This case study examines how W. James McNerney, Jr., Boeing's chairman, president, and CEO beginning in 2005, applied the four primary functions of management — planning, organizing, leading, and controlling — to address the company's long-standing challenges. Drawing on industry reporting from 2005 and 2008, the paper evaluates McNerney's performance in each functional area. It finds that while he demonstrated notable strength in planning, particularly in advancing the 787 Dreamliner program, significant weaknesses remained in organizing Boeing's bureaucratic culture, leading its internal workforce, and executing timely corrective action on major projects.
Like many organizations, Boeing Co. has faced a variety of challenges in recent years. This paper explores how the four primary functions of management — planning, organizing, leading, and controlling — should be, and have been, applied by newly appointed Boeing chairman, president, and CEO W. James McNerney, Jr. Drawing on a 2005 industry profile and a 2008 updated article by Weber, the paper evaluates whether McNerney has used these functions effectively in turning Boeing around.
One of the four primary functions of management is planning. This ongoing process of developing an organization's mission and objectives is critical to its success. Management is charged not only with developing the company's vision, but also with determining how that mission will be accomplished. When McNerney took the helm in 2005, he recognized that planning was an essential priority. Although the company already had major objectives in place — including the 787 Dreamliner and the Army's Future Combat System — previous failures to achieve targets, such as the production problems of 1998 (Holms, 2005), had damaged Boeing's reputation, competitiveness, and profitability.
Now well settled into his position, McNerney has demonstrated a strong ability to plan. Over the years following his appointment, he worked to keep objectives like the Dreamliner and the Future Combat System on track. In June 2009, the Dreamliner began gauntlet testing, moving it one step closer to production release ("787 Dreamliner," 2009). In addition, McNerney explored other growth opportunities for the company, recognizing that both the commercial aviation and defense segments of the business faced potential decline, and pursuing acquisitions as a hedge against that risk (Weber, 2008).
Organizing is another critical managerial function that McNerney needed to address when he took the reins of Boeing Co. The internal organizational structure of the company was among its primary weaknesses. Holms (2005) described cleaning up Boeing's toxic culture as "Job One." Prior to McNerney's arrival, bureaucracy within the organization stifled innovation; Boeing resisted change and tolerated behaviors that were not conducive to success. Weber (2008) describes several changes McNerney introduced, such as toughening in-house ethical oversight. However, the multi-layered bureaucracy that had become a tradition at the company remained largely intact, preventing Boeing from becoming the nimble organization it needed to be in an increasingly competitive marketplace.
A third primary function of management is leading. To lead effectively, a manager must influence others' behavior through communication and motivation, inspiring them to help the organization achieve its objectives. McNerney needed to concentrate on this function, as several past challenges — including labor disputes that led to work stoppages — had hindered the organization. Weber (2008) details how McNerney skillfully led external forces, specifically the Defense Department, yet notes that internal leadership had not been fully developed. For this reason, the renewed threat of labor stoppages remained a major concern for the company.
McNerney needed to focus more on internal leadership if he hoped to avoid repeating the same workforce challenges. Leading by empowering employees — including eliminating much of the organizational bureaucracy — would go a long way toward inspiring them to embrace the company's objectives as their own.
The controlling function involves a multi-step process: setting performance standards, measuring actual performance, analyzing the results, and taking corrective action when needed. When McNerney first took the reins, there were concerns about delivery dates on both the Dreamliner and the Future Combat System (Holms, 2005). In Weber's (2008) article, those concerns had not been resolved. Both projects were still underway and moving forward only slowly.
"Internal workforce leadership gaps and labor disputes"
"Delayed corrective action on major projects"
Weber, J. (2008, September 29). McNerney's bumpy ride at Boeing. Business Week, 4101. Retrieved November 2, 2009, from ProQuest database.
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