Martin Marietta Ethics Summary

Martin Marietta: Ethics Case Analysis

Martin Marietta is a leading-edge aerospace and defense company which produces technology for the federal government. The company has four main operating divisions or companies. Most of the company’s over 60,000 employees work at nine United States locations. The 1980’s were a climate of government and public mistrust for defense companies. There were many accusations of fraud, waste and misconduct. In 1985, after Martin Marietta found itself under investigation for improper travel billings, the firm’s president decided that it was time to institute an ethics program. The company started with a 12 page “Code of Ethics and Standards of Conduct” which they distributed to the 60,000 employees by mail.
Similar to executive and management briefings where financial metrics are assessed, they could also cover their ethics program metrics at these meetings. For example, they could use common business metrics analogous to on-time delivery, which is often used in monthly reviews to show the percentage of goods that were not delivered on time. Currently, they track similar information like the amount of time that a given case stays open. However, instead of assigning a metric to this, they index it up the chain of command and only look at the number of cases open. In creating a hard metric based on percentage, it can be used to chart trends and assess management progress, and therefore be tied to evaluations. In addition, over time the company should see a better response time and the percentage should decrease. Any spikes, would indicate a problem area that must be looked in to further. Of course to do this effectively, they would have to properly categorize cases and discard any that were outside of the scope of the ethics program. By converting the collected data in to various performance metrics, they could measure improvements and see trends and spikes. In addition, areas where there was lack of progress would be evident and could be focused on. A key area of concern for Martin Marietta
The company used a self governance approach to managing their ethical behavior and the goal of the program was to establish total faith by the government and public in their ability to do so. In conclusion, I believe that the current state of business requires clarity now more than ever. Technology is advancing at an incredible rate, which requires companies to not only innovate much faster, but also to be able to make decisions faster. As observed by Martin Marietta and the defense industry in general, without an ethical framework to guide companies in their decision making process, fraud, waste and—more importantly—unnecessary mistakes are inevitable. A company’s ethics program is a rudder to steer them through uncertain business conditions. To use an analogy, had many of the companies that issued subprime mortgages had an ethical framework in place to prohibit loans to people that clearly could not afford them, the world would not be in this current economic downturn. The fact is that there were no laws preventing such business decisions. If these companies would have had a relevant ethics program—one that incorporated the tenants of corporate social responsibility, perhaps we would have avoided the