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Organizational Assessment

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Conducting an Organizational Assessment

This paper will evaluate the Boeing Company’s business strategy and global competitiveness plan, an internal assessment of the Boeing Company will be presented using the SWOT analysis, and the external environment will be assessed via an external scenario evaluation. The company’s organizational structure will be presented, and the organization’s business process will be discussed utilizing the tools of business process design, as well as any potential ethical issues that may impact the traditional management functions of the company will be identified and preventative measures will be presented.
Business Strategy & Global Competitiveness Plan:
Business Strategy & Global Competitiveness Plan:

Boeing’s international strategy focuses on mutually beneficial partnerships. Around the globe, Boeing is developing partnerships that benefit its customers, business partners and local economies. In return, the company is strengthened by growing sales and tapping the best technologies the world has to offer. According to the Boeing company’s 2010 annual report, sales outside the United States accounted for 41 percent of Boeing’s revenue. That number is expected to increase significantly over the next few years. More than 80 percent of the Boeing Commercial Airplanes’ backlog is for jetliners ordered by non-U.S. customers. International sales are rapidly increasing as a portion of Boeing Defense, Space & Security’s total revenue. Shep Hill, Boeing International president, said “Boing has long focused on providing the best and most innovative products and services at affordable prices” (www.boeing.com, 2011). The company has also worked to meet the specific needs of individual customers and regions. Boeings international strategy supports the strategies of its business units and aligns with the expectations and aspirations of the countries in which it operates. In doing so, the company values diversity and is sensitive to local laws and customs.
Boeing is enhancing its presence by hiring local talent and deploying U.S. employees at key locations around the world. According to William Seil, “more than 8,500 of Boeing’s 164,000 employees work outside the United States” (Seil, n.d.). This strategy also involves establishing and strengthening research and development partnerships worldwide, as international markets fuel R&D growth. “In addition to providing the best, most advanced products, the company is continually increasing its ability to provide outstanding customer service, quickly and effectively, throughout the world” (Seil, n.d.).
A SWOT analysis of The Boeing Company: 1.

Strengths – a. The company has strong international operations with customers in around 145 countries, employees in more than 60 countries and operations in 26 states. Worldwide, Boeing and its subsidiaries employ close to 188,000 people with major operations in Washington State; Southern California; Wichita, Kansas; and St. Louis, Missouri. Boeing enjoys the ownership of a brand with good and far reaching awareness on a global scale. Strong relationships with business partners. b. Boeing enjoys many strong alliances with many other globally powerful companies. In defense projects Boeing works closely with Northrop Grumman in programs such as the joint common missile program. Boeing is also a 50-50 partner with Lockheed Martin in the United Space alliance. Boeing also works with many other organizations such as NASA in close relationships, which strengthen the company’s position in other markets. c. Broad product line that covers most major market niches / R&D development- Boeing Company offers a wide range of product lines. For main commercial product such as aircraft, Boeing has 717, 737, 747, 757, 767, and 777 families of jetliners and the Boeing Business Jet. At the moment it is planning to release a new version, 787, which is called the Dreamliner. The company has more than 14,000 commercial jetliners in service worldwide, which is roughly 75% of the world fleet. Its product line is continuing to expand, creating new versions of its family of commercial airplanes. This pioneering technology development helps ensure Boeing stay a leader in the industry (www.boeing.com, 2014). 2. Weaknesses- d. A hierarchical, ridged, and semi autocratic management style, which is a product of its military heritage. Since the Second World War, the Boeing company still operates under a management style in which the employers makes decisions on their own with little or no input from employees. This does not fit in the modern management and for this reason; Boeing has several problems in management when it practices racial discrimination, tussles with its union workers, and then lets its executives flee the scene to avoid accountability. e. Labor problems- When production problems delayed delivery, Boeing was forced to increase its work force, working in three shifts, to complete the planes. This inexperienced work force created additional problems and the cost per plane is increased substantially. Moreover, the inexperienced workforce found the aircraft design too complex to implement. The managers ordered forced overtime: 50-to-60-hour workweeks became common. The problems affected other Boeing airplanes and complaints from customers began to mount. The Federal Aviation Administration (FAA) ordered special inspections of all Boeing jetliners produced since 1980 to look for defects that might affect safety. The strains of the forced overtime contributed to a 48-day strike in the fall of 1989 that hurt Boeing financially (www.boeing.com, 2014). f. Dependence on US government and WTO-incompatible subsidies- At the moment, Boeing mainly gains the benefit from the US which is 65 % of the company total annual sales. Moreover, Boeing is being criticized by Airbus for the subsidy contracts as well as foreign and domestic support all amount to aid for Boeing’s 7E7 model that is double what was available for the new Airbus A380. While this fact is on one hand a great strength of the company with many opportunities it could also be construed as a weakness (www.boeing.com, 2014). 3. Opportunities- g. New aircraft to gain market share-With the impressive show of Airbus A380 recently, Boeing also plans to release its powerful weapon in the competition with Airbus. The new version Boeing 787 which inherits the most advanced technologies and advantages of the previous models is hoped to be a big hit to the airline industries. At the moment, Boeing has received a number of orders for Boeing 787- Dreamliner and this opportunity actually shows that Boeing still insists on its successful business strategy to build longer-range, more capable, smaller aircraft that could go point-to-point and, therefore, serve city pairs directly rather than having to hook them up through a hub. The new 787 is the proof that Boeing does not lag behind the competition (www.boeing.com, 2014). h. Increase demand for point to point routes-This is related to the booming market of low-cost airline. All the low-cost airline companies use point to point routes in order to reduce the costs substantially. Fortunately, this is suitable with the strategy of Boeing as mentioned in the previous parts. Airbus A380 is still unsure about its future because most of the big airline companies at the moment are not gaining profit. 4. Threats- i. Slowdown in the commercial jet market- No industry was hit harder than airline industry after September 11th, 2001. Boeing and Airbus as well had to suffer big losses in revenues from 2001. Recently, there are some good signals recently for both of the companies with the increase of order number. The demand for international tourism and delivery is increasing. However, it still does not reach the level before the terrorism event (www.boeing.com, 2014). j. Uncertain airline industry environment- The airline industry environment is so dynamic and uncertain that to guess long-term or even short-term outcomes is very questionable. Competition in the commercial aircraft industry is particularly intense with regard to price, operating costs and production schedules. Increasingly, major manufacturers are teaming with global suppliers to reduce their risks, cut costs, and boost profitability. Besides, a number of low-cost carriers continue to gain market share, remain profitable and are ordering new airplanes. There have been encouraging signs that the US economy and global air traffic are recovering and airline interest is slowly increasing. However, the timing of a commercial airplane recovery remains uncertain.
Boeing Organizational Chart:
Boeing Organizational Chart:

Boeing Design Change Process:

“When design changes to a commercial airplane such as the 787 Dreamliner must be made, Boeing teams use an established change management methodology. Changes are made for various reasons, including improving efficiency or performance, meeting new regulatory requirements or addressing customer airline requirements. Any airplane can undergo numerous design changes, big or small, and for myriad reasons, throughout its service life. Over the life of an airplane program, the changes can number in the thousands” (787updates.newairplane.com, n.d.).
When the need for a product change is identified, representatives from across Boeing come together. Tooling, scheduling, finance, design engineering, manufacturing engineering, contracts and other functions all have a role. Technical and trade studies might be conducted if a design solution is not easily identified, or when multiple options are under consideration. Early action can include prototyping or design-and-build workshops to validate conceptual solutions. After a solution has been proposed, a change proposal is created. Boeing engineers and business teams go over the situation and solution. Design considerations include safety requirements, weight, technical performance measures and configuration. On the business side, resources, schedule and organizational effects are assessed. Once the proposal is approved by management, the lead engineer gathers data from affected organizations and supplier partners and initiates a change request. An impact assessment review board is convened to make sure that all groups who will be affected by the change have been identified and asked for input. Senior managers go over the proposal with an eye to understanding the implications for their areas of responsibility. For example, engineering leaders from the fuselage team, wing team, interiors team and others are involved.

The design change is then examined by a technical review board, consisting of deputy chief project engineers, Boeing Research & Technology experts and Boeing Technical Fellows. They ensure that the change is technically sound and the best solution for the airplane. At the last step in this process, program leaders and the chief project engineer evaluate the change and make the final determination whether to proceed. In some exceptional cases, a futher review by all of the program leaders may be required.
Once a change is approved, the lead engineer and change analysts begin developing a plan to make the change. The plan includes work statements, schedule quotes from production teams and the supply chain, and integrating requirements into one master plan. Next, new engineering drawings are reviewed and approved, and teams from manufacturing engineering create production plans and work instructions for technicians on the factory floor. Engineering teams then make sure that the new data is correctly incorporated and is proceeding through the system.
Some changes require Federal Aviation Administration (FAA) certification. Special engineering teams are tapped early in the process to define the testing required, which must be validated by the FAA before tests can proceed. The FAA may decide to observe tests in addition to analyzing report and test data to make sure that regulatory requirements are met and to approve the closure of the certification plan associated with the change.
Making changes is a routine part of designing and building airplanes. This rigorous process is in place because of the complexity of commercial jetliners—the 787 Dreamliner has 2.3 million parts and complex, integrated systems—and because changes can have significant engineering and production implications. Whenever changes are made, Boeing makes them using this proven disciplined and effective process. (787updates.newairplane.com, n.d.).
Ethical Implications
Boeing has had its problems when it comes to ethics. Lawmakers question Boeing’s ethical commitments. (Mandel, 2006) This on the heels of two separate charges involving Boeing. Boeing was being charged with improper possession of documents belonging to competitor Lockhead Martin Corp. The documents were most likely used to win a contract for government rocket launches. Boeing has since settled these charges in court and put into place an extensive ethics policy which was developed to protect the corporation and its employees. It requires all employees to follow the conduct set forth in the Boeing Code of Conduct. Boeing has also set up a hotline for employees to ask questions and report questionable behavior. These efforts are intended to create a favorable corporate image for Boeing. Management must make decisions based on what is right and wrong not what is going to be profitable if it wishes to be viewed as a company with high ethical standards. In essence Boeing’s actions must match up with its ethics policies.
The aircraft industry has many factors that contain risks and could affect its overall success. In today’s world the three main factors are economy, globalization and terrorism. All these factors could affect Boeings strategic, tactical and contingency planning.
The economy of a country is a huge factor for aircraft manufacturers. When an economy is on the downturn or appears to be heading toward a recession the demand for airline travel goes down. The order for new airplanes also goes down when the economy goes down. Boeing has had to look to other countries for business and focusing on more military projects.
The threat of terrorism has affected the strategic and management plans in the airline industry. Terrorist attacks are unpredictable and it makes passengers not want to fly and this affects the airline industry’s profits. Since 9/11 many airlines have stopped their flights to certain countries such as the Middle East for fear of hijacking. Terrorism in the air can be minimized but it requires the combined efforts of government and their security agencies together with the airline companies and management.
This paper has evaluated the Boeing Company’s business strategy and global competitiveness plan, an internal assessment of the Boeing Company has been presented using the SWOT analysis, and the external environment was assessed via an external scenario evaluation. The company’s organizational structure was presented, and the organization’s business process was discussed utilizing the tools of business process design, as well as any potential ethical issues that may impact the traditional management functions of the company was identified and preventative measures were presented.

References
787updates.newairplane.com. (n.d.). The Boeing Design Change Process - Boeing 787 Updates. Boeing Mobilizes Resources. Retrieved from http://787updates.newairplane.com/Design-Change-Process/The-Boeing-Design-Change-Process#
Mandel, J. (2006). Lawmakers question Boeing's ethical commitments. Government Executive. Retrieved from http://www.govexec.com/defense/2006/08/lawmakers-question-boeings-ethical-commitments/22399
Seil, W. (n.d.). Boeing Frontiers Online. Boeing. Retrieved from http://www.boeing.com/news/frontiers/archive/2011/june/i_bds.pdf

www.boeing.com. (2011). The Boeing Company 2010 Annual Report. Retrieved from http://www.boeing.com/assets/pdf/companyoffices/financial/finreports/annual/2010/annual_report www.boeing.com. (2014). About US. Boeing. Retrieved from http://www.boeing.com/boeing/companyoffices/aboutus/index.page?…...

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