Case Study

hi I'm Wayne Casio in a recent study of ethics and values at work conducted by the Society for Human Resource Management respondents describe companies whose senior managers lied to employees customers and stockholders alike the shared stories of executives who condoned and even ordered illegal activities and they told of organizations with hostile work environments and blatantly discriminatory hiring practices in recent years there have been numerous scandals in the United States and elsewhere involving corporatemisbehavior and some executives have even been convicted of criminal violations in the ensuing turmoil careers have been shattered along with corporate reputations but this is a different kind of story it's a story about the good guys the ones you rarely hear about who maintain a higher standard of integrity and are strong believers in a culture of ethics to tell this story effectively we needed a company that consistently strives for the highest standard of ethics that company is Lockheed Martin headquarteredhere in Bethesda Maryland Lockheed Martin corporation was formed in 1995 with the merger of two of the world's premier technology companies Lockheed corporation and Martin Marietta corporation the combined company employs about a hundred and thirty-five thousand people worldwide and is engaged in the research design development manufacture and integration of advanced technology systems products and services to understand how Lockheed Martin does it we spoke with some of the company's senior leaders as well as with itssupervisors and employees Bob a CEO you set the tone of ethics and values for the entire organization specifically how do you do that it's really important that we communicate clearly our expectations and our values and I think the best way that we've found to do that is to lead by example try to emulate a standard of excellence and integrity in our own behavior each day and to find examples across our workforce of employees who have taken an action that we very much admire ethics has been something that's veryimportant at this corporation and I've never been in a corporation that takes it this seriously they're constantly watching you as a leader and you send a very important message whether you like it or not you are sending messages by the way you conduct yourself so it's very important for the managers to walk the talk and we spend a lot of time on communications to managers our entire board for the last two years has received the same training that our employees receive for our fundamental belief as employees want to do the rightthing integrity is hard to teach it but it is easy to demonstrate good ethics is good business what we focus on is giving employees a roadmap some tools some experiences some advice from colleagues that can help guide them through complexities every day to build a better business is it fair to say then that that one of the challenges you face is to get people to do the right thing even when nobody's looking yeah absolutely absolutely you need to do that test of would I do this if you know if I knew that I wouldn't get caught integritybinds all of us together we've actually been amazed in some senses of how one action by one employee can distort the contribution in our case of a hundred and thirty five thousand employees so part of our communication includes a discussion around do you want to be the person who would taint the reputation of all these colleagues who we admire and trust you need to make sure that your hiring practices and your metrics collection and the tone that you set is strong enough is robust enough to make sure that when you're not in the rightplace at the right time that others are carrying that forward ethical considerations are absolutely part of the fabric of our business every day what does HR do to ensure that employees and managers will do the right thing even when no one is looking the fact that it's ingrained in our culture is a magnificent tool to make sure that people understand ethics they make it a part of themselves it's not just something that we have written on the wall at Lockheed Martin our first policy statement CPS zero zero one is ourethics policy statement and we always coordinate through HR on that policy as well as other policies that HR is working and when they work changes they coordinated through the ethics office one of the things that we do is we are always trying to promote a positive and inclusive work environment I think what's one of the roles that HR constantly plays because we are out front and deliver that message to the employees your HR is where the the folks will touch taste and feel the kind of culture the company wants to developwith 2005 sales of thirty seven point two billion dollars Lockheed Martin's operating units are organized into five business areas aeronautics Space Systems electronic systems information and technology services integrated systems and solutions what advice do you have for other CEOs who are trying to instill corporate cultures that value high ethical standards to always remember that good ethics is good business there is no difference between the two that our performance and I think every CEOsperformance is in fact measured over the long run not quartered a quarter and not even year-to-year but in some cases decade to decade I think if you're a small organization you look at your senior management and you say hey this this message starts here this is not something that you can choose don't treat it as a initiative of the month consistency in the messaging is key you have to be consistent you have to tell the message repeatedly and continue to maintain that awareness and that complaint is not happy with the resultsand he or she can bring it up to the business area director level and they will review it and again if the complaint remains unhappy it'll come up to my level and I'll review it and get feedback and sometimes employees request that things go to the Board of Directors as well consistency requires repetition and so we use all of our vehicles whether it's Lockheed Martin today our company newspaper our monthly video lm-1 we have messages to the management team messages from our CEO to all employees there's anethics hotline we can pick up the line at any time and we need to and call someone and say there is an issue and without fear of having someone come to you and have your boss come to you in this case and say I hear you call the ethics hotline so that is a terrific way of communicating and not having to worry about repercussions we have developed a template that we call full spectrum leadership that examines not just a person's ability to put numbers on the board which is an element certainly of executiveperformance in behavior but also the method by which they do that their behavior their respect for fellow employees their track record not just on the performance side but on the behavior side you take it very seriously but in every performance review there is a look at what was accomplished but also how was it accomplished and did you do it in the way that we would want our employees and our leaders to do it one theme that has come through clearly in the people we've just heard from is that strong corporate values and high ethicalstandards are not just public relations hype to improve corporate image rather among organizations that truly believe in living those values and ethical standards it takes work to develop practical policies and programs and it takes constant vigilance to ensure that the policies are being enforced here are five important lessons for companies that are serious about building corporate cultures that reflect both high ethical standards and solid corporate values 1 get buy-in from top management it drives organizationalculture 2 communicate a consistent message across the organization three use a variety of internal communications to repeat the message constantly four provide annual training for all employees and board members updated each year five include an ethics component in performance reviews the greatest source of enduring value is the value of the workforce in an enterprise when that workforce has the right foundation structured on ethics integrity trustworthiness you'll do the very best for the business

Please Answer the Following with using the information from the case study above

• Discuss several ways in which Lockhead Martin have worked on developing an ethical culture.