Boeing is a market leader in the aircraft manufacturing industry. The success of Boeing can be attributed to effective management and specifically the effective application of control mechanisms to lead to desired change. As a market leader in aircraft manufacturing, Boeing constantly engages in an ongoing search for improvement of both its internal and external processes. A good example is the 2002 laying off of staff which was aimed at promoting efficiency . Boeing uses four broad control mechanisms. The first one is Budgets.
Budgets are important to any given organization because they lead to better utilization of resources considering the fact that every given organization is faced with the constraint of finances, the budget comes in handy to avoid overspending and misappropriation of resources. Boeing uses well-crafted budgets to break down the company’s expenditure and to prioritize areas requiring urgent attention . Budget as a control tool is appreciated as a means of ensuring financial discipline as well as guaranteeing accountability.
In addition, Boeing uses budgets as a measure of ensuring compliance not only to the rules and regulations of the company, but also national and international standards.
Another useful control mechanism which Boeing applies is Schedule control mechanism. Usually, Boeing services clients both in the commercial sector and the military. Therefore, scheduling is very central to the functioning of Boeing considering the fact that customers have deadlines to meet when it comes to phasing off of some flight fleets and acquiring new fleets.
Most customers schedule such acquisition of new fleets to coincide with launching of new products as part of ongoing, restructuring or process improvement.
This is a clear indication that schedule as a control mechanism is very important to Boeing. Proper scheduling ensures that production and project completion are achieved in time and wastage is minimized. For purposes of scheduling, Boeing utilizes tools of scheduling such as Gantt Charts as well as project network diagrams.
Boeing has put in place market control mechanism which is a form of control tool used to monitor performance of competitors, the threats as well as opportunities in the market. This has enabled Boeing to come up with strategies which respond to market threats and capitalize on market opportunities. The other common control mechanism used in Boeing is information system based control mechanism. Boeing understands the importance of information in the industry. Therefore, Boeing has invested in modern information technologies and systems which make internal and external processes easier and therefore causes reduction of wastage.
As a result of the information based control mechanism, Boeing has been able to predict future trends and therefore avoid mistakes which can cost the company profits or even its place in the industry. Control mechanisms at Boeing are utilized for the purpose of increasing performance and specifically to boost production, employee morale, staff interrelations as well as increased output. The control mechanisms as applied to Boeing are specifically aimed at ensuring that Boeing addresses the threats it is faced with especially the threat from competitor activity considering its trade wars with Airbus.
For Boeing, quality is something that it cannot underestimate. The business environment is fast changing as technological advancement calls for higher and more suitable products which often cost companies a lot of investment. To achieve the desired effects, Boeing has put in place control mechanism at the organizational level whereby the executive establishes goals and objectives revolving around the company’s mission statement. This means that the control mechanisms in place should help in the achievement of the mission of the company.
The control mechanisms also apply to the middle level management in terms of performance indicators which the company uses to monitor progress. Some form of control measures which exist at this level include setting of quotas/targets which individuals and teams must meet. In conclusion, Control mechanisms serve to ensure financial discipline and they have succeeded in helping Boeing evade some cash scandals especially when it comes to tendering.