Values (Undated)

Organization: 

Lockheed Martin

Source: 

Lockheed Martin - Values

Date Approved: 

Undated

Other Versions: 

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Values

One transgression by one employee can have an enormous impact on our entire corporation - whether it is the liability incurred by not coping properly with an environmental problem or the financial penalty resulting from an engineering failure. Even more daunting is to try to restore one's collective reputation once it is tarnished - even if undeservedly As the British Prime Minister James Callaghan once observed, "A lie can be halfway round the world before the truth has got its boots on."

Recently I read an article in which the author suggested that maintaining high ethical standards is untenable in today's business climate, especially now that we compete in a global marketplace where ethical standards vary widely from country to country. I altogether reject this view for three reasons. First, it contradicts everything we as a company stand for. Second, such "logic" can lead to actions that are against the law. Third, it is bad business. With regard to the last point, I recognize that abiding by uncompromising ethical standards does not always guarantee the sought-after, short-term outcome; but I am absolutely convinced that by following a demanding ethical compass one is always better served over the longer term.

I would never suggest that ethics is simple. Not only does one have to know the right thing to do one must also have the moral fortitude to do it. Of course, ethical people believe in honoring their word, respecting the law, acting honestly, respecting other people's property, displaying loyalty, and working hard. But even these values can be misplaced. For example:

OPTIMISM is not unethical; in fact, in most cases it's even admirable. But in business, misrepresentation under the guise of optimism is a crime.

INFORMATION is valuable, but it's ethical only as long as you have a right to have it.

PROFIT is valued, as long as you've earned it.

LOYALTY is appreciated, as long as it isn't misplaced. (The Iraqis following Saddam Hussein could be considered to have been loyal.)

At Lockheed Martin, we of course intensely want to win business. But we even more intensely want to compete fairly and ethically for the business we win. And that means not only conducting our business affairs within the letter of the law - but also the spirit of the law.

Sometimes the ethical choices faced are clear-cut. Such was the case some time ago when we were in competition for a major contract and the day before we were to submit our proposal we received in the mail a copy of our competitor's price sheet. It presumably came from a disgruntled employee.

We opened the package, not knowing what was inside. Once realizing what we had, the package was promptly handed to our attorneys who informed the government and the competition what had happened. We did not change our bid price.

Incidentally, we lost the contract ... and some of our dedicated employees very possibly lost their jobs due to lack of work. But few would argue that we had done the wrong thing or that the company was not best served for the long term.

Other ethical choices are not so clear-cut. Potter Stewart, the former Supreme Court Justice, defines ethics as "knowing the difference between what you have a right to do, and what is the right thing to do." There are people who believe that if it's legal, it's ethical. Justice Stewart obviously doesn't agree with that. Neither do I. Ethical behavior goes beyond merely complying with the law. Ethics requires some degree of voluntary compliance. You have a legal right to burn the flag. But I believe it's the wrong thing to do. Racial discrimination was legal at one time. But it always was wrong. In business, preemptive hostile takeovers are legal - but I think they are the wrong thing to do.

In a similar vein, professional football teams labor all season to get into the play-offs and get the " homefield advantage." Assuming this was what it was all about, a few years ago I was surprised to see a letter to the editor in the Washington Post challenging the Redskins coach -a highly ethical man in my opinion - for being unethical in encouraging the crowd to make lots of noise in the upcoming play-off game so that it would be difficult for the opposition to hear the signals being called. It probably did not occur to the 55,000 people in the stands that what they were doing might be considered by some to be unethical. Was it?

Frankly, I believe we should - and do - hold ourselves to a higher standard of ethical performance than many other companies. In fact, after our company's formation, the first overarching principle we set forth declared: "In realizing our vision, we will adhere to the highest standard of ethical conduct in everything we do." I view this as our Corporation's starting point and believe that we must become ever more committed to ethical behavior as we evolve Lockheed Martin's heritage.

Employees are expected to know what the ethical standards are and adhere to them. And as you know, we have an ethics training program which virtually all of us, both in this country and overseas, have attended -including myself We also have a Corporate Ethics Office that's charged with responsibility for monitoring performance under our Code of Ethics, providing advice and resolving concerns presented to the Ethics Office.

In confronting some of the "close calls" involved in today's business environment, all of us are aided by the ethics officers, whom we might perhaps better think of as ethics advisors. These highly trained individuals are committed to helping all of us raise awareness of ethical issues and to deal with difficult situations. The Ethics HelpLine (800-563-8442 or 800-LM ETHIC) is available 24 hours a day.

Any one of us who believes that we have observed unethical conduct should report it to our supervisor or, alternatively, to the Ethics Office. More importantly, anyone who is uncertain as to what in fact is ethical behavior in a particular situation can solicit advice simply by calling the HelpLine. Our ethics advisors are committed to maintaining confidentiality and, importantly, to establishing rigorous safeguards against retribution in any form against those who seek to share concerns.

Let me just note at the end of this essay that the truly difficult ethical choices in life involve day-to-day decisions, where the long-term "payoff" or advantage from ethical comportment seems remote at best. And that is why I want to return to the point that there is, in fact, occasionally a short-term cost for acting ethically. I personally believe that is part of the whole ethical equation, I would define the price of being ethical as similar to the price we pay for all the meaningful things in our lives. We achieve an education only at the price of years of hard work and self-discipline. We enjoy a fulfilling family life only with some sacrifice of individual desires and with hard work devoted to truly understanding those closest to us. We are rewarded with a successful business or academic career only after doing more than what is absolutely required. We excel in sports only after many, many hours of training and conditioning. And we achieve greatness as a nation only when we act selflessly and devote ourselves to a greater good.

Our goal in meeting the ethics challenge must be exactly the same as our goal in meeting all the other challenges we face - namely, to be the very best. We must continue to build the type of corporation which is regarded by all as comprising highly ethical people working together to produce Mission Success - the kind of corporation for which all of us want to work and the kind of corporation with which customers like to do business.

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