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