W. Gale Cutler

Commentary On

Kevin Clearing, as an engineering manager, is confronted with a situation that is typical of many situations in which engineering managers find themselves. He is faced with trying to find a "right" answer to a problem that has no clear cut "right" answer. The approach to such a situation is to list the possible options, consider the advantages and disadvantages of each option and select what appears, after due consideration, to be the best option. (Some engineering ethics courses develop a decision making matrix for situations like this. Using a matrix, alternatives, selection criteria, and weighting factors are used to calculate mathematically what appears to be the optimum solution.)

Kevin clearing appears to have at least three options:

  1. Maintain status quo of the roadway. Reduce the speed limit further.
  2. Find an alternate route and eliminate the current roadway.
  3. Widen the current roadway at the expense of the 30 trees.

Option #1 does not eliminate the problem because drivers are already known to violate the existing speed limit. (The thought proposed by the environmental group to sue drivers if they don't drive sensibly is an irrational, unenforceable solution and should be rejected.) Option #2, while it could be very effective, is probably not practical because it would involve a heavy expenditure of funds.

Option #3 seems to be the only workable solution and will involve Kevin's convincing the environmental group that the safety of users of the road is worth the destruction of the trees. To encourage the environmental group to withdraw their objection to this option, Kevin should develop a plan to do new tree and shrub plantings along the newly widened highway to restore its beauty and ecological integrity.

The citizen environmental group is a special-interest group and caution must be exercised in dealing with such a group. While special-interest groups frequently accomplish worthwhile results, they are also frequently guilty of so polarizing a situation that it is difficult to reach a rational decision. In this case, it is unfortunate that a logical best solution was not worked out without the local media adding to the turmoil of the situation.

The special-interest group must be approached in a spirit of compromise, settling differences by mutual concessions and reconciling conflicts through adjustments in attitude and conduct.

Information costs money to generate and store and has value. Many companies consider information a form of asset. Proprietary information is information which a company or organization owns or is the proprietor of. This term is used primarily in a legal sense, just as "property" and "ownership" are ideas carefully defined by law. Normally it refers to new knowledge generated within the organization which can be legally protected from use by others. A rough synonym for "proprietary information" is "trade secrets." A trade secret can be virtually any type of information which has not become public and which a company has taken steps to keep secret.

Jason has no proprietary right to the information developed by Prof. Nice and in whose development he participated in a minor way. That information is proprietary to the university or the sponsor who funded the research work. Some agreement prior to the initiation of a research project must be developed (and adhered to) about to whom the data and information assembled during the project belong. When Prof. Nice receives a request from Jason he must get clearance from the owner of the proprietary information before sending a copy to Jason. The only case in which this would not be necessary is if the university/Prof. Nice arrangement grants ownership of the information contained in the report to Prof. Nice. Even in that case, it is unwise to send the information to Jason without a clearly defined explanation of just what Jason intends to do with the report.

When Prof. Nice finds out what Jason has done with the report he must admit the error he made and inform authorities at the university that granted Jason his degree of this flagrant case of plagiarism (passing off of another's work as one's own). Hopefully, this step (which is a form of "whistleblowing") should lead to the action granting Jason a master's degree being rescinded. Where were the university supervisors of Jason's graduate work when this plagiarism was happening?

A case somewhat similar to this occurred at a company for which I worked. An employee left voluntarily to go to graduate school. Due to some slipshod handling of his "exit procedure" by the Human Resources Department, the fact that he had taken his laboratory notebooks (containing company proprietary data) was not discovered until several weeks after his departure. Letters asking him for his notebooks, which contained proprietary (and sensitive) data on the flammability of plastics, were ignored. A couple of years later he received a Master's Degree in Chemistry from a reputable university. Major portions of his thesis bore strong resemblance to the research work he had done for the company at which I worked. We chose to take no action because we felt we could not prove his plagiarism in court if a legal action developed.

XYZ orders 5000 custom made parts from ABC. A price is agreed on based in part on the cost of materials to be used in the part. ABC discovers a less expensive alloy that can be substituted "only slightly compromising the integrity of the part." The customer won't be able to detect the substitution unless they do "a fair amount of testing." The part is still of "good quality" but "might not last quite as long." There is a simple, one word description of this way of doing business: Fraud!!

The alloy substitution should be made, if and only if, the customer (XYZ) agrees to the substitution, with disclosure of what this substitution does to the expected life of the part, and an appropriate price reduction is made.

If ABC goes ahead with the substitution without notifying XYZ and the substitution of the less expensive alloy is subsequently discovered, I can assure you that ABC will have lost a customer. In no way can such substitution be considered good business.

Christine must share her thoughts about the impropriety of substituting the less expensive alloy with Vernon and if he fails to listen to reason, she must carry her feeling about this wrongful act to a higher level of management.

Vernon's actions are unethical and some of his defensive statements border on the ridiculous. For example, "This is business, not engineering" is belittling to the engineers in the company. Sound business is built on having a well-engineered product. Vernon states, "We're not in the business of giving away money." However, he is literally asking XYZ to do just that by paying full price for a part in which a cheaper material has been substituted!

Christine should not sign a report falsifying the composition of the alloy in the part and when Vernon persuades someone else to sign the report, she should go over Vernon's authority to higher management to report this. The future of ABC's business depends on the elimination of deceitful practices such as Vernon endorses and uses.

I was Director of Research for a major corporation for over 20 years. Our Analytical Department routinely ran a "fingerprint" analysis on many of the components, chemicals, plastics, cleaners, paints, etc. that we purchased and periodically checked for adherence to the specifications agreed on at the time of purchase. We once had a problem in a metal cleaning operation--analysis proved that the problem was due to change in the chemical composition of a cleaning compound. The change in the chemical composition of the compound cheapened its manufacturing cost and reduced its cleaning efficiency; we were not notified of the change and no adjustment was made in our purchase price. WE NOTIFIED THE COMPANY WE WERE AWARE OF THIS UNAUTHORIZED CHANGE AND CEASED TO DO BUSINESS WITH THEM.

The significant point about which this case revolves is "credibility." If management is to be credible (trustworthy, believable) in the eyes of its employees communications to employees must be open, prompt and honest. A supervisor (in this case, Tony) has the responsibility of communicating to his workers. This communication usually involves passing on information that has been communicated to the supervisor from upper levels of management. It is a part of Tony's job to carry out this communication process and to do so in such a manner that he preserves his credibility and that of the management to which he reports. This responsibility for communicating promptly to the workers supervised is a part of the maintenance of the supervisor's credibility and this communication responsibility is not relieved just because the news is bad!

One can infer from Tony's handling of his communication responsibility by delaying the delivery of bad news that he would have functioned differently had the news been good. Had Arnold asked that Tony inform all the people he supervised that they would get a surprise Christmas bonus, you can imagine Tony would have communicated this news promptly and efficiently. Some supervisors fall easily into the trap of only passing on good news and/or favorable comments. Of course, in so doing, they are undermining their own credibility when the worker finds out through other channels that some information has been withheld.

In the Tony-Ralph-Arnold situation Tony has damaged his reputation and credibility with both Arnold and Ralph. Arnold has every right to be angry and disillusioned with Tony for failing to carry out his responsibility as a supervisor. Although Tony may feel that he was right to wait until after Christmas to deliver bad news to Ralph, in doing so he has caused Ralph to lose any faith he had in the credibility of his supervisor.

Shirley, too, will not only suffer a financial loss but will be reluctant to trust the next supervisor for which she works.

An excellent organizational climate exists when confidence and trust prevail throughout an organization. Management has trust in the employees and the employees have trust in management. In such an organization whenever management presents something in words, either orally or in writing, this communication is perceived by the employees as being true. If the actions of managers are consistent with their words, managers have considerable credibility in the eyes of the employees. Confidence and trust are an outcome of authenticity. Tony's single act of delaying the communication of the "before Christmas layoff" has dealt a serious blow to the confidence and trust the employees have in management in his organization.

The workers Tony supervises will be reluctant to trust him as a communicator and supervisor in the future. Upper management, too, will have lost its trust in Tony's competence as a supervisor and may very well be justified in relieving him of supervisory duties.

A modern corporation, particularly one with several manufacturing divisions and internal capabilities to produce parts and tools it needs to manufacture a finished product, is a very complex organization. A major corporation can literally be thought of as a series of individual companies bound together by the management of the corporation. It is healthy in such an organization for internal competition to occur in bidding to make tools, parts, dies, etc. for other portions of the company. In such competitive bidding, honest quotes can only be obtained if internal departments/divisions are treated exactly the same as outside sources also asked to quote.

In Part I of this case, Purchasing should refuse to disclose outside quotes to the internal tool and die department. Disclosure of outside quotes violates the relationship a purchasing department should have with outside vendors and will give the internal tool and die department an unfair advantage. It will be impossible to get a fair and impartial quote from the internal tool and die department if they are provided the quotes from outside vendors. A truly competitive situation will provide the best situation for the company as a whole.

In Part II, the outside vendors have a justifiable complaint when they discover they are competing with an internal tool and die department that has full access to their quotes. With this kind of information available the internal department will undoubtedly deliver a quote low enough to win the job but this in no way assures they will produce the best quality tools and dies for the price. An honestly derived bid from the internal tool and die department is actually a very good check on the accuracy and validity of bids acquired externally.

In Part III, the tool and die department head has a definite misconception when he pleads that the "company should not compete with itself." Internal competition goes on in many major corporations and helps assure that they work effectively and efficiently to produce the best product at the best price. If the tool and die department has the goals and objectives of T&D in mind they will want tools and dies produced by the organization that will do it best, considering quality and price, whether than organization is outside the company or internal to the company.

An internal department, propped by access to privileged information, can actually prove a detriment by "rigging" quotes to get internal business it would not get otherwise. Frequently the internal department will overrun the cost of producing the item on which it has bid and the overrun reduces company profit in final accounting.

The aspect of this case that should produce the most concern is the apparent and immediate conclusion by Tom that Jack "faked" data without any concern about the results of his action. This is equivalent to a "guilty until proven innocent" approach to justice. The first action taken by Tom when he learned that the results of the stress test were suspect should have been to bring Jack into the discussion, either by telephone or, in view of the seriousness of the situation, by paying Jack's expenses to return to the laboratory to discuss the tests. If Jack has a valid explanation for the results he obtained, the failure to bring this explanation into consideration could place an irreparable blight on Jack's career because of the hasty accusation. This contact with Jack should also have occurred before the University co-op coordinator was contacted with the fear that Jack had falsified data.

However, in terms of proper management of co-op students it is unthinkable that the important tests such as Jack was running were not closely supervised and the results checked periodically. Such supervision is the essence of good laboratory management and in no way displays a lack of trust in Jack (or any other employee so supervised). At the very least, Jack's test results should have been carefully reviewed before he departed for college.

Certainly we have reason here to question the proficiency of laboratory management in the Material Science Department at XYZ. To judge Jack's behavior we also need to know exactly what his instructions were when assigned to do the tests. Was he told how critical the tests were? Or was he led to assume the tests were merely routine? Did his supervisor say quickly, "I need this part qualified by the end of the week?" If that's what Jack heard he could have interpreted the directions as "hurry and run some tests but the part is going into production anyhow." In research and development situations we must always take the time to explain all of the "why" of the problem when we delegate a task. Analytical test work, in which the answer depends particularly on the question asked and how it is asked, demands an especially careful statement of the problem. If in subsequent conversation with Jack he confesses to falsifying data he should be severely reprimanded and probably XYZ (unless extenuating circumstances are revealed) should terminate its co-op relationship with Jack.

In the reprimanding (and terminating) procedure, Jack must be reminded of the responsibility of an engineer. To quote the National Society of Professional Engineers Code of Ethics: Engineering is an important and learned profession. The members of the profession recognize that their work has a direct and vital impact on the quality of life for all people. Accordingly, the services provided by engineers require honest, impartiality, fairness and equity, and must be dedicated to the public health, safety and welfare. In the practice of their profession, engineers must perform under a standard of professional behavior which requires adherence to the highest principles of ethical conduct.... There is a growing and encouraging trend to incorporate the teaching of ethics into the engineering curriculum. This incorporation is being done best in the form of case studies in engineering courses so that the student has an opportunity to combine the study of both the technical and ethical considerations of engineering problems. Such instruction brings home to the engineering student the responsibilities of the engineering profession and the personal obligations of members of the profession. Responsible people accept moral responsibility for their actions!

Commentary On

Accepting incentives from vendors is a road which sooner or later will lead an engineer, a purchasing agent, etc. into trouble. Even though many such incentives are offered in the spirit of building good will, the vendor who offers major incentives does so to build a "sense of obligation" in the recipient. In the absence of a company policy about incentive gifts, the safe rule is to accept only a gift of token value from a vendor and to be strict about your definition of a token. A necktie at Christmas, a dinner after a working sales conference with a vendor, a package of golf balls inscribed with the vendor's logo probably can be accepted as tokens. A round of golf at the Country Club, tickets to a major football game, free use of a condo in Florida (or even use at a reduced price) cannot be considered token gifts and should be politely refused when offered. The intended recipient need only say, "Thank you, company policy does not permit me to accept your gift," or, in the absence of company policy say, "My personal policy is to decline such a generous gift." A company should have a policy on incentive gifts to take pressure off its employees. This company policy should be published for all employees and company management should enforce it promptly and fairly. The following appropriate statements have been extracted from policies of major companies:

  • Raytheon: "When you negotiate with suppliers, you must base all prices, terms, conditions and agreements on sound business judgment. If you fail to do so, you can get fired. You must show no favoritism or preference to anyone at the expense of the company. You must do no one any favors. NOR CAN YOU ACCEPT ANY FAVORS. Gifts, free services, discounts on personal purchases- these are also wrong, whether they are for you or for anyone else in your family or household. So are trips, entertainment or special considerations of any kind. You must decline favors and return gifts. Do it pleasantly and diplomatically, but firmly."

 

  • Martin Marietta: "Employees may accept meals, refreshments, or entertainment of nominal value in connection with business discussions. A common sense determination should dictate what one would consider lavish, extravagant or frequent. Employees are not permitted to accept gifts from individuals, firms or representatives of firms who have or seek to have business relationships with Martin Marietta. Employees should report to the Ethics Office any instance in which they are offered money, gifts, or anything else of value by a supplier or prospective supplier."

 

  • Air Products: "It is contrary to Company policy for employees to accept or furnish gifts, favors, or entertainment of a size or nature which might influence or raise doubts as to the impartiality of the recipient." A company that has a policy of offering generous incentive gifts (with apparently "no strings attached") may believe it is not doing anything wrong, but almost inevitably the offering company does expect to maintain or increase its business by doing so. Ideally, a company's product, quality and price should speak for themselves and not require the support of incentive gifts to those making buying recommendations and decisions. In this case, Scott should refuse the first offer of condo rental at "moderate cost" and certainly, with Upscale's policy in effect, must let Larry know he cannot- because of his adherence to company policy- accept the offer Larry has made. The guidelines for use with the fundamental canons of ethics of the Accreditation Board for Engineering and Technology (ABET) recommend a hard line on gratuities: "Engineers shall not solicit nor accept gratuities, directly or indirectly, from contractors, their agents, or other parties dealing with their clients or employers in connection with work for which they are responsible." Most employers consider this position excessive and only ban gratuities which have more than a "nominal value." "Other people do it" is not a valid reason for accepting a gift! Two questions you may want to ponder further:
  1. What is the difference between "an incentive gift" and a bribe?

  2. Should companies have an ethics statement about giving gifts as well as receiving gifts?

Commentary On

In the publication "Common Sense and Everyday Ethics" (American Viewpoint, Inc., 1980) there is an interesting quote:

There is no such animal as an absolutely honest human being, and there is no perfect society. For whatever reasons, however, it does seem that it is the compelling destiny of man to seek survival. In the process of trying to survive under increasingly complicated demands and responsibilities, both individual man and society as a whole must strive toward perfection or slide toward destruction.

In this case Al cheats his company by ordering tools for his own use, Michael fears Al's management power over him and takes a devious route to disclose Al's dishonesty rather than confronting Al directly, and then he lies about having disclosed Al's dishonesty.

Lying (a lie is a false statement or action made with the intent to deceive) is an omnipresent social disease that may be endured in mild forms, but at advanced and epidemic stages can erupt to destroy the foundations of a free society. Today many people do not consider lying dishonest!! To them the threshold of dishonesty begins with stealing. A significant number do not even consider stealing very dishonest, may not at all when one steals from big businesses (a large manufacturing plant, a major insurance company, a utility, etc.). Some people feel so impersonally toward big businesses that they do not think of a big corporation as having any particular ownership.

The government doesn't fare any better. The honor system of paying one's proper taxes is now eroding. Unreported earnings from cash income taken in by various industries, services and individuals have been estimated at several hundred billion dollars annually. This type of lying isn't just a harmless social habit that can be tolerated ethically and morally- it's a decline in society's honesty.

People will claim that they lie because they do not wish to hurt someone by telling the truth. The inescapable conclusion of this type of thinking is that it is all right to lie anytime it will benefit oneself or one's friend. What if everyone used this standard? Sooner or later you wouldn't be able to trust anyone.

Doubtless there may be times when it might seem preferable to lie rather than not lie, but if an individual must lie to save his job, then he is working for the wrong person in the wrong place. In this case, Al is clearly committing a wrong act in ordering tools for his own use and, when found out, should be severely reprimanded or discharged. Michael should either confront Al directly or when accused by Al of "ratting" say clearly that he did "rat." If Michael has to live a lie to preserve his job, he is working for the wrong person and the wrong company. Even if Michael lies to Al, it is probably inevitable that Al will find out who told on him. Rather than live in dread of this, Michael should face up to Al when asked if he "ratted" and hope that management will back him in disclosing Al's wrongdoing. If management doesn't, Michael will simply have learned that he is working for the wrong person and the wrong company.