Boeing's organizational planning function and structure

Boeing Organization Planning Function

The planning function deals with "the future impact of today's decisions." This basically means that the organization is keen to develop strategic, tactical and operational plans, as set of specific actions and tasks, that help the company reach its strategic, tactical and operational objectives.

External environment factors such as legal or ethical factors, impact the short, medium and long-term planning process for the organization, as this means that the company will need to adapt its decision making process to reflect the impact of such factors. This is also Boeing's case. For example, in June 2006, Boeing was forced to recognize legal charges referring to the implementation of an airborne surveillance program.

Expanding on the impact of this legal factor on the organization and on the planning function, we can point out that the implementation of security regulations from national governments forced different air companies to implement programs such as Airborne Early Warning & Control (AEW&C) for the airplanes they were using. This is where Boeing entered the operational stage, with the necessity to implement this on the newly produced aircrafts. A regulatory, legal issue impacted production and the capacity to deliver the products according to contracts.

It also changed Boeing's organizational planning, because new tasks needed to be implemented in order to circumscribe these new technical requirements. Additionally, from a financial planning perspective, the company's budgetary projections needed to be adapted to afford the legal charges and the extra expenses related to the technological developments.

In terms of social responsibility factors, Boeing sponsors Supplier Technical Exchange forums once every 18-month in order to collaborate with its suppliers on environmental issues. Further more, the company has always promoted the use of substitutable materials that are less hazardous for the environment.

Obviously, this impacts the communication and PR - related planning within the company's planning function. These are generally actions that a company such as Boeing will aim to communicate to the general public and build an image of a company concerned with the environment and with protecting it. From this perspective, the company's strategic planning will also include tasks and actions destined to properly reflect the company's image as an organization environmentally concerned and active.

In terms of the ethical issues that impact the planning function at Boeing, the company was accused, in 2006, of improper possession of documents from rival company Lockheed Martin that were used to gain a governmental contract in the competitor's detriment.

Again, such an external event determines the company to have a distinct backup, strategic plan to deal with such situation that (1) put the company into a negative light and threaten to reduce their base of consumers, (2) forces the company to change its financial planning as well and (3) emphasis the necessity to have an ethical-related plan, active in such situations.

The company's management will need to have set in place a specific set of strategic actions and tasks that can be activated in such situations. This will include the capacity to respond to press questions and the ability to negotiate with the government and obtain fee reductions.

The customers' negotiating power is the first important factor that affects the organization's strategic, tactical or operational planning process. Indeed, this is a particularity of the industry where Boeing is competing. This is characterized by very expensive and price that can reach tens of millions for one aircraft. The customers are generally governments or other large organizations that have a high negotiating power. A negotiation for a set of planes can reach several million of the bill.

From this perspective, Boeing needs to have a negotiating margin and to be able to take the right decisions when it comes to completing a deal or not. If this a long - term collaboration, the company can let the deal go for less of the initial price. All this is, however, related to strategic planning, since the deals are usually made before the planes are built.