Boeing\'s Planning Process Is Usually

Boeing's planning process is usually oriented to a long-term time horizon. The company's two main industries are in defense and in civilian aircraft. Each of these industries is characterized by complex products, long lead times for new product development and customers that accept these terms. The company works with its customers -- particularly in its defense division -- in order to ensure that products meet the customers' specifications. Working with different customers, for example, led Boeing to develop the complementary 777 and 787 jet families, which has allowed customers to simplify their fleets (Boeing, 2005).

The product complexity and long time frames mean that strong relationships are an essential component of Boeing's strategy. The company, for example, has fostered relationships with China that involve using Chinese parts for their planes in exchange for Chinese airlines buying from Boeing (Cohan, 2010). Boeing has a similar long-term relationship with the Department of Defense. The company works with the DoD to ensure that projects receive long-term funding in the federal budget. This ensures sufficient funding levels over a long period of time in order to develop products (Weinberger, 2008). The product development process therefore relies on working with customers from the outset to determine a need and a product to fill that need. This contradicts the process for many firms, which start with a product and build a market; Boeing starts with a market and develops the product only when it has long-term financing in place already, especially in its defense business.

The legal environment is not as significant to Boeing's planning process as the political environment. Shifts in the political climate can impact on funding for long-term project development; the legal environment can have a minor impact on most projects. Ethics are an interesting concept for Boeing. While there are some who would argue that Boeing suffers from ethical deficiencies for its defense business, the company's main ethical responsibility is to pursue contracts with government and airline customers ethically. The company can experience ethical dilemmas such as dealing with rogue regimes around the world, or with respect to abusing a near-monopoly position in some categories. Management must plan to conduct business without abusing market power and without entering into agreements with rogue states. Boeing's corporate social responsibility lies in treating employees well, and in dealing honestly and without corruption with foreign and domestic government agencies. Boeing has had ethical issues in the past, and in 2006 ethical violations cost the company $1.15 in settlements for issues relating to dealings with the Australian and Turkish governments (Wayne, 2006).

Strategic planning is impacted by a number of factors including the global security situation, contracts with the DoD and the worldwide aircraft market. These different factors play a role in setting long-run strategy at Boeing, such as product development and decisions regarding manufacturing capacity. The company must also make human resources decisions based on expected demand, and the period of planning can stretch 5-10 years or more.

Tactical planning can also be a long-term process at Boeing. This is impacted by competition within the defense industry, the expectations for DoD budgets and the state of the economy. These types of decisions will reflect the specific products that Boeing develops and to whom those products will be marketed. Operational planning is impacted by the firm's internal financial situation, the availability of key human resources and by the current state of relations with states around the world. Boeing needs to make decisions, for example, about the sourcing of inputs. If the relationship with China is on the rocks, for example, Boeing needs to seek out other potential suppliers of inputs in order to produce its goods.