Boeing Assignment

Xtreme Green Group

Factors resulted in Boeing unethical culture:
Absence of clear code of conduct Allowing illegal negotiation with stakeholders Corporate misbehavior of the key executives of the company and the failure of others to act as professional leaders For example, o o o The jailing of Boeing's former chief financial officer for holding illegal job negotiations with a senior Pentagon official, The indictment of a manager for allegedly stealing some 25,000 pages of proprietary documents from his former employer, Lockheed Martin Corp. (LMT ), and The judicial finding that Boeing had abused attorney-client privilege to help cover up internal studies showing that female employees were paid less than men.

The attitude and behavior of the Boeing former president who is supposed to be the role model of Boeing company For example, "The former CEO, the married Stone cipher began a relationship with a female vicepresident at Boeing, a misjudgment that ultimately paved the way for his humiliating ".

Using the position power to acquire personal benefits rather than working for the own good of the corporate. Absence of controlling and supervision over the CEOs behavior. Lack of efficient communications between the different departments. Absence of Leadership.

Absence of coordination between the different departments For example, A balkanized management team that has been at war ever since Boeing merged with McDonnell Douglas Corp. in 1997. The distinct cultures of the two companies never meshed, and the differences calcified into bitter rivalries. The internal rivalry not only is at the root of the company's ethical scandals but also has prevented managers from cutting costs and sharing good ideas effectively

Implementation of inaccurate competition rules with resulted in decreasing the performance rather than improving it. Centralization of power in limited persons. There was a culture of 'win at any cost"' employees were reluctant to speak and report when they see bad actions taken .This has lead that bad news surfaced so slowly. If that was indeed the case, the price turned out to be incredibly high -- and not just to the company's reputation. For example, Lockheed Martin manager who accepted a job in 1997 with McDonnell Douglas in its space rocket program, which later became a Boeing unit competing against Lockheed. Branch took about 25,000 pages of documents, many with proprietary markings, from Lockheed Martin. About a dozen Boeing employees saw some of these documents over a 2 1/2-year period. It was only in June, 1999, that an employee came forward. The incident cost Boeing $1 billion in government business and Lockheed Martin is seeking up to $2 billion in damages, citing lost business.

The corporate offices that Boeing adopted as headquarters when it moved from Seattle to Chicago in 2001 had become a hotbed of corporate infighting with executives competing for resources and recognition as the next in line for the CEO spot. Even when sales at the business units declined, costs at headquarters had continued to rise. Boeing's past long-term incentive system, called Performance Shares, paid out based on a higher stock price. But that system failed to consider management's performance during the down cycles inherent in the industry, thus offering managers few incentives to find a way to improve performance during a downturn.

Steps that the new CEO is taking to change the Boeing culture:
Creation of a new vision for the company Restoring the coordination and union between the different management teams More effective central leadership Being open with the company managers to speak about the wrong issues Encouraging managers to talk more openly about Boeing's severe ethical lapses. "I want to try to make it O.K. to have that dialogue," Restore the trust between all members in the company in all levels Trying to get the values line up with the performance Leading by example McNerney wins praise from co-workers for paying attention to the small things like remembering people's names, listening closely to their presentations, and not embarrassing underlings in public. Giving attention and being interested in the human side when dealing with his people He wins praise from co-workers for paying attention to the small things like remembering people's names, listening closely to their presentations, and not embarrassing underlings in public. Erasing the unhealthy legacy at Boeing world headquarter Restructuring and downsizing of the company o o He's also narrowed the corporate headquarters' role to primarily supporting Boeing's two big profit-and-loss centers Uniting the management team that has been at war ever since Boeing merged with McDonnell Douglas Corp

Creating new bonuses system which take in consideration the ethical values of the company and the collaboration between the company units Bonuses are directly linked to how well executives embrace a set of six leadership attributes such as "Living Boeing Values." That includes new criteria such as promoting integrity and avoiding abusive behavior. Mc.Nerney is also giving managers financial incentives that better reflect the cyclical nature of the aerospace industry

Improving the supply chain of the company Mc.Nerney plans to take greater advantage of Boeing's economies of scale in the supply chain and to create a more efficient research and product development process. "It's all about making us one company. It will give us leverage and make us dependent on each other for success."

Developing more efficient researches and product development processes Focusing on being (one company) Standardizing the tools and processes between the different units

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