Planning is the means of choosing the best option among others to carry out different managerial roles in order to attain predetermined objectives. It is a necessary management role, which consist of formulation of one or more thorough plans to attain optimal balance of wants or demands with the accessible wealth. Planning is a thorough agenda concerning upcoming course of action. In the essay, I will discuss the management planning of Boeing organization.
Planning as a purpose of management involves six steps. The first step is the establishment of realistic, acceptable and attainable objectives that should be well-affirmed in terms of quantity. The second is the establishment of planning grounds to find out the business barricade during the course of doing business. These are either internal that are controllable or the uncontrollable external. The third step is choosing the alternative path of action by evaluating the pros and cons in light of availability of resources and organizational requirements hence choosing the best alternative. The fourth step is the forming a derivative plan, which indicates time, schedule and sequence of attaining various tasks and helps in attaining the main plan. The fifth step is securing co-operation by involving the subordinate in decision making, implementation and execution of the plans. This motivates the employees. Step six is plans appraisal. Here, the departmental information or feedback, received after the plan has been implemented, helps the management in correcting deviation or modifying the plan and ensure more realistic plans that can be accomplished in the future are planned for. It also links the planning and controlling function.
Legal issues can complicate management planning and put a company in an embarrassing position. In 2000, for example, Boeing was sued in a gender disparity pay case, which was a complex legal issue (Business Week, 2004). A clear evidence on disparity pay existed, but the privilege by client lawyer protected Boeing from liability and later most of the evidence was taken out. At the end, Boeing was saved from public humiliation by an out of court settlement. Boeing saved millions of dollars by having a legal team supervising all decisions and vital documents. By this, company resonated better with its staffs, consumers and the general public.
Ethical issues also affect the airline industry. In business units, profit maximization is the major role of management for the advantage of its shareholders and the company, which is a fundamental concept in any system. A proper course of action is any legal and moral decision made by management to increase the return on investment. An example is lying off staffs as a consequence of shifting to new locations or offices being closed down. In some occasions, ethical motives have led to neglect of profit motives which have lead to decisions that could be immoral to other entities. Boeing is dedicated to demonstrating quality, integrity, leadership and customer satisfaction (Boeing, 2008).
Social responsibility involves a person or a group’s events benefiting the society more than oneself or more than the group. A social responsibility for every airline company is a research and development. The use of systematic industrial research benefits Boeing in increasing customer’s choices every year while enabling the company to provide safe and effective services to customers. The aim of research and development apart from the ability to raise profits is ensuring an effective and secure service for the advantage of customers. Business managers and owners as private citizens may presuppose liability for other problems in society. For example, the CEO of Boeing can provide guidance for a national drive to raise money for medical research to cure childhood leukemia. A clear distinction between the responsibility of individuals who work and own companies and the public responsibility of companies is important (Besser, 2002). However, if a social responsibility is done by any member of the company outside of the company’s intent, then it could reflect on their entire reputation of the company.
In the industry, commercial aircraft has a lot of uncertainties that have factors and risks that could have effect on the overall business success. The three factors influencing Boeing strategic, operational, tactical and contingency planning are economy, terrorism and globalization. Currently, Boeing Company has control on the profit levels, pricing and a series cash flow. In the commercial aircraft market planes, which is the most profitable Boeing enjoys a virtual monopoly; however, Boeing has to consider the very important factors when strategizing due to the volatility and fluctuating nature of the industry.
The country’s economy is the main factor that impinges on aircraft manufactures. The decline of the economy explains the diminishing in orders for new airplanes. The purchasing power of airlines is low during the recession when demand in air travel is poor. A pilot project for target costing was implemented at Boeing and is now used companywide. In the entire company value chain, the major challenge is reaching the target cost. On the basis of an economy performance, Boeing works with its suppliers to clarify the current market pressures on cost and also to unearth solutions for challenges faced. The company’s cost is lowered than the competitors by adopting the lowest cost strategy, and this enables the company to offer products higher or equal value at a lower price (Hoctor & Thierauf, 2003). This is achieved through control of cost drivers. Low-cost leadership is the most common used strategy to establish a company from other rivals.
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Terrorism is also a factor that influences strategic, tactical, operational and contingency planning since attacks by terrorist are unpredictable thus creating fear to passengers when flying, hence customers will avoid using planes as a means of transport. Airplanes demand will thus be affected by the airlines demand. As a result of terrorist attacks and outbreak of wars in countries like Middle East, most airlines have ceased the flights in these countries and the involved countries with fear of attack of their planes. Therefore, the security agencies and the government actions combined with the airport managements and the carriers can minimize air terrorism.
Globalization also influences strategic, tactical, operational and contingency planning. The advent of globalization is increased by competition, the much powerful exterior force. Globalization has been faster through interaction of transformation in business innovation and government policy in the airline business. A company is simply locked out from new markets if it does not become global. Since fluctuating demand is an inevitable fact for company life, a business needs to adapt itself (Hoctor & Thierauf, 2003). In order to get customers in the industry committed early, the company employs sophisticated means to ensure demand reaches a certain level in a given period. To ensure the airlines are filled to a certain capacity, the airlines use the fourteen and twenty one day airfares before rising of prices. It is very expensive to carrying an idle capacity.
There exists an interrelation among the three factors and they affect each other thus creating more problems. The effects are raising fuel prices, increased labor costs, increasing losses and lowering passenger numbers.