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Ethics In Business

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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, isn't

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



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