Ethics Code and its Importance at Lockheed Martin

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EthicsCode and its Importance at Lockheed Martin

EthicsCode and its Importance at Lockheed Martin

Lockheed’sethics code and its significance to the firm’s ethics program

A code of ethicscontextualizes the way a firm runs its businesses through the desiredorganizational culture and conduct. In most cases, it denotes thepolicy statements that describe ethical principles for anorganization’s conduct (Davidson &amp Stevens, 2012 Mihelic,Lipicnik, &amp Tekavcic, 2010). This means that although a code ofethics is not the guiding booklet for all the values and conduct of afirm, it allows employees to stay engaged on ethical aspects.According to Terris (2005), Lockheed Martin’s code of ethics,Setting the Standard was created in 1995 following the mergerof Lockheed and Martin and exists in a compact-sized brochureintended for handy reference. The code is updated annually or afterevery two years and contains an acknowledgment form in each updatefor all employees to abide by its principles. Terris (2005) positsthat a printed code of ethics is fundamental to an organization as itpromotes corporate responsibility and accountability. This means thata detailed code allows a firm to develop principles, guidelines,rules, regulations, and don’ts that employees need to extensivelyconsider in completing their duties. As such, a detailed andaccessible code protects an organization from unethical employees.For example, Terris (2005) asserts that Setting the Standardplaces accountability for moral performance and behavior on eachemployee and establishes parity between line employees,administration, and leadership.

Importanceof ethics training and employee involvement

Training andengaging workers on ethics enable a firm to set standards and teachthe employees on the significance of integrity. Training creates afavorable environment for employees to engage in a professionalmanner and take responsibility for their action. Furthermore,training and developing workers enhance employment engagement andcreate a sense of belonging. It is imperative to note that ethicstraining enhances teamwork as it infuses trust and respect inco-workers. By training people and engaging them towards a sharedgoal, a firm manages to create a harmonious and conducive situationwhere employees trust each other, take responsibility for theiractions, and focus extensively. Terris (2005) contends that LockheedMartin’s has a yearly ethics awareness drill, which is the mostextensive and consistent ethics activity of the organization. Theprogram has become effective and successful since it uses a single,flexible instrument where all its employees spend more than 1 hourannually discussing ethics. The program is redesigned every year anda new routine and rhythm created to make it fresh and enableemployees to explore new approaches. New cases are introduced andemployees discuss the cases and envisage an ethical approach, whichallows them to understand ethical decisions and become accountable.During the training and discussion on ethical values and decisions,the management encourages the employees to ask questions, obtaininformation, engage extensively, and reframe issues. Furthermore, themanagement develops training modules on numerous topics, which allowemployees to discuss a range of ethical issues. Since the trainingprogram is developed on the basis of interactive communication andpersonal accountability, it allows employees to engagecomprehensively and appreciate the training.

Measurementof success at Lockheed with respect to ethics

For a company todetermine whether its code of ethics is working, it needs to developstandards for measuring its success. Mihelic et al. (2010) contendthat organizations must evaluate their performance to determine theirlevel of commitment to ethics. This means that the development of apolicy to assess the effectiveness of ethics program allows a companyto stay ethical and accountable. At Lockheed, the management places alot of importance on the success of its ethics program since aneffective program illustrates the commitment of the firm toaccountability. Terris (2005) contends that Lockheed utilizes metricsto determine the success of its program. The metrics are developed onthe framework of a biennial survey of the firm’s complete laborforce. With the help of a non-profit firm, Ethics Resource Center,Phil Tenney develops and administers the survey. Since the surveyallows the employees to fill in questionnaires on their understandingof an ethics program, as well as, their role in behaving in anethical manner, it allows the ethics department to measure successeffectively. The Office of Ethics uses the responses from theemployees’ survey to create new reactions to specific issues.Furthermore, the survey allows the management to determine the levelof effectiveness since it draws a line on the reaction ofsupervisors. The Ethics Office carries out consistent andeffective evaluations to look at the data and trends about theaccusations reported, timelines of reactions, and contacts received.The information gathered from the survey is significant inunderstanding the efficiency and areas of improvement of the program,as the data is made available to the firm’s leadership. It isimperative to note that the firm rates employees and evaluates theircomments on integrity and ethics. The survey is also supported byannual assessments on the implementation and success of the program.Lockheed has managed to develop its ethics program effectively giventhe level of success it has realized since its merger. For example,the company has avoided scandals and is regarded as an ethicalorganization by the public opinion.

Conductat operational level to make the ethics program a success

To ensure that its ethics code becomes effective and a success, thecompany promotes a positive and favorable working environment for allemployees. The firm has employed an environment that respects allworkers, recognizes diversity, and supports trust, honesty, andresponsibility. Besides, the conducive and positive environment, thefirm keeps complete and consistent records on ethics programs andsurveys. Terris (2005) asserts that the firm has recognized the needfor an extensive and efficient ethics program, especially with theincreased intensive scrutiny. As such, it has 35 ethics officers whoare in control of defining and sustaining a sense of belonging andcommitment to all employees. To ensure that the ethics officerspromote and enhance the effectiveness of the program, the firm onlyemploys honest, discreet, accountable, trusted, and independentpeople to the office. The company chooses the ethics officers fromthe most loyal, tested, and trusted employees. The ethics officersare accountable for ensuring that all employees understand theexisting guidelines and regulations on ethical behavior andperformance. Furthermore, the officers have confidential hotlineswhere workers can report immoral or illegal conduct. Terris (2005)observes that the helplines allow the employees to remain anonymous,which inhibits discontent or bad blood among employees. The hotlinessupport the firm’s objective on ethics as they allow the ethicsofficer to investigate cases and report their findings to theleadership for the application. Davidson and Stevens (2012) assertthat a code of ethics should be developed on the basis of a firm’sworkforce to ensure that all members are served indiscriminately.This means that the development of the hotlines allows the company topromote ethical performance and behavior across all departments.


Davidson, B. I., &amp Stevens, D. E. (2012). Can a code of ethicsimprove manager behavior and investor confidence? An experimentalstudy.&nbspThe Accounting Review,&nbsp88(1), 51-74.

Mihelic, K. K., Lipicnik, B., &amp Tekavcic, M., (2010). Ethicalleadership. International Journal of Management and InformationSystems, 14(5), 31-41&nbsp

Terris, Daniel. (2005) Ethics at work: Creating virtue at anAmerican corporation. Brandeis University Press. Waltham, MA

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