Managing Change – Change case study - Boeing
Pham Nguyen Hoang Anh (17243070)
THE CASE STUDY OF BOEING
In the period of late 90s to early, Boeing encountered a series of problems which badly affected business operation and tainted the corporate reputation, making it to lose the market position as an industry leader to the hands of its biggest rival: Airbus. First came the manufacturing crisis, which caused Boeing to stop its production for nearly a month. Then, Boeing’s acquisition in an attempt to diversify its business portfolio created cultural clash problems and raised doubts about financial trickery. Boeing’s diversification plan also generated unwanted results of demolishing history-long corporate culture and employee morale deterioration. Following are problems and loss of competitive edge, which were caused by Boeing’s obsolete technological systems.
Question 1. What is your analysis of what went wrong? Critically discuss what Boeing should have done to avoid this issue? Through the case study, several key problems of Boeing are identified including out-dated technology system, production issues, organizational structure, issues of merger and acquisition, cultural issues of diversification and leadership issue. The first problem of Boeing is outdated technology (Palmer and Akin 2008). This is identified as a key problem, which had a severe effect on Boeing’s business since in industries, which rely heavily on machinery, the significance of technology is emphasized more than ever and technological innovation in such industries is in fact, one of the main sources of competitive advantage. To avoid this issue right from the start, Boeing should have conducted regular analysis of external market environment, which includes factors such as political factors, economic factors and technological factors, etc. Only when knowing about what is going on in the market, what is the trend, what are the influential forces, organization would be able to design strategies to respond. Once acknowledging the advancement in technology, Boeing should have experts to inspect and propose options of new technological systems. It is also worth to mention that organization should not wait until the change already happens to act; it is strongly advised that the analysis of external factors is conducted regularly to identify the trends, the potential problems before they even happen in order to best prepare and counter the effects of such changes. The inefficiency in managing supply chain (here is at manufacturing stages) is another failure of Boeing (Palmer and Akin 2008). Disruption in supply chain resulted in the collapse of the whole chain: manufacturing of products is delayed, customers are not happy, and corporate reputation is compromised. This problem was caused by lack of communication within the organization (Palmer and Akin 2008). If Boeing had had a better bond among organization departments and units, it could have avoided this problem. Corporate communication is crucial to every organization in a sense that it facilitates the full dissemination of corporate values and practices to all corners of the organization (Cooren and Kuhn 2011). Corporate communication is also important in coordinating activities among different departments and divisions. To avoid the miscommunication resulting in manufacturing supply chain, Boeing should have required all associated divisions (manufacturing and production planning units) to have frequent meetings to exchange information of what they are doing, what is the specific support required from other units. The third key issue of Boeing is its organizational structure created obstacles in coordination within the corporate. Decentralized organizational structure may lead to lack of control and unfit collaboration among different units, units are not aware of one another’s activities which resulted in overlaps and...
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