Lockheed Martin Code Of Ethics

Lockheed Martin is one of the largest contractors in aerospace, defense, and security industry. After getting caught using unorthodox sales strategies, including bribery and illegal trades, Lockheed decided to develop a code of ethics as part of its culture. Lockheed took the first step by publishing a document with the title “Lockheed Principles of Business Conduct” in the firm’s magazine. Using this document, the company communicated its devised policies and principles to the employees, making it a responsibility for every employee of the company to follow and act according to these policies. When the “Defense Industry Initiative on Business Ethics and Conduct” was drafted by the major defense contractors in the mid-1980s, Lockheed and Martin

Corporations were also present in the meeting. Lockheed promised to act as per DIY principles.. After the merger of Lockheed Martin, Norman Augustine (CEO), took major steps to ensure that the employees understand the code of ethics of the company. In order to make the task of learning ethics less boring and more creative for the employees, Augustine used the comic strips of Dilbert so that the employees could learn the implication and effect that ethics have on the development and growth of the company. Lockheed Martin adopted the idea that it was not enough to simply expose the employees to ethics awareness but that it really mattered that they respond to it. The program is redesigned each year with new cases, and a new format is developed to keep it fresh and allow employees to explore new approaches.

Building an Ethics-Based Workplace Culture
Lockheed Corporation was an American aerospace company established by two brothers named Allan and Malcolm Lougheed. It was later on merged with Martin Marietta Corporations in March 1995. The company is considered as one of the largest contractors in aerospace, defense, and security industry.
In May 1977, as Lockheed strived to rebound from the bribery scandals and the “Church Committee Hearings”, the company published a document named “Lockheed Principals of Business Conduct” in its magazine. The company assured its stakeholders that it would comply with the laws of the United States as well as other foreign countries, working in a way that would not create any conflict of interest between the United States and the organization, and would strive for integrity and honesty in its work (Terris, 2005). With these claims, Lockheed challenged itself and other major companies to put ethics and responsible behavior ahead of their need to maximize profits.
Lockheed began doing efforts based on the assumption that each and every employee of the company is responsible in creating the culture of the whole organization and will represent the whole organization with his/her actions. It was the first attempt of Lockheed at its code of ethics. Lockheed had a challenge to earn salaries for its workers and create wealth for its stockholders while at the same time following and acting as per its code of ethics. Its first efforts were based on the premise that employees simply needed to be reminded of the “right thing to do”. The code of conduct was duly published, revised, and disseminated.
When the “Defense Industry Initiative on Business Ethics and Conduct” was drafted by the senior officials and CEOs of Jack Welch, General Electric and 17 other defense contractors in the mid-1980s, Lockheed and Martin Corporations were also present in that meeting.

Lockheed and Martin Corporations along with 32 other defense contractors had promised to act as per these principles. The contractors had assured that they would develop their organization’s culture as per the code of ethics, training their employees in that culture, encouraging internal reporting of violations of ethics, implementing systems that would monitor compliance with the code of ethics, and being responsible in case of violation of

ethics.
Lockheed Martin’s code of conduct was based on carefully chosen principles, a style that places its signal emphasis on a concept of open communication. The six values, honesty, integrity, respect, trust, responsibility, and citizenship, were promoted as the pillars of the way Lockheed Martin does business. It clarified their mission, values, and principles, linking them with standards of professional conduct. The code articulated the values the organization wished to foster in its employees and in doing so defined desired behavior. As a result, written codes of conduct or ethics became benchmark against which individual and organizational performance was measured.
The code was a central guide and reference for employees to support day-to-day decision making.

The code encouraged discussion of ethics and compliance, empowering employees to handle ethical dilemmas they encountered in everyday work. The “Ethical Decision Making Model” asked employees to evaluate information, consider how their decision making might affect the stakeholders, estimate what ethical values are relevant to the situation, and determine the best course of action taking into account relevant values and stakeholder’s interests.
In March 1995 Lockheed and Martin Corporations merged their companies after the approval of their shareholders. In 1996 Norman Augustine became the CEO of the new company after Daniel Tellep retired in the same year. Augustine quickly recognized the dull and boring ethics program of Lockheed Martin, considering it to be counterproductive since it stimulated resentment, cynicism, and outright hostility towards the whole idea of ethics. Carol Marshall was in charge of Lockheed Martin’s ethics program, and she was told by Augustine to introduce a better

idea.
While moving around the corporation, Marshall noticed that the employees were very much in love with the comic strips named Dilbert, being pasted on every bulletin board, office door, and cubicle. Considering it an excellent way of employee training and communication, Augustine made a deal with Steve Cohen and David Gebler, the owners of the rights to Dilbert, to work for the Lockheed Martin’s ethics program with Dilbert at its center.
The result of their work was “The Ethics Challenge”, which became the mandatory ethics awareness program for every employee at Lockheed Martin in 1997. The concept of the game was similar to that of “Monopoly” or “Clue”. To begin a move, each team selected one of fifty case file cards, each containing an ethical issue or dilemma based on an actual experience of Lockheed Martin ethics officers and employees. A team member would read the case to the team and then give them four possible responses to choose from. Teams would then discuss the case and decide the best ethical response to the case.
Team members were instructed to base their responses on the six company values: honesty, integrity, respect, trust, responsibility, and citizenship. Thus, the game became successful in creating a sense of awareness in employees, regarding the ethical values of the organization and their importance in its survival. By the turn of the century, the company’s ethics office had evolved from a small, centralized office concerned with federal regulations into a corporation-wide network of codes, principles, programs, and people. It ensured that the company’s success was in no way under threat from its ethical responsibilities.
Lockheed Martin had realized that while giving in to illegal or unethical practices could lead to short term gains, it is harmful for the growth of the company in the long run. Moreover, lack of a strong ethical culture and value system could lead the company to face severe consequences in the future. Amoral or illegal practices could damage the company’s reputation and make it unappealing to stakeholders, leading to loss in profits in the long run.
Lockheed Martin adopted the idea that it was not enough to simply expose the employees to ethics awareness, but that it really mattered that they respond to it. The program’s success is measured not only by how effective it was in reaching employees but also by how positively they responded to it. The program is redesigned each year with new cases, and a new format is developed to keep it fresh and allow employees to explore new approaches.
Lockheed Martin has created the tidiness of its ethics program by building it inside a sturdy compartment and then carefully making sure that the package remains intact. This is a careful strategy aiming to build morale within the Lockheed Martin community and to build confidence about the ethics program among those who work for the U.S. Government and in the larger arena of public opinion.