Boeing Company: Operational decision making

Contents

Abstract 3

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Introduction. 4

Leadership and decision making style. 4

Deciding for the organization. 5

The relationship between operational and strategic decisions. 7

The role of ethics in organizational and operational decision making. 8

Unethical practices in Boeing Company. 8

Ethics and Compliance in Boeing Company. 9

Conclusion. 10

References. 12

Abstract

Decisions in an organization are influenced by a wide range of factors including both internal and external factors. This paper seeks to examine how Boeing Company is well-positioned to make new decisions that are based on promoting the operations of the organization. Under the new management, the organizations should seek to boost its performance to reach the intended goals of the organization. The paper also examines how the leadership in an organization influence decision making and how the management can collaborate with other stakeholders in promoting the performance of the organization by making well-informed decisions. In order to promote good image in the industry, organizations should focus on ensuring ethical practices. In examining the operations decisions, the paper also will explain how organizations can maintain ethical practices when making decisions.

Introduction

Decision making in an organization is influenced by a wide range of factors, both internal and external. The decisions made by the leader in an organization can either boost or destroy the operations of an organization. When making a decision, the management can decide to follow the right path and rules despite the impact it will have on the organization. The management usually engages in unethical decision making when they perceive that the decision is likely to dent the performance of the organization or dent its operations. Although it seems like a transient remedy, unethical practices can significantly dent the reputation of the organization and erode public confidence.

This paper examines the operation decision making in an organization basing the study on Boeing Company. 

Leadership and decision making style

            Business leaders are required to make various decisions during various changes in the organization. The leaders of an organization are expected to work together with their staffs to ensure that the decision made benefits the organization. According to Wild (1983), various leadership styles can be employed when deciding on an organization: autocratic, consultative, group decision and delegation.

The new demand for new aircrafts has made Boeing Company invest in new leadership with the aim of enhancing operations of the company to keep up with the changing market. After getting the order of 50.2 billion dollars, the company decided to hire a new president and COO, Dennis Muilenburg, to succeed Jim Mcnerney (Dillow, 2015). As the CEO assumed office, he was faced with a myriad of challenges and decisions to make. The new CEO is required to decide on the new strategy of operations based on the strict federal budget, on whether to still hold on to the manufacture of commercial jets or focus on its Range strike bomber decision of $55 billion. As a 30 –year veteran of the financial sector, the 51-year Muilenburg is expected to bring in new experience into the company (Dillow, 2015). His experience in the financial sector has made Mulleinburge to be seen as the right choice move to help the organization establish ways for boosting earnings and revenue in the industry.

            Among the various decision waiting to be made by Muilenburg, the effectiveness of the decision will depend on the kind of leadership that he will exhibit. Dillow (2015) explained that the new CEO would have to boost the new strategies embraced by the organization such as the production of 737 and 787 aircraft and shifting to new updated model 777 to model 777x. Generally, the CEO will have to work on three critical areas, the area of production and design, improving supply to meet the growing demand as well as defending the defense unit with new military aircrafts. Beaugency, Talbot, and Sakinc (2015) a company that is limited by resources can turn to outsourcing as a strategy to maintain the growing market demand for its products. Since inadequate resources curtail Boeing, it can partner with other companies to maintain the market influence and retain the customers. 

In making such decisions, the new CEO will be required to work with other stakeholders in ensuring that the organization makes well-informed decisions (Denning, 2013). In such major decision, it is likely to confuse because of the conflicting goals and the failure to examine all pending situations. According to Orasanu and Martin (1998), the ambiguous cues, underestimation of risks, conflicting goals and unanticipated consequences can contribute to decision errors. Muilenburg should, therefore, collaborate with other stakeholders to prevent any error which may affect the Boeing Company in future.

Deciding for the organization

            Bower & Gilbert (2007)explains that the everyday decision made by the management can create or destroy the strategy of the company. In their argument, Bower & Gilbert (2007), explains that the corporate strategy should guide resource allocation. In this regard, since Boeing already has pending fact strategies in place but confronted with limited resources, the focus should be on allocating the resource on the right place (Karp, 2017). For instance, because of the scarce resource from the federal government, the company should focus on the commercial jet in order to raise enough resources to serve the military department.

            Based on Bower & Gilbert (2007) analysis in decision-making CEO Muilenburg should invest in dispersing information to all the sectors of the company to ensure that every person makes objective decisions based on facts. The CEO of Boeing company should ensure that other managers are involved in the decision-making to ensure a smooth process. Autocratic leadership style is characterized by the centralization of decision-making process where lower rank managers and employees are barred from participating in the process (Denning, 2013). Although with autocratic leadership style is relatively easy to decide because of the less opposition, it can lead to making a wrong decision especially when the autocratic leader is ill-informed.

          Decisions making process should be delegated to other members. Collaborating with other staffs members when making decision helps to make them feel valued and thus work hard to achieve the goals of the organization. In Muilenburg case, he should involve other parties such as staffs and other managers in examining the best approaches to be embraced by the organization. Additionally, the Muilenburg should also consult other experts in the industry such as consulting other firms and former CEOs as a strategy to learn new ways of conducting various activities.   

The relationship between operational and strategic decisions

            Understanding the difference between operational and strategic decision can help to avoid making decisions may lead to conflicting outcomes. In an organization like the Boeing Company, strategic decision touches on the overall operations of the organization. These decisions usually touch on long-term aspects of the organization. The strategic decision requires a high level of experience and long-term planning because it mostly touches on both internal and external aspects of the business (Mankins and Rogers, 2010). On the other hand, operational decision touches on the day-to-day operations of the organization. The strategic decision, unlike operation decision, usually involves a high level of risk because it anticipates the future and comes with a lot of uncertainty (Wild, 1983). For instance, in the case of Boeing Company, the new CEO will mostly be tasked with making strategic decisions for the organization. This includes deciding on whether to focus on defense or commercials jet or deciding on the right kind of Jet that the company should focus on manufacturing.  

            Operation decisions are made after key personnel in the organization such as the CEO, other managers, and the boards have decided on the future direction of the organization. The strategic decision of the organization examines a wide range of factors such as the amount of resources required to achieve the production rate, the anticipation of the future demand to plan on the rate of production and future partnerships and market expansions (Karp, 2017). After planning for the future direction of the organization the company now is faced with the need to adjust the daily operations to align with the strategic plan of the organization. It is through the making of daily operations decision that an organization is able to achieve all its strategic ambitions.

The role of ethics in organizational and operational decision making

            Code of ethics is a set of principles and values that guide the decision-making process in an organization. Making ethical decision is important for preventing the organization from falling into a risky decision that may dent the corporate image. Ethical decision-making process embraced by the leaders in an organization can impact the morale and loyalty of the employees working in the organization. According to Soltes (2017), leaders use the code of ethics to determine the kind of behaviour they expected to be exhibited by staffs in the organization. According to Soltes (2017), ethical decisions are determined based on what is perceived to be right and honest by the others. However, in order to make a huge impact, it is advisable for leaders to lead the team members by example. When leaders uphold ethical decision making, they also influence the corporate image as well as help to enhance the performance of the organization in the financial market.

Unethical practices in Boeing Company

            Although Boeing Company has set in place a code of conduct and put other measures to promote ethical practices in the organization, it has, on various occasions, been accused of engaging in unethical practices. In 1997, Boeing Company was alleged to have violated the federal securities laws (Gaynor, 2014). The company was alleged to have hidden vital information regarding its manufacturing process which exposed would have severely dented the price of shares of Boeing Company. In 2003, Boeing was faced with another misconduct issue where it was accused by one of its major competitors, Lockheed, unlawfully accessing proprietary technical of Lockheed Company. According to Lockheed, accessing the information help Boeing Company to illegal won the contract of manufacturing Evolved Expendable Launch Vehicle (EELV) for the U.S Air Force in the 1990s (Icmrindia Organization, 2015). 

            Although leaders in an organization are the most observed when it comes to upholding ethical practices, employees, although rarely involved in the decision-making process, are also required to uphold a high level of ethical practices. Employees play a significant role in the performance of an organization, therefore ensuring they also uphold ethical practices contributes significantly to the overall ethical practices in the organization (Kotalik et al., 2014). Ethical practices among employees can help to ensure a high level of quality, good relations as well as good customer services.

            In achieving ethical practices in the organization, the organization should establish an ethical organizational culture to help in shaping the behavior of new hires. After from having a written code of conducts, the leaders of an organization should exhibit the behavior they want the employees to portray as they execute their duties. Additionally, Denning (2013) argues that the organization can strengthen ethical practices in the organization by rewards employees the exhibit ethical practices and take punitive actions against those that fail to uphold ethical practices.

Ethics and Compliance in Boeing Company

            Since it was faced with various unethical allegations in the 1990s, Boeing Company decided to establish a strong ethical policy in 2003 to ensure regular ethical decision making. The company has established a daily commitment strategy to ensure that all the employees are operating within the right standards set by the organization. With more than 7000 employees, the Boeing is dedicated to ensuring that employees are working with the same infrastructure across the world to maintain the same level of integrity (Dillow, 2015). The leaders of the organization are given a higher responsibility of ensuring that the organization upholds ethical practices. Boeing established an ethical business conduct guideline that is meant to guide the staffs on how they should conduct their activities. The initiative is meant to help the leaders of the organization to establish a powerful organizational culture based on ethical practices. The company seeks to promote openness and transparency when conducting various business transactions. As a global organization with many years in the industry, the company seeks to improve it corporate image and boost public confidence (Dane & Sonenshein, 2015). The allegations that have faced the company because of engaging in unethical practices have significantly affected the image of the company.

            Ethical compliance in the organization will be promoted by a wide range of resources led by the management. The employees will be given the opportunity to meet and discuss various ethical issues facing the organization in addition to taking part in the decision-making process. Ethical practices in the organization is planned to be engaged in regular discussions to ensure that issues are dealt with as they emerge (Dane & Sonenshein, 2015). Although transparency and openness is important for the employees, it is promoted for the sake of promoting public confidence on the organization.

Conclusion

            Managers should involve other parties when making the decision to avoid errors that may severely dent the operations of the organization. Managers are required to engage in strategizing for the future of the organization and also engage in making daily operational decisions of the organization. The leadership of an organization plays a vital role in leading the direction of the organization by making well-informed decisions. The leaders, therefore, should embrace the right leadership style that will help to incorporate other parties when making the decision. In the case of Boeing Company, the new CEO is required to ensure that operational decisions are in line with corporate strategy of enhancing the performance of the company with growth in the demand of its aircraft in France. Although Boeing was faced the with unethical allegations in the past, the new code of conduct policy is vital for ensuring regular transparency and openness in the organization.   

References

Beaugency, A., Talbot, D. and Sakinc, M.E., (2015), Outsourcing of strategic resources and capabilities: opposing choices in the commercial aircraft manufacturing, Journal of Knowledge Management, Vol. 19 Issue: 5, pp.912-931

Bower, J. L.& Gilbert, C. (2007). How managers’ everyday decisions create or destroy your company’s strategy. Strategic Direction, 23(8).Retrieved January 4, 2018,https://hbr.org/2007/02/how-managers-everyday-decisions-create-or-destroy-your-companys-strategy August 2007

Dane, E., & Sonenshein, S. (2015). On the role of experience in ethical decision making at work: An ethical expertise perspective. Organizational Psychology Review5(1), 74-96.

Denning, S. (2013). Boeing’s offshoring woes: seven lessons every CEO must learn. Strategy & Leadership41(3), 29-35.

Denning, S. (2013).What Went Wrong At Boeing, Forbes.https://www.forbes.com/sites/stevedenning/2013/01/21/what-went-wrong-at-boeing/#1874f2657b1b – Accessed July 2017

Dillow, C. (2015). Boeing’s New CEO Has Some Tough Decisions to Make. Fortune Magazine. Retrieved January 4, 2018, from http://fortune.com/2015/06/25/boeing-leadership-ceo/

Gaynor, G. H. (2014) Boeing and the 787 Dreamliner, in Decisions: An Engineering and Management Perspective, John Wiley & Sons, Inc., Hoboken, NJ, USA. doi: 10.1002/9781119020264.ch9

Icmrindia Organization. 2015. Boeing’s Unethical Practise. Icmrindia Organization. Retrieved January 4, 2018, from http://www.icmrindia.org/casestudies/catalogue/Business%20Ethics/Business%20Ethics%20-%20Boeing%20-%20Unethical%20Practices.htm

Karp, A., (2017), Building from Strength to Strength,  Air Transport World; Cleveland 54.4 (May 2017): 16. Manufacture of Engines & Turbines, Except Aircraft, Vehicle & Cycle Engines 2015  Market Digests –

Kotalik, J., Covino, C., Doucette, N., Henderson, S., Langlois, M., McDaid, K., &Pedri, L. M. (2014, June). Framework for ethical decision-making based on mission, vision and values of the institution. In HEC forum (Vol. 26, No. 2, pp. 125-133).Springer Netherlands.

Mankins, M. and Rogers P., (2010), The Decision Driven Organisation, HBR, June. Accessed at  https://hbr.org/2010/06/the-decision-driven-organization Retrieved January 4, 2018 from http://calleam.com/WTPF/?p=4617

Orasanu, J. and Martin, L., (1998), Errors in Aviation Decision Making, A Factor in Accidents and Incidents. Retrieved January 4, 2018 from http://www.pacdeff.com/pdfs/Errors%20in%20Decision%20Making.pdf

Retrieved January 4, 2018, from http://www.allanalytics.com/author.asp?section_id=1411&doc_id=261889

Soltes,E., (2017), Why It’s So Hard to Train Someone to Make an Ethical Decision. Retrieved January 4, 2018 https://hbr.org/2017/01/why-its-so-hard-to-train-someone-to-make-an-ethical-decision

Wild, R. (1983).Decision-making in operations management.Management Decision21(1), 9-21. Retrieved January 4, 2018,https://doi.org/10.1108/eb001307

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