make such crucial decisions. Decisions about the ist he drawn is that the tamili
ID: 368221 • Letter: M
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make such crucial decisions. Decisions about the ist he drawn is that the tamilias model of shareho emplksesssrations is left targely to the choices that each group a wwrk best in ted managers trom market outcoes should be mad wwalhh that depart frum market outcomes h the shareholders need not be investors butcould be ine the return of add one more cond is justified, ahthoug rtunity to torgo the h a firm or diffienen th the firm in a market. Through vach contracting, each ntracting i interest and gain its rightfal group in able to itral share of the wealth created by engaging in cc the wea the shareholder moslel of oporate governance is better able than the abernative up woulkd prefer the h of protection than a stakeholder firm to best serve all stakeholder Explore the Concept on mythinkinglab.com se of problems that Buciary duty should ut as an Bath Iron Works On May 17, 1991, a quick decision by CEO William E. Haggett almost destroyed Bath Iron works the largse por the s Navy with 10,400 employes As one of rwo companics with the employer in Maine. Founded in l 884, Bath Iron Works (BW to build Aegis naval destroyers worth $250 million each, BIW was competing fier ts with its rival, Ingalls Shipbuilding in Mississippi. At 5:30 that morning, a janiton rovides not only a of the firm. This et a larger piece of rity or expanded Business Sensitive" in a conference room that had bern a 6-page document stamped " used the previous document s day for a meeting with navy officials. Two vice presidents who examined the realized that it contained a detailed comparison of BIW's and Ingalls's costs for building the Aegis destroyer. They delivered the document to Mr. Haggett at 9:00 A.M. The who was leaving the office to deliver a luncheon speech, examined it for 15 minutes CEO, before making a decision. He ordered the two vice presidents to copy the document, return the original to the conference room, and met with him late in the afternoon to discuss how they During the next few hours, the two executives analyzed the information and did some . At 2:15 they decided to notify the president of BIW, Duane D. should handle the situation. Fitzgerald, who had a reputation for impecable integrity. Mr. Fitzgerald immediately that the federal Procurement Integrity Act requires defense contractors to certify been in unauthorized possession of any proprietary information. In computer modeling based on it Buz that they have not addition, BIW is a signatory to the se Industry Initiative on Business Et (DID), which was formed in 1986 in response to revelations by the Packard Commission of industry contracting. The six principles of the DIl require not only irregularities in defense signatories adopt a written code of ethics, engage in ethics training, and provide mechanisms for internal reporting of possible misconduct but also that they take responsibility for any violation of law, Principle 4 states, "Each company has the obligation to self-govern by monitoring compliance with federal procurement laws and adopting procedures for volun that in ness or justice oduce wealth arket on the disclosure of violations of federal procurement laws and corrective actions taken." Mr. Fitagerald ordered that all copies be shredded and all data erased from the computer. Upon return, Mr. Haggett agreed with the action taken and admitted that he had made an inappropriate business-ethics decision."The CEO personally delivered the original document navy officials on site.However, Mr. Haggett decided not to reveal that copies had been made his to The navy launched its own investigation and concluded that the bidding process had not ised. An adverse decision could have resulted in suspension or debarment as a but to admit only that "no copies existed the vernment contractor, which would have jeopardized the survival of the firm with devastating y. As part of the setlement with not consequences for its employees and the surrounding community, As part of t nary, RiW agreed to establish an ethics program headed by an ethics officer, espand ethicsExplanation / Answer
Yes, it was the correct decision for Bath Iron Works (BIW) to ask the two vice presidents leave the company. The reason is that both the VPs were not ethical in their choice of decision. Logically speaking any situation that tests the value and ethics of an individual should be dealt with careful attention so that it protects the ethical values of an individual. The honesty and integrity of an individual reflects on the ethical decision that the person takes. It is pertinent for every organization, that all the employees follow the ethical code of conduct and do not violate the rules and regulations. Also, the Federal Procurement Integrity Act states that the act requires the defense contractors to certify that the employees are not in any unauthorized possession of any proprietary information. In the case given, the two VPs violated this act and hence they violated the ethical code of conduct. As the leaders of the organization, these two VPs need to set an example for their employees for being fair and ethical in their decision. Hence, it is correct that the two VPs leave the company over the 15 minute ethical lapse.
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