PETER MORTON

What tangible steps could have been taken to mitigate the negative cultural effects of the

McDonnell Douglas merger of 1996, and subsequently, what can present Boeing

management do to restore some of the firm’s former engineering, collaborative glory?

Boeing, once cited as one of the greatest engineering firms in the world, is in free fall

following the wreckage—and inept managerial response to—the 737 MAX crashes and

subsequent manufacturing disasters (Kennedy). These failures are not so much indicative of poor

engineering capabilities as they are of a cultural shift towards short-term profits and away from

the firm’s original tenants of quality and safety (Morton).

Over the years, power-driven managers from McDonnell Douglas infected Boeing’s

culture with Wallstreet aspirations, doing so by implementing many ruthless managerial practices

from Welch’s General Electric, such as rank and yank lay-offs, inflation of quarterly earnings,

and operating on the limits of legally acceptable behavior (Morton). As we dissect these issues, it

becomes blatantly obvious that the merger between McDonnell Douglas and Boeing was the

impetus for this negative cultural shift, but what is not so clear is what could have been done to

mitigate such damage.

Most market stakeholders were thrilled by the announcement of the McDonnell Douglas

merger, particularly Wall Street investors, who ardently supported the merger and boosted

Boeing stock over 4% post-announcement (Bryant). Market stakeholders were more skeptical.

Much of this hesitancy derived from concerns over the synthesis of Boeing’s engineering-first

culture with McDonnell Douglas’ profits-first approach. Self-described “hunter killer assassins,”

many of the retained McDonnell Douglas executives were notorious for their fixation on profits
and cavalier views on product safety (Robison 70). Compared to Boeing’s decades of dedication

to developing their collaborative culture—specifically around the “Working Together” motto of

the 777 project—McDonnell Douglas management’s deference for Wall Street investors did not

align with the original Boeing value propositions of quality and safety (Morton).

Boeing could have made a multitude of different choices in an endeavor to remain

steadfast to their engineering-centric culture, including forging stronger relationships with their

engineering team to avoid their strike, appointing engineering-focused Mullaly instead of profits-

driven McNerney to CEO, keeping the headquarters in Seattle to avoid divisions between

manufacturing and corporate, and restricting “Welch” practices such as laying off 10% of the

workforce annually (Morton). It is unclear if implementing any of these alternative practices

would have kept the McDonnell Douglas merger from negatively impacting Boeing or if their

merger was truly destined for disaster.

Mere years following the 737 MAX crashes, Boeing is again faced with severe scrutiny

for its manufacturing ineptitudes. During a short flight over Oregon, a door plug was blown out

of an Alaska Airlines flight (Rose). Following this incident, 737 MAX planes were grounded,

additional quality inspections were mandated, and Boeing’s working relationship with Alaska

Airlines strained (Feuer). In Boeing’s most recent earnings report, current CEO Dave Calhoun

claimed that Boeing would remedy these issues after the door plug incident by increasing safety

inspections, selected a quality officer to complete a comprehensive review of commercial

airplane quality management system, and “encourage and reward” employees for speaking up

(McMichael) Despite these promises of safety and transparency, this incident has resulted in a

wavering in public trust, with Boeing stock subsequently falling about 14% (Sindreu). Although

some safety protocols are being implemented in response to this most recent incident, it’s clear
that existing cultural problems have been contributing to this manufacturing mess “for years”

(Terlep).

The continued legal and reputational fallout from the 737 MAX crashes of 2018 and 2019

and recent manufacturing incidents demands Boeing act to improve its culture and

manufacturing processes. There is a plethora of ways Boeing could implement these changes,

such as restructuring managerial roles, hiring additional external quality auditors, or an overhaul

of existing manufacturing safety protocols. Regardless of the steps Boeing may take to rebuild

their trust with the public and their customers, it is clear that immediate action is necessary to

prevent the firm from falling into further disarray.

“I have reviewed the rules relating to properly citing material from other sources, as

outlined in the syllabus, and affirm that my paper complies with these rules.”
 Works Cited

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Accessed 30 January 2024.

Feuer, Will. “Alaska Airlines Warns of $150 Million Hit From Boeing Grounding.” The Wall Street

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Kennedy, Rory, director. Downfall: The Case Against Boeing. Imagine Documentaries, 2022.

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Morton, Peter. Reflections on Corporate Culture and Consequences. 26 May 2020.

Robinson, Peter. Flying Blind: The 737 MAX Tragedy and the Fall of Boeing. Anchor Books, 2021.

Rose, Joel. “Inspections of Grounded Boeing Planes Begin After a Door Plug Blew Off One in Flight.”

NPR, 8 January 2024, https://www.npr.org/2024/01/08/1223567743/inspections-of-grounded-

boeing-planes-begin-after-a-door-plug-blew-off-one-in-fl. Accessed 30 January 2024.

Sindreu, Jon. “Boeing Investors Can't See a Thing.” The Wall Street Journal, 31 January 2024,

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January 2024.

Terlep, Sharon, and Andrew Tangel. “'This Has Been Going on for Years.' Inside Boeing's

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