In the wake of concern for citizens’ safety and security, the recent accidents that occurred to Boeing planes, particularly, the 737 model, put the company in an extraordinarily difficult position. Boeing owes a tremendous amount of responsibility to its key stakeholders, passengers’ safety being the key area of the company’s concern. Therefore, to address the tragedies that have happened lately during the flights offered by the company, Boeing will need to reconsider its philosophy by placing the safety of its passengers at the top of its concerns and investing in the enhancement of safety management system, including technology and human resources, to the maximum extent.
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Boeing’s Five Most Important Stakeholders
The organization should currently be considered about the people and organizations that influence its position in the market and define the perception of its corporate image. Thus, the firm will need to appease not only its customers but also its business partners, investors, and corporate shareholders, as well as the company employees themselves. Thus, the firm will require a substantial change to live up to the standards that it will have to set to repair its reputation in the global community.
The stakes of the described stakeholders are quite high, with each requiring that their needs should be met impeccably. Customers currently have the greatest stakes in the further promotion of changes within the company since their safety and lives are at stake. Since the target audiences are likely to refuse Boeing’s services in the nearest future, the company’s shareholders are also going to suffer extensively due to the drop in the company’s profit margins and their subsequent financial losses.
Considering business partners, specifically suppliers, as another important stakeholder of the organization is also a critical step on the way toward improving the firm’s current situation. Apart from experiencing difficulties working with the organization that is presently deemed as untrustworthy and downright dangerous to use, suppliers of Boeing have also been facing difficulties to the firm’s inability to match the set deadlines, as recent reports mention (Tabuchi and Gelles). Since suppliers provide the company with essential materials for building aircraft and ensuring its quality, the stakes of the identified party are also very high in the context of Boeing’s supply chain.
Investors represent another important group of stakeholders whose considerations Boeing will have to accept and incorporate into its organizational framework. Currently, the shareholders of the company are likely to experience extensive concern due to the rise in the number of catastrophes involving Boeing 737, which implies that the shareholders may decide to sell their shares to a third party (Kaplan). The described choice will affect the company’s position in the market to its detriment, causing a vast drop in the firm’s popularity and credibility as a corporation (Kaplan). Thus, catering to the needs of shareholders should be regarded as one of Boeing’s most urgent tasks.
Finally, one should mention employees as an important group of the firm’s stakeholders. To improve the quality of Boeing’s products, it is necessary to enhance the performance rates, which will be impossible without engaging and motivating employees. Therefore, the specified group of stakeholders also has a significant amount of power over the company.
Attributes of Stakeholders in the Described Situation
Currently, Boeing is experiencing significant pressure from its stakeholders, who possess a significant amount of power over the further decisions of the organization. To be more accurate, the company’s CEO and shareholders possess a vast amount of power regarding the firm’s decisions and the course of actions undertaken by its leaders and managers. Customers and suppliers, in turn, do not exert their power over Boeing directly, yet they also shape how decisions are made at the company.
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Due to comparatively high competition and a sizeable number of rivals, Boeing has to deal with quite impressive rates of buyers’ bargaining power, which weakens its position in the market (Tabuchi and Gelles). However, the organization should not consider the ability to meet customers’ requirements and satisfy their demands as a weakness. Quite the contrary, Boeing should presently seek ways of addressing the concerns raised by its stakeholders. Business partners and investors are two other types of stakeholders whose needs the organization has to take into consideration when shaping its current policies.
The relationships between the stakeholders of Boeing may affect the attributes and their distribution among the groups significantly. For example, with the increase in the dynamics of communication between the company’s shareholders and its members, one is expected to observe a drop in the power of the latter and a rise in the urgency of appropriate solutions to the current quality concerns. Therefore, there is a correlation between the attributes of power and the dialogue between the key stakeholders.
Economic, Legal, Ethical, and Philanthropic Responsibilities
Similarly to any company functioning in the global market, Boeing has an array of legal responsibilities, including the necessity to comply with the legal standards of the countries to which it provides flights. However, by far the greatest one that the firm has to meet to address the current indignation of its stakeholders is the responsibility to ensure the safety of passengers by avoiding crashes. In addition, the organization has product liabilities, which it will need to manage the recent cases of plane crashes.
The economic responsibilities that Boeing has to meet are also quite numerous. For example, the organization has to handle the problem of managing its schedules and complying with the responsibilities that the firm has for its stakeholders, particularly, its business partners, including suppliers. The described issue pertains particularly to the organization’s propensity to default on its deadlines in the management of its supply chain processes. The described characteristic of Boeings affects its relationships with its suppliers to the firm’s detriment. According to a report published recently, the company tries to “make it appear to Boeing executives in Chicago, the aircraft purchasers and Boeing’s shareholders that the work is being performed on schedule, where in fact the aircraft is far behind schedule” (Kitroeff and Gelles). As a result, the very foundation of trust based on which the organization is supposed to interact with its partners is being destructed by the company’s choices.
Boeing has several ethical responsibilities to its stakeholders, the necessity to care for its customers’ safety being one of the essential aspects of corporate ethics. Therefore, the organization must reconsider the principles based on which decision-making within its environment occurs. The choices made by managers and staff members, especially regarding ensuring safety and security, as well as the proper functioning of all elements of aircraft, should be grounded in the foundational principles of corporate ethics (Beech and Suhartono). Boeing is ethically responsible to make the choices that meet the needs of every party affected by the firm’s decisions, which is why it is imperative to redesign the present approach toward decision-making in the context of the organization.
Finally, the philanthropic aspect of the firm’s functioning and decision-making should also be taken into account when altering its present decision-making framework. As a business entity, Boeing bears the responsibility of providing philanthropic assistance to disadvantaged members of the population. Therefore, the company should consider providing financial support to vulnerable groups (Meseret and Kirubel). The identified task can be implemented by partnering with charity organizations to which Boeing will provide the resources required for addressing vulnerable groups’ needs. Alternatively, the company could consider donating to several charities, thus making a positive shift in the current social dynamics.
Actions to Be Taken
The key actions that the company will have to take need to be geared toward acknowledging publicly the firm’s current flaws and making it evident that the current technological and communication-related changes will contribute to the change. When considering specific issues that the organization will have to fix, one should mention the current approach that it uses to manage risks (Bacon et al.). According to a recent report, the firm’s framework for risk management could use certain improvements due to the presence of sizeable gaps in it: “The F.A.A. classifies potential problems with aircraft at different levels of risk” (Glanz et al.). Therefore, Boeing has to shape its risk management framework to locate the slightest deviations from the required levels of safety.
Regarding the firm’s current PR strategy, the company should accept the responsibility for the incidents and the blame that will come with it. Simultaneously, it is recommended that the company should emphasize the fact that it is willing to change, thus developing the platform for future improvements. As far as the technical issues are concerned, the company will need to hire more competent engineers, who will constitute a team of technological safety experts and will ensure that the safety levels meet the required standards. The issue of quality is of particularly high significance for the organization presently. According to the previous record of the firm, Boeing used to sacrifice quality for the sake of being ahead of the race compared to its rivals such as Airbus: “A technician who assembles wiring on the Max said that in the first months of development, rushed designers were delivering sloppy blueprints to him” (Gelles et al.). Thus, the company should focus on improving its current performance quality and enhancing the safety of its passengers.
It is also critical to invest in the R&D department of the organization to prompt the study of the available safety improvement technologies. Specifically, Boeing will require the devices that will allow determining the slightest flaw in the product design. Thus, the company will be able to seek new options for enhancing the safety of its passengers and meeting the needs of the rest of its stakeholders. However, the organization should be especially careful in introducing non-incremental innovations such as autonomous vehicles into its range of services given the recent catastrophes. Without the proper marketing approach, the features such as the one mentioned above will not spark the expected emotions of joyful amazement but, instead, may strike fear in potential buyers.
The problem mentioned above brings one to the next point of managing the company’s current situation. Boeing will need to alter its marketing approach to continue to appeal to its audiences. With the introduction of innovative technology that will allow preventing the disasters such as the ones that happened lately, the company should build its public image around the sense of safety and reliability (Paris and Romo). Thus, customers will be more eager toward purchasing Boing’s services and accepting the change in the organization’s value system and ethics.
Overall, Boeing will need to incorporate the actions associated with collaborating with, monitoring, and defending its stakeholders. Boeing should design the framework that will allow for collaboration between its employees and managers, as well as within the group of its shareholders. The monitoring function, in turn, should be enhanced in the production environment to maintain the quality of aircraft consistently high. Thus, Boeing will be able to elevate its current image and re-establish itself as a caring and innovative organization with high levels of passenger safety.
To address the change in the public image, which occurred after the infamous plane crashes that occurred lately, Boeing will have to make an effort to change its corporate policy and introduce the principles of continuous and unceasing improvement into its philosophy. Thus, the company will be able to change people’s perception of the organization’s image and the impression of how poorly the firm managed the public concern initially.
By reconsidering its present-day framework for meeting stakeholders’ needs and treating its concerned partners, in general, Boeing will elevate itself regarding the current unfortunate position that it holds in the global market. As soon as the firm proves that it has taken the course for a major improvement, its perception of the global economy will change. The subsequent shift in the organization’s representation will entail a significant improvement in its overall performance, launching a series of positive changes. Thus, it is currently essential for the firm to reconsider its idea of its stakeholders and the role that they play in the company’s success and public perception.
Bacon, John, et al. “Boeing CEO Accepts Blame for Two Plane Crashes, Apologizes to Families of Victims: ‘We Own It’.” USA Today. 2019, Web.
Beech, Hannah, and Muktita Suhartono. “Lion Air Crash Families Say They Were Pressured to Sign No-Suit Deal.” The New York Times. 2019, Web.
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Gelles, David, et al. “Boeing Was ‘Go, Go, Go’ to Beat Airbus with the 737 Max.” The New York Times. 2019, Web.
Glanz, James, et al. “In Ethiopia Crash, Faulty Sensor on Boeing 737 Max Is Suspected.” The New York Times. 2019, Web.
Kaplan, Thomas. “After Boeing Crashes, Sharp Questions About Industry Regulating Itself.” The New York Times. 2019, Web.
Kitroeff, Natalie, and David Gelles. “Claims of Shoddy Production Draw Scrutiny to a Second Boeing Jet.” The New York Times. 2019, Web.
Meseret, Elias, and Yidnek Kirubel. “Airlines ground Boeing jet after plane crashes in Ethiopia.” AP News, Web.
Paris, Francesca, and Vanessa Romo. “Preliminary Crash Report Says Ethiopian Airlines Crew Complied With Procedures.” National Public Radio. 2019, Web.
Tabuchi, Hiroko, and David Gelles. “Doomed Boeing Jets Lacked 2 Safety Features That Company Sold Only as Extras.” The New York Times. 2019, Web.