Martin Marietta aimed to transform their reputation in an industry filled with fraud and corruption, and they embarked on a ten-year journey to establish an ethical company. The primary objective was to cultivate a work environment comprised of “decent people doing quality work” (page 1). However, achieving this goal entailed tackling numerous hurdles. Despite the difficulties, Martin Marietta rose to the occasion and implemented a comprehensive ethics program. Measuring the program’s achievements proved challenging, but a SWOT analysis was employed to evaluate all facets of the ethics program.
The case study explored Martin Marietta’s accomplishments, setbacks, and future plans for their ethics program. Martin Marietta, established in the field of selling innovative aerospace and defense technology, encountered numerous unethical business dealings. Jacques Croom, General Counsel of the company, aimed to establish a culture of “doing things correctly” (Sharp, page 2). Croom strongly disapproved of the media’s negative portrayal of the defense industry, which depicted them as engaging in activities like overcharging, falsifying tests, and occasionally bribing government officials (Sharp, page 4).
With the aim of establishing an ethical company, Croom initiated his mission. In 1985, Martin Marietta released their “Code of Ethics and Standard Conduct” and established an “audits and ethics committee.” By utilizing a SWOT analysis, it became feasible to evaluate the strengths, weaknesses, opportunities, and threats of the Ethic Programs. (The complete SWOT analysis can be found in Appendix A.) Martin Marietta’s Ethics Program was successful in promoting accountability among employees for their actions; however, it also created a sense of fear of reprisal among the employees.
The effectiveness of the program was difficult to measure. Martin Marietta aimed to create an outstanding ethics program, but their goals for the program kept expanding to the point where they became unachievable. Martin Marietta was actively involved in the development of their Ethics Program, but monitoring the “ethical decisions” of 60,000 employees required a large workforce. In 1986, Martin Marietta and other defense contractors formed a committee called “A Defense Industry Initiative on Business Ethics and Conduct (DII).”
Marietta introduced a voluntary disclosure program that mandated the reporting, monitoring, and resolution of all instances of employee misconduct. To facilitate this, an audit committee was established and experienced a threefold increase in its workforce from 1986 to 1991. George Sammet was appointed as the leader of the Ethics program to actively address employee complaints, queries, and concerns. Each branch of Martin Marietta had designated “Ethic Officers” who were responsible for handling employee-related issues. Ethical complaints could be submitted anonymously or directly communicated to these officers. The officers would then report the complaints to relevant teams such as audit, personnel, security, or legal staff for investigation. Nearly half of the reported complaints pertained to personnel matters like salaries, promotions, and inadequate supervision. Despite the comprehensive nature of the program, employees worried about potential retaliation for reporting issues. Once filed, appropriate actions were taken ranging from verbal or written reprimands to transfers or even termination.
Employees raised concerns about inconsistent disciplinary actions for similar incidents and favoritism towards certain employees. According to Sharp, Martin Marietta’s Ethic Program was initially thorough and comprehensive. However, the company became overly fixated on committees and guidelines, causing them to lose sight of their original goal. The program’s complexity made it difficult to evaluate its efficiency. Rather than reevaluating the program, Martin Marietta decided to further expand it.
It is impossible to educate and report every instance of employee misconduct for a workforce of 60,000 people. Martin Marietta may have gained significant benefits from implementing a more focused ethics program. The main advantages that Martin Marietta gained from executing an ethics program included improving their public image and thus creating a positive perception among the public, which would ultimately boost sales. Furthermore, the program offered employees a way to voice concerns and report misconduct. Regrettably, the program led to the depletion of company resources and caused employees to fear potential retaliation (Sharp).
To evaluate the program’s achievements and shortcomings effectively, the first step would be to simplify it. Employees should only raise concerns or report misconduct if it poses a risk to the company. Not every instance of gossip or dissatisfaction over promotion or raises needs to be brought to an ethical committee. It is important to acknowledge that there is no flawless company, and while aiming for perfection is commendable, it is essential to proceed step by step. Considering Martin Marietta’s extensive workforce dedicated to ethics, I suggest they remain at each branch.
Now auditors will only need to deal with serious issues, giving them more time to resolve larger issues instead of workplace gossip. Hopefully, employees can focus solely on their jobs without worrying about being reported to an ethics committee. A specific punishment system should be implemented to avoid favoritism towards certain employees. Ethical issues should be handled within the divisions of audit, personnel, security, and legal staffs.
Each division should implement a three-step punishment system: Minor Issues, which could be resolved through a written or verbal corrective action; Critical Issues, which could be resolved with suspension or transfer; and Major Issues, which would be addressed through termination. In order to avoid favoritism, employee complaints should be referred using department serial numbers. This will ensure that the individuals responsible for administering the punishment do not know the identity of the employees involved. Once the punishment has been determined, the branch’s Ethics Officer will be informed.
After informing the specific employee of their reprimand, it is recommended to evaluate the scaled-back program in three separate ways. Initially, monitor and compare reported “ethical” issues each quarter to observe a decreasing trend of such misconduct. Additionally, provide employees with a scantron survey to gauge their satisfaction with the program, managers, and the company as a whole.
With a large company like Martin Marietta, it is important to use scantron surveys to analyze effectiveness quickly. Additionally, field ethics officers should gather to discuss both concerns and positive elements of the program. An issue worth mentioning is that employees are worried about facing consequences for speaking up. It is crucial for ethics officers to be able to address and alleviate these fears. One way to reduce these concerns could be to slightly scale back the program. However, if Martin Marietta decides to proceed with their current Ethics Program, they must handle cases of retaliation appropriately.
There should be a strict policy against retribution in the workplace, whether it involves supervisors retaliating against employees who report misconduct or coworkers retaliating against each other. Initial offenses should be addressed with corrective measures, while repeated offenses should lead to termination. If termination is the consequence for retribution, employees may reconsider engaging in such behavior. Martin Marietta’s hands-on approach to their Ethics Program demonstrates their genuine commitment to being perceived as an ethical company.
Martin Marietta has dedicated resources to establish a strong ethics program, investing manpower, finances, and reputation. Given the company’s size, they have made significant efforts to achieve perfection. Martin Marietta is making progress in becoming an ethical entity in the defense sector. Other companies can benefit from studying Martin Marietta’s objectives, errors, and achievements in developing their own ethics program. Understanding ethics can be challenging, and the task becomes even more arduous for larger companies. Moreover, when dealing with the defense industry, the complexity of ethical considerations intensifies further.
Martin Marietta has done an exceptional job of creating an Ethics Program, which could be made even more easily accessible with some modifications and a more targeted approach. The importance of ethics cannot be underestimated for the success of any company, and Martin Marietta recognized this fact long before many others in the industry. Their efforts have paved the way for ethical standards within the defense sector. While it would be ideal to assume that businesses could make moral decisions without a structured ethics program, in today’s world, this is far from feasible. It is crucial to establish guidelines that can prevent the occurrence of unethical choices.
Work Cited
Sharp Paine, Lyn. Martin Marietta: Managing Corporate Ethics (A). Boston: Harvard Business School-Harvard Business Publishing, revised 17 August 2004. Print. Pages 1-14
