Week 5 Final

Organizational Development and Change Themes

By: Ameki Lee

South University

Dr. Essler

SU_MGT7200 Seminar in Organizational Development and Change

06/21/2020

Boeing Company

Case Organization

What is the organization?

This company was established by William Boeing in 1916 in Seattle (Boeing: The Boeing Company, 2020). This was the original company but it later moved into a merger with the McDonnel Douglas and this merger led to the formation of the current Boeing Company (Boeing: The Boeing Company, 2020). The Boeing Company has its headquarters in Chicago, Illinois. It is divided into divisions that include Boeing defense, space, and security, Boeing Commercial Airplanes, Boeing Shared Services Group. It is arguably one of the best-performing companies in the design and building of airplanes. The company has been recognized and given several awards attributable to their performance in the industry. In the year 2018, the Fortune Global Magazine ranked the company 64th, in the same year the company was ranked 19th on the World’s Most Admired Companies List. The company was put to test in 2019 after two airplanes from the company crashed (Boeing: The Boeing Company, 2020).

What does it do?

This is a company that operates on the global economy but it has its headquarters in the U.S. several products are offered by this company to its customers and they include rotorcrafts, satellites, telecommunication equipment, missiles, and rockets (Boeing: The Boeing Company, 2020). This company also offers services to its customers such as support and leasing services. Considering the revenue that is earned by this company, it is considered the largest manufacturer of aerospace products and the second-largest producer of defense products.

Who does it do it to/for?

This company offers its products to its customers who include the government and airlines from all over the world. Boeing is the leading producer of commercial airlines that include commercial jets that are offered to both local and international customers (Boeing | Customers & Markets, 2020). Boeing has continued to serve its customers with quality through its huge investments in research and development, for example in developing Boeing's newest jetliner, the 777, the company has made its airline customers full partners in the design-build process (Condit, 1994). Other services that this company offers to its customers include modification of aircraft, maintenance services and relating documents, spare parts for the airplanes, advice concerning the airplanes and training activities. These are services that are offered by the company’s commercial department. The defense, space, and security department has the department of defense in the U.S as their main customers and in 2016, 67% of the revenue earned by the department of defense, space and security came from the department of defense in the U.S (Boeing | Customers & Markets, 2020). Other customers of the company include civil markets, international defense markets, National Aeronautics and Space Administration, and commercial satellite markets. Additionally, the company has access to international customers from outside the U.S (Boeing | Customers & Markets, 2020).

Initial Assessment

Grounding of 737 Max

One of the most detrimental effects to Boeing’s financials in the year 2019 was the grounding of 737-Max planes. The company recorded massive losses in terms of public trust leave alone revenue amounting to an estimated $60million per day as a result of the grounding event (Cruz et al, 2020). The 737 Max had engaged in two fatal accidents in Indonesia and the other one in Ethiopia claiming the lives of 346 passengers (Cameron et al, 2019). After investigations were conducted to identify the cause of these crashes, it was identified that the planes were fitted with faulty controls systems. Boeing presented the 737 max planes as purely similar to its predecessors 737-200 and 737-700 which did not have flight problems. However, in order to reduce costs, and speed up the process of building 737 Max, Boeing not only opted to hide the differences between the 737-MAX and its predecessors in order to avoid the requirement of a new certification but also hid the maneuvering characteristics operation system in the manual for use by pilots (Cruz et al, 2020). Although tests conducted on the planes found the systems to be faulty the management was aware of the situation. The airplanes were still given a go-ahead to fly depicting a clear sign of mismanagement at the organization. The management of the company also came out clean and they claimed that they were aware of the faults in the system (New York Times, 2019). They had however failed to communicate this information to the relevant parties in the organization. The poor communication that led to the two crashes is not just a sign of mismanagement at the organization but is also a symptom of problems at the organization.

Falling behind Airbus

An article sourced from the wall street journal quoted “Boeing.co is poised to lose its place as the world’s largest plane maker to Airbus after a reign of 7 years as its jetliner deliveries fell by more than third in the first half of 2019 with the grounding of 737 Max aircrafts.” (Cameron et al, 2019). Falling behind the Airbus in performance is another indication of poor performance at the organization. The Airbus performance when it comes to themed-range aircraft had surpassed that of Boeing Company. One of the major causes of the 737 Max crashes was the increased competition between Boeing and Airbus. The launch of A320neo by airbus led which reduced fuel burnout by 20% led to the hurried processing of the Boeing 737 Max as competing product (Cruz et al, 2020). Boeing has always surpassed airbus in terms of deliveries since the 1980s but A320neo came as potential game changer in 2010 (Cruz et al, 2020). Since the two crashes, Boeing has made a lot of losses and by the end of 2019, the company recorded a $ 693 million loss. Loses the company has suffered both financial and its customers is a clear indication of more problems that may affect the company in the future.

Evidence

The first evidence that indicates that there is a problem at the company is that the company management agreed to the fact that they were aware of the faulty system which they also failed to mention to the pilots of the planes or even to the necessary parties in the organization. Poor communication in any organization is a source of problems just like at the Boeing Company was two airplanes crashed due to poor communication. The management of the company had the duty of ensuring the safety of the passengers and the pilots by making sure that planes were safe to fly and if not, they should be grounded until a solution has been found (Boeing knew of earlier 737 Max problem, 2020). The mismanagement at the company caused the death of so many people, loss of customers, financial losses, and a lot of conflicts and damage to the company's reputation.

Poor communication is another evidence of problems at the company and it is one of the major reasons that led to the crashes of the 737 Max. Although the company was aware that there was a problem with the systems that they had installed on the planes, they still did not communicate to the relevant departments like the engineering division or the pilots flying the planes. If the management had communicated the findings of the test then the crisis would have been averted and lives saved. Another instance of improper communication on the company's side came from the fact that the company failed to communicate with their customers, especially the airlines about the faulty systems. Boeing needed to communicate to their customers about the problems before selling the planes to them (Boeing knew of earlier 737 Max problems, 2020).

Data Gathering Plan

A data gathering plan is a detailed documentation for the sequential process of collecting and analyzing data. A well-developed data gathering plan should incorporate novel and powerful forms of local completeness reasoning in order to transform those plans into contingent plans of high quality (Friedman et al, 1997). To fully examine the root causes of poor organizational management at airbus then I embarked on a research involving data collection techniques such as interviews for employees at the firm and information analysis sourced from the media and plane crash investigation authorities. The particular publication (Cruz et al, 2020) also provides useful insights on the background information of Boeing in the article ‘fatalities or malpractice’.

Data Assessment

Interviews

To dig deeper and identify the root of problems at the Boeing Company there needs to be clear and sound investigative plans. An effective way to do this is through interviews with various personnel at the organization including groups, individuals, and departments at the organization. Interviews in research serve to describe and the meanings of central themes in the life world of the subjects. The interviews will therefore establish what the interviewee perceive and know in order establish the areas at Boeing that require change theme implementation. Since I require accurate and first-hand information, I will conduct a face to face interview. An interview is an investigation tool that has been designed in a way that provides a deeper insight into factors under investigation (Evalued, 2020).

When it comes to Boeing Company I will interview the company managers heading different departments involved in the design and building of airplanes. For example, a question I would pose to the operations manager is why he/she failed to fully comply with the FAA guidelines on product release. Another question to the marketing team would be based on whether the market demanded 737-Max or it was just out pure competitive grounds that its release dates were altered. These kinds of questions would enable me to find out the reasons why they chose not to communicate the information that they had about the faulty systems on the airplanes. The next group of employees at the organization that I will interview is those that work for the engineering department and the main information that I require from this group of employees is to understand if the faults that were identified on the airplanes could be repaired and if yes, why they were not repaired (Virginia Tech, 2018). The next group of employees that I will interview is the quality assurance team and the interview will seek to get clarification on their findings after they had tested the fitness of the airplanes to fly.

Findings

After conducting the interviews, I realized that the strategy theme and the policy themes are the ones that have facilitated the problems of the company. From the data gathering plan deployed, the most evident root cause of the 737-Max clashes was competition decisions. In essence the fear of Airbus’s A320neo model taking up control of major market lines for Boeing e.g. the South West airlines that operated fleets of pure 737 planes had declared possible shift to Airbus led to the rushed production of 737-Max planes (Cruz et al, 2020). The company had failed to put in place adequate strategies that could be implemented in the event the company faced a crisis like the one that happened after the 737 Max crashes. When it comes to the policy theme, the communication policy in the organization had flaws because the company had failed to communicate to the necessary parties in the industry including the airlines and the pilots and this is the main factor that led to the crashes. The company management agreed that it was aware of the faults in the plane's system but failed to ground the planes until necessary repairs had been made.

Self-Assessment

From the information that I have gathered from this assignment since week one, I believe that the blame for the two crashes of 737 Max lies squarely on the top management leadership in the company. A company’s management is the decisions crafting organ hence its actions are significant and should be sanctioned properly before implementation. The management team at Boeing made no effort to address the information that they had on the faults on the planes, it was the duty of the company management to decide what happens to a plane given the faults. However, they decided that they were fit to fly even without informing the airlines that had purchased them. What are clear and evident here are problems that could have been thwarted had there been proper communication on the part of Boeing’s management to airlines operating the 737 Max planes.

Statement of Organizational Issues

Organization’s Problems and Gaps

Considering the information that I gathered after conducting this research, I believe that the main problems that the company is facing are communication problems and poor management structures, these challenges combined have led the company into a crisis making it lose millions of money and customers. The future of the company greatly depends on its ability to find effective solutions to these problems and gaps. If the company will be able to put in place a qualified management team then it can recover its lost glory and also regain its position in the industry.

Conclusion

In conclusion, I come to find that the Boeing Company has been recognized and given several awards in regard to their performance in the industry. The year 2018 saw the Fortune Global Magazine rank the company at 64th position. This company also offers services to its customers that include: support and leasing services. Boeing is the leading producer of commercial airlines including commercial jets that are offered to both local and international customers. The interviews I conducted led to my findings i.e. the company had failed to put in place adequate strategies that could be implemented in the event of a crisis like the one that happened after the 737 Max crashes. With the right Management team, Boeing Company could be successful again, and restore its rightful place in the eyes of the industry.

References.

Boeing: The Boeing Company. Boeing.com. (2020). Retrieved 20 June 2020, from https://www.boeing.com/ .

Boeing | Customers & Markets. Fi-aeroweb.com. (2020). Retrieved 20 June 2020, from http://www.fi-aeroweb.com/firms/Customers/Customers-Boeing.html .

Boeing knew of earlier 737 Max problem. BBC News. (2020). Retrieved 20 June 2020, from https://www.bbc.com/news/business-48174797

Boeing puts the cost of 737 Max crashes at $19bn as it slumps to annual loss | Business –

Condit, P. M. (1994). Focusing on the customer: How Boeing does it. Research-Technology Management, 37(1), 33-37.

Cameron, D., & Wall, R. (2019). Airbus poised to overtake Boeing as biggest plane maker. The Wall Street Journal.

Cruz, B. S., & de Oliveira Dias, M. (2020). CRASHED BOEING 737-MAX: FATALITIES OR MALPRACTICE?. GSJ, 8(1), 2615-2624.

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Friedman, M., & Weld, D. S. (1997). Efficiently executing information-gathering plans. In In Proc. of the Int. Joint Conf. of AI (IJCAI.

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Kimberly, J. R., & Bouchikhi, H. (1995). The dynamics of organizational development and change: How the past shapes the present and constrains the future. Organization Science, 6(1), 9-18.

The 737-Max clashes of 2019 retrieved from (2019): https://www.nytimes.com/interactive/2019/business/boeing-737-crashes.html

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2020, from https://www.guides.lib.vt.edu/researchmethods/interviews