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Much of the difficulty with the Hughes case comes from faulty procedures at Hughes for ensuring that the chips were appropriately tested. One of the responsibilities of management is to design procedures that assure that the obligations of the organization are carried out appropriately. In addition to designing procedures that work management also sets the moral tone in the organization for how those procedures should be implemented in practice. Hughes failed in both these responsibilities.


Documentation Procedures

The documentation in this case consists mostly of the "travelers" that went along with every chip. These were forms that specified how each chip was tosw be tested and that allowed documentation to accumulate (by initials, checks, etc.) that the tests had in fact been carried out and that the chip had passed. These paper documents were easily altered by management to make it look as though chips has passed tests that they had in fact failed. The only undeniable evidence in the Hughes criminal trial was a photocopy of a traveler saying "failed" on it that could be compared to the altered document in the files that showed "passed" written over erasure marks. Goodearl and Ibarra had made the photocopy knowing that LaRue was going to alter the traveler. This provided them with clear proof.

It is tempting to think that some sort of electronic monitoring system (using bar codes or some other information bearing medium) could be implemented that would make this sort of fraud by erasure impossible. But someone, likely someone in management, will still have passwords and access to the databases in this system and can still alter data. It is instructive to note that most financial loss from computer systems in banks and other organizations is from fraud perpetrated by those with trusted access to information. No matter how secure the technical part of a system is, there is no security if the personnel cannot be trusted.

So, if management wanted to alter information to make the chips appear to pas inspection, they would do so regardless of the kind of technical system was in place. What is needed, in fact, is independent supervision of the process.

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Oversight Procedures

The procedures in Hughes for handling oversight were badly flawed. Not only was there no independent oversight of the testing process, there was also no independent way to investigate an internal charge of fraud. Hughes did have a quality control group to check on the testing procedures, but their only course of action if they discovered something wrong was to ask the very people who might be doing the thing they were complaining about. Thus, Ibarra in quality control could only ask LaRue why such-and-such a test had been skipped, and often LaRue simply replied "none of your business."

LaRue's immediate subordinates were the "girls" on the testing line who were actually performing the tests. On several occasions, these people complained to Goodearl that LaRue was asking them to mark chips as passed when they had actually failed. LaRue would simply explain that the chips in questions were special and required different treatment. Or sometime he would not explain at all and simply say "Do what I say." It was clear that the atmosphere of the testing floor was one of great power disparity, and the girls were simply to do as they were told and not question management orders. In addition to this atmosphere of absolute obedience, was the lack of training that the girls had. They did not have, and were not given the chance to acquire, the information that LaRue had about the chips. This meant LaRue could simply ignore their questions and concerns.

If you look at the guidelines for ethical dissent you will find that one of the main sources of power in an attempt to dissent from an organization's decision is the information to prove one's case. This power was systematically kept from the "girls" of the testing floor.

In addition, Hughes did not have an independent way of investigating allegations of fraud or harassment when they were brought internally. The first reaction of those in the personnel department was to alert Goodearl's management that there was a problem. This might seem reasonable at first blush, but if Goodearl is, in fact being harassed, this makes it quite easy for management to punish her for reporting it. And in fact, this is what happened.

Several things can be said in defense of Hughes procedures in the socio-technical system. It is true that the "girls" did not have the knowledge to challenge LaRue's insistence that they pass a chip. It also true that they did not need detailed information to do their jobs, and that hiring people with minimal qualifications helped Hughes keep its costs down. In addition, it was not a widespread practice at the time to have independent oversight, either for quality control or for harassment charges. It was in fact cases like those at Hughes that have driven the concern for independent oversight and investigation.

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