g
g
g
g
g g
Case 1-9
g g
Case 1:
FAILUREgBYgDESIGN:gBOEINGgANDgTHEg737gMAXg
TEACHINGgNOTEg
g
g
g
Thisgcasegillustratesgthegfollowinggthemesgandgconceptsgdiscussedgingthegchaptersglisted:g
g
Theme/Conceptg g g g g g g
Chapterg
ConflictgofgInterestg g g g g g g g
5g
OrganizationalgEthicsgg g g g g g g
6g
BusinessgGovernmentgRelations;gGovernmentgRegulationg g g
7g
ProductgSafety g g g g g g g g
14g g g g
g
CasegSynopsisg
g
OngMonday,gOctoberg29,g2018,gLiongAirgFlightg610gcrashedgintogthegJavagSeagingIndonesiag
shortlygaftergtakeoff,gkillinggallg189gpeoplegongboard.ggThegaircraftgwasgagnearlygnewgBoeingg737g
MAX,gdeliveredgtogLiongAir,gaglow-costgregionalgcarriergandgonegofgBoeing’sgmajorgcustomers,g
justgfourgmonthsgearlier.ggThegMAXgwasgBoeing’sgnewestgaircraftgandgthegcenterpiecegofgtheg
company’sgstrategygforgthegshortgtogmid-rangegcommercialgmarket.ggCEOgDennisgMuilenburgg
facedgangurgentgangurgentgtask:gtogdeterminegwhatghadggonegwronggandgwhygwithgBoeing’sg
newestgandgso-fargsuccessfulgnewgmodel.gThegcasegpresentsgtheghistorygofgBoeinggandgitsgexternalg
competitivegenvironment;gthegevolutiongofgitsgstrategy,ggovernance,gandgethicsgpractices;gandgitsg
relationshipgwithgU.S.gregulatorsgduringgthegdesigngandgcertificationgofgtheg737gMAX.ggWhatg
organizationalgandgenvironmentalgfactorsghadgcontributedgtogBoeing’sgdevelopmentof g gang
apparentlygunsafegaircraft?ggWhatgcouldgBoeing,ggovernmentgregulators,gandgitsgairlinegcustomersg
andgothergstakeholdersgdogtogpreventgunsafegaircraftgfromgbeinggmanufacturedgandgsoldgingthegfut
ure?g
g
g
1
g©gMcGrawgHillgLLC.gAllgrightsgreserved.gNogreproductiongorgdistributiongwithoutgthegpriorgwrittengconsentgofgMcGrawgHillgLL
C.g
, TEACHINGgTIP:gWHEREgTOgUSEgTHEgCASEgINgTHEgCOURSEg
g
Thisgcasegisgintegrative,gingthatgitgdrawsgongmanygthemesgingthegtext.ggInstructorsgmaygusegitgatgthegen
dgofgthegcoursegasgagfinal,gintegrativegassignment,gorgwithgthegstudygofgChaptersg5gandg6g(EthicalgRe
asoninggandgOrganizationalgEthics)gorgChapterg7g(BusinessgGovernmentgRelations).gggg
g
g
g
g
TEACHINGgTIP:gVIDEOg
g
InstructorsgmaygwishgtogintroducegthegclassgdiscussiongwithgagshortgvideogofgthegLiongAirgflight.ggThe
gfirstg4gminutesgofgthisg9-
minutegsegmentgdepictsgthegfatalgflightgofgLiongAirg610,gingwhichgagjournalistgridesgingagsimulatorgwi
thgangexperiencedg737gpilotgwhogrecreatesgthegflightgfromgthegperspectivegofgthegcockpit.gg(Thegremai
ndergofgthegclipgdepictsgthegEthiopiangAirlinesgcrashgandgisgnotgrelevantgtogthegcase.)ggViewersgmaygfi
ndgthegvideogclipgdisturbing,gevengterrifying.gg
g
www.youtube.com/watch?v=OxPsxmU_ocIg
g
g
TEACHINGgTIP:gSTARTINGgAgCASEgDISCUSSIONg
g
Onegwasgtogstartgagclassgdiscussiongofgthisgcasegisgtogaskgstudentsgtoghuddleginggroupsgofg2gtog4.ggGiv
egthemg5gminutesgtogwritegonegorgtwogsentencesgbeginninggwith:g―OnegreasongthatgBoeinggproduce
dgangunsafegaircraftgwas…‖ggTheygshouldgthenghavegagrepresentativegwritegtheirgsentence(s)gongthegb
oardgorgsharegongagcommongelectronicgplatform.gTheginstructorgmaygthengcategorizegtheganswersgand
gusegthemgasgagjumpinggoffgpointgforgtakinggupgvariousgissuesgraisedgbygthegdiscussiongquestions.gggg
g
Sampleganswers:ggOnegreasongthatgBoeinggproducedgangunsafegaircraftgwas…g
g
ThegculturegofgBoeingghadgshiftedgfromgagfocusgongengineeringgexcellencegtogagfocusgongshareholder
greturns.ggThegcompany’sgcapabilitiesgforgaircraftgdesignghadgdeteriorated.gg
g
ThegFAAgdelegatedgmostgofgthegworkgofgcertifyinggtheg737gMAXgtogBoeinggitself,gsogthegregulatorsg
weregunablegtogexercisegeffectivegoversight.ggg
g
BoeinggwasgundergtremendousgpressuregbecausegofgcompetitiongfromgAirbus,gsogtheygdecidedgtogupd
ategtheg737grathergthangdesigngangall-
newgplane.ggThisgcreatedgangunsolvablegengineeringgproblem,gbecausegthegbiggergmoregfuel-
efficientgenginesgtheygwantedgtogusegdidgnotgfitgundergthegwingsgofg737.gg
g
Boeing’sgtopgexecutivesgandgdirectorsgemphasizedgshareholdergreturnsgovergengineeringgexcellen
ce.ggCostgandgefficiencygweregmoregimportantgtogthemgthangthegqualitygofgthegaircraft.g
g
Boeingghadgspentgsogmuchgmoneygongstockgbuybacksgandgshareholdergdividendsgthatgtheygdidgno
tghavegenoughgleftgovergtoginvestgproperlygingR&Dgandgaircraftgengineering.g
g
Boeingghadgagcodegofgethicsgbutgdidgnotgseemgtogenforcegit.ggItgignoredgworrisomegsurveygresults
gandgdidgnotglistengtogseriesgwarningsgfromgseniorgmanagers.gg
g
ManufacturinggofgthegMAXgwasgrushed,gpossiblygleadinggtogdefectsgingaircraftgdeliveredgtogcusto
mers.g
g
2
g©gMcGrawgHillgLLC.gAllgrightsgreserved.gNogreproductiongorgdistributiongwithoutgthegpriorgwrittengconsentgofgMcGrawgHillgLL
C.g
,ThegFAAgbasicallygallowedgBoeinggtogcertifygthegsafetygofgitsgowngplane.ggg
g
Boeing’sgstrategygwasgtogacquiregothergmanufacturersg(e.g.,gMcDonnellgDouglas)gandgkeepgupda
tinggtheirgoldgmodels,grathergthangtogdesigngnewgaircraft.ggOvergthegyears,gtheyglostgmuchgofgtheir
gengineeringgknow-how.gg
g
InstructorgTip:gg―C‖gstudentsgmayganswergthisgquestiongbygdescribinggcharacteristicsgofgtheguns
afegplanegorgitsgdesigngflaws.ggForgexample,g―OnegreasongBoeinggproducedgangunsafegaircraftgw
asgrelyinggongjustgonegsensor.‖gg―A‖gstudentsgwillgunderstandgthegdistinctiongbetweengthegproble
mgitselfg(angunsafegdesign)gandgthegcausegofgthegproblemg(e.g.,gorganizationalgculture,gregulatory
gfailures,gexternalgcompetition).ggTheginstructorgmaygneedgtogpointgoutgthatgthegquestiongasksgforg
thegreasongBoeinggproducedgangunsafegplane,gnotgthegreasongthegplanegwasgunsafe.g(Questiong1,g
below,gaddressesgthegreason(s)gthegplanegwasgunsafe.)g
g
g
DiscussiongQuestionsgandgAnswersg
g
g
1. WhatgweregthegimmediategtechnicalgcausesgofgthegcrashgofgLiongAirgFlightg610?g
g
Basedgonginformationgingthegcase,gstudentsgwillgconclude:gAgfaultyganglegofgattackgsensorgfed
gerroneousgdatagintogthegplane’sgcomputers,gtriggeringgthegmaneuveringgcharacteristicsgaugmenta
tiongsystem,gorgMCAS.ggThegplane’sgcomputergreliedgongonlygonegsensorgatgagtimeg(agsinglegpoin
tgofgfailure),gandgthegaircraftgdidgnotghavegangactivegcockpitgalertgforgdisagreementgbetweengthegt
wogsensors.ggOncegMCASgwasgactivated,gitgrepeatedlygforcedgthegnosegofgthegplanegdown,gdesta
bilizinggthegaircraft.ggThegLiongAirgpilotsghadgnotgbeengtrainedgongagsimulator,gweregunawaregofg
MCASgandgitsgcapabilities,gandgtheirgflightgmanualgdidgnotgincludegrelevantginformation.ggEvent
ually,gthegpilotsglostgcontrolgofgthegaircraftgandgitgcrashedgnosegdowngintogthegsea,gkillinggallgongb
oard.g
g
2. DescribegthegculturegofgthegBoeinggorganization.ggHowgdidgthegcompany’sgculturegaf
fectgthegdevelopmentgandgproductiongofgtheg737gMAX?g
g
Thegtextbookgdefinesgcorporategculturegasg―agblendgofgideas,gcustoms,gtraditionalgpractices,gco
mpanygrules,gandgsharedgmeaningsgthatghelpgdefinegnormalgbehaviorgforgeveryonegwhogworksgatg
agcompany‖g(Chapterg6).gThegtextbookgpointsgoutgthatgweakgethicalgculturesgcangfostergunethicalg
behavior.ggToghelpgstudentsgunpackgthisgquestion,gtheginstructorgmaygwishgtogelaborategbygpointi
nggoutgthatgcorporategorgorganizationalgculturegisgoftengunderstoodgasghavinggthreeglayers:gbasicg
assumptions,gvaluesgandgnorms,gandgartifactsg(Schein,g2004;gChatman,g2014).ggBasicgassumptio
nsgaregdeeplygheldgvaluesgaboutgthegorganization’sgpurposegandgreasongforgexistence.ggNormsgare
gunwrittengexpectationsgforgappropriategbehaviorgthatgreflectgthesegvalues.gArtifactsgaregvisiblegor
ganizationalgpracticesgthatgcommunicategvalues,gsuchgasgrituals,gstories,gandglanguage.g
g
Onegwaygtogorganizegthisgdiscussiongisgtogpromptgstudentsgtogfillgingagboardggrid,gshowingghowgt
hesegthreeglayersgofgBoeing’sgculturegchangedgfollowinggthegcompany’sgacquisitiongofgMcDonne
llgDouglasg(1997).gg
g
Boeing’sgOrganizationalgCulturegBeforegandgAftergthegAcquisitiongofgMcDonnellgDouglas
gg
g
Leve Pastgg Presentg
lg
3
g©gMcGrawgHillgLLC.gAllgrightsgreserved.gNogreproductiongorgdistributiongwithoutgthegpriorgwrittengconsentgofgMcGrawgHillgLL
C.g
, Basic Boeinggisgagtrendsettergingaircraftgtechnology.ggT Boeinggisgangaircraftgmanufacturer.ggTheg
gAss hegpurposegofgthegcompanygisgtogdesigngbettergp company’sgpurposegisgtogcreategthegbestgv
umpt lanesgthatgflyghigher,gfaster,gfarther.gg aluegforgitsgcustomersgandgtheghighestgpos
ionsg siblegreturnsgforgitsginvestors.gg
Shareholdergvaluegisgprioritized.g
Valu Coregvaluesgaregquality,ginnovation,gandgsafety.g Coregvaluesgaregefficiency,gprofitability,ga
esgan gEngineeringgexcellencegisgvalued.gInvestmentgi ndglowgcost.g
dgNo ngresearchgandgdevelopmentgisgprioritized.g Shareholdergvaluegisgprioritized.ggg
rmsg
Artif StoriesgaboutgWilliamgBoeing’sgattentiongtogqua Commongslogansgwereg―We’reging
actsgg lity,ginnovation,gandgsafetygweregpartgofgthegco business‖gandg―We’regmanagingg
mpanygfolklore.ggThegcompanygwasgdescribedga forgvalue.‖ggg
sgang―associationgofgengineers.‖gg
g
g
Summary:ggOvergtime,gBoeinggcultureghadgshiftedgfromgagfocusgongquality,ginnovation,gandgsafe
tygtogagfocusgongefficiency,gprofitability,gandgshareholdergvalue.ggThisgaffectedgthegdevelopmentg
ofgtheg737gMAX,gasgitgledgtogdecisionsgtogre-
toolgangoldgmodelg(theg737)grathergdevelopgthangagnew,gclean-
sheetgmodel,gtogkeepgcostsgdowngandgspeedgupgdeliverygtogkeygcustomers.g(Thegdecisionsgmadeg
bygBoeinggduringgthegdevelopmentgofgthegMAXgaregfurthergexploredgingthegresponsegtogQuestion
g4,gbelow.)gggg
g
3. DescribegthegethicsgpoliciesgandgpracticesgofgBoeing.ggWhatgethicalgsafeguardsgweregingp
lacegtogpromotegsafety?ggEvaluategthegeffectivenessgofgthesegsafeguardsgduringgthegdevel
opmentgandgproductiongofgtheg737gMAX.gg
g
Chapterg6gdescribesghowgcompaniesgcanginstitutionalizegethicsgbygbuildinggethicalgsafeguardsgint
ogtheirgeverydaygroutines.ggThegcasegshowsgthatgBoeingghadgingplacegthegkeygelementsgofgagrobus
tgethicsgandgcompliancegprogram,gincluding:g
g
• Agcodegofgconductgandgvaluesgstatement.g
• Agseniorgexecutivegwithgresponsibilitygforgethicsgandgcomplianceg(DianagSands).g
• Agrequirementgthatgemployeesgannuallygsigngthegcodegofgconduct.gg
• Periodicgtraining.g
• Regulargsurveysgofgemployees.g
• Angethicsgreportinggsystemgandgperiodicgreviewgofgcomplaintsgfiledgingthisgsystem.g
g
However,gingpracticegthegsystemgfailed,gingthatgitgdidgnotgpreventgthegdesigngandgproductiongofgu
nsafegaircraft.ggWhygdidgitgfail?ggStudentsgmightgmakegseveralgarguments:g
g
• Thegcomplaintsgprocessgfailedgingpractice,gasgexemplifiedgbygthegexperiencesgofgEdwardg
Piersongandgothers.ggSeniorgmanagersgfailedgtogrespondgproactivelygtogseriousgconcernsgP
iersongandgothersgraisedgaboutgsafetygandgquality.ggggg
• Thegethicsgandgcompliancegfunctiongwasgheadedgbygangaccountant.ggPresumablygshegwasg
mainlygconcernedgwithgfinancialgreturnsgandginvestorgrelations;gshegmaygnotghaveghadgsu
fficientgexpertisegingethics.gg
4
g©gMcGrawgHillgLLC.gAllgrightsgreserved.gNogreproductiongorgdistributiongwithoutgthegpriorgwrittengconsentgofgMcGrawgHillgLL
C.g
g
g
g
g g
Case 1-9
g g
Case 1:
FAILUREgBYgDESIGN:gBOEINGgANDgTHEg737gMAXg
TEACHINGgNOTEg
g
g
g
Thisgcasegillustratesgthegfollowinggthemesgandgconceptsgdiscussedgingthegchaptersglisted:g
g
Theme/Conceptg g g g g g g
Chapterg
ConflictgofgInterestg g g g g g g g
5g
OrganizationalgEthicsgg g g g g g g
6g
BusinessgGovernmentgRelations;gGovernmentgRegulationg g g
7g
ProductgSafety g g g g g g g g
14g g g g
g
CasegSynopsisg
g
OngMonday,gOctoberg29,g2018,gLiongAirgFlightg610gcrashedgintogthegJavagSeagingIndonesiag
shortlygaftergtakeoff,gkillinggallg189gpeoplegongboard.ggThegaircraftgwasgagnearlygnewgBoeingg737g
MAX,gdeliveredgtogLiongAir,gaglow-costgregionalgcarriergandgonegofgBoeing’sgmajorgcustomers,g
justgfourgmonthsgearlier.ggThegMAXgwasgBoeing’sgnewestgaircraftgandgthegcenterpiecegofgtheg
company’sgstrategygforgthegshortgtogmid-rangegcommercialgmarket.ggCEOgDennisgMuilenburgg
facedgangurgentgangurgentgtask:gtogdeterminegwhatghadggonegwronggandgwhygwithgBoeing’sg
newestgandgso-fargsuccessfulgnewgmodel.gThegcasegpresentsgtheghistorygofgBoeinggandgitsgexternalg
competitivegenvironment;gthegevolutiongofgitsgstrategy,ggovernance,gandgethicsgpractices;gandgitsg
relationshipgwithgU.S.gregulatorsgduringgthegdesigngandgcertificationgofgtheg737gMAX.ggWhatg
organizationalgandgenvironmentalgfactorsghadgcontributedgtogBoeing’sgdevelopmentof g gang
apparentlygunsafegaircraft?ggWhatgcouldgBoeing,ggovernmentgregulators,gandgitsgairlinegcustomersg
andgothergstakeholdersgdogtogpreventgunsafegaircraftgfromgbeinggmanufacturedgandgsoldgingthegfut
ure?g
g
g
1
g©gMcGrawgHillgLLC.gAllgrightsgreserved.gNogreproductiongorgdistributiongwithoutgthegpriorgwrittengconsentgofgMcGrawgHillgLL
C.g
, TEACHINGgTIP:gWHEREgTOgUSEgTHEgCASEgINgTHEgCOURSEg
g
Thisgcasegisgintegrative,gingthatgitgdrawsgongmanygthemesgingthegtext.ggInstructorsgmaygusegitgatgthegen
dgofgthegcoursegasgagfinal,gintegrativegassignment,gorgwithgthegstudygofgChaptersg5gandg6g(EthicalgRe
asoninggandgOrganizationalgEthics)gorgChapterg7g(BusinessgGovernmentgRelations).gggg
g
g
g
g
TEACHINGgTIP:gVIDEOg
g
InstructorsgmaygwishgtogintroducegthegclassgdiscussiongwithgagshortgvideogofgthegLiongAirgflight.ggThe
gfirstg4gminutesgofgthisg9-
minutegsegmentgdepictsgthegfatalgflightgofgLiongAirg610,gingwhichgagjournalistgridesgingagsimulatorgwi
thgangexperiencedg737gpilotgwhogrecreatesgthegflightgfromgthegperspectivegofgthegcockpit.gg(Thegremai
ndergofgthegclipgdepictsgthegEthiopiangAirlinesgcrashgandgisgnotgrelevantgtogthegcase.)ggViewersgmaygfi
ndgthegvideogclipgdisturbing,gevengterrifying.gg
g
www.youtube.com/watch?v=OxPsxmU_ocIg
g
g
TEACHINGgTIP:gSTARTINGgAgCASEgDISCUSSIONg
g
Onegwasgtogstartgagclassgdiscussiongofgthisgcasegisgtogaskgstudentsgtoghuddleginggroupsgofg2gtog4.ggGiv
egthemg5gminutesgtogwritegonegorgtwogsentencesgbeginninggwith:g―OnegreasongthatgBoeinggproduce
dgangunsafegaircraftgwas…‖ggTheygshouldgthenghavegagrepresentativegwritegtheirgsentence(s)gongthegb
oardgorgsharegongagcommongelectronicgplatform.gTheginstructorgmaygthengcategorizegtheganswersgand
gusegthemgasgagjumpinggoffgpointgforgtakinggupgvariousgissuesgraisedgbygthegdiscussiongquestions.gggg
g
Sampleganswers:ggOnegreasongthatgBoeinggproducedgangunsafegaircraftgwas…g
g
ThegculturegofgBoeingghadgshiftedgfromgagfocusgongengineeringgexcellencegtogagfocusgongshareholder
greturns.ggThegcompany’sgcapabilitiesgforgaircraftgdesignghadgdeteriorated.gg
g
ThegFAAgdelegatedgmostgofgthegworkgofgcertifyinggtheg737gMAXgtogBoeinggitself,gsogthegregulatorsg
weregunablegtogexercisegeffectivegoversight.ggg
g
BoeinggwasgundergtremendousgpressuregbecausegofgcompetitiongfromgAirbus,gsogtheygdecidedgtogupd
ategtheg737grathergthangdesigngangall-
newgplane.ggThisgcreatedgangunsolvablegengineeringgproblem,gbecausegthegbiggergmoregfuel-
efficientgenginesgtheygwantedgtogusegdidgnotgfitgundergthegwingsgofg737.gg
g
Boeing’sgtopgexecutivesgandgdirectorsgemphasizedgshareholdergreturnsgovergengineeringgexcellen
ce.ggCostgandgefficiencygweregmoregimportantgtogthemgthangthegqualitygofgthegaircraft.g
g
Boeingghadgspentgsogmuchgmoneygongstockgbuybacksgandgshareholdergdividendsgthatgtheygdidgno
tghavegenoughgleftgovergtoginvestgproperlygingR&Dgandgaircraftgengineering.g
g
Boeingghadgagcodegofgethicsgbutgdidgnotgseemgtogenforcegit.ggItgignoredgworrisomegsurveygresults
gandgdidgnotglistengtogseriesgwarningsgfromgseniorgmanagers.gg
g
ManufacturinggofgthegMAXgwasgrushed,gpossiblygleadinggtogdefectsgingaircraftgdeliveredgtogcusto
mers.g
g
2
g©gMcGrawgHillgLLC.gAllgrightsgreserved.gNogreproductiongorgdistributiongwithoutgthegpriorgwrittengconsentgofgMcGrawgHillgLL
C.g
,ThegFAAgbasicallygallowedgBoeinggtogcertifygthegsafetygofgitsgowngplane.ggg
g
Boeing’sgstrategygwasgtogacquiregothergmanufacturersg(e.g.,gMcDonnellgDouglas)gandgkeepgupda
tinggtheirgoldgmodels,grathergthangtogdesigngnewgaircraft.ggOvergthegyears,gtheyglostgmuchgofgtheir
gengineeringgknow-how.gg
g
InstructorgTip:gg―C‖gstudentsgmayganswergthisgquestiongbygdescribinggcharacteristicsgofgtheguns
afegplanegorgitsgdesigngflaws.ggForgexample,g―OnegreasongBoeinggproducedgangunsafegaircraftgw
asgrelyinggongjustgonegsensor.‖gg―A‖gstudentsgwillgunderstandgthegdistinctiongbetweengthegproble
mgitselfg(angunsafegdesign)gandgthegcausegofgthegproblemg(e.g.,gorganizationalgculture,gregulatory
gfailures,gexternalgcompetition).ggTheginstructorgmaygneedgtogpointgoutgthatgthegquestiongasksgforg
thegreasongBoeinggproducedgangunsafegplane,gnotgthegreasongthegplanegwasgunsafe.g(Questiong1,g
below,gaddressesgthegreason(s)gthegplanegwasgunsafe.)g
g
g
DiscussiongQuestionsgandgAnswersg
g
g
1. WhatgweregthegimmediategtechnicalgcausesgofgthegcrashgofgLiongAirgFlightg610?g
g
Basedgonginformationgingthegcase,gstudentsgwillgconclude:gAgfaultyganglegofgattackgsensorgfed
gerroneousgdatagintogthegplane’sgcomputers,gtriggeringgthegmaneuveringgcharacteristicsgaugmenta
tiongsystem,gorgMCAS.ggThegplane’sgcomputergreliedgongonlygonegsensorgatgagtimeg(agsinglegpoin
tgofgfailure),gandgthegaircraftgdidgnotghavegangactivegcockpitgalertgforgdisagreementgbetweengthegt
wogsensors.ggOncegMCASgwasgactivated,gitgrepeatedlygforcedgthegnosegofgthegplanegdown,gdesta
bilizinggthegaircraft.ggThegLiongAirgpilotsghadgnotgbeengtrainedgongagsimulator,gweregunawaregofg
MCASgandgitsgcapabilities,gandgtheirgflightgmanualgdidgnotgincludegrelevantginformation.ggEvent
ually,gthegpilotsglostgcontrolgofgthegaircraftgandgitgcrashedgnosegdowngintogthegsea,gkillinggallgongb
oard.g
g
2. DescribegthegculturegofgthegBoeinggorganization.ggHowgdidgthegcompany’sgculturegaf
fectgthegdevelopmentgandgproductiongofgtheg737gMAX?g
g
Thegtextbookgdefinesgcorporategculturegasg―agblendgofgideas,gcustoms,gtraditionalgpractices,gco
mpanygrules,gandgsharedgmeaningsgthatghelpgdefinegnormalgbehaviorgforgeveryonegwhogworksgatg
agcompany‖g(Chapterg6).gThegtextbookgpointsgoutgthatgweakgethicalgculturesgcangfostergunethicalg
behavior.ggToghelpgstudentsgunpackgthisgquestion,gtheginstructorgmaygwishgtogelaborategbygpointi
nggoutgthatgcorporategorgorganizationalgculturegisgoftengunderstoodgasghavinggthreeglayers:gbasicg
assumptions,gvaluesgandgnorms,gandgartifactsg(Schein,g2004;gChatman,g2014).ggBasicgassumptio
nsgaregdeeplygheldgvaluesgaboutgthegorganization’sgpurposegandgreasongforgexistence.ggNormsgare
gunwrittengexpectationsgforgappropriategbehaviorgthatgreflectgthesegvalues.gArtifactsgaregvisiblegor
ganizationalgpracticesgthatgcommunicategvalues,gsuchgasgrituals,gstories,gandglanguage.g
g
Onegwaygtogorganizegthisgdiscussiongisgtogpromptgstudentsgtogfillgingagboardggrid,gshowingghowgt
hesegthreeglayersgofgBoeing’sgculturegchangedgfollowinggthegcompany’sgacquisitiongofgMcDonne
llgDouglasg(1997).gg
g
Boeing’sgOrganizationalgCulturegBeforegandgAftergthegAcquisitiongofgMcDonnellgDouglas
gg
g
Leve Pastgg Presentg
lg
3
g©gMcGrawgHillgLLC.gAllgrightsgreserved.gNogreproductiongorgdistributiongwithoutgthegpriorgwrittengconsentgofgMcGrawgHillgLL
C.g
, Basic Boeinggisgagtrendsettergingaircraftgtechnology.ggT Boeinggisgangaircraftgmanufacturer.ggTheg
gAss hegpurposegofgthegcompanygisgtogdesigngbettergp company’sgpurposegisgtogcreategthegbestgv
umpt lanesgthatgflyghigher,gfaster,gfarther.gg aluegforgitsgcustomersgandgtheghighestgpos
ionsg siblegreturnsgforgitsginvestors.gg
Shareholdergvaluegisgprioritized.g
Valu Coregvaluesgaregquality,ginnovation,gandgsafety.g Coregvaluesgaregefficiency,gprofitability,ga
esgan gEngineeringgexcellencegisgvalued.gInvestmentgi ndglowgcost.g
dgNo ngresearchgandgdevelopmentgisgprioritized.g Shareholdergvaluegisgprioritized.ggg
rmsg
Artif StoriesgaboutgWilliamgBoeing’sgattentiongtogqua Commongslogansgwereg―We’reging
actsgg lity,ginnovation,gandgsafetygweregpartgofgthegco business‖gandg―We’regmanagingg
mpanygfolklore.ggThegcompanygwasgdescribedga forgvalue.‖ggg
sgang―associationgofgengineers.‖gg
g
g
Summary:ggOvergtime,gBoeinggcultureghadgshiftedgfromgagfocusgongquality,ginnovation,gandgsafe
tygtogagfocusgongefficiency,gprofitability,gandgshareholdergvalue.ggThisgaffectedgthegdevelopmentg
ofgtheg737gMAX,gasgitgledgtogdecisionsgtogre-
toolgangoldgmodelg(theg737)grathergdevelopgthangagnew,gclean-
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4
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