentives undertaken by Lockheed Martin can be considered especially beneficial. Among them are the acquisition of Sikorsky Aircraft, the joint effort with Exostar, the development of a new strategic airlifter, and signing the contract for training Australian pilots.

In summer 2015, Lockheed Martin announced its plan to purchase Sikorsky Aircraft. This November, the acquisition was completed, and, as a result, a new company (Lockheed Martin’s Sikorsky company) was created (Lockheed Martin completes acquisition of Sikorsky Aircraft, 2015). This action has far-reaching implications for the company’s ethics program. First, it shortens the number of the US defense distributors and reduces the diversity among them (Pentagon criticizes Sikorsky acquisition, 2015, par. 1). Lockheed Martin will certainly need to alter their program and undertake actions to promote diversity in this sphere.

Second, the creation of a new dependent company will need to be addressed as well. Lockheed Martin’s Sikorsky company will need a new ethics program, or the program of the mother company will need to be altered and adjusted to the new company; in any case, a mere copying of the ethics program can hardly work. Leaving the old program, which Sikorsky Aircraft had before its acquisition will not work either due to the difference in conditions. Lockheed Martin should take care of the employees, who worked for Sikorsky Aircraft before the change of ownership. The ethical problems of Sikorsky Aircraft are now the concern of Lockheed Martin.

The partnership with Exostar is another beneficial initiative. Lockheed Martin started this partnership to secure and facilitate the process of getting access to the company’s resources for partners, customers, and other suppliers via such external-facing systems as OneAero and LM Procure to Pay (LMP2P). To get access to these systems, a person or an organization should possess an account at Managed Access Gateway (Supplier & industry initiatives, 2015). This initiative certainly strengthens the company’s ethics program in addition to being consistent with its standards.

First, investing in security is not only profitable but is also a strong implication of the ethical concern about the security and satisfaction of customers and partners. Second, this incentive strengthens the company’s strive for the responsible conducting of its business. Third, the incentive demonstrates the respect to other suppliers and even rivals of the company. Finally, the company claims to value its reputation highly, and this incentive will certainly have a positive impact on their reputation. Overall, the incentive serves to strengthen and fulfill the company’s ethics program.

The new strategic airlifter announced by Lockheed Martin in 2015 is twin-engine and has a blended wing body. The company’s specialists had been developing its concept for six years, and the design is an absolute success: the new airlifter can carry as much weight as Lockheed C-5 and burns 70% less fuel compared to Boeing C-17 (Lockheed Martin’s hybrid wing-body future airlifter, 2015). The launch of new products, especially successful ones, always has serious implications for ethical policy.

First of all, the success of a new product establishes a high standard and creates a certain positive reputation. Therefore, a need arises to maintain that standard and preserve the reputation, which adds one or two more ethical tasks to the company. Additionally, the launch of this airlifter establishes a high innovation standard, so the ethics program will need to include that standard as well. Aside from that, the fact that the new airlifter burns much less fuel strengthens the ethical program because it is beneficial for the environment. Therefore, this initiative not only strengthens the ethics program of Lockheed Martin but expands it.

A little while ago, Lockheed Martin has won the contract for seven years and $867 million with the Australian government. The task is to train the new generation of Australian military pilots, who serve in the Royal Australian Air Force, the Australian Army, and the Royal Australian Navy. Lockheed Martin will deliver an aircraft, several flight simulators, special courseware, and logical support, and create an appropriate learning environment for the students (Shalal, 2015). This incentive may have a significant influence on the company’s ethics program.

First of all, the incentive will test the company’s ability to work with a diverse contingent. Even if the effort is successful in the aspect of diversity, the employees of the company will certainly discover something new in this aspect, which will lead to the alterations in the ethics program. Next, the incentive offers an opportunity to pass over the company’s ethical traditions. Finally, it will strengthen the bonds within the professional community. Of all the mentioned incentives, this one will probably have the strongest consequences for the company’s ethical policy since it involves working with people from a different environment.

Conclusion

In this work, the following initiatives of Lockheed Martin and their effect on ethical policy were studied: the purchase of Sikorsky Aircraft, the interaction with Exostar, the new strategic airlifted, and the contract with the Australian government. The last initiative is the most significant in its impact on the implementation of the ethics program.

References

(2015). Web.

Lockheed Martin Corporation. (2014). . Web.

Lockheed Martin’s hybrid wing-body future airlifter. (2015). Web.

Pentagon criticizes Sikorsky acquisition. (2015). Rotor & Wing. Web.

Shalal, A. (2015). . Reuters. Web.

(2015). Web.

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