Week 5 Final

profileDr. Williams
SU_MGT7200_W1_Lee_Acopy.docx
Home>Business & Finance homework help>Week 5 Final

BOEING 4

Boeing Company

By: Ameki Lee

South University

Dr. Essler

SU_MGT7200 Seminar in Organizational Development and Change

06/06/2020

Running head: BOEING

Boeing Company

Case Organization

What is an organization?

Boeing: The Boeing Company. Boeing.com. (2020). Retrieved 6 June 2020, from https://www.boeing.com/.

William Boeing who was a resident of Seattle started this company in 1916. Later in 1997, the Boeing Company merged with the McDonnel Douglas to form the current Boeing Corporation. The company has its base of operations, headquarters, located in Chicago, Illinois. This company is made up of five main divisions that include activities and technology, Boeing shared services group, Boeing capital, Engineering, Boeing defense, space and security, and Boeing commercial airplanes. The company is one of the best performing airplane manufacturing companies in the world and in the year 2018, and it was ranked 64th on the Fortune Global magazine, and the same year, it was also ranked 19th on the world’s Most Admired Companies list. In the year 2019, the company faced a crisis that negatively impacted its reputation, and the company's financial rating dropped after the 737 MAX all over the world was grounded after several fatal accidents.

What does it do?

Boeing: The Boeing Company. Boeing.com. (2020). Retrieved 6 June 2020, from https://www.boeing.com/.

Boeing is a multinational company based in the United States and mainly deals in different types of airplanes. The company airplanes, satellites, rotorcrafts, telecommunication equipment, rockets, and missiles, then go ahead to manufacture them and sell them to their customers all over the world. This company also offers total support and leasing services to its clients. Boeing is one of the largest aerospace manufacturers in the world and based on the revenue generated in 2018; it is also considered the second-largest defense contractor in the world and the most significant US exporter.

Who does it do it to/for?

Boeing | Customers & Markets. Fi-aeroweb.com. (2020). Retrieved 6 June 2020, from http://www.fi-aeroweb.com/firms/Customers/Customers-Boeing.html.

The commercial airplane segment of the Boeing Company designs develops, manufacture, and the market the company's commercial jets and also offers the customers support services from all over the world. This company is a leading manufacturer of commercial airplanes and produces a line of commercial jets that meet different passenger and cargo requirements for both foreign and local customer base. The Commercial Airplane department in the company also provides additional services to commercial and government clients from all over the world. Some of the additional services offered by the department include aircraft modification, aviation services support, maintenance documents, spares, technical advice, and training. The company's Defense, Space, and Security department have the United States department of defense as its primary customer. Statistics indicate that 64%, 62%, 65%, and 67%, of revenue were generated by the department in 2016, 2015, 2014 and 2013 respectively. Other customers of the company that has generated substantial revenue for it is the National Aeronautics and Space Administration, civil markets, international defense markets and commercial satellite markets. Statistics have indicated that from 2016, 2015, 2014 and 2013 Boeing generated 23%, 27%, 30% and 34% respectively from contracts that were awarded by the US government. The company also has customers from outside the US, and in 2016, 2015, 2014, 2013, 2012, and 2011 the company was able to generate an estimated 59%, 59%, 58%, 57%, 54%, and 50% of its revenue from its non-US customers.

Initial Assessment

Boeing Company has had many problems but the major one was the two crashes one in Indonesia and the other one in Ethiopi that claimed the lives of 346 people. The main reason behind the crashwas the mismanagement which came from the management team which was aware of the flaws in the software that were installed in the plane. If the management team had communicated the information about the flaws to the airlines and pilots then lives of the passages would have been saved.

Symptoms

Grounding of 737 Max

Rushe, D. (2020). Boeing puts the cost of 737 Max crashes at $19bn as it slumps to an annual loss. The Guardian. Retrieved 6 June 2020, from https://www.theguardian.com/business/2020/jan/29/boeing-puts-cost-of-737-max-crashes-at-19bn-as-it-slumps-to-annual-loss.

This is the first symptom that there is a problem at the Boeing Company. The main reason behind the grounding of the 737 MAX all over the world is that this 737 MAX had caused fatal accidents in Indonesian and Ethiopia, and in both incidents, 346 people lost their lives. Investigators of the incidents claimed that a faulty automated flight control system that had been installed on the plane was the main reason behind the crash. The fact that the software was fitted into the planes and various tests for quality were conducted and the planes were found fit to fly is a big problem that regulators need to look at because the tests should have identified that the automated system was faulty. Additionally, the management of the company claimed that they were aware of the fact that the system was flawed, but they did not go ahead and recall the planes but allowed them to continue flying hence risking the lives of thousands of passengers using the 737 MAX planes. The management team at the Boeing is part of the problem that the company is facing, and in the event the company decides to come up with measures to mitigate challenges it is facing, it is necessary that it starts with the management team.

Falling behind Airbus

Rushe, D. (2020). Boeing puts the cost of 737 Max crashes at $19bn as it slumps to an annual loss. The Guardian. Retrieved 6 June 2020, from https://www.theguardian.com/business/2020/jan/29/boeing-puts-cost-of-737-max-crashes-at-19bn-as-it-slumps-to-annual-loss.

Due to the grounding of the 737 MAX, the Boeing Company has fallen behind the Airbus in terms of the mid-range aircraft that they produce. The mid-range aircraft has a market of between 2500 and 4000 planes, and the Airbus has placed its orders to A321nero-XLR. This decision by Airbus has negatively impacted the Boeing financial position. Boeing has made a lot of losses since the 737 MAX crashes, and by the end of the year 2019, the company had made losses estimated at 693 million dollars. The crashes affect the company and the losses that it has made their after indicates the more problems that the company might face.

Evidence

Boeing knew of earlier 737 Max problem. BBC News. (2020). Retrieved 6 June 2020, from https://www.bbc.com/news/business-48174797.

The first evidence that I will provide that there is a problem at the company is that the company management agreed that they were aware of the fact that there was a problem with the 737 MAX before the accidents. It was the duty of the company management to ensure that all the planes were safe and that if any planes have a problem, they were supposed to ground the plane until all repairs have been made and the plane certified as fit to fly. This evidence is a sign of mismanagement at the company, which has cost hundreds of lives. In as much as the management cited a different cause of the accidents but agreed that they were aware of another flaw in the plane yet still allowed it to fly a sign of problems at the company is a sign of a problem at the company.

Poor communication is another sign of problems at the company, and this factor was part of those that caused the 737 MAX. The management of the company was aware of the faulty software on the planes but failed to communicate this information to the pilots; hence they were not aware of MCAS's potential failure. Another instance of poor communication still comes from the management, which was aware of the problems but again failed to inform the airlines that had purchased them. The crashes would have been averted if the company had communicated the information about the planes to the relevant parties.

Relevant Theme

Hilarispublisher.com. (2020). Retrieved 6 June 2020, from https://www.hilarispublisher.com/open-access/the-five-themes-of-change-management-2223-5833-1000305.pdf.

The strategy theme is the best change theme that can describe the problems that the company is going through. By setting precise visions for the company, the management would have been able to understand the correct actions that should be taken in the event of what happened to Boeing Company. By establishing effective strategies, organizations will be able to have effective and efficient plans through anticipation of some of the challenges that the company may face during operations and how these problems will be handled.

Annotated Reference List

Boeing | Customers & Markets. Fi-aeroweb.com. (2020). Retrieved 6 June 2020, from http://www.fi-aeroweb.com/firms/Customers/Customers-Boeing.html.

Boeing knew of earlier 737 Max problem. BBC News. (2020). Retrieved 6 June 2020, from https://www.bbc.com/news/business-48174797.

Boeing: The Boeing Company. Boeing.com. (2020). Retrieved 6 June 2020, from https://www.boeing.com/.

Hilarispublisher.com. (2020). Retrieved 6 June 2020, from https://www.hilarispublisher.com/open-access/the-five-themes-of-change-management-2223-5833-1000305.pdf.

Rushe, D. (2020). Boeing puts the cost of 737 Max crashes at $19bn as it slumps to an annual loss. The Guardian. Retrieved 6 June 2020, from https://www.theguardian.com/business/2020/jan/29/boeing-puts-cost-of-737-max-crashes-at-19bn-as-it-slumps-to-annual-loss.