Larry was a young port engineer who worked energetically for his shipping company, overseeing repairs and related projects. He was proud when he was put in charge of a multimillion-dollar repair order for one of his company's ships. The repairs were contracted out to a major shipyard, and everything went smoothly until the end of the project - when he was handed the bill, he realized it had been inflated by about one-third of total project costs.

Larry was shocked. He had never been confronted by such an apparently corrupt practice before. After delaying the sign-off for a couple of days, he approached his boss, pointed out what was going on, and explained why he could not sign off. His boss asked for specifics, which he readily supplied.

A meeting was arranged between shipyard and shipping company officials, who went over the disputed items. They agreed that the shipping company was being overbilled by millions of dollars. To Larry's surprise, there was little reaction from either side of the table. Nor was there any definitive, ethical stance from his company.

The meeting was adjourned until the next day, when shipyard officials offered to split the difference. Both parties turned to Larry for approval, who explained that he couldn't sign off on the adjusted bill, either. Again, the meeting adjourned with no apparent reaction, and Larry left in a daze.

By the third meeting, Larry was beginning to piece things together. Apparently his superiors respected his integrity. They were following orderly procedures to arrive at a final bill. But he couldn't help noticing their lack of outrage and conviction. What would drive them to such a compromise? What would make such a fine company turn a blind eye to such practices?

As Larry thought it over, he realized that more was at stake here than a dispute over a bill. Good shipyards with skilled labor on hand were increasingly scarce, and Larry's company was dependent on the few that remained. If his company took the shipyard to court, the shipyard might be prevented from further operation. What would Larry's company do then?

As Larry considered the larger picture, he began to understand that his own truth vs. loyalty dilemma was in fact a short-term vs. long-term dilemma for his bosses. Larry had to decide between signing off loyally on a bill he knew to be dishonest, or sticking up for the truth. Was it better to rid the industry of corrupt practices in the long term, even if meant that in the short term there were no good shipyards in operation? Or was it better to tolerate such practices now and ensure that ships could continue to be repaired well into the future?

The Outcome

When Larry found himself in that third meeting, he was joined by higher officials from each company, and by each company's lawyers. The lawyers on both sides agreed that the court costs that would arise in a lawsuit would more than equal the disputed amount. They urged Larry to sign off on the bill. Larry continued to maintain that he couldn't put his name to a dishonest document. With tact and no hard feelings, Larry's superiors overrode his decision, signing off for half of the disputed amount. They also relieved Larry of further dealings with that particular shipyard.

As the years passed, Larry maintained his position on padded bills, and his company never seemed to penalize him as a result. He learned to understand that his company occasionally sacrificed principles for the greater good, even while honoring his integrity and his drive to stand on principles.

Copyright © 1999 Institute for Global Ethics. All rights reserved.