Boeing Management Planning
- Length: 1388 words (4 double-spaced pages)
- Rating: Excellent
Boeing for a larger share of the market. Boeing management, through excellent planning, an ethics policy that demands large returns for shareholders, and constant work to comply with ever changing legal demands of the industry has led to the constant success of the company.Planning, an imperative part of any business environment, is a daily focus at Boeing Corporation. The organization faces daily challenges to produce products to fit the consumer wants for air travel, comfort, and efficiency. While Boeing deals with a constant need for innovative ideas it also deal with the challenges of its main competitor airbus whom has historically been subsidized by many of the European nations to compete with
"It was the jet Boeing didn't build that averted what could have become one of the worst crash landings in the company's 91-year history--and cleared Boeing to conquer the skies again."(Masters, 2007). Boeing's Management team's work hard to plan what project's will be best for customers, lead to the largest returns to shareholders, and keep a reputation of being a world leader in the aviation industry. "In October 2002, executives of the aircraft manufacturer met with a group of global airline representatives at a conference center on the Seattle waterfront. The executives were trying desperately to figure out what to build next to hold off a soaring Airbus."(Masters, 2007) Boeing had made plans to build a high speed jetliner prior to this meeting. Through careful planning and expert decision making Boeing officials found that the world was more interested in comfort and efficiency. Boeing's high speed aircraft would have been a huge economic let down because of the huge price tag and expensive operating costs. After that meeting Boeing changed plans to make the Dreamliner which is a more cost effective and comfortable aircraft that has enough orders to keep Boeing busy building the aircraft for customers until the year 2015. While Boeing has spent many resources planning what to build, Boeing is now faced with the problems of how to meet customer demands of the new aircraft.
Boeing Corporation is at an all time high for sales. "For the first time, its commercial-airplane unit earned more than its defense side."(Masters, 2007) "Boeing's backlog of orders increased 47% to a record 208 Billion, more than seven times the units 2006 revenues."(Masters, 2007) This has presented a separate problem for the organization.
While Boeing has global operations Boeing is not prepared to produce the number of orders currently on the books. "Boeing's nightmare scenario is a repeat of the 1980s, when the industry poured cash into building more production capacity only to witness market demand crash a few years later." Management is at this point outsourcing 20% more of the work then they have historically to keep up with the current industry demand. Boeing management has developed strategic alliances with suppliers and contractors to keep up with the current demand. In fact, Boeing has 17 companies from 10 different countries helping to build the Dreamliner. Of course, Boeing's new Dreamliner is not the only product in production. Management is also responsible for keeping up with the demand for the organizations other products.
Boeing Corporation, known for its place in the aviation industry, also supplies smaller planes for shorter distances. In addition to the commercial industry, Boeing also has government contracts for military aircraft and special projects for NASA. Managements planning and coordination to keep all the different aspects of the company is a testament of their commitment to keeping their 155,000 employees working, and keep economic growth acceptable to shareholders. While Boeing is highly successful in its vision to continue being a world leader in aviation and aerospace industry they are not without the occasional legal and ethical problems.
Boeing Corporation is under a constant struggle to stay ahead of its one major competitor, Airbus, a European aviation manufacturer. In the early 1900s Boeing nearly monopolized the aviation industry by building planes, engines, hiring pilots, and running airports. "As the postwar industry grew in importance during the 1950s and 1960s, governments began to regulate air transport heavily."(Juan, 1997) "The U.S. Government broke up this monopoly when the U.S. Post Office denied its mail contracts to Boeing."(Juan, 1997) Since then Boeing has been forced to fight constant legal battles to maintain its top spot in the aviation industry. In fact, Boeing was forced to fight a legal battle in the World Trade Organization (WTO) because of government subsidies Airbus was continuing to receive from European countries. Boeing was fast losing its share of the market and could not keep up with a fast moving Airbus because it was not receiving the same subsides from the American government. Boeing argued, while it is right for small start-up companies to use and depend on those government grants, that Airbus could not be considered a small company. Boeing was being forced to subsidize its own research and development with price tags in the billions while Airbus was receiving much of money in subsidies from European countries. Boeing was quickly losing its share of the aviation market, returns to shareholders were dropping, and Boeing was in fact, on the verge of being forced out of the commercial airline business. In addition to the legal issues Boeing had with the government aid Airbus was receiving from various countries Boeing has an ethical responsibility to keep growing as a company and keeping its 155,000 employees at work.
Boeing's legal struggles do not end with economic issues with the competition. In 2006 Boeing management decided to restructure health benefits for employees. Boeing chose to go with a preferred network of doctors, where doctors were rated on performance. While this is an excellent idea, plans were not implemented properly and it ended up being scrapped. Doctors were not being rated fairly and in some cases were lied about outright. Fortunately, it was scrapped before any legal trouble started. Again this is a testament to Boeing's management ability. A potentially major legal problem that could have scarred Boeing's reputation and cost the company money was averted.
Being one of the largest companies in the world, having high ethical standards is important for Boeing. "In 2003, Boeing Co. was stunned to find itself among the companies that made headlines for high profile ethical lapses."(Brandes, 2007). Immediate action was taken by CEO, Jim McNerney. He put implemented a new management model that promotes more openness and discipline. Although it took 4 years, quick and decisive action on this situation led to the company receiving the compass award from the Oklahoma Business Ethics Consortium in 2007. Boeing is a company that's vision and focus is on profit. Although they have an ethics manual, until 2003 where they made headlines for ethical lapses, management was not overly concerned with ethics. Prior to 2003 "Each employee and the company thought of themselves as good and ethical people." (Brandes, 2007) Boeing maintains high ethical standards, but when having to depend on human nature and outside influence there will always be lapses by people in any organization. Boeing had issues that included bribery of government officials, conspiring with the CIA to the kidnapping and torture of a known terrorist, and theft of proprietary documents from another company. Again CEO, Jim McNerney expressed serious concerns about these problems. While complete control of every employee in such a large company is near impossible, Boeing is a company who now feels it has a responsibility to maintaining an excellent reputation.
Boeing Corporation has had many ups and downs in its 91 year history but through excellent planning skills and management with high regard for integrity it remains one of the world's largest and most profitable companies. The company has met challenges in the past couple decades head on and with a company focus to continue to stay profitable and even continue to lead the world aviation community.
Brandes, H. (2007, April 26). OKEthics hands out annual Compass Award at luncheon. Retrieved Febuary 14, 2008, from general Onefile via gale: http://find.galegroup.com
Juan, E. J. (1997, Winter). Aviation: the politics and economics of a boom.. Retrieved Febuary 14, 2008, from General OneFile via Gale: http://find.galegroup.com
Masters, C. (2007, September 10). How Boeing Got Going. Retrieved Febuary 14, 2008, from general OneFile via Gale: http://find.galegroup.com
Smerd, J. (2007, Febuary 26). Backfire at Boeing: Misadventures in high-performance healthcare. Retrieved Febuary 14.2008, from general OneFile via gale