Corporate Social Responsibility at Boeing

Boeing’s Hope for the Future

In August 2011 Boeing publicly announced the release of the 737MAX. The maiden flight of the 737MAX was on January 29, 2016. The goals of the 737MAX were to improve fuel usage and operating efficiency through the introduction of new engines. On March 8, 2017, Boeing received FAA certification.

There were high expectations for this aircraft. Boeing pushed to expedite approval of 737MAX to compete with a competitor’s plane, the Airbus 320neo. Boeing’s goal was to globally deliver all 500 737MAXs by the end of 2018.

However, two fatal accidents, which occurred within five months, caused a worldwide grounding of the 737MAX. The first accident occurred in October 2018, killing 189 people. The second accident occurred in March 2019, killing 157 people. Both accidents occurred within minutes of takeoff. The accidents caused the U.S. government to launch an investigation into Boeing’s regulatory process.

So, what happened and who is at fault?

Where Boeing Fell Short in Social Responsibility

In September 2019 a whistleblower that formerly worked as an engineer for Boeing filed an ethics complaint alleging that during the development of the 737Max, Boeing had rejected a safety system to minimize costs (Bouw, 2019.) This piece of safety equipment he believed could have reduced the risks that contributed to the two fatal crashes. The whistleblower alleged the chief executive publicly misrepresented the safety of the plane. Boeing’s actions emphasized profit instead of safety (Kitroeff et al, 2019.)

The whistleblower alleged that during the development process of the 737MAX, Boeing deliberately failed to add components that would have forced airlines to train their pilots in flight simulators which would cost millions of dollars over the life of the aircraft. Also, changes to the initial plans for the aircraft would require Boeing having to go through a long, drawn-out FAA approval process, instead of expediting certification of a modified existing model (Kitroeff et al, 2019.)

After the first crash in October 2018, Boeing along with the FAA deflected fault to the abilities of the pilots, even though it was eventually shown that pilots were not given the directional guidance needed to properly react to the aircraft’s tendency of unexpected descents. An operational flaw that became evident during the development stage. It wasn’t until the second crash in March 2019, that Boeing acknowledged that a software (known as MCAS) glitch in the plane’s cockpit may have contributed to the accidents (Hall and Goelz, 2019.)

Although Boeing, was to blame for failing to produce a safe aircraft, they were not the only ones to blame in this tragic scenario. The FAA was also at fault. Following the first crash, FAA engineers admitted that they did not fully understand the MCAS software, which was the automatic system that contributed to sending the plane into a nose-dive. As such the FAA regulators did not fully assess the risks that may be associated with the MCAS, before approving the aircraft in 2017. According to current and former employees of Boeing and the FAA, the regulatory process to FAA approvals is flawed. The FAA regulator on the MAX project relegated nearly complete control to Boeing, which left some key FAA officials in the dark about the MCAS systems as well as other systems (Kitroeff et al, 2019.)

Another area in which the FAA failed to do its due diligence is in the way that the current regulatory process is designed. The current system allows a company (i.e. Boeing) to make significant modifications to an aircraft design without mandating a new certification review. In the case of the 737MAX, the new aircraft had different flight characteristics, bigger engines, and a completely new flight management system. With all the revisions no simulator training was required for pilots who were familiar with older versions of 737s. Boeing used this omission of “No additional training needed,” as a marketing ploy to increase sales. With all these changes the FAA allowed this to happen (Hall and Goelz, 2019.)

What Was Done to Correct the Oversight of Social Responsibility

Immediately following the second crash of the 737MAX in March, many countries and airlines started grounding the aircraft pending investigation into the crashes. However, here in the U.S., FAA regulators and several prominent carriers stood by Boeing. The FAA reaffirmed its judgment call that the aircraft was still airworthy. Based on the FAA reaffirmation Southwest Airlines and American Airlines continued flying the planes. Subsequently, it was not until President Trump announced the planes were to be grounded that the U.S. grounded these planes. Up till this decision Boeing continued to resist all efforts to ground the 737MAX (Sucher, 2019.)

Boeing’s immediate response was to tout to the President and investigators that the aircraft is safe, and that simply retraining the pilots on the new system is all that is needed to resolve the problem. It was not until April 4, 2019, that Boeing CEO Dennis Muilenburg announced, “Boeing formally accepts responsibility for the two crashes.” He expressed sympathy for all the lives that were lost and acknowledged that the MCAS software played a role in the crashes (Fan, 2019.) This announcement would have been better received had it not taken a whole month to happen.

Boeing made the same mistake as Wells Fargo, it failed to take accountability, promptly. When repairing damage to a company, experts say accountability is key. Taking accountability for a situation means understanding the mistakes that were made, admitting fault, not passing blame and then learning from the mistakes.

To date, the 737MAXs are still grounded and the Department of Justice and the Department of Transportation continue their investigation into both Boeing’s operation and the regulatory processes of the FAA.

Conclusion

In the corporate world, deontological social responsibility generally promotes a sense of duty that’s more reactive than proactive. This means that the sense of duty is in reaction to a regulation or law and it does not occur to promote the efficiency or effectiveness of the company.  Boeing’s attempt to make things right after the 737MAX crisis was reactive not proactive (Chakrabarty & Bass, 2015.)

The actions of Boeing were contradictory to the Deontology (Ethics) theory. Deontology (Kantian) ethics theory states morality is based on duty and obligations of one party to another. The actions of the first party are judged independently of the outcome. Kant believed, using people only to get what you want while disrespecting the human worth of others is against moral law. This is exactly what Boeing has done, they put personal gain before the safety of human lives. Boeing violated Kant’s Categorical Imperative #2-the Formula of Humanity. This imperative, states “act so that you treat humanity, always as an end and never as a mere means.” (Crash Course, 2016.) The lives of 346 passengers that were lost were a mere means to Boeing’s goals.

References

• Bouw, B., (2019), “Boeing Shares Slip on Report Company Engineer Filed 737MAX Ethics Complaint,” Retrieved on October 3, 2019 from www.thestreet.com/markets/regulation/boeing-shares-slip-on-report-company-engineer-filed-737-max-complaint-15112575
  Chakrabarty, S. and Bass, A.E., (2015), “Virtue, Consequentialist, and Deontological Ethics-Based Corporate Social Responsibility: Mitigating Microfinance Risk in Institutional Voids,” Retrieved on October 5, 2019 from ProQuest, Journal of Business Ethics: JBE; Dordrecht Vol. 126, Issue 3,  pg. 13 (Feb 2015): 487-512. DOI:10.1007/s10551-013-1963-0
• Crash Course, (2016), “Kant and Categorical Imperatives, Crash Course Philosophy #35,” Retrieved on October 5, 2019 from www.youtube.com/watch?tv=8bly6JoEDw
• Fan, K., (2019), “Boeing Takes Responsibility for Lion Air, Ethiopian 737MAX Crashes,” Retrieved on October 5, 2019 from https://thepointsguy.com/news/boeing-takes-responsibility-for-737-max-crashes/
• Hall, J. and Goelz, P., (2019), “The Boeing 737 Max Crisis Is a Leadership Failure,” Retrieved on October 3, 2019 from www.nytimes.com/2019/07/17/opinion/boeing-737-max.html?action=click&module=RelatedCoverage&pgtype=Article&region=Footer
• Kitroeff, N., Gelles, D. & Nicas, J. (2019), “Boeing 737MAX Safety System was Vetoed, Engineer Says,” Retrieved on October 3, 2019 from https://www.nytimes.com/2019/10/02/business/boeing-737-max-crashes.html
• Kitroeff, N., Gelles, D. & Nicas, J. (2019), “ The Roots of Boeing’s 737 Max Crisis: A Regulator Relaxes Its Oversight,” Retrieved on October 3, 2019 from https://www.nytimes.com/2019/07/27/business/boeing-737-max-faa.html?action=click&module=RelatedCoverage&pgtype=Article&region=Footer
• Sucher, S., (2019), “How Boeing Should Have Responded to the 737MAX Safety Crisis,” Harvard Business Review, Retrieved on October 5, 2019 from https://hbr.org/2019/03/how-boeing-should-have-responded-to-the-737-max-safety-crisis
• Comparing Virtue, Consequentialist, and Deontological Ethics-Based Corporate Social Responsibility: Mitigating Microfinance Risk in Institutional Voids
• Chakrabarty, Subrata; Erin Bass, A. Journal of Business Ethics: JBE; Dordrecht Vol. 126, Iss. 3,  (Feb 2015): 487-512. DOI:10.1007/s10551-013-1963-0