Reference no: EM133173077
Problem-Solving Application Case-Money, Design, and Disaster
Boeing, one of the longtime giants of the aviation industry, currently faces a number of questions following a string of incidents involving its Boeing 737 Max aircraft. The issue appears to go deeper than an isolated instance of faulty design, as problems with the company's internal processes and communication appear to be the root cause. This activity is important because Boeing's 737 Max failure illustrates that problems with these processes can literally become a matter of life and death.
The goal of this exercise is for you to examine the root causes of the Boeing 737 Max problem and consider what Boeing needs to do differently to fix it and avoid similar issues in the future.
Read about Boeing's response to problems with the 737 Max. Then, using the three-step problem-solving approach, answer the questions that follow.
Assume the you're the CEO of a company which has one of your products account for nearly 80 percent of current sales (worth over $300 billion) and is the fastest selling in the long and proud history of your company. The same product sells for approximately $100 million, and great care was taken in its design with the strategy of ensuring it easily fit with your company's other products which have been purchased by companies around the world. However, this same product is responsible for the deaths of 346 people in just six months. The CEO is Dennis Muilenburg, the company is Boeing, and the product is the 737 Max plane. Every one of these planes sits on the ground across the globe.1
Costs to the Company
The value of the lives lost are immeasurable, and other costs to the company are varied and potentially enormous in the long run. The financial costs include a drop in the value of the stock, massive legal liabilities from the families of the passengers and increased scrutiny from regulators. Boeing's reputation is horribly tarnished, to say the least. Confidence in the quality and safety of Boeing's products has been deeply shaken for a range of important stakeholders, notably airline passengers who fly In Boeing's products, investors who buy the company's stock, airlines who purchase the planes, and the pilots and cabin crews who fly them.
Another stakeholder who thus far has been largely overlooked is Boeing's employees. After all it is they who built, tested, and helped certify the safety of the planes. The crashes call into question their performance, the collaboration between departments, and importantly management oversight. In addition to the blame cast upon them, they too are concerned and deeply saddened by the loss of life due to the product failures.
How Did This Happen?
Facts will no doubt continue to emerge for a long time, but now we know several relevant details. The Max was the latest model in the long line of 737's dating back to the 1960's.2 The Max is more fuel efficient and has longer range than its predecessors, making it more attractive to airlines around the world. These gains are due primarily to larger engines, but they in turn require positioning farther forward and up than the previous models. The design modification causes the plane's nose to tilt upward in some conditions which can cause the plane to stall. To combat this potentially catastrophic event, Boeing created and installed software-Maneuvering Characteristics Augmentation System (MCAS)-to adjust the nose down. It is now clear the MCAS and its accompanying sensors did not function properly and wrestled control away from pilots and caused the crashes.3
Adding to the problem, it appears Boeing cut corners in the design and certification of the Max. Many experts have claimed the MCAS was a band-aid and insufficiently addressed the underlying design problems. Also insufficient was that only one sensor triggered the software, whereas most critical systems on planes have redundancies to guard against a failure in one element. It has also come to light that the Federal Aviation Association (FAA), the governmental agency responsible for certifying new planes, actually had Boeing employees play a significant role in the certification process, raising concerns of conflict of interest. To elaborate, critics have accused the FAA of having a "cozy" relationship with Boeing and allowing the airline to exert undue influence in the certification and safety testing. These certification processes also in large part determined how much training would be required by airlines and their pilots to fly the new planes.4
Training and Communication
One of the key selling points of the Max was it could be easily integrated into existing fleets, in particular, minimal pilot training would be required. This would reduce costs and boosts profits, making the plane more attractive to airlines. However, it appears Boeing did not appropriately train and inform pilots of the changes, new systems, and potential challenges associated with the Max, engine positioning, and MCAS.5
Some pilots have since commented that a lack of training and communication related to these types of changes are uncharacteristic of Boeing, meaning historically pilots could trust they would be appropriately informed and trained. Evidence for these deficiencies was revealed in black-box and flight data recordings and in subsequent simulations. These showed pilots of the doomed flights had less than a minute to respond, and when they did, were unable to regain control of the planes due to the MCAS.6
What Happened in the Hangars, Design Rooms, and in Countless Meetings?
From designers, to their managers, to safety engineers, and regulators, their decision-making criteria and processes failed. Senior leadership's knowledge and involvement is yet to be revealed, but as with the emissions scandals in the auto industry in recent years, it is likely that numerous senior leaders had intimate involvement and knowledge. This could pose personal liability (legal and financial), along with the jobs and reputations of many executives. Some protestors are already calling for CEO Muilenburg to resign.
Moreover, additional Information has come to light showing that Boeing engineers "believed" a key cockpit warning light was a standard feature on all new 737 Max planes-it wasn't. Only the 20 percent of airlines who had purchased the equivalent of a premium package had the working warning light. The light signaled pilots when two key sensors register different readings about the angle of the plane, which suggests there may be a malfunction with the sensors that pilots should investigate. But without the functioning light, it seems pilots of the doomed flights were unaware the sensors malfunctioned, activating the MCAS, which dramatically and inappropriately corrected the angle of the planes. This scenario played out in seconds, not minutes, and seems to be a major design flaw and fundamental cause of the fatalities.7
This scenario was exacerbated by a lack of communication by Boeing. After learning in 2017 the lights didn't function on all planes, Boeing conducted internal tests and concluded the planes were still safe and no action was necessary. Because of this the company did not notify airlines, pilots, or the FAA.8
Boeing's troubles, however, are broader and deeper than the 737 Max. Production processes and practices for its 787 Dreamliner have been scrutinized for years. (Remember the battery fires that grounded those planes in 2013? The fixes were much more complex than software.)9 Company norms were strong and clear, such that criticisms of key products were discouraged and or ignored. Numerous reports exist of employees being intimidated and, in some instances, retaliated against for speaking up. Critics, some of whom are current and former employees, claim the company values production speed over quality, and similar concerns motivated Qatar airlines to stop accepting planes from a plant in South Carolina. Many now wonder If this reflects deeply embedded cultural problems throughout Boeing and Its products.10
Current Predicament
For the Max to fly again, Boeing must develop and implement a software fix, have this certified by the FAA, which will take several months. Many people both inside and outside the airline industry doubt that will be enough. Trust is gone. As stated by Ross Aimer, aviation consultant and former Boeing training captain: "Boeing in the past always told the pilots and airlines exactly what was on those airplanes. ... I have been a Boeing pilot for over 50 years and have loved their products, but they have lost my trust." He further said he feels Boeing was purely profit focused in these decisions. A survey showed that 53 percent of American adults would rather not fly in the 737 Max even when it is approved for service.11
Mr. Muilenburg realizes the magnitude of the situation and began what is sure to be a long apology and trust rebuilding tour.12 But again, many experts question whether he or anyone else can do enough. Some argue Boeing will need to replace the 737 Max altogether, still others say the flying public has short memories and such drastic action will not be required. To elaborate, sadly planes do crash, and sometimes this is due to design errors which are then corrected, and the same model of planes returns back into service.
Assume you are the board of directors at Boeing, apply the 3-Step Problem-Solving Approach to the predicament facing the company.
Apply the 3-Step Problem-Solving Approach to OB
Use the Organizing Framework in Figure 8.8 and the 3-Step Problem-Solving Approach to help identify inputs, processes, and outcomes relative to this case.
Apply the 3-Step Problem-Solving Approachn.
- Step 3: Make your recommendations for solving the problem. Consider whether you want to resolve it, solve it, or dissolve it (see Section 1.5). Which recommendation is desirable and feasible