Notre Dame expert says Congressional report condemning Boeing, FAA raises questions of culture, mission

A Congressional report released today condemned both Boeing and the Federal Aviation Administration (FAA) for numerous design, management and regulatory failures in development of the 737 Max jetliner, which led to two “preventable” crashes that killed 346 people.

The 238-page report suggested Boeing prioritized profits over safety and pressured employees to rush completion of the plane. The crashes led to a worldwide grounding of the planes and were the “horrific culmination” of engineering flaws, mismanagement and a severe lack of federal oversight, according to the report.

James Otteson, the John T. Ryan Jr. Professor of Business Ethics at the University of Notre Dame’s Mendoza College of Business, says, “Profit seeking can turn bad or suspicious when a company loses sight of its imperative to seek benefit for itself only by simultaneously benefiting others. Of course, it is in no company’s interest to have its products fail, let alone to have them lead to deaths. And Boeing has paid a significant price for what appears to be too much risk taking and the tragic consequences to which it led.”

The report concluded an 18-month investigation based on interviews with two dozen Boeing and agency employees and some 600,000 pages of records.

Lawmakers earlier this year introduced legislation that would increase the FAA’s oversight of the industry. They determined the agency failed to protect the traveling public, in part because of “excessive” delegation of certification work to Boeing.

“Increased federal oversight might help prevent similar tragedies from occurring in the future,” Otteson said, “but no system of external oversight can watch everything a firm does. The best defense against both good- and bad-faith mistakes is for firms themselves to cultivate a rigorous internal culture of ‘honorable business’ that puts providing value to others at the center of their mission.

“The only way a company can have long-term success,” he noted, “is by creating genuine value for others. Mistakes will happen, but honorable businesses relentlessly seek to minimize mistakes by incorporating this goal into the fabric of their culture and into everything they do.”