In the mid-1980s, Sam was Alpha Electronics’ project leader on a new contract to produce manufactured weaponry devices for companies doing business with NATO government agencies. The devices were advanced technology land mines with electronic controls that could be triggered with capacitor circuits to go off only at specified times rather than years later when children might be playing in old minefields. NATO provided all the technical specifications, and Alpha Electronics fulfilled the contract without problems. However, Sam was concerned that one new end user of this device could negate the safety aspects of the trigger and make the land mines more dangerous than any others on the market.
After the NATO contract was completed, Sam was dismayed to learn that Alpha Electronics had signed another contract with an East European firm that had a reputation for stealing patented devices and also doing business with terrorist organizations. Sam halted the production of the devices. He then sought advice from some of his colleagues and contacted the U.S. State Department’s Office of Munitions Controls. In retrospect, he wishes he had also contacted the Department of Commerce’s Bureau of Export Administration, as well as the Defense Department. He ruefully acknowledges that the issue would have been brought to a close much more quickly.
The contract that Sam unilaterally voided by his action was for nearly $2 million over 15 years. Sam noted that no further hiring or equipment would have been needed, so the contract promised to be highly profitable. There was a $15,000 penalty for breaking the contract.
On the basis of global corporate citizenship, it was clear that Alpha Electronics could legally produce the devices for the NATO countries but not for the East European company. The Cold War was in full swing at that time.
On the basis of local corporate citizenship, it was clear that Alpha Electronics had to consider the expected impact on local communities. In particular, there was no guarantee about who the East European company would be selling the devices to and how they would end up being used.
Sam took matters into his own hands without any foreknowledge of how his decision would be viewed by his company’s upper management, board of directors, or his fellow workers, many of whom were also company stockholders. Happily, Sam was never punished for his unilateral action of halting production. He recently retired from Alpha Electronics as a corporate-level vice-president. He was especially gratified by the number of Alpha employees who were veterans of World War II, the Korean War, and the Vietnam War who thanked him for his action.
Sam strongly believed his action was the right thing to do, both for his company and for the public welfare.
Class Discussion: Identify and discuss the ethical issues that might support Sam’s conviction. Are there other ethical issues that should be discussed?