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Boeing business strategy
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Boeing is the largest aerospace company and the largest manufactor of commercial and military aircraft in the world. Boeings military aircraft come equipped with missiles, satellite, launch vehicles and advanced information and communication systems. Boeing is the number one U.S. exporter when it comes to sales. Boeing’s management must understand the importance of the legal, ethical and social responsibility of their organizations. All of the above mentioned will have an effect on the planning function of management.
Legal Issues
Some of the legal regulations Boeing encounters are antitrust regulations and foreign trade regulations. The government can influence a company’s strategy by the laws the government imposes. A company has a legal responsibility to follow all government regulations. Boeing will also have to pay attention to environmental laws and copyright and patent laws. Boeing must also pay attention to impositions that other countries may put on the airline industry. Boeing must respond appropriately to other countries political and economic environment. The biggest legal responsibility Boeing faces is the safety of their passengers. When an airplane crashes without being manipulated by outside factors it is always the responsibility of the airline. The airline will be responsible for paying out any compensatory damages to the surviving family members.
Social Responsibility
Social responsibility is an individual or group’s actions benefiting the society as a whole more than oneself or the group. Boeing uses research and development as a way to increase customer’s choices every year as well as providing a safe and effective service for their customers. Boeing is currently developing a new 787 Dreamliner jet. Some of the features of this new jet include a new interior environment that will have a lower altitude and higher humidity making the customers more comfortable during long flights (Troy 2005). Boeing understands that the purpose of using research and development is more than just a way to raise profits they see it as a way to benefit the customer. This is one the reasons Boeing is one of the world’s top airline companies. Boeing is also a member of the foundation for Corporate and Social responsibilty and encourages other companies to get involved in supporting ethics in business.
Ethics
Boeing has had its problems when it comes to ethics. Lawmakers question Boeing’s ethical commitments. (Mandel,2006) This on the heels of two separate charges involving Boeing.
Strong internal rivalry between the after-merged Boeing and McDonnell Douglas Corp is also contributing to company’s ethical scandals. As competition between each party gets stiffer, employees might tend to resort to ethical breaches to gain competitive advantages so as to outshine each other.
It's expected that in the first few years, Boeing will incur more expenses than income. Revenues will come at a later date when the 7E7 planes are delivered. The project will have to be evaluated periodically and management will have to make changes to ensure that the company is profitable based on current and future conditions. The board's prerogative is not to give Airbus a profit sanctuary' by not accepting the project, but rather to maintain or increase its market in the industry even if it's not profitable in the short-run. Boeing has deep pockets and should be willing to challenge its competitors.
Social responsibility can be defined as “the continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as of the local community and society at large” (Mallen Baker, 2004). In addition, social responsibility has been defined differently by various corporate leaders that provide guidelines which impacts how one manages the core business. Social responsibility is an essential part of a business. If managed correctly should strengthen the competitive spirit of the company and provide prosperity to society.
The Boeing Company originally started out as the Pacific Aero Products Co., which was founded on July 15, 1916. The name was changed about a year later to The Boeing Airplane Company. The Boeing Company stayed relatively small until World War I when they were selected by Navy officials to produce an order for 50 model C's planes for the war efforts. The company continued to prosper and by the late 1950s, Boeing President William Allen knew that the company had the scientists, the experience and the facilities to lead the company into uncharted territories. He was right, Boeing has emerged as the leading aerospace company in the world today.
The Boeing Corporation is one of the largest manufacturers in the world. Rivaled only by European giant Airbus in the aerospace industry, Boeing is a leader in research, design and manufacture of commercial jet airliners, for commercial, industrial and military customers. Despite enjoying immense success in its market and dominating an industry that solely recognizes engineering excellence, it is crucial for Boeing to ensure continued growth through consistent strategy formulation and execution to avoid falling behind in market share to close and coming rivals.
So before we go in greater detail on the different perspectives related to social responsibility, one might question the meaning of social responsibility. It is generally agreed that social responsibility is defined as the business obligation to make decisions that benefit societ...
To achieve the above goals and fulfil Boeing’s mission, the following objectives will guide company:
What Went Wrong At Boeing? - Forbes. 2014. What Went Wrong At Boeing? - Forbes. [ONLINE] Available at:http://www.forbes.com/sites/stevedenning/2013/01/21/what-went-wrong-at-boeing/. [Accessed 27 March 2014].
Airbus and Boeing have developed similar capabilities, and an intense competition to be the number one in aviation. The market is a duopoly market, resulting in a low profit margin for both companies. There is slow industry growth in the aviation industry, and no clear market leader. The barrier to exit is high, which leads to intense rivalry between Airbus and Boeing.
Technology Innovation: - Boeing should carefully analyze the market to evaluate the trends in the airline industry and aggressively invest in a new product line (top dog strategy) that could counter Airbus’s A380.
... Boeing has gained a reputation for its forward thinking approach to their business model. Boeing appears to be a company that isn’t afraid of risk because they understand nothing risked is nothing gained. In 2001, when the airline industry collapsed after 9/11, they could have folded their 737 division up or sold it off to a competitor, but instead they found a way to make it work, and make it work better than it had previously. During World War II, and the Korean War, Boeing’s innovation helped the US Armed Forces achieve their military goals, and at the same time positioned themselves as the major player in the defense business.
Every business has a social responsibility toward society. That means to maximize positive affects and minimize negative affects on the society. Social responsibilities includes economic-to produce goods and services, that society needs at the price, that satisfy both-business and consumers, legal responsibility-laws that business must obey, ethical responsibilities-behaviors and activities that are expected of business by society, but are not codified in the law, philanthropic responsibilities-represent the company’s desire to give back to society (charietys, volunteering, sponsoring).
Just a couple years later the company changed its name to the Boeing Company and would become the world’s leader in manufacturing airplanes, rotorcrafts, and space and security systems. Similar to how airplanes connect the world, Boeing has reached its success due in large part of its globalization. Through the process of acquisition, mergers, and strategic partnerships, Boeing has expanded its presence internationally. This has allowed them to take advantage of global sourcing
While the concept of an individual having responsibility is commonly recognized, modern views have lead to the emerging issue of corporate responsibility. Business Directory.com defines corporate social responsibility as, “A company’s sense of responsibility towards the community and environment (both ecological and social) in which it operates. Companies express this citizenship (1) through their waste and pollution reduction processes, (2) by contributing educational and social programs, and (3) by earning adequate returns on the employed resources.” But such a concept has been much disputed since at least the 1970’s.
Corporate Social Responsibility is an organisation’s obligation to serve the company’s own interest and the one’s of the society. Moreover, Corporate Social Responsibility has a definition of a concept where the companies integrate social and the environmental concerns into their own business operation and also on a basis of voluntary with their interactions they have with the stakeholders. Corporate Social Resp...