3/07/2005

Boeing and The Affair

This week Boeing ousted Chief Executive Officer Harry Stonecipher for having an affair with a female employee. Was this a smart move for Harry Stonecipher? Let's pretend to be in the shoes of Harry Stonecipher as he is making the decision to have an affair with this woman. Lets look at the opportunity cost; On one side you can say if I don't have an affair I can save my name and still be the head of Boeing. On the other side you can say if I have the affair I will get a quick fix and maybe carry on the relationship with the employee, but I will be fired because I violated the code of conduct. This is a tough decision. What would you do if you were in this situation? I cannot decide.

5 comments:

June said...

Do you think he was considering his job security? He was basically throwing out every other important aspect of his life, and I don't think he worried too much about his job at the time. If the CEO is fired for an intercompany extra-marital affair, do you think the other employee should be fired aswell?

I think it is about time that American standards came back around. The non-exec chairman said he was fired because some of the decisions he made in connection to the affair put into question his ability to lead the company inthe future. He said it was not directly because of his sexual behavior, but connected decisions put his competancy in doubt.

Those in positions of power should begin to rethink all of their unethical and immoral actions. At least it would be good if our system started expecting more from its leaders.

Keston said...

Personally I don’t think that Stonecipher sat down and said “Now let me see, what are my opportunity costs going to be in each of these situations.” I think it just happened. However, I think it’s great that he is getting fired for his affair because like June said, it’s great to see traditional American values being upheld.

To answer June’s question, yes I do think that the other employee should be fired as well. If there is a rule in the code of conduct on not have sexual relationships with co-workers than both workers should be fired.

Chuck said...

Salty, I enjoyed the post and in particular your writting style. If I were in this situation I would not have the affair; first, for personal moral values, second, my name and reputation are important to me, third, my job is also very important to me especially in this case. I do feel that the woman in this issue should be fired as well. Both were in volved in this knowing it was against company policy. It takes two to tango!

Dr. Tufte said...

-1 on June's and Chuck's comment for spelling errors.

I think Stonecipher knew exactly what he was doing. If he didn't, he wouldn't have tried to hide it Keston. I think he made a rational calculation that his odds of getting caught were low.

The dumb party here is Boeing. I have heard nothing that there was a clause in Stonecipher's contract stipulating that he would lose anything worthwhile for conduct detrimental to the company. Now, they may have thought that losing your job was enough of a deterrent, but apparently not.

Marie said...

I just think that it is funny that you took the time to relate this to economics. Salty you are great at finding economics in all things. Any way, you would think that any one would see that the cost way out weigh the benefits to this situation. They have girls on corners for reasons, you certainly don't have to get a quick fix within your company to solve that issue.