Considering the effects of computer technologies in business and the recent tragedies associated with Boeing aircrafts is so complicated that a step by step process is necessary.
When I recently thought about Boeing’s fall from grace (the recent 737 MAX crashes), I was reminded of Arthur Andersen’s fall back in 1998. Both corporations have a history before their fall of having a sterling reputation and providing excellent jobs to their employees. They also share a history of depending upon computers to do some of the work that was once done exclusively by people. In the case of Arthur Andersen, computers were used as bookkeepers starting in 1950 (the Glickiac). In the case of Boeing, computer programs have become part of the tool set that pilots use to fly. The software system MCAS was used by Boeing to adapt to an engineering innovation in its 737 MAX plane. Can computers cause this exact kind of failure to meet the firm’s primary goals? I think that the answer is yes.
In the case of Boeing, one of the company’s primary goals was for safety in the context of advances in engineering so that the public could rely on Boeing planes to fly them to their destination without crashing. In the case of Arthur Andersen, one of the company’s primary goals was to maintain the public’s trust by having reliable and truthful accounting which didn’t distort account reporting to maximize the client’s stock performance; the stock buying public could rely on their truthfulness.
“Why?” and “How?” did computers cause these companies to fall from grace? The computers brought new operation advantages but they also brought disadvantages. The Arthur Andersen bookkeeping Glickiac encouraged growth that caused imbalances in the power structure of Arthur Andersen. Over time this unbalanced growth encouraged unethical reports, and non-standard accounting methods. Eventually competition for clients caused a split between consulting and accounting services. In the case of Boeing, the software for adjusting flight because of an engineering change in plane design failed to adequately compensate for the novel engineering and it may even have blocked pilots from manoevering the plane successfully.
The Glickiac computer that did bookkeeping brought growth to Arthur Andersen’s consultants that weren’t accountants or auditors. They became salesmen that were finding new clients that wanted to use the Glickiac and get business advice. This put pressure on auditors and accountants to likewise find new clients in order to compete with the consultant’s client growth. Auditors were encouraged to make more money and sympathize more with their client’s ambitions and get ever more clients, bringing in more money in more accounts. Competition among accounting firms also increased at this time as did deregulation. According to an article titled, “Arthur Andersen: Fall from Grace–A Sad Tale of Greed!” from the Business Journal, written on June 23, 2015, Arthur Andersen eventually fell into a habit of encouraging its auditors to over-sympathize with their clients. They would make insolvent companies seem solvent by hiding their financial shortcomings. Remember Enron? Enron was one of Arthur Andersen’s clients. Misleading the public about client’s real asset values undid the public’s trust and doomed Arthur Andersen. After a period of phenomenal growth, Arthur Andersen’s consulting branch was renamed Accenture to limp away and its accounting branch closed down.
In the case of Boeing, according to an article entitled “Regulatory Failure and the 737 MAX Disasters,” written in March of 2019, in Understanding Society: Innovative Thinking About a Global World, regulators at the FAA gave over the responsibility of safety quality checks more and more to Boeing itself. Regulatory failure happened in the context of a revolving door between workers at Boeing who were advocating for the company, lobbies that lobbied for the company and regulators: the same people would move between each segment of influence because they were valued for their knowledge of the business. What Boeing shows us is twofold. First, relying on Boeing to self-regulate neglects the social good of making safety the top priority. Allowing that revolving door between Boeing employees, lobbies and regulators created more loyalty to profits than to safety. Boeing’s profits eclipsed safety concerns.
The MCAS software program seems to have failed to help pilots and may have hindered them. Boeing found it cheaper and faster to make computer programming changes to address problems with flight than to re-engineer. Instead of re-engineering, they tried to tweak computer programming which wasn’t enough to keep the plane safely aloft. Even pilots who tried to use Boeing’s training advice with their plane’s computer were unsuccessful at keeping aloft. The failure of computer programming to fix engineering problems is the second lesson we learn from Boeing. Computers can’t fix engineering. The outcome of having multiple deaths in two crashes is now undermining Boeing’s previously good reputation and its profits. I’m sorry to see all of these terrible and tragic consequences.
Computers don’t have morals or a sense of ethics. They don’t value honesty or safety. People do that. And people can have a bias in favor of profitability that undermines concerns about safety especially now during deregulation. People can also hide behind computer algorithms that they imagine as magical problem-fixers. Revolving doors between Boeing employees and lobbyists and regulators undermined regulatory oversight. Substituting an algorithm for an engineer’s experience based judgement didn’t work. The public needs the good of both truthfulness and safety. Safety and honesty are a crucial part of business ethics and they are the very heart of business. Neither profitability nor algorithms can substitute for business integrity to maintain the public’s trust.
Finally, deregulation and a partnership between the government and large companies has been part of the neoliberal project. Regulatory capture and non-GAAP accounting remain part of business in America at this very moment. Corruption continues to undermine the public’s trust, security and safety as we see in this discussion. Corruption also undermines long-term profits. If you want to learn more about political ideologies over U.S. history and their economic consequences, buy a copy of Political Catsup with Economy Fries at Amazon.com.
Business Journal, http://www.businessjournalng.com/arthur-andersen-fall-from-grace-a-sad-tale-of-greed, June 23, 2015, accessed April 30, 2019.
Understanding Society: Innovative Thinking About a Global World, “Regulatory Failure and the 737 MAX Disasters,” https:// understandingsociety.blogspot.com/ 2019/03/regulatory-failure-and-737-max-disasters.html, March 2019, accessed 30 April 2019.