Boeing Management Planning
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Planning, an imperative part of any business environment, is a daily focus at Boeing Corporation. The organization faces daily challenges to produce products to fit the consumer wants for air travel, comfort, and efficiency. While Boeing deals with a constant need for innovative ideas it also deal with the challenges of its main competitor airbus whom has historically been subsidized by many of the European nations to compete with Boeing for a larger share of the market. Boeing management, through excellent planning, an ethics policy that demands large returns for shareholders, and constant work to comply with ever changing legal demands of the industry has led to the constant success of the company.
“It was the jet Boeing didnt build that averted what could have become one of the worst crash landings in the companys 91-year history–and cleared Boeing to conquer the skies again.”(Masters, 2007). Boeings Management teams work hard to plan what projects will be best for customers, lead to the largest returns to shareholders, and keep a reputation of being a world leader in the aviation industry. “In October 2002, executives of the aircraft manufacturer met with a group of global airline representatives at a conference center on the Seattle waterfront. The executives were trying desperately to figure out what to build next to hold off a soaring Airbus.”(Masters, 2007) Boeing had made plans to build a high speed jetliner prior to this meeting. Through careful planning and expert decision making Boeing officials found that the world was more interested in comfort and efficiency. Boeings high speed aircraft would have been a huge economic let down because of the huge price tag and expensive operating costs. After that meeting Boeing changed plans to make the Dreamliner which is a more cost effective and comfortable aircraft that has enough orders to keep Boeing busy building the aircraft for customers until the year 2015. While Boeing has spent many resources planning what to build, Boeing is now faced with the problems of how to meet customer demands of the new aircraft.
Boeing Corporation is at an all time high for sales. “For the first time, its commercial-airplane unit earned more than its defense side.”(Masters, 2007) “Boeings backlog of orders increased 47% to a record 208 Billion, more than seven times the units 2006 revenues.”(Masters, 2007) This has presented a separate problem for the organization. While Boeing has global operations Boeing is not prepared to produce the number of orders currently on the books. “Boeings nightmare scenario is a repeat of the 1980s, when the industry poured cash into building more production capacity only to witness market demand crash a few years later.” Management is at this point outsourcing 20% more of the work then they have historically to keep up with the current industry demand. Boeing management has developed strategic alliances with suppliers and contractors to keep up with the current demand. In fact, Boeing has 17 companies from 10 different countries helping to build the Dreamliner. Of course, Boeings new Dreamliner is not the only product in production. Management is also responsible for keeping up with the demand for the organizations other products.
Boeing Corporation, known for its place in the aviation industry, also supplies smaller planes for shorter distances. In addition to the commercial industry, Boeing also has government contracts for military aircraft and special projects for NASA. Managements planning and coordination to keep all the different aspects of the company is a testament of their commitment to keeping their 155,000 employees working, and keep economic growth acceptable to shareholders. While Boeing is highly successful in its vision to continue being a world leader in aviation and aerospace industry they are not without the occasional legal and ethical problems.
Boeing Corporation is under a constant struggle to stay ahead of its one major competitor, Airbus, a European aviation manufacturer. In the early 1900s Boeing nearly monopolized the aviation industry by building planes, engines, hiring pilots, and running airports. “As the postwar industry grew in importance during the 1950s and 1960s, governments began to regulate air transport heavily.”(Juan, 1997) “The U.S. Government broke up this monopoly when the U.S. Post Office denied its mail contracts to Boeing.”(Juan, 1997) Since then Boeing has been forced to fight constant legal battles to maintain its top spot in the aviation industry. In fact, Boeing was forced to fight a legal battle in the World Trade Organization (WTO) because of government subsidies Airbus was continuing to receive from European countries. Boeing was fast losing its share of the market and could not keep up with a fast moving Airbus because it was not receiving the same subsides from the American government. Boeing argued, while it is right for small start-up companies to use and depend on those government grants, that Airbus could not be considered a small company. Boeing was being forced to subsidize its own research and development with price tags in the billions while Airbus was receiving much of money in subsidies from European countries. Boeing was quickly losing its share of the aviation market, returns to shareholders were dropping, and Boeing was in fact, on the verge of being forced out of the commercial airline business. In addition to the legal issues Boeing had with the government