Ethics in Business

>From a business perspective, working under government contracts can be a
very lucrative proposition. In general, a stream of orders keep coming in,
revenue increases and the company grows in the aggregate. The obvious
downfalls to working in this manner is both higher quality expected as
well as the extensive research and documentation required for government
contracts. If a part fails to perform correctly it can cause minor
glitches as well as problems that can carry serious repercussions, such as
in the National Semiconductor case. When both the culpable component and
company are found, the question arises of how extensive these
repercussions should be. Is the company as an entity liable or do you look
into individual employees within that company? From an ethical perspective
one would have to look at the mitigating factors of both the employees and
their superiors along with the role of others in the failure of these
components. Next you would have to analyze the final ruling from a
corporate perspective and then we must examine the macro issue of
corporate responsibility in order to attempt to find a resolution for
cases like these.
The first mitigating factor involved in the National Semiconductor
case is the uncertainty, on the part of the employees, on the duties that
they were assigned. It is plausible that during the testing procedure, an
employee couldnt distinguish which parts they were to test under
government standards and commercial standards. In some cases they might
have even been misinformed on the final consumers of the products that
they tested. In fact, ignorance on the part of the employees would fully
excuse them from any moral responsibility for any damage that may result
from their work. Whether it is decided that an employees is fully excused,
or is given some moral responsibility, would have to be looked at on an
individual basis.
The second mitigating factor is the duress or threats that an
employee might suffer if they do not follow through with their assignment.
After the bogus testing was completed in the National Semiconductor labs,
the documentation department also had to falsify documents stating that
the parts had surpassed the governmental testing standards. From a legal
and ethical standpoint, both the testers and the writers of the reports
were merely acting as agents on direct orders from a superior. This was
also the case when the plant in Singapore refused to falsify the documents
and were later falsified by the employees at the have California plant
before being submitted to the approval committees (Velazquez, 53). The
writers of the reports were well aware of the situation yet they acted in
this manner on the instruction of a supervisor. Acting in an ethical
manner becomes a secondary priority in this type of environment. As stated
by Alan Reder, . . . if they [the employees] feel they will suffer
retribution, if they report a problem, they arent too likely to open their
mouths. (113). The workers knew that if the reports were not falsified
they would come under questioning and perhaps their employment would go
into jeopardy. Although working under these conditions does not fully
excuse an employees from moral fault, it does start the divulging process
for determining the order of the chain of command of superiors and it
helps to narrow down the person or department that issued the original
request for the unethical acts.
The third mitigating factor is one that perhaps encompasses the
majority of the employees in the National Semiconductor case. We have to
balance the direct involvement that each employee had with the defective
parts. Thus, it has to be made clear that many of the employees did not
have a direct duty with the testing departments or with the parts that
eventually failed. Even employees, or sub-contractors, that were directly
involved with the production were not aware of the incompetence on the
part of the testing department. For example, the electrical engineer that
designed the defective computer chip could act in good faith that it would
be tested to ensure that it did indeed meet the required government
endurance tests. Also, for the employees that handled the part after the
testing process, they were dealing with what they believed to be a
component that met every governmental standard. If it was not tested
properly, and did eventually fail, isnt the testing department more
morally responsible than the designer or the assembly line worker that was
in charge of installing the chip? Plus, in large corporations there may be
several testing departments and is some cases one may be held more
responsible than another depending