Thompson Rivers University

International Business
Recent Events Question Set: Boeing 737 Max
Sept 2021

According to the video case, please answer the following questions. These answers do not need to be
submitted; they are for your reference only.

1. Boeing:
a. How significant is the 737 Max to Boeings sales success?
 The fastest aircraft model in the company’s history.
 Sold 387 of these planes and more than 4000 orders to dozens of airline all over
the world.
 Bigger engines were added, which had to be mounted further ahead and higher. In
order to do that they add a software named M.C.A.S.
b. M.C.A.S. means what?
 MCAS, Maneuvering Characteristics Augmentation System.
Why is this software significant to these airplane crashes?
 The system designed to push back the nose back down to avoid a stall
c. Why did Boeing conceal the presence of the M.C.A.S. software from the companies that
purchased the planes and the pilots that flew the planes?
 Try not to overload the crews with information that’s unnecessary.
 If the M.C.A.S fails, it will depend on the pilots.
d. What were the priorities of Boeing?
 Care more about the profits and the “customers” requirements, which is not to
train the pilots and safe more money.
 Trying to maintain the reputation.
 The profit is the most important
e. Which “straw man” approaches to business do you see exemplified by Boeing management
in this situation?
 Friedman doctrine: asserts that a business should only have one social
responsibility of making profits by using its resources legally in an open and
free manner without perpetuating fraud or sham.
 righteous moralist:  adopt business practices from the parent countries of
firms when making ethical business decisions.
 cultural relativism:  claims that ethics is simply a reflection of a given
culture. Therefore, a company should only apply or adopt the concept of
ethics within its culture.
 naive moralist:  should only do what other managers of multinational firms
do in their host countries

2. U.S. F.A.A./ U.S.N.T.S. Board & Outsourcing / Pilots Union:

a. What is the U.S. F.A.A.?
 us F.A.A: US Federal Aviation Administration
U.S.N.T.S. Board? What are the equivalent agency’s in your country?

 b. Why is the F.A.A.’s outsourcing of certification for the plane’s safety during its manufacturing
a conflict of interest? Clearly explain your answer.
 Rather doing all of the safety test, F.A.A contracted out to personnel paid by
Boeing, which represents an obvious conflict of interest.
 The fear of being replaced and the need of salary increased

3. In business, a conflict of interest arises when a person chooses personal gain

over duties to their employer, or to an organization in which they are a
stakeholder, or exploits their position for personal gain in some way.

-
4. In the video, one of the ex-Boeing scientists being interviewed describes Boeing’s behavior as
“capitalist extremists”, others in the video suggest “the [regulatory certification] system is broken”.
Discuss these two phrases.
5.  Capitalist Extremists: they followed greed, putting people in the upper echelon, putting their
interests first above the workers and the product. They doing a disservice
6.  Regulatory Certification: faa just trying to do the standard test
-  self-regulation is less costly to the government because it shifts the cost of developing and
enforcing rules to the industry.
- the government may still be involved in supervision, but supervision requires fewer resources
than direct regulation. 
7. List the most significant stakeholders in this situation. From this list of stakeholders, discuss which
are the most culpable (deserving blame). Rank each on a scale of 1 (most culpable) to 10 (least
culpable).
 mc donnell Douglas Corporation.: 1.5/10
 F.A.A : 2/10
 US transportation department: 5/10
 Boeing: 1/10

8. To resolve this situation as best as possible, how should the most culpable be penalized?

9. Is there more recent information about this situation available on the www? How does this more
recent information further inform of us this topic?

10. Are any of the videos or articles presented partisan (holding a specific political bias)? Explain your
answer, with clear references to the videos and/or articles.

11. Identify minimally three concepts the above analysis illustrates about both the:
 Sustainability spectrum (3 concepts illustrated?):
 Social pillar: The approaches to securing and maintaining this
support are various, but it comes down to treating employees
fairly and being a good neighbor and community member, both
locally and globally.
 Economic pillar: To be sustainable, a business must be
profitable. Sometimes, this pillar is referred to as the governance
pillar, referring to good corporate governance. This means that
boards of directors and management align with shareholders'
 interests as well as that of the company's community, value
chains, and end-user customers
 Political spectrum (3 concepts illustrated?)
- Left-wing:

5th Estate video is available at https://www.cbc.ca/fifth/episodes/2019-2020/how-boeing-crashed-the-

inside-story-of-the-737-max?cmp=newsletter-Jan.+19

Terms:
 Corruption = abuse or misuse of power or trust for personal benefit rather than the reasons for
which power or trust was given.

 Conflict of interest = as a situation where an individual’s employer, whether a government, business

or media outlet, is confronted with choosing between the duties and demands of their position, and
their own private interests. For example, “The government official was removed from office due to a
conflict of interest between her personal investments in Company Z, and her official government role
which allowed her to change the government regulations that affect the profitability of Company Z.”

 Lobbying = seeking to influence a decision or the behavior of an elected government official or

government employee on a regulatory issue. For example, “The industry association has heavily
lobbied the government to ease the regulations.”

 Bribery = money or benefits given or promised in order to influence the judgement or behavior of a
person in a position of trust. For example, “The judge was bribed.”