Boeing’s Fatal Flaw
As stipulated in the syllabus, a course project worth 15% of your grade is required. This case is intended to reinforce your understanding of and evaluation of the application of a corporation’s values, mission statement and sense of ethics in conducting its operations seeking to meet its business objectives.
You are asked to focus on your analysis of the Boeing Corporation in its manufacture of the 737 Max aircraft and the catastrophic failures of two of those aircraft flights leading to the deaths of 346 people. To enable your analysis, watch “PBS/Frontline/Boeing’s Fatal Flaw”, found on Google. Be sure to watch the full length documentary of a bit less than one hour.
This is an intense report produced by the New York Times and Frontline probing the Boeing Corporation in an attempt to gain understanding about how not one but two of these aircraft in the span of four months, loaded with passengers, failed in flight. What were the causes? Why was the airplane not grounded after the first crash?
Following airing of the documentary a sort of post-mortem was held in an open Zoom discussion involving the journalists who researched and presented this TV program. We will discuss this in class after you submit your papers.
People who choose to travel by air are entitled to safety above all else. Which seat or class, foods, entertainment are all far less important to any traveler. US commercial flying has proven to be very safe with a safety record recognized around the world. The US Government provides oversight of the aviation industry through the Federal Aviation Administration (FAA). It is the FAA’s job to oversee aircraft design, manufacture and maintenance to ensure safety.
The basic idea of giving a government agency license to inspect aircraft and maintenance practices is intended to prevent competitive pressures or simple incompetence from impairing safety. The FAA has a strong fundamental responsibility to do all in its power to audit company practices so that safety is never marginalized. It is the job of Congress to evaluate FAA’s effectiveness in carrying out its mission. Congress also has the authority to enact new legislation it deems necessary.
PART A
Following your viewing of the documentary, provide your responses to the following questions. Your paper should be structured by simply listing each enumerated question and then providing your response.
1. We have discussed corporate culture and its importance and influence in every area of work in a companies large and small. From what you have discerned from this documentary, how would you describe the Boeing culture, its importance to the corporation’s mission and its impact on the company’s day-to-day operations. (Culture is defined as the beliefs, values, behaviors and practices of a given organization or society.)
2. Of all the aircraft manufactured by Boeing, how important is the 737 in meeting its business objectives?
3. How did you assess Boeing’s practice of packaging extra safety features to be sold to customers as an extra cost?
4. Describe the competition Boeing faced with the 737 Max.
5. The 737 frame is 50 years old. In producing the Max, new larger engines were installed on the wings. MCAS was created to smooth out the impact of these changes on the plane’s performance. Did this act of innovation intended to increase sales impact safety? Explain. What drove the creation of the 737 Max and its new software?
6. Assess Boeing’s decision not to inform the FAA about MCAS.
7. Assess Boeing’s refusal to include a description of MCAS in pilot manuals and exclusion of MCAS from simulator training for pilots. What pressures in the Boeing Corporation led some employees to suggest that all references to MCAS should be removed from the pilot training manuals? What about Boeing’s culture made those decisions OK?
8. What pressures in the Boeing Corporation led some employees to suggest that all references to MCAS should be removed from the pilot training manuals?
9. Assess this statement from Mark Forkner, Boeing’s chief test pilot: “There will be no simulator training required for Max pilots. Boeing will not allow that to happen.” He said MCAS should be removed from the pilot manual to, in effect, conceal the software from the pilots.
10. Further assess that later on Forkner, upon learning that MCAS had been expanded, did not go back to the FAA and correct what he said earlier when recommending approval of the aircraft by the FAA? At the time he said he would never do anything to endanger pilots or their passengers. When Lion Air was calling for simulator training for their pilots, Forkner called them stupid idiots. Who is responsible at Boeing for this to happen vis-à-vis its stated priority of safety?
11. How were corporate costs for pilot training allowed to drive decision-making impacting ultimate safety? After the first crash what was the business deal Boeing offered Southwest Airlines in connection with their purchases of the 737 Max?
12. Comment on the fact that after the first crash no one at Boeing could find anyone at the highest levels of the company who acknowledged it could happen again.
13.Why was the fact that Boeing was over budget on its 787 and 747-8 deliveries considered a factor in the 737 Max crashes? What does this mean: the reporters concluded that Engineering at Boeing took a back seat to Finance? If so, who at Boeing do you think was responsible for this?
14.Explain what you believe to be the reason two 737 Max aircraft experienced catastrophic failures within the span of four months without the aircraft being grounded by Boeing?
15. Why didn’t the FAA act after the first crash? As a member of the flying public would you assume the FAA was on top of whatever caused the first crash before later flying on a 737 Max anywhere in the world? Indeed, the FAA gambled against time that MCAS would be fixed before the second crash and did not ground the plane.
16. If safety was supposed to be the number one priority of this corporation, how and why was it so spectacularly ignored with the 737 Max?
17. Interpret the following: A senior 737 pilot at American Airlines, upon reviewing reports after the crashes, stated that after each pilot maneuver in the failing aircraft that “I would have done that, and that…” concluding there was a complete lack of understanding by Boeing about what was going on in the cockpit of the doomed planes.
18. If you were running Boeing with key business performance goals would you have approved of the “Delegation” of FAA oversight to your employees? One reporter concluded that with the level of delegation in place between Boeing and the FAA it was hard to know who was working for whom. Explain.
19. The investigation discovered that senior FAA managers would overrule technical inspectors telling them to delegate review and approval to Boeing.
20.Can you speculate about why the FAA waited until China and the EU grounded the 737 Max before doing so in this country? (This question is not directly related to class discussions or the text but a clue is that the FAA is responsible to Congress.)
21.Why was American Airline’s switch to the European A320 a “dagger to the heart” of Boeing according to one of the NYT reporters?
22.An internal Whistle Blower at Boeing cited marked changes from Boeing’s appeal as an employer. Employees became concerned that safety was no longer the cornerstone of the Boeing culture believing its top technology design and safety values were in decline. If true, how would such impact Boeing operations and possibly contribute to these disasters? How could decisions by the CEO in the corner office directly impact the day-to-day work quality of employees at the lowest levels of the company?
23. How does the following offer a clue to the health of the management structure at Boeing: “There was pressure to design a plane quickly and cheaply with speed at the center of strategy and the loss of healthy debate?”
24. How was it possible for a 737 Max to fly without either the ground crew or pilot understanding the role of the Angle of Attack sensor or knowing if it was operating correctly? It was reported that a Boeing engineer questioned “what would happen if we had a faulty AOA indicator?” He was ignored.
25. Is the AOA issue alone an explanation for the crashes?
26. To this day Boeing doesn’t fully accept responsibility for the Max crashes. Do you believe Boeing CEO Dennis Muilenburg bore personal responsibility for the failures of the Max and the subsequent loss of life? If so, how and why? What is the position of the Board of Directors who appointed Muilenburg and were responsible for oversight of the Boeing Corporation’s management? After Muilenburg was sacked, a member of the board was appointed his successor and he laid all the blame for the accidents on his predecessor.
PART B
To conclude, write your comments on the following:
Why do you think no one at Boeing or the FAA would agree to an interview with the NYT or Frontline?
Is business journalism as exhibited by the NYT and Frontline in this case appropriate, necessary, or an improper intrusion into the private activities of a business?
How are corporate cultures formed? Are these catastrophes the result of the Boeing culture? Explain.
Should Muilenburg, the Board, Forkner, and/or others be criminally indicted? The FAA?
The FAA has recertified the Max and today it is flying around the world. Would you fly on one? Most aircraft flying in the US today were manufactured by Boeing. Would you fly on one?
Boeing has thousands of good paying jobs with annual bonuses. Would you work for Boeing? Why or why not?
Explain your ideas about a company’s Mission Statement, Leadership, Culture and Ethics. How important are these elements in the life of a corporation in meeting its business objectives?
Do you believe the Boeing Corporation will survive? If so, what changes do you see to be necessary in carrying out its business objectives and the oversight of them? How would Boeing regain the world’s confidence?