Reference no: EM132821478
McDonnell Douglas is now part of the Boeing Company, but that does not diminish in any way the turnaround that took place at McDonnell Douglas between 1992 and 1997. Times were not good for the company in the early 1990s. With the military buildup a thing of the past, the huge military division watched as sales plummeted. The commercial aircraft division struggled to be competitive with Boeing and Airbus. Waste and inefficiency were rampant. McDonnell Douglas stock sat at $9 a share in 1992-the lowest in anyone's memory. The company, once the nation's largest defense contractor, and the world's number two supplier of commercial aircraft, was in serious trouble.
The senior management staff under the leadership of John McDonnell, then board chair, decided to try total quality management. They got off to a very rocky start but learned from their mistakes and by 1992 were making good progress. Starting that year, executives were measured on three items: cash flow, return on net assets, and TQM, with the latter being tied to improvement on a Baldrige self-assessment score. In 1992, the self-assessment score was 200 (on the 0-1,000 scale). Over the next three years, the score increased by 100 points per year. This took the company from being a so-so performer in the traditional ranks to being a high midlevel performer in the TQM realm.
McDonnell Douglas found that as its Baldrige self-assessment score improved each year, its key business performance indicators tracked in parallel fashion. By 1995, its stock valuation reached $70 per share, profits were several times greater than in 1992, cash was up, and debt was down-all in a vastly smaller market. TQM literally turned around this giant company to the extent that the Boeing Company considered it imperative to merge in order to save Boeing. (The merger became final on August 1, 1997.)
Discussion Questions:
1. Explain how the use of TQM could contribute to the improvement noted in McDonnell Douglas Corporation's key business performance indicators.
2. What was John McDonnell's motive in making improvement in the company's Baldrige self-assessment score a part of executive performance evaluations?
|
Information security and safe computing
: Explain what the following terms mean to you as they apply to information security and safe computing: Confidentiality, Integrity, and Availability.
|
|
Define school districts special education mission statement
: Discuss how the school district's special education mission statement either supports or differs from what was observed from the state's special education.
|
|
Phase of the business cycle
: Compare and contrast the phase of the business cycle. Compare and contrast expansionary and contractionary fiscal policy.
|
|
Describe problem that exists between owners and lenders
: Briefly describe the agency problem that exists between owners and lenders. How do lenders cause firms to incur agency costs to resolve this problem?
|
|
John mcdonnell motive in making improvement
: What was John McDonnell's motive in making improvement in the company's Baldrige self-assessment score a part of executive performance evaluations?
|
|
What lin should receive a debit to her capital account of
: At this time, LIN capital balance was P24,000 and DO capital balance was P56,000. LIN should receive a debit to her capital account of
|
|
Critically evaluate the effectiveness of leadership
: Critically evaluate the effectiveness of leadership exhibited by mark park (NIKE) -Evaluate mark park characteristics, attributes, skills and leadership behavi
|
|
What is the combined gain realized by nunu and jyp
: On June 1, 2020, What is the combined gain realized by Nunu and JYP upon the sale of a portion of their interest in the partnership to Cheer?
|
|
Pros and cons of corporate social responsibility
: In responses to your classmates, debate the pros and cons of corporate social responsibility and give an example of what happens when ethics fails at an organiz
|