Tuesday, June 4, 2013

Management Techniques: Case of Boeing Aircraft Company

Boeing was founded in Seattle in 1916 by William E. Boeing. The firm is currently a multinational company currently comprised of varied business units such as Engineering; defence, space and Security; commercial Airplanes; operations and technology and the Boeing shared services group among other business units. The company has its headquarters in Chicago, IL. The firm registered revenue levels of 64.306 billion US dollars in 2010 making it the largest aircraft manufacturer in the world based on revenues (Boeing, 2010). Based on the revenues accrued from defence related production, the firm ranks as the third largest globally airplanes maker. The firm currently has a total of 164,495 employees working in the various business units of the firm (Boeing, 2012). The jets made by Boeing comprised over 66 per cent of all the commercial airplanes that were sold in 1995. The earnings per share (EPS) of Boeing are expected to increase all through out the decade. The essay is a case study of Boeing Company with a specific focus on the management techniques that are employed in the firm. Regarding the management technique at Boeing, the essay will answer two questions. The first question regards the problems which Boeing was facing before the change in management. The second question is an evaluation of the leadership style between Shrontz and Condit. There are a variety of management problems that Boeing was under the old management headed by Shrontz. To begin with, the employees of the firm were treated as products which were to be used in the achievement of the goals of the firm without any regards to their individual welfares. Due to the non consideration of the welfare of the employees, there was a very high rate of labour problems especially from the unions. If the management would have been keen on the welfare of the employees, the loyalty of the employees to the organisation would be high (Lewis, 2006). Also, there would be a higher level of productivity of the employees. This is currently not the case with the organisation. The second problem with the organisation is the high level individualism that was in existence in the company. Upon the introduction of the new working environment, under the new management, some employees were still wary of the teamwork which was being fostered in the firm. Teamwork is lacking in the organization as there are barriers which existed in terms of the different departments where the people worked. Under the old management a worker would have to contact their supervisors before any errors that they noticed in the parts which were delivered to them had. The problem would be moved a long the various hierarchies until the problem was finally sorted out by the person who was concerned. These long chains led to a serious wastage of time thus significantly contributing to the longer times it took to deliver the products of the firm (Reader, 1972). Also, Boeing under Shrontz was highly centralised with very many barriers between the employees and the managers. The manager could never be close to the employees and so they were intimidated of the managers of the firm (Oxley & Poskitt, 1996). The employees felt they were never good enough for their jobs du to the constant supervision that they were receiving. Moreover, the firm is also faced with the long delivery times and increases in the costs of producing the airplanes. These are management problems mostly related to the motivation of the employees and the working environment (Lewis, 2006). When the employees are highly motivated, they will work towards completing the various tasks that they are given in time. When the jobs are not completed on time, the deliveries cannot be made at the appointed time thus the firm can be faced with lost sales as the customers can cancel the orders. There were also problems in the staffing as people were promoted into position of management regarding their technical expertise and not their ability to lead the others. Upon selecting Condit to replace Shrontz, the latter stressed that the selection was made based on the ability of Condit to motivate the employees. This motivational factor was lacking in the managers as they both were people who had a high technical ability without any human relations face to it (Lewis, 2006). Finally, there was little input of the employees in the various decisions which were being made by the firm. The work methods which were followed in the organisation were dictated by manager thus cases of back logs may rise in the course of doing the work (Reader, 1972). When the employees are not consulted they can resort to delaying tactics which they use as a weapon to hit back at the manager. There were a variety of differences between the management styles which were employed by the two managers; Shrontz and Condit. Under Condit, there was an increased level of teamwork between the various departments and the divisions which were found in the firm. This was completely the opposite of what was taking place under Shrontz. Shrontz built an organisation where there were very high bureaucracy and an increased level of individuality. The employees of the firm who worked in different departments worked independently of each other. This method of carrying out work sin the organisation led to serious problems as it took a great amount of time to make corrections to the various production malfunctions. Condit brought changes where there was a closer working relationship between the employees of the firm regardless of the departments where they work. There was a higher rate of consultation between the employees and an increased sharing of ideas as no one sets of employees can know everything that they are needed to do accurately. Condit’s “design build” teams thus ensured that any errors that were committed can be corrected in the group thereby no significant time was lost during the process (Lewis, 2006). Under Shrontz, decisions regarding the composition of the workforce were made without any consultation with the unions that the employees were under thus leading to industrial problems for the firm. An example is given in the case where there was a strike which went on for sixty nine days. Shrontz hoped to reduce costs that the firm incurred through the shrinking of the workforce thereby almost bringing the firm onto its knees. Condit on the other hand focused on improvement of the relationship between the firm and the employees as the surest way through which the firm could deal with the problems that were facing it such as high costs and the reduction of the time it took to deliver the products (Armstrong, 2000). Under Condit, there was created a more informal work environment where employees felt free to express themselves. Shrontz leadership was so hands on that the employees felt greatly intimidated at all times. Condit could walk into stores and in other informal gatherings of the employees and hear them out. For instance during the picketing, Condit was able to walk out and talk to the employees regarding the issues that were affecting them. Through this informal interaction, he was able to communicate to the employees in a relaxed way that they were greatly appreciated by the firm (Ward, 1998). This was not the case during Shrontz tenure where the employees of the firm were treated just as the other factors of production were treated. Condit brought about changes which were to make the employees partners of the firm. There are also changes in the human resource functions for instance the staffing of the firm. Under Shrontz, when the firm was in need of new employees, the applicants to the posts were taken through a series of tests which were to determine their ability to carry out the tasks (Lewis, 2006). However, under Condit, there have been changes where the focus is not very much on the technical ability of the person but on their will power and the belief of the applicants in the various functions which they were carrying out. Also, there are differences the channels of communication and the hierarchies that existed in the organization. Under Condit, the employees would directly communicate with their fellow employees and make decision without having to seek the opinions of the supervisors. This kind of change has broken down the hierarchy in the organisation towards the creation of a flat structured one where communication can originate from any source. Under Shrontz, the employees of the firm were not allowed to communicate directly with their fellows in other department. To effect any communication, the employees had to go through their supervisors exhibiting a highly hierarchical organisation (Armstrong, 2000). The tall organisation structure led to huge wastages of time and thus significantly increasing the costs to the firm. Example is given of Russell whom under the new management was able to speak directly to an engineer who designed the component, Metal deck; he received which was larger than the blueprint. They were able to solve the problem quickly than if they were to wait for the message to be passed through the supervisors until it reaches the engineer (Ward, 1998). Russell was able to save a great deal of time coupled with the related costs associated with the long waits for the reply. The practice initiated by Condit was common place in the William Boeing original factories where design was located on one floor and the production on the other. In case of a problem, it only took a walk from one floor to the other (Lewis, 2006). The final difference between the management practices of Shrontz and Condit lies in the fact that the latter introduced elements of rewards for individual performances. This ensured that the employees felt appreciated for the work that they undertook. In conclusion, it can be stated that the changes that were initiated by Condit reflected a shift from an autocratic leadership style towards a system where democracy prevailed. Under the new system, there would be fewer employee troubles as they felt recognised and appreciated in whatever they were doing for the firm. Also, the new management system significantly helped in reducing costs and dealing with delays as the employees did not have to wait for their supervisors to make decisions. However, the changes were faced with problems as there were some employees who still believed in the fact that some of the employees were more skilled than the others and thus had to dictate the terms. References Armstrong, M. (2000), A handbook of management techniques, London: Kogan Page Boeing (2010), Form 10-K [online]Accessed 09 January, 2012 Boeing (2012), History [online]Accessed 09 January, 2012 Lewis, J. P. (2006), Working together: 12 principles for achieving excellence in managing projects, teams, and organizations, Washington, D.C.: Beard Books Oxley, R. & Poskitt, J. (1996), Management techniques applied to the construction industry, Oxford: Blackwell Science Reader, W. J. (1972), Management techniques, London: Unilever Ltd. Information Division Ward, M. (1998), 50 essential management techniques, Hampshire, England: Gower