The Boeing Company is the world's largest manufacturer of commercial jets; it also produces military aircraft and missiles. It developed a large backlog in the early 1990s built on the strength of its commercial transport orders. It had particular success with its 737 jet introduced in the 1960s, and the industry is anxiously awaiting the introduction of the 777 jet, expected in the mid-1990s. The 777 is a joint project with Mitsubishi.
Boeing's success is due in part to the industry itself: the commercial airplane industry has recently experienced large growth. However, Boeing's primary American competitor, McDonnell Douglas, has not enjoyed the same financial success that Boeing has during the same period, and so Boeing's success must also be attributed to its organization and management. This research examines Boeing's success in terms of its organization.
Boeing Corporation uses a hybrid organizational structure with some of its functions centralized and others decentralized. Manufacturing takes place in Seattle, where the company headquarters is also located. This geographic arrangement means that the company is able to avoid some of the problems that decentralization introduces into organizations. For example, although accounting, payroll and other administrative tasks are handled centrally, the fact that the bulk of the company's operations are based in the same area means that there are fewer delays than might be encountered in organizations that are geographically dispersed. This hybrid organization contributes significantly to Boeing's success since the company is able to take advantage of both centralized administrative operations and decentralized functional operations (Robey, 1991, p. 200).
Airlines looking to expand or renovate their fleets in the late 1980s had essentially three aircraft manufacturers from which to choose: Boeing, McDonnell Douglas and Airbus. Other manufacturers accounted for a smal...