Organizational Structure Of Boeing: Advantages And Disadvantages Of Matrix Structure

Organizational Structure of Boeing

Discuss about the Fundamentals of Management for Computational Economics.

The Boeing is a multinational corporation of America. It is world’s leading aerospace company. The company is the largest manufacturer of jetliners, defense, space and security systems. Boeing has more than 3000 employees in 38 locations. The company has the broadest portfolio in Australian aerospace including it’s employees, extensive supply chain, support and training and unmanned systems. The company was established in 1916 and it’s headquarter is situated at Brisbane. It is the largest subsidiary. This report includes the organizational structure of Boeing. The analysis of matrix organizational structure is done to understand why it is important for the organization’s growth. Further, the disadvantages of the structure are explained. Finally, the suggestions are given to overcome disadvantages of matrix organizational structure.

The above chart represents the organization structure of Boeing. The matrix organizational structure is used by Boeing in the departments such as business expansion and strategy, communications, engineering, operations and technology, human resource and management, international and public policy. The matrix organization structure is important towards company’s growth as it makes efficient use of limited human resources, clearly defines the objectives of the project and integrates the project and functional objectives (Boeing, 2018). The matrix organizational structure enables information flow throughout the departments of the organization. The line of communication flows more freely and allows increases accountability for both team and managers. It develops team spirit and high morale. It saves time in the distribution of resources and brings efficiency in the resource management. The time of staff can be used for the different project which leads to efficiency in staff management. The matrix organizational structure leads to morale difficulties with less frequency as the employees attain the experience of regular working on major projects. It overcomes the inadequacies of the company by combining functional departmentalization. For instance, when the company wants to develop a new product then it can coordinate with functional departments like research, engineering, production and marketing (Boeing, 2018).

The matrix organization structure comprises the vertical and horizontal structure.  It uses differentiation and integration in it’s vertical structure. In the differentiation, various units work on the different units by using different skills and methods. The integration put back together differentiated units to coordinate in overall products. The top supervisors make decision in the vertical structure of matrix. In the horizontal structure of matrix, the organisation is divided into smaller departments (Flynn, 2015). Each section has a head who directs the employees and overall division. The lower level of management is liable to report head departments. The head departments report to the CEO and CFO. The horizontal structure creates separate and specific divisions to direct functions of the organisation.

Advantages of Matrix Organizational Structure

The vertical and horizontal structure works synonymously. The vertical structure enables top managers to take desired actions to run the organisation. It dictates how authority is passed on. The department is divided into smaller units in the horizontal structure overseen by the heads who report to top advisors. It also dictates how each division is incorporated into the company (Grubenmann, 2017). The main role of matrix organisational structure can be known by these departments:

• Human resources: The matrix organizational structure develops and implements growth opportunities.
• Operations department: The matrix organizational structure assigns the duty to operations department for the purchasing, logistics, quality control and estimates.
• Marketing department: The organization leads strategic direction, revenue, and market share due to the matrix organizational structure (Shanmugam & Robert, 2015).

The management of Boeing supports matrix structure and implements where it adds value. It removes barriers such as cultural and others. It clears direction of supply. It utilizes resources in an efficient way and shares several important programs. There are continuous changes in technology at Boeing which reflects that cooperation among divisions is needed for the success. The company is able to design and produce products which are of same kind due to the matrix structure which allocates resources very well (Guisado-González, Wright & Guisado-Tato, 2017).

Boeing is the leading aerospace company. It is allocated into 2 business entities, commercial airplanes, and defense, space and security. The matrix structure is used by Boeing to run organization which enables different divisions to run independently. The matrix structure was introduced in the aerospace industry in the 1950s to deal problems associated with projects (Boeing, 2018). The structure reflects the external complexity of the internal structure of the company. Boeing uses such organizational structure which enables to compete with other airline manufactures by dropping the cost of manufacturing and improving the quality of products. The company faces constant changes in technology. It makes collaboration essential among the divisions for success. The matrix structure makes resource utilization efficiency as key resources are shared across significant programs at the same time. This structure enables the free flow of communication and allows enlarged accountability from the project team and supervisors (Boeing, 2018). It is used to alleviate the disadvantages related to both geographic area and product division structures.

The company uses matrix structure of management which comprises horizontal and vertical organizational structure. The horizontal structure comprises different departments, directed by the department heads. It enables the departments to execute particular tasks. It also improves the efficiency of employees by dividing the project into smaller units. These units are intervened by department heads and mangers. Boeing is allocated into the departments given below:

• Human resources and administration
• International
• Public policy
• Law Department
• Internal governance
• Finance
• Communication
• Business development and strategy
• Engineering, operations, and technology

These departments execute different duties and use methods to attain their goals. Boeing uses incorporation to unite different units at the time of decision-making process or manufacturing. For example, the departments like communication, engineering, law, operations and technology and internal governance department stratagems on the way of respond to public concerns on issues like accident history of aircraft, noise level or pollution (Boeing, 2018). The departments like engineering, business development and strategy department, operations and technology department, the human resource, and administration departments meet when the company wishes to manufacture a new aircraft model.  

Disadvantages of Matrix Organizational Structure

The vertical hierarchical structure includes various levels of management and authority runs from the top management to bottom supervisors. The heads of department have a duty of transmitting information delivered by the top management to employees. They also overlook different operations within different departments (Salas-Fumás, Sáenz-Royo & Lozano-Rojo, 2016). The chief executive officer at top management directs R & D strategies within the various departments.

In the matrix organizational structure of Boeing, both of it’s structure horizontal and vertical work together in consensus. The vertical structure of company includes top management which takes serious management decisions to choose activities of Boeing whereas the other structure caters the company into smaller sections. The matrix structure enables the top management to make critical decisions and it also makes easy for the organizational structure to transmit the decisions by the top management to reach heads of departments and employees. The matrix structure makes it easy to monitor and evaluate employees, as a result, which increases the productivity of employees (Närman, Johnson & Gingnell, 2016). The structure also helps in enhancing product development of company and resource utilization.

The matrix organizational structure makes it easy for Boeing to distribute it's financing to various departments. Boeing has many departments which are liable to conduct different activities and have different budgetary essentials. The structure develops transparency by utilising distributed finances and makes the audit of company easier; it is because the auditors handle various departments separately.

There is huge competition in the aeronautical industry and it stresses on high-quality products time on time. The company manufactures various options of aircraft and avionic products which ensures the safety of passengers and pilots. The products of the company are known for higher proficiency and consistency. The matrix structure prepares the marketing department to sell the products to the clients easily (Saunila, Mäkimattila & Salminen, 2014). The marketing department is also incorporated with other units like engineering and product development.

The matrix structure assists Boeing to employ committed and high-quality staff in different departments. The aeronautical industry is the most vigorous industry and strains on innovative products. Boeing employs an expanded workforce in departments to confirm that operations of the company are run in a smooth way without any complications. The present arena is difficult due to the innovative military hardware used by many countries (Ferraro, Iovanella & Pratesi, 2016). The company needs to make sure that the products are standardised in order to curtail losses to the country.

Recommendations

Boeing produces an extensive range of specific products such as jet engines, avionics systems, fixed-wing planes, and helicopters. All of the products require enormous technical knowledge and it makes diversity of operations necessary. The matrix structure ensures company to focus on the expansion of different products to make sure features are latest and significant. The structure permits the company to be more responsive to the need of customers. The matrix organizational structure enabled Boeing to compete in the environment.

The challenges of misaligned goals are faced by employees throughout the organization by using matrix organizational structure. It has been noticed that various problems related to this structure are found more at many levels of management. For example, the middle management of Boeing finds vague roles and responsibilities and indefinite authority it’s biggest challenges. The disadvantage faced by top management is that it finds the lack of an effective PMS explicit to this structure the main challenge. Some other disadvantages are:

Silo-focused employees: The personal encounters between leaders, inadequate communication or dearth of trust between staff in diverse business units of Boeing hinder cooperation between units. A serious issue found is that silo-mindset staff may lack necessary skills to function in the matrix structure.

Ambiguous authority: It creates misperception who has final authority and lack of transparency on areas of responsibility which causes a delay in decision making. The leaders who used to perform earlier in the traditional hierarchical structure are unaccustomed to share rights decisions in matrix structure (Hart-Smith, 2014).

Mis-aligned goals: The structure which requires a horizontal and vertical flow of information in companies usually face the problem of misaligned goals. These problems are conflicting objectives between matrix dimensions, lack of harmonisation, direction and poor scheduling of work plans and goals, contradictory points between matrix dimensions and insufficient communication between matrix dimensions.

The absence of effective PMS: An ineffective monitoring, assessment, and rewards for performance also sometimes fail to encourage personnel to make the matrix system work. They moreover create an indistinct understanding of the role of employees (Sathiyanarayanan, Turkay & Fadahunsi, 2018).

The matrix structure should be used and implemented where it adds value. The suggestions to overcome disadvantages given below:

Combine functions: Various departments are given different responsibilities and heads to save money, especially when it requires part-time attention. For instance, Boeing combines bookkeeping with human resources, marketing with sales or administration and technology. It is suggested to separate these departments to reduce the workload and increase revenue.

Conclusion

Chain of command: The organizational structure should be designed in such a way that superiors should directly designate to employees. The employees do not have need to follow the direction of co-workers, as a co-worker is not superior. It prevents employees from going over the head of supervisors (Yang, Yao, Lu, & Zhang, 2014).

Communicate structure: The matrix organizational structure is not a top-secret document. The structure works well when the employees know the structure from down to lowest. These employees work on the chain of command and know the structure. A meeting should be arranged from time to time to explain the reason of using matrix structure, it’s benefits and grievance procedures. It reduces the conflict between employees.

Conclusions

The matrix structure empowers Boeing to restructure and realign it’s operations. The structure enables managers to deliberate various intersection decisions such as resource allocation, innovation, and customization. This structure assists the company to manufacture new products without negotiating the quality of products. It also allows the company to adopt numerous change initiative based on the need of customers confirming confidentiality. The above report represented the efficient organizational structure of Boeing. The matrix structure used by Boeing is analysed. The disadvantages of matrix structure have been discussed which can overcome by taking preventive measures.

References

Boeing, (2018). Boeing overview. Retrieved on 27 May, 2018 from https://www.boeing.com/resources/boeingdotcom/company/general_info/pdf/boeing_overview.pdf

Boeing, (2018), Uniquely positioned to serve commercial and government customers. Retrieved on 27 May, 2018 from https://www.boeing.com/services/index.page

Boeing, (2018). A Century of Positive community Change. Retrieved on 27 May, 2018 from https://www.boeing.com/principles/community-engagement.page

Boeing, (2018). Boeing in brief. Retrieved on 27 May, 2018 from https://www.boeing.com/company/general-info/

Boeing, (2018). Boeing support and services. Retrieved on 27 May, 2018 from https://www.boeing.com/commercial/#/about-our-market

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