Organizational Structure of Boeing: Analysis of Matrix Structure

This report analyzes the organizational structure of Boeing, focusing on the matrix structure. It discusses the advantages and disadvantages of the structure and provides suggestions to overcome the disadvantages. The report includes the organizational chart of Boeing, analysis of matrix organizational structure, disadvantages of structure, and suggestions to overcome disadvantages. The subject is Fundamentals of Management, and the course code is not mentioned. The college/university is not mentioned.

RUNNING HEAD: Fundamentals of Management 0
boeing
Fundamentals of Management

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Contents
Introduction...........................................................................................................................................2
The organizational chart of Boeing........................................................................................................2
Analysis of Matrix structure..................................................................................................................4
Disadvantages of structure.....................................................................................................................7
Suggestions to overcome disadvantages................................................................................................8
Conclusions...........................................................................................................................................8
References.............................................................................................................................................9

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Introduction
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 organizational chart of Boeing
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,

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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.
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

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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).
Analysis of Matrix structure
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.

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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.
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

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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.
Finance:
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.
Marketing:
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.
Human resource:
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.
Operations:

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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.
Disadvantages of structure
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.

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They moreover create an indistinct understanding of the role of employees
(Sathiyanarayanan, Turkay & Fadahunsi, 2018).
Suggestions to overcome disadvantages
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.
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.

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References
Boeing, (2018). Boeing overview. Retrieved on 27 May, 2018 from
http://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
http://www.boeing.com/principles/community-engagement.page
Boeing, (2018). Boeing in brief. Retrieved on 27 May, 2018 from
http://www.boeing.com/company/general-info/
Boeing, (2018). Boeing support and services. Retrieved on 27 May, 2018 from
http://www.boeing.com/commercial/#/about-our-market
Ferraro, G., Iovanella, A., & Pratesi, G. (2016). On the influence of nodes' characteristic in
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Flynn, D. N. (2015). Building a better model: a novel approach for mapping organisational
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Grubenmann, S. (2017). Matrix Organisation: The design of cross-beat teamwork in
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Guisado-González, M., Wright, L. T., & Guisado-Tato, M. (2017). Product–process matrix
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Hart-Smith, L. J. (2014). Is there really no need to be able to predict matrix failures in fibre-
polymer composite structures? Part 2: Examples of matrix failures preceding fibre
failures. Australian Journal of Mechanical Engineering, 12(2), 160-178.
Närman, P., Johnson, P., & Gingnell, L. (2016). Using enterprise architecture to analyse how
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Salas-Fumás, V., Sáenz-Royo, C., & Lozano-Rojo, Á. (2016). Organisational structure and
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