Organizational Behavior Research Paper: Boeing

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Organizational Behavior Research Paper: Boeing

Organizational Behavior Boeing: Abstract

The paper presents an overall analysis of organizational behavior, insights, and interpretations of the Boeing Company. As the world's largest aerospace company, Boeing manufactures space and security systems, commercial jetliners, defense systems, and the company offers aftermarket support for its customers. There exist two leading civil aircraft manufacturers, and they are distinct from each other in terms of controlling an aircraft. However, Boeing Company has shifted its focus from human to computer-based systems by developing the criticized MCAS system that caused two fatal accidents within the last year.

Keywords: Boeing, organizational behavior, leading, MCAS

Introduction

Especially within the last century, aviation technologies have drastically improved. Today, passengers have easy access to daily scheduled flights that take off for the most distant destinations of the world, such as Australia, New Zealand, and even the poles on the north and the south. However, maintaining the flow of organization and operation regardless of unexpected incidents both during manufacturing and duty is of great importance as safety always comes first in aviation. Also, the improvement of aviation technologies has always been supported by manufacturer companies across the world. Accordingly, Boeing Company is one of the biggest aviation manufacturers in the world. In this assignment, the organizational aspects and behavior of the Boeing Company have been analyzed and examined in terms of the income statement, risks management, company’s leadership, communication networks, decision making, negotiation processes, organizational change, power, politics, organizational culture and innovation, goals and structure, strategy, technology, and the organizational design. The paper also presents an overall analysis, comparison, insights, and interpretations into the organizational and financial structure of the company. Although Boeing is considered the most prominent aerospace organization, the company should concentrate on the reversal from the MCAS system that has caused two fatal accidents within the last year.

The Boeing Company

Founded in 1916 by William E. Boeing in Seattle, Washington, the company serves customers in 150 countries. As the world’s largest aerospace company, Boeing manufactures space and security systems, commercial jetliners, defense systems, and the company offers aftermarket support for its customers (“About Us” n.p.). The company has corporate offices in Chicago and employes at least 150,000 employers across the U.S. and world (“2018 Annual” 22). Briefly, Boeing is categorized into three business branches; Space, Defence, & Security, Commercial Airplanes, and Boeing Global Services. The company, today manufactures the 787, 777, 767, 747, and 737 families. Currently, more than 10,000 Boeing airliners are active on the operation (“2018 Annual,” 22). Additionally, about 95 percent of the world’s cargo is carried through Boeing freight planes.

Income Statement

The Boeing Company and Subsidiaries Consolidated Statements of Operations


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Source: “2018 Annual Report of Boeign Company."

Accordingly, the net sales of products for the Boeing company were $83,740 and $90,229 million for 2017 and 2018, respectively. Gross profit for Boeing Company was $8,458 in 2017, $10,460 in 2018. Total assets of Boeing Company consist of property, plant and equipment, goodwill, customer financing, investments, deferred income taxes, and calculated as $112,362 million in 2017 and $117,359 million in 2018.

Company Leadership

The Boeing Company’s flow of operations is conducted by its managers, employees, and corporate officers that are led by the chief executive officer. Board of Directors is responsible for providing oversight into the work of chief executive officers (“Corporate,” 2019). Also, the company’s governance practices and principles are periodically reviewed and audited by the Board's Governance, Organization and Nominating Committee (“Corporate,” 2019). In this sense, the corporate officers and the Board are aware of the fact that the long-term interest of the company is dependent on them. In other words, they are always responsive to the issues and concerns of customers, communities, public officials, employees, suppliers, and shareholders. In addition to the structure as mentioned above, a Code of Ethical Business Conduct has been adopted by the Board (“Corporate,” 2019). Accordingly, each Director and the Board provides guidance to deal with ethical issues on areas of ethical risk, to develop existing mechanisms for reporting of unethical conducts across the company (“Corporate,” 2019). Also, the Code aims to sustain a culture of accountability and honesty among employees and governance.

Risk Management & Decision Making

Boeing Company counts highly on commercial airplanes and global services that are subject to unique risks. Market circumstances may have significant impacts on the demand for commercial aircraft and services. Airline profitability, availability of aircraft financing, government-to-government relations, world trade policies, technological advances, and other competitive factors influence the demands for the aviation industry. Therefore, significant deterioration in the global economy or financial issues with major customers may result in risks for the Boeing Company.

According to Boeing, ethical business conduct is the primary focus across the company. In this context, the company always aims to do the right thing for the customers, employees, communities, and stakeholders to build and trust partnerships for future bilateral interests (“Compliance,” 2019). Therefore, each year, the chairman of the company provides a company-wide and live broadcast event with all employees across the world. In this sense, the company aims to highlight the significance of ethical and intentional decision-making in every step the company takes. Also, “each employee is accountable for upholding the Boeing Code of Conduct” (“Compliance,” 2019, para. 1). In other words, the company aims to ensure that enduring values are maintained throughout the whole process by following applicable regulations, laws, and internal company policies. Also, Ethics and Business Conduct, Corporate Audit, Security & Fire Protection, Global Trade Controls, and other enterprise services are among the critical functions of compliance and ethics regarding the decision-making process (“Compliance,” 2019. These operating groups represent more than 1900 employees across the world, and they report audit findings, necessary investigations, or any related concerns of the workflow and decision-making (“Compliance,” 2019). Eventually, this structure provides an advantage for the company by ensuring consistent company profile, decision-making, and performance across the world.

Team Building

The company values the importance and contribution of, especially, diverse team building. For example, the company combines the technology, innovation, and teamwork in order to provide rapid manufacturing processes of its customers across the world (Brooks, 2014). With the proper combination of leadership, teamwork, and innovation, the company could manage to produce ten airplanes per month (Brooks, 2014). In this sense, one may readily highlight the rapid production rate of the company.

On the other hand, as a manufacturer of aircraft, Boeing values and understands the importance of development and training (“Training and Development Strategy at Boeing,” 2013). The company deals with complicated processes of manufacturing and high technology outcomes that merely well-trained and educated people could accomplish working in such an environment where unexpected incidents often occur (aviation) (“Training and Development Strategy at Boeing,” 2013). Accordingly, Boeing has complicated and comprehensive training programs for its employees across the world. In general, there are two programs; the off-site learning program and on-site on the job training (“Training and Development Strategy at Boeing,” 2013). As Boeing has an academic partnership with many universities, the learning program provides tuition for both employees and intern students. On the other hand, on the job training enables new workers to get used to the company environment, become familiar with the culture, and understand current and future works (“Training and Development Strategy at Boeing,” 2013). Especially, this training seems to be beneficial in terms of developing good relationships among employees.

Additionally, as the aviation sector is strictly audited by related government authorities, Boeing also considers the importance of formal and compulsory pieces of training for the employees. Boeing also has a library and learning center to support the learning process to the most. There, employees may experience certification, web-delivered, register-on, and video-on courses and pieces of training that are useful for both sides (“Training,” 2013). Furthermore, the company provides its employees with leadership training as it is highly critical and significant in the aviation business. The aim of such a program is to educate employees to cover future leadership needs and overcome challenges in the upcoming days. There is a lot of opportunities for international workers as well. Accordingly, diverse and international employees "could get consultation and counseling service when he or she experiences a work-related program" (“Training and Development Strategy at Boeing”, 2013, para. 12). After all, maintaining a competitive business in today’s world requires a great deal of skilled and educated workers. In this sense, one may infer that Boeing Company has invested a great deal of focus and resources to maintain a proper business environment for both employees and customers.

Change Management – MCAS System

In general, the Boeing Company is known to prioritize human factor when it comes to controlling an aircraft, and Airbus prioritize the computer. In other words, there exist two leading civil aircraft manufacturers, and they are distinct from each other in terms of controlling an aircraft. However, Boeing Company has shifted its focus from human to computer by developing the criticized MCAS (Maneuvering Capacity Augmentation System) system that caused two fatal accidents within the last year (Wendel, 2018 ). Eventually, the Boeing 737 Max airliners have been prohibited from flying in many countries by the national aviation authorities and created a lot of challenges for the company.

To implement this shift from the MCAS system to the conventional Boeing way, the three-stage model is not applicable (arguably) as it requires a reversal to a previous system. However, the planned reversal can be implemented by making use of rational persuasion, force coercion, or shared power. Also, there will not possibly be resistance for the reversal to the conventional Boeing system rather than the MCAS because everyone in the sector is now aware of the fact that the MCAS system has caused two highly fatal incidents, and most of the planes have been grounded across the world. In this sense, one may readily highlight the necessity of reversal to the previous system where everything was decent for Boeing; before the MCAS system.

Innovation Culture & Organizational Structure

“To be the strongest, best, and best-integrated aerospace company in the world – now and in the future” is the vision statement of the company (“Corporate,” 2019). Therefore, innovation, productivity, customer expectations, and the more for less approach, are among the company's alchemy of success (Lyons, 2014). By designing efficient airliners, applying hi-tech in autonomous systems, and considering the needs of employees, the company highly values the innovation culture (Lyons, 2014). Therefore, the company promotes and rewards curiosity, finds ways to innovate the culture, blend social media technologies, identify high potential employees with strong discipline, learning, and teaching, builds systems and financial decisions to improve innovation, and finds ways to accept and manage failures (Lyons, 2014). In this sense, the company has a series of must-haves, including global outlook, broad cultural and geographic perspectives, a strong sense of purpose and values, technical excellence, creativity balanced with analytical thinking, and managing complexity and diversity in all its forms.

In terms of the organizational structure, Boeing is a centralized organization. In particular, high-level executives make most of the decisions and pass them down to lower levels for the implementation process. The company uses differentiation and integration (Lyons, 2014). In other words, the organization is composed of different units that are concentrated on various tasks by using characteristical work methods and skills (Lyons, 2014). Also, the differentiated parts are later put together so that the complete coordination is provided throughout the manufacturing and customer care process. Additionally, the authority trickles down the organization from top to bottom: CEO, CFO, COO, President, Vice President, and Department Heads, respectively. Boeing uses the Matrix structure to run the organization (Lyons, 2014). For example, different divisions are run independently because there are many distinct products of the company. Also, the collaboration between different divisions is essential as the company experiences abrupt changes in technology because of the rapid developments in the aviation sector. The company values the resource utilization as crucial resources are shared across several different divisions simultaneously to ensure rapid manufacturing. Eventually, Boeing is a network organization with independent, single-function firms that collaborate on a good or service.

Business Environment

The organization’s business environment is based on remaining competitive and providing products that comply with the needs of customers (Uhl-Bien et al., 2015). Developing responsive models to the current needs of the aerospace industry, ensuring safety, and the security of transport are among the primary policies of the company. As the growth of technology presents potential benefits for any company, Boeing has focused on enhancing its engineering, technology, and operations. Also, the company has been provided with support from the USA government. The creation of convenient policies between the government and the company has created a lot of opportunities for the company.

The global business environment is also significant for the company as the Boeing company is a multinational organization. Therefore, the company has to concentrate on predicting potential areas and future sales to gain competitive advantages in the sector. In this context, the prediction of the elements, as mentioned above, is dependent on the evaluation of current data for the global economic environment. In this sense, the company has to properly evaluate the available data to come up with action plans for the company’s future direction.

Overall Analysis and Comparison with a Local Competitor

In commercial aviation, as there exists a drastic amoung of competition, there is always a risk for Boeing to have financial issues. For example, Southeast Airlines is known to be one of the biggest costumers of the company with 500+ airliners demand in total. Therefore, a possible financial crisis in Southwest Airlines may result in a drastic loss of revenue and net incomes for the Boeing Company. Additionally, the global environment is a determinant in the aviation industry. As can be observed from the 9/11 incidents, a possible terror attack and accident may drastically affect the commercial airliners and manufacturers, respectively. Also, as the global tension defines the fuel prices, airliners and the company may experience a slight decrease in demands resulted from the global economy.

On the other hand, a competitor, Lockheed Martin, cooperates highly with the U.S. government and other agencies that are related to the Administration. Domestic regulation and policy issues regarding the Congression may result in unexpected risks for the Lockheed Company. Comparably, a possibility of governmental collapse is lower than a private-sector crisis because the U.S. economy and Administration is regarded as one of the most secure and trustworthy in the world. Also, possible drawbacks in the F-35 program may cause financial issues to the Lockheed Company (Kinard, 2018). However, the program is financed by more than 40 countries across the world. One may assume that the cosmopolitan structure and diverse financing of the program result in a better opportunity for Lockheed Martin when compared with the Boeing Company that highly counts on the commercial airline industry.

Comparably, the revenue and gross profit numbers of Boeing Company seem to be higher than Lockheed Martin. However, one may assume that there are more risks for Boeing Company because the company focuses on the private aviation industry. Accordingly, the accidents with Boeing 737 MAX airliners drastically affected the Boeing Company, and the company has almost lost most of its orders (“Air Accident Investigation Board…”, 1999). In the aviation industry, safety first is the primary principle. A possible crash or accident scenario is regarded as the worst thing that may happen to a manufacturer or commercial airline. Unfortunately, Boeing experienced 2 of such scenarios in the last year, resulting in the death of more than 350+ passengers. Accordingly, relevant national aviation authorities have banned Boeing MAX airliners from their air spaces.

Accordingly, considering the recent accidents of Boeing 737 MAX airliners, Boeing Company is not doing well, especially with handling the situation regarding the “MCAS software that is considered to be the reason” for both accidents (Wendel, 2019). The company has lost its reputation across the world. On the other hand, Lockheed Martin is considered one of the strong competitors of the market as the company is highly supported by the U.S. Government. Also, the F-35 program and the involvement of more than 40 nations indicates that the company is a big opportunity for investing.

Conclusion

In conclusion, in this assignment, the organizational aspects and behavior of the Boeing Company have been analyzed and examined in terms of the income statement, risks management, company’s leadership, communication networks, decision making, negotiation processes, organizational change, power, politics, organizational culture and innovation, goals and structure, strategy, technology, and the organizational design. Also, the paper presents an overall analysis, comparison, insights, and interpretations into the organizational and financial structure of the company. Founded in 1916 by William E. Boeing in Seattle, Washington, the company serves customers in 150 countries. As the world’s largest aerospace company, Boeing manufactures space and security systems, commercial jetliners, defense systems, and the company offers aftermarket support for its customers. There exist two leading civil aircraft manufacturers, and they are distinct from each other in terms of controlling an aircraft. However, Boeing Company has shifted its focus from human to computer-based systems by developing the criticized MCAS (Maneuvering Capacity Augmentation System) system that caused two fatal accidents within the last year. Although Boeing is considered the most prominent aerospace organization, the company should concentrate on the reversal from the MCAS system that has caused two fatal accidents within the last year.

References

2018 Annual Report. (2018). The Boeing Company, pp. 10–85.

Air Accident Investigation Board (AAIB) Calls on Boeing to Modify Boeing 737 Design to Prevent Leaks. (1999). Disaster Prevention and Management: An International Journal, 8(1),

Brooks, R. (2014, January 28). Boeing Combines Teamwork and Technology to Deliver.

Compliance: Boeing. (2019). Retrieved December 10, 2019.

Corporate Governance. (2019). Retrieved December 10, 2019.

Kinard, Don A. (2018) “F-35 Production – Advanced Manufacturing and the Digital Thread.” 2018 Aviation Technology, Integration, and Operations Conference.

Lyons, B. (2014, October 30). Innovation: How Boeing Manages. Retrieved December 10, 2019.

Training and Development Strategy at Boeing. (2013, December 12). Retrieved December 10, 2019.

Uhl-Bien, M., Schermerhorn, J., & Osborn, R. (2015). Organizational Behavior, 13th Edition. John Wiley & Sons.

Wendel, W. (2019) “Technological Solutions to Human Error and How They Can Kill You: Understanding the Boeing 737-Max Products Liability Litigation.” SSRN Electronic Journal.

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