The Planning Function of Management – Case Study Boeing Company
Boeing Corporation is massive and complex organization that majors in commercial aerospace and defense. It is the world’s largest aero crafts’ manufacturers and one of the worlds’ major commercial and defense contractor. Boeing has a wide range of products that includes commercial airliners, military aircraft, munitions, space systems, computer services, satellites, and missiles. Being a complex organization, the planning functions of Boeing management plays the key role in the success of the company. The planning function of management deals entirely with the formulation of organizational objectives and lays down the strategies of achieving them over a defined period. In order for the organization to reach its ultimate goals, good plans should complete activities and tasks as well as take into account contingencies to avoid chaos associated with unforeseen challenges.
The planning function in the Boeing organization cuts across all the major departments. It ensures efficiency through setting goals within the engineering, sales, mechanical and product testing departments (Malhotra, et al, 2001). Every goal set; there is a set of guidelines stipulating how the goal will be attained. These guidelines outline the series of events that will address issues regarding management, inventory and personnel to achieve the ultimate goal of the plan for example promote highest level of efficiency within the organization. In matter regarding management planning for example, the first step for planners is usually to thoroughly analyze all the circumstances surrounding the goal. This helps the management to determine the steps needed in order to achieve the ultimate goal. Secondly, they may evaluate alternative goals and plans to have multiple plans to compare and contrast. This provides a platform to analyze the cost and benefit as well as advantage and disadvantage of accruing to each alternative and hence making an optimizing decision. If most of the plans are generating more benefits, the alternative plans can be combined into a single plan. The management should prioritize important steps; delegate the key roles to reliable persons who will be efficient to perform the tasks for the ultimate goal to be achieved in time.
The planning function of management of Boeing organization is greatly influenced by legal issues, ethics and social responsibilities. This is because its planning is very complex and influenced by both endogenous and exogenous factors that will include the above-mentioned three factors. Legal issue has influenced the planning function of Boeing since the organization holds industrialization for defense systems and paraphernalia. It has the legal responsibility of adhering to the international standards for products. The planning function therefore has the responsibility of guaranteeing safety since people lives are at stake in their equipments. The planning function also has the legal responsibility to adhering to laws in their particular local site, lest they are put in awkward position. In 2000, for instance, Boeing was sued over a complicated legal issue involving gender pay differential (Malhotra, et al, 2001). An internal conflict emerged after evidence of pay differential existed based on gender. A, salary study showed that female employees were paid less than their male counterparts were. The males were also more likely to be hired for high paying positions than the female. Fortunately, the company was protected from liability by the Attorney’s client and the evidence thrown out to be sorted out of court.
Ethics issues also influence the planning function of management of the Boeing organization because matters of trust, respect and confidentiality must be integrated in the plan in order to secure consumer loyalty and confidence. The employees are supposed to obey the Boeing code of conduct. An example showing how the planning function is influenced by ethics Boeing ‘s planning management include seminars in their plan to rekindle the ethical responsibilities among Boeing’s employees. They understand how emphasis on ethics plays an important role in the achievement of the organization ultimate objective. Social responsibility is another major influence of the Boeing’s planning function. As the planner think of how to better their product or introducing new products, they have to think of the social cost attributed to the society and the environment at large. Boeing planning function of management has the social responsibility of reducing emissions since according to The Political Economy Research Institute, Boeing made the list of one “of the largest corporate emitters of toxics in the US”. The planners had to come up with a “five-year plan” to reduce “reduce greenhouse gas emissions intensity 25 percent from 2008 to 2012” (Swink, et al, 1996).
Several factors influence Boeing’s strategic, tactical, operational, and contingency planning. These include the following, economic conditions, competition and innovation. The management should be speculative to the economic trends in order to plan and optimize the different economic seasons that unfold. For example, the C.E.O, Jim McNerney, of Boeing Company speculated the upturn in the economy after the world economic decline as of 11th Feb. 2010 (Malhotra, et al, 2001). This speculation meant that demand for airline would increase and therefore, the management was able to plan for an increased production rate. For purposes of minimizing cost, Boeing opted to install new engines instead of building new aircraft (McDonald, et al, 2000). The decision will lead to a tactical planning regarding installing and testing of the new engines whereby the success of the testing will imply hiring of experts to fix the engines in the plane. On the other hand, should the testing fail contingency measures will be to analyze the alternative options.
Innovation is another factor that influence the company’s strategic, tactical and contingency planning. This is attributed to the fact that technology has really determines the success in the industry. In defense and security for instance, high performance of the equipment is the main factor that guarantees success as far as military equipment and weapons are concerned. Boeing management formulated strategic goal come up with a technologically innovative product for the US Navy (Swink, et al, 1996)
Tactical planning would be to march the model design to the product. The technological innovation applied was to have “On board P-8A, all sensors contribute to a single fused tactical situation display” and grants complete “delivery of information” among coalition forces and US forces (McDonald, et al, 2000). The contingency measure should the model fail is to have alternative models.
Competition is the third factor influencing the planning process. The Airbus is known to gives the Boeing company a cutting-edge competition in the industry. Currently, Airbus is the leading manufacturer of commercial jets Boeing plan to out do the airbus was futile since their backlog led to delays; prompting client to opt for the Airbus to meet their immediate needs. This problem in the Boeing’s assembly line has caused its management to change the deadlines. On the other, Airbus is also experiencing a problem because of the Boeing’s backlog prompting them to increase their monthly output. The other competitor to Boeing’s defense systems is the Lockheed Martin and lately, these two competitors have been working on some projects together in order to meet a greater demand. Therefore, the management strategic plan may be to establish partnership with the U.S Air Force in order to secure the sales of Air Force tankers. The tactical plan may be to establish measures that will reinforce the partnership and definitely, marketing has to be integrated in the venture.
Malhotra, A., Majchrzak, A. & Carman, L. (2001). Radical innovation without collocation: A case study at Boeing-Rocketdyne. MIS Quarterly 25 (2), 229-249.
McDonald, S., Corrigan, S., Daly, C., & Cromie S. (2000). Customizing Concurrent Engineering Processes: Five Case Studies. Safety Science 34 (1-3), 151-176.
Swink, L., Sandvig, J., & Mabert, A. (1996). Customizing Concurrent Engineering Processes: Five Case Studies. The Journal of Production Innovation Management, 4, 6-7