Complete Teaching Guide: Business Ethics & Society Case Studies (17th Edition) – Boeing 737 MAX, Opioid Crisis, Wells Fargo, Nestlé, & More

Case 1-9 V




Case 1: V




FAILUREVBYVDESIGN:VBOEINGVANDVTHEV737VMAXVTEAC

HINGVNOTE



ThisVcaseVillustratesVtheVfollowingVthemesVandVconceptsVdiscussedVinVtheVchaptersVlisted:

Theme/Concept Chapter

ConflictVofVIntere 5
st
OrganizationalVEthic 6
s
BusinessVGovernmentVRelations;VGovernmentVRegulati 7
on
ProductVSafet 14
y

CaseVSynopsis

OnVMonday,VOctoberV29,V2018,VLionVAirVFlightV610VcrashedVintoVtheVJavaVSeaVinVIndone
siaVshortlyVafterVtakeoff,VkillingVallV189VpeopleVonVboard.V TheVaircraftVwasVaVnearlyVnewV
BoeingV737VMAX,VdeliveredVtoVLionVAir,VaVlow-
costVregionalVcarrierVandVoneVofVBoeing’sVmajorVcustomers,VjustVfourVmonthsVearlier.V The
VMAXVwasVBoeing’sVnewestVaircraftVandVtheVcenterpieceVofVtheVcompany’sVstrategyVforVth
eVshortVtoVmid-
rangeVcommercialVmarket.V CEOVDennisVMuilenburgVfacedVanVurgentVanVurgentVtask:VtoVd
etermineVwhatVhadVgoneVwrongVandVwhyVwithVBoeing’sVnewestVandVso-
farVsuccessfulVnewVmodel.VTheVcaseVpresentsVtheVhistoryVofVBoeingVandVitsVexternalVcomp
etitiveVenvironment;VtheVevolutionVofVitsVstrategy,Vgovernance,VandVethicsVpractices;VandVits
VrelationshipVwithVU.S.VregulatorsVduringVtheVdesignVandVcertificationVofVtheV737VMAX.V
WhatVorganizationalVandVenvironmentalVfactorsVhadVcontributedVtoVBoeing’sVdevelopmentVo
fVanVapparentlyVunsafeVaircraft?V WhatVcouldVBoeing,VgovernmentVregulators,VandVitsVairlin
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©VMcGrawVHillVLLC.VAllVrightsVreserved.VNoVreproductionVorVdistributionVwithoutVtheVpriorVwrittenVconsentVofVMc
GrawVHillVLLC.

,eVcustomers




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GrawVHillVLLC.

,andVotherVstakeholdersVdoVtoVpreventVunsafeVaircraftVfromVbeingVmanufacturedVandVsoldVin
VtheVfuture?




TEACHINGVTIP:VWHEREVTOVUSEVTHEVCASEVINVTHEVCOURSE

ThisVcaseVisVintegrative,VinVthatVitVdrawsVonVmanyVthemesVinVtheVtext.V InstructorsVmayVuse
VitVatVtheVendVofVtheVcourseVasVaVfinal,VintegrativeVassignment,VorVwithVtheVstudyVofVChapt
ersV5VandV6V(EthicalVReasoningVandVOrganizationalVEthics)VorVChapterV7V(BusinessVGovern
mentVRelations).



TEACHINGVTIP:VVIDEO

InstructorsVmayVwishVtoVintroduceVtheVclassVdiscussionVwithVaVshortVvideoVofVtheVLionVAir
Vflight.VTheVfirstV4VminutesVofVthisV9-
minuteVsegmentVdepictsVtheVfatalVflightVofVLionVAirV610,VinVwhichVaVjournalistVridesVinVaV
simulatorVwithVanVexperiencedV737VpilotVwhoVrecreatesVtheVflightVfromVtheVperspectiveVofVt
heVcockpit.V (TheVremainderVofVtheVclipVdepictsVtheVEthiopianVAirlinesVcrashVandVisVnotVrel
evantVtoVtheVcase.)V ViewersVmayVfindVtheVvideoVclipVdisturbing,VevenVterrifying.

www.youtube.com/watch?v=OxPsxmU_ocI

TEACHINGVTIP:VSTARTINGVAVCASEVDISCUSSION

OneVwasVtoVstartVaVclassVdiscussionVofVthisVcaseVisVtoVaskVstudentsVtoVhuddleVinVgroupsVof
V2VtoV4.VGiveVthemV5VminutesVtoVwriteVoneVorVtwoVsentencesVbeginningVwith:V―OneVreas
onVthatVBoeingVproducedVanVunsafeVaircraftVwas…‖V TheyVshouldVthenVhaveVaVrepresentativ
eVwriteVtheirVsentence(s)VonVtheVboardVorVshareVonVaVcommonVelectronicVplatform.VTheVins
tructorVmayVthenVcategorizeVtheVanswersVandVuseVthemVasVaVjumpingVoffVpointVforVtakingV
upVvariousVissuesVraisedVbyVtheVdiscussionVquestions.

SampleVanswers:V OneVreasonVthatVBoeingVproducedVanVunsafeVaircraftVwas…

TheVcultureVofVBoeingVhadVshiftedVfromVaVfocusVonVengineeringVexcellenceVtoVaVfocusVonV
shareholderVreturns.V TheVcompany’sVcapabilitiesVforVaircraftVdesignVhadVdeteriorated.

TheVFAAVdelegatedVmostVofVtheVworkVofVcertifyingVtheV737VMAXVtoVBoeingVitself,VsoVth
eVregulatorsVwereVunableVtoVexerciseVeffectiveVoversight.

BoeingVwasVunderVtremendousVpressureVbecauseVofVcompetitionVfromVAirbus,VsoVtheyVdeci
dedVtoVupdateVtheV737VratherVthanVdesignVanVall-
newVplane.V ThisVcreatedVanVunsolvableVengineeringVproblem,VbecauseVtheVbiggerVmoreVfue
l-efficientVenginesVtheyVwantedVtoVuseVdidVnotVfitVunderVtheVwingsVofV737.


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©VMcGrawVHillVLLC.VAllVrightsVreserved.VNoVreproductionVorVdistributionVwithoutVtheVpriorVwrittenVconsentVofVMc
GrawVHillVLLC.

, Boeing’sVtopVexecutivesVandVdirectorsVemphasizedVshareholderVreturnsVoverVengineeringVex
cellence.V CostVandVefficiencyVwereVmoreVimportantVtoVthemVthanVtheVqualityVofVtheVaircraf
t.

BoeingVhadVspentVsoVmuchVmoneyVonVstockVbuybacksVandVshareholderVdividendsVthatVthey
VdidVnotVhaveVenoughVleftVoverVtoVinvestVproperlyVinVR&DVandVaircraftVengineering.


BoeingVhadVaVcodeVofVethicsVbutVdidVnotVseemVtoVenforceVit.V ItVignoredVworrisomeVsurvey
VresultsVandVdidVnotVlistenVtoVseriesVwarningsVfromVseniorVmanagers.


ManufacturingVofVtheVMAXVwasVrushed,VpossiblyVleadingVtoVdefectsVinVaircraftVdeliveredVt
oVcustomers.

TheVFAAVbasicallyVallowedVBoeingVtoVcertifyVtheVsafetyVofVitsVownVplane.

Boeing’sVstrategyVwasVtoVacquireVotherVmanufacturersV(e.g.,VMcDonnellVDouglas)VandVkeep
VupdatingVtheirVoldVmodels,VratherVthanVtoVdesignVnewVaircraft.V OverVtheVyears,VtheyVlostV
muchVofVtheirVengineeringVknow-how.

InstructorVTip:V ―C‖VstudentsVmayVanswerVthisVquestionVbyVdescribingVcharacteristicsVofVthe
VunsafeVplaneVorVitsVdesignVflaws.V ForVexample,V―OneVreasonVBoeingVproducedVanVunsafe
VaircraftVwasVrelyingVonVjustVoneVsensor.‖V ―A‖VstudentsVwillVunderstandVtheVdistinctionVbe
tweenVtheVproblemVitselfV(anVunsafeVdesign)VandVtheVcauseVofVtheVproblemV(e.g.,Vorganizati
onalVculture,VregulatoryVfailures,VexternalVcompetition).V TheVinstructorVmayVneedVtoVpointV
outVthatVtheVquestionVasksVforVtheVreasonVBoeingVproducedVanVunsafeVplane,VnotVtheVreaso
nVtheVplaneVwasVunsafe.V(QuestionV1,Vbelow,VaddressesVtheVreason(s)VtheVplaneVwasVunsafe
.)


DiscussionVQuestionsVandVAnswers


1. WhatVwereVtheVimmediateVtechnicalVcausesVofVtheVcrashVofVLionVAirVFlightV610?

BasedVonVinformationVinVtheVcase,VstudentsVwillVconclude:VAVfaultyVangleVofVattackVsen
sorVfedVerroneousVdataVintoVtheVplane’sVcomputers,VtriggeringVtheVmaneuveringVcharacterist
icsVaugmentationVsystem,VorVMCAS.V TheVplane’sVcomputerVreliedVonVonlyVoneVsensorVatV
aVtimeV(aVsingleVpointVofVfailure),VandVtheVaircraftVdidVnotVhaveVanVactiveVcockpitValertVfo
rVdisagreementVbetweenVtheVtwoVsensors.V OnceVMCASVwasVactivated,VitVrepeatedlyVforced
VtheVnoseVofVtheVplaneVdown,VdestabilizingVtheVaircraft.V TheVLionVAirVpilotsVhadVnotVbeen
VtrainedVonVaVsimulator,VwereVunawareVofVMCASVandVitsVcapabilities,VandVtheirVflightVma
nualVdidVnotVincludeVrelevantVinformation.V Eventually,VtheVpilotsVlostVcontrolVofVtheVaircra
ftVandVitVcrashedVnoseVdownVintoVtheVsea,VkillingVallVonVboard.

2. DescribeVtheVcultureVofVtheVBoeingVorganization.V HowVdidVtheVcompany’sVculture
VaffectVtheVdevelopmentVandVproductionVofVtheV737VMAX?



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©VMcGrawVHillVLLC.VAllVrightsVreserved.VNoVreproductionVorVdistributionVwithoutVtheVpriorVwrittenVconsentVofVMc
GrawVHillVLLC.