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Boeing Organizational Structure
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Boeing Organizational Structure

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  • Boeing generalizes the divisions of their organization into six areas that they manufacture products out of. They then use matrix structure to assign responsibilities to individuals working with a Senior Vice President as the head of the department
  • Boeing is an international company with headquarters outside of as well as inside the United States. Matrix structure allows for all headquarters to operate independently of the general headquarters in Chicago.
  • Boeing has many Manager’s that help the employees achieve their goals in the specific departments. W. James McNerney, Jr., Chairman, President and Chief Executive Officer oversees the strategic direction of the Chicago-based, $66.4 billion aerospace company. There are several people who oversee the departments of Boeing. Mike Cave is senior vice president of Business Development and Strategy and responsible for analyzing and developing plans to drive the company's growth and nurture new businesses. Tom Downey is responsible for the development and implementation of strategic communication plans companywide. He leads the company's global communications activities, which include public relations, branding and advertising, executive and employee communications, and international communications. John Tracy is responsible for defining and implementing corporate strategies for attaining and maintaining technical and functional excellence and enhancing the yield of technology investments across the enterprise. James Bell is the Chief Financial Office who oversees all of Boeing’s 66.7 billion dollar assets. Richard Stephens is in charge of all Boeing’s HRO facilities and Boeing’s administrative staff. Wanda Denson-Low is responsible for the advancement and effective implementation of the company's internal governance strategies. She also maintains management oversight for Internal Audit, Ethics and Business Conduct, Global Trade Controls, which includes import-export policies and compliance, and other related regulatory and compliance matters. Shep Hill oversees the company's international affairs and has leadership responsibilities for 20 Boeing in-country operations throughout the world. Mike Luttig is responsible for leading the Boeing Law Department across the company. Timothy Keating leads the company's public policy efforts, including all U.S. federal, state and local government liaison operations (Boeing, 2007). Although the executives in the organizational chart are Presidents, Sr. Vice Presidents, and Executive Vice Presidents they also oversee department heads that oversee how the work is actually progressing. In order for them to get a job done they must ensure that the work is flowing in a way to compliment the goals and vision of Boeing. Because Boeing works with a matrix style organization it can be hard to distinguish whose direction to follow; however, when a group is part of a team or project there is no day in, day-out confusion about the goals or whether they are responsible to a project, they know they are because of the relationship that the executives have with the fellow team (Waterman, R. 2008).
  • Vertical structure works to distinguish top management from lower-level management. Authority is delegated from high-level management down to lower-level management. Each top-level executive oversees the entire organization.
  • Horizontal Structure works to break the organization into small division that can work independently based on top-level management decisions.
  • Vertical structure and Horizontal structure are used together to help organizational goals be met without CEOs, CFOs, and COOs having to personally supervise each division. Delegation of individual departments responsibilities are given by the CEOs, CFOs, and COOs to the department heads who oversee the individual division.
  • Teams at Boeing are highly encouraged to take initiative and work together. Says Henry Shomber, a Boeing chief engineer: "We have the no-messenger rule. Team members must make decisions on the spot. They can't run back to their functions for permission" (Dumaine, 1994). Boeing’s organizational function teams seem to have equipped the matrix managers at this level with the knowledge, skills information and confidence to make decisions and manage in this complex environment.
  • Boeing has created a hierarchy of teams. Instead of a traditional organizational pyramid with layers of management, Boeing has four layers of teams. These teams eliminate layers of middle management and empower employees at lower levels. Says Boeing President Philip Condit: "Your competitiveness is your ability to use the skills and knowledge of people most effectively, and teams are the best way to do that'' (Dumaine, 1994).
  • With a long history of leadership and innovation, Boeing is showing the way to achieve success through the use of layers of teams instead of middle management.
  • Boeing is a national icon-the world leader in commercial aircraft, one of the country’s leading exporters and this is why the culture of the organization has to have depth (Bishop, L (2001). Boeing’s culture includes; values, leadership, integrity, quality, customer satisfaction, and share holder value. Boeing is committed to a set of core values that not only define who they are, but serves as guideposts to help them become the company they want to be. Boeing strive to truly live by the following values every day. Leadership, Boeing will be a world-class leader in every aspect of the business -- in developing team leadership skills at every level; in management performance; in the way Boeing designs, builds and supports the products; and in it’s financial results. Integrity, Boeing will always take the high road by practicing the highest ethical standards and by honoring their commitments. Boeing will take personal responsibility for the organizations actions and treat everyone fairly and with trust and respect. Quality, Boeing will strive for continuous quality improvement in all that it does, so that the organization will rank among the world 's premier industrial firms in customer, employee and community satisfaction. Customer satisfaction, satisfied customers are essential to Boeing’s success. They will strive to achieve total customer satisfaction by understanding what the customer wants and delivering it flawlessly. Enhancing share holder value, Boeing will ensure it’s success by satisfying the customers and increasing shareholder value (Boeing, 2007).
  • These elements help to define the a structure, when Boeing analyzed what was important to them they look at items such as these. This helped to move Boeing into a Matrix structure. “Boeing has customers in more than 90 countries around the world and is one of the largest U.S. exporters in terms of sales.” (Boeing, 2008) Because they are so big and operate in different fields all over the world with very specific products for each customer, the Matrix structure best fits Boeing. A benefit of the Matrix structure would be, “Decision making is decentralized to a level where information is processed properly and relevant knowledge is applied.” (Bateman, 2009)
  • Matrix structure allows for delegation at the appropriate levels so that the higher management levels are not overloaded with operational decisions.
  • Since Boeing is based out of the United States but operates in many countries across different continents, they have set up a series of networks to gather resources and supply their customers from different branches of their company instead of having one centralized office to support them. “Headquartered in Chicago, Boeing employs more than 160,000 people across the United States and in 70 countries, with major operations in the Puget Sound area of Washington State, southern California and St. Louis.” (Boeing, 2008)
  • Since products are differentiated between customers, Boeing decided to use a matrix based structure to be very customer oriented. This allows multiple products to be designed and manufactured at once that are very specific to each customer. Resources are difficult to share because of the different branches needing the same resources. For Boeing’s defense systems they provide, “end-to-end services for large-scale systems that enhance air-, land-, sea- and space-based platforms for global military, government and commercial customers.” (Boeing, 2008)

Boeing Organizational Structure Boeing Organizational Structure Presentation Transcript

  • Organizational Structure Presented by: Team D Ann Blasius, Jolene Cabazos, Julie Comeau, Ryan Scalmanini and Nora Trombley MGT/330 Management: Theory, Practice & Application Professor Darin Jones December 1, 2008
    • As an organization that utilizes the matrix structure of management, communication is the key to success
    • At Boeing the lines of communication flow more freely with this structure and thus allows for increased accountability both from the project teams and project managers.  
  • Boeing’s Organizational structure
    • Boeing uses the Matrix Structure:
    • - Each Department has a Senior Vice President  
    • Business Development and Strategy
    • Communications
    • Engineering, Operations & Technology
    • Finance
    • Human Resources and Administration
    • Internal Governance
    • International
    • Law Department
    • Public Policy
  • Organizational structure cont.
    • Boeing uses Specialization:
    • - Different individuals in different units perform specific tasks
    • Executive council
    • Capital Corporation
    • Commercial Airplanes
    • Engineering, Operations, and Technology
    • Integrated Defense Systems
    • Shared Services Group
  • Organizational structure cont.
    • Boeing uses Corporate Governance :
    • The firm is overseen by its executive staff and board of directors.
    • The executive staffs and board of directors use integration to run the organization.
    • Boeing’s use of integration, brings the Executive council, Capital Corporation, Commercial Airplanes, Engineering, Operations, and Technology, Integrated Defense Systems, and Shared Services Group together via the Senior Vice Presidents to make decisions about how to stay competitive and increase revenue.
  • Organizational structure cont.
    • Boeing’s span of control is wide:
    • - 163,851 employees
    • - In 70 countries
    • Boeing is a Centralized Organization :
    • - high-level executives make most decisions and pass them down to lower levels for implementation.
  • Boeing’s Organization Chart W. James McNerney, Jr. Chairman, President, and CEO Michael J. Cave, Sr. Vice President Business Development and Strategy Tom Downey, Sr. Vice President Communications J. Michael Luttig, Sr. Vice President & General Counsel Shep Hill, President Boeing International Wanda Denson-Low Sr. Vice President Internal Goverence Richard Stephens, Sr. Vice President Human Resource & Administration James Bell, Executive Vice President Chief Financial Officer John Tracy, Sr. Vice President Engineering, Operations, &Technology Timothy Keating, Sr. Vice President Public Policy
  • Vertical Structure
    • Has hierarchy levels where top supervisors make decisions for organization
    • Uses Differentiation - the organization is composed of many different units that work on different kinds of tasks, using different skills and work methods.
    • Uses Integration - the differentiated units are put back together so that work is coordinated into an overall product.
    • Authority trickles down organization from top to bottom
      • CEO and CFO and COO
        • President and Vice President
          • Department Heads
  • Horizontal Structure
    • Organization is subdivided or departmentalized into smaller units or departments.
    • Each Department has a Department head that oversees that division and all employees in the division.
    • Lower level management reports to department head who reports to CEO, CFO, or COO.
    • This structure works to create individual and specific divisions that oversee specific functions of the organization.
  • Analysis of Vertical and Horizontal Structure
    • Vertical and Horizontal Structure often work synonymously.
    • Vertical Structure establishes top supervisors who make decisions about how to run the organization.
    • Horizontal Structure breaks down the organization into smaller divisions overseen by department head who report to top supervisors.
    • Vertical Structure dictates how authority is delegated (top to bottom)
    • Horizontal Structure dictates how each division is integrated into the organization.
  • Boeing’s Organizational Functions
    • Human Resources – develop and implement company growth activities.
    • Marketing Department – leads strategic direction, revenue, market share and brand development.
    • Operations Department – responsible for purchasing, quality control, logistics, evaluations, etc.
  • Boeing’s Senior Management
    • Needs to:
    • Support matrix structure and only implement where it adds value.
    • Remove barriers - cultural and others.
    • Supply clear direction.
  • Leadership and Innovation
    • At Boeing each organizational function has it’s own purpose and place in the management of the company.
    • The company as a whole is ever striving to improve at all levels.
    • They realize that their strength comes from their employees, and that management at all levels must continue to support the many ongoing efforts by its teams.
  • Boeing’s Culture
    • Values
    • Leadership
    • Integrity
    • Quality
    • Customer Satisfaction
    • Enhancing Share Holder Value
  • Organizational Design Elements
    • Matrix Organization:
      • Geographic
      • Functional
      • Customer-Based
      • Product
      • Service
      • Hybrid
      • Matrix
      • Marketing channels
      • Departmentalization
  • Matrix Structure
    • Boeing uses the Matrix structure to runs its organization.
    • - Different divisions run independently due to the diversity of Boeing’s products.
    • - Boeing is an organization that has constant changes in technology, which means that collaboration amongst the divisions is essential for success.
    • - Boeing is a network organization with independent, single-function firms that collaborate on a good or service.
    • -Resource utilization is efficient because key resources are shared across several important programs or products at the same time.
  • Geographic's
    • Based out of Chicago, Boeing has customers all over the world.
      • Boeing has sales offices throughout the world to cater to their customers.
    • Boeing’s span of control is wide:
    • - 163,851 employees
    • - In 70 countries
        • This ensures customer satisfaction and proper communication between both parties.
  • Product
      • Boeing’s products are very specific to each customer, especially in defense systems for governments.
      • With a Matrix structure, Boeing is able to design and manufacture products that are one of a kind while still allocating resources very well.
  • Conclusion
    • We value the skills, strengths, and perspectives of our diverse team.
    • We will foster a participatory workplace that enables people to get involved in making decisions about their work that advance our common business objectives (Boeing, 2008).
  • References
    • Boeing, (2008). Boeing; About Us ; Retrieved on November 29, 2008 from http:// www.boeing.com/aboutus/culture/index.html#diver
    • Dumaine, B. (1994). THE TROUBLE WITH TEAMS. Fortune, 00158259, Vol. 130, Issue 5; Retrieved on November 28, 2008 from http :// www.mph.ufl.edu/events/seminar/TroublewithTeams.pdf
    • Peters, T., Waterman, R. (2004) In Search of Excellence pg 307 p2.  Retrieved from http:// books.google.com on November 29, 2008.
    • Almojuela, B. (2000). The Core of Planning Process. (1-5). http://www.alignent.com/resources/benalmojuela-qa.htm
    • Galligan, M. (1998) Policy/Management Track: Strategic Planning. (4) Kansas Legislative Research Development. http://www.ncsl.org/programs/lis/nalit/galligan1.htm
    • Bishop, L.A., (2001) Shaping the corporate ownership structure to build shareholder value.  Strategic Investor Relations 1.2 p 47(4) Retrieved on November 29, 2008 from General One File UOP.