Case Study: How Boeing Lost Its Way Preparation Review the following: Dimensions of Ofganizational Culture How Culture ls Created and Maintained 2.3ldenti in Ethical ' toan external site. Your Assignmen t First, read/watch the following: How Boein Lost Its ' to an external site. Relaxed FAA Oversight At Root of Boeing's Cg; i'mnloasi Relaxed FAA. Oversight At Root of Boeing's Crisis Congressional Regort Faults Boeing on MAX Design, FAA for Lax WCongwssional Report Faults Boeing on MAX Design FAA for Lax Oversight Next, based on what you read and watched, answer the following questions: 1. 2. How did Boeing's organizational culture change after it acquired McDonnell Douglas? FOCUS on 1-3 dimensions that are most prominent. Symbols, one type of cultural artifact, reinforce organizational culture by conveying to employees who is important and the kinds of behavior that are expected and appropriate. By moving the company's headquarters from Seattle to Chicago in 2001, what message did Boeing leaders convey? Why did Boeing decide to conceal the Maneuvering Characteristics Augmentation System (MCAS)? Was this decision an ethical failure, cultural failure (see question 1), or both? Explain. One of the most common ethical dilemmas is conflict of interest. According to The Wall Street Journal article, the Congressional report reiterates earlier complaints by lawmakers that Boeing was able to exert undue influence over the FAA, partly because regulators delegated much of their oversight responsibilities to Boeing employees authorized to act on the government's behalf. How is this situation a classic conflict of interest for Boeing, and what steps should have been taken to avoid it in the first place? Boeing and the FAA agreed the MCAS's software needed a major redesign, though the Congressional report indicates FAA officials allowed the plane to keep flying despite multiple prior certication blunders pertaining to the MAX. Making solid ethical decisions often requires moral courage. What are some likely reasons that the FAA did not show the moral courage to stand up to Boeing in the face of these safety concerns? Hint: See p. 2 of "Relaxed F.A.A. Oversight At Root of Boeing's Crisis." Click on the "Submit Assignment" button to submit your response as a file upload. To successfully complete this assignment, Write approximately 2-3 pages in total, using 12-point font, double-spacing, and one-inch margins. Number your answer to each question, but please do not include the question text in your response. Incorporate course concepts and include appropriate reasons, evidence, and/or examples as support for your position. Demonstrate exceptional control of grammar, paragraph structure, punctuation, sentence construction, and spelling.Dimensions of Organizational Culture Exhibit 2.1 summarizes the seven dimensions of organizational culture. For a detailed explanation of each dimension, review 8.4 Measuring Organizational Culture Ex Attention to Detail Degree to which employees are expected to exhibit precision, analysis, Innovation and and attention to Outcome Risk Taking detail Orientation Degree to which Degree to which managers focus on employees are encouraged to be results or outcomes innovative and take rather than on how these outcomes are risks achieved Organizational Stability Culture People Orientation Degree to which Degree to which organizational management decisions and decisions take into actions emphasize account the effects maintaining the on people within the status quo organization Aggressiveness Team Orientation Degree to which Degree to which employees are work is organized aggressive and around teams competitive rather rather than than cooperative individuals Exhibit 2.1 Seven Dimensions of Organizational CultureHow Culture ls Created and Maintained As you learned in 8.5 Creating and Maintaining Organizational Culture 35, an organization's culture usually reects the vision of its founder. However, as the organization grows, the founder is no longer able to interact on a day-to-day basis with every employee. Therefore, it's critical for the organization to develop other mechanisms for maintaining its culture. In 8.5 Creating and Maintaininggganizational Culture j>_, pay special attention to the role of cultural artifactsthe observable elements of culture (i.e., what people do or say)in the onboarding (also known as "socialization") process. Because culture is invisible, employees cannot observe it directly. However, by observing artifacts, new employees "learn" an organization's culture. The most common cultural artifacts are 0 Stories j>_narratives of signicant events or people o Rituals j> repetitive sequences of activities that express and reinforce the important values of the organization o ymbols j>_(layout of facilities, how employees dress, size of ofces, material perks provided to executives, furnishings, etc.)c0nvey to employees who is important and the kinds of behavior that are expected and appropriate 0 @gge j>_special acronyms, unique terms, and slogans that identify and unite members of a culture Which type of cultural artifact is represented by this clip from The Ofce? Disclaimer: This is a machine generated PDF of selected content from our products. This functionality is provided solely for your convenience and is in no way intended to replace original scanned PDF. Neither Cengage Learning nor its licensors make any representations or warranties with respect to the machine generated PDF. 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Oversight At Root of Boeing's Crisis Authors: Natalie Kitroeff, David Gelles and Jack Nicas Date: July 28, 2019 From: The New York Times Publisher: The New York Times Company Document Type: Article Length: 2,805 words Lexile Measure: 1200L Full Text: SEATTLE -- In the days after the first crash of Boeing's 737 Max, engineers at the Federal Aviation Administration came to a troubling realization: They didn't fully understand the automated system that helped send the plane into a nose-dive, killing everyone on board. Engineers at the agency scoured their files for information about the system designed to help avoid stalls. They didn't find much. Regulators had never independently assessed the risks of the dangerous software known as MCAS when they approved the plane in 2017. More than a dozen current and former employees at the F.A.A. and Boeing who spoke with The New York Times described a broken regulatory process that effectively neutered the oversight authority of the agency. The regulator had been passing off routine tasks to manufacturers for years, with the goal of freeing up specialists to focus on the most important safety concerns. But on the Max, the regulator handed nearly complete control to Boeing, leaving some key agency officials in the dark about important systems like MCAS, according to the current and former employees. While the agency's flawed oversight of the Boeing 737 Max has attracted much scrutiny since the first crash in October and a second one in March, a Times investigation revealed previously unreported details about weaknesses in the regulatory process that compromised the safety of the plane. The company performed its own assessments of the system, which were not stress-tested by the regulator. Turnover at the agency left two relatively inexperienced engineers overseeing Boeing's early work on the system. The F.A.A. eventually handed over responsibility for approval of MCAS to the manufacturer. After that, Boeing didn't have to share the details of the system with the two agency engineers. They weren't aware of its intricacies, according to two people with knowledge of the matter. Late in the development of the Max, Boeing decided to expand the use of MCAS, to ensure the plane flew smoothly. The new, riskier version relied on a single sensor and could push down the nose of the plane by a much larger amount. Boeing did not submit a formal review of MCAS after the overhaul. It wasn't required by F.A.A. rules. An engineering test pilot at the regulator knew about the changes, according to an agency official. But his job was to evaluate the way the plane flew, not to determine the safety of the system The agency ultimately certified the jet as safe, required little training for pilots and allowed the plane to keep flying until a second deadly Max crash, less than five months after the first. The plane remains grounded as regulators await a fix from Boeing. If the ban persists much longer, Boeing said this past week that it could be forced to halt production. The F.A.A. and Boeing have defended the plane's certification, saying they followed proper procedures and adhered to the highest standards. "The agency's certification processes are well-established and have consistently produced safe aircraft designs," the regulator said in a statement Friday. "The 737 Max certification program involved 110,000 hours of work on the part of F.A.A. personnel, including flying or supporting 297 test flights."Boeing said \"the F.A.A.'s rigor and regulatory leadership has driven ever-increasing levels of safety over the decades," adding that "the 1'3? Max met the F.A.A.'s stringent standards and requirements as it was certified through the F.A.A.'s processes.\" [If you have worked at Boeing or the F.A.A. and want to discuss your experience, contact The Times confidentially here.] Federal prosecutors and lawmakers are now investigating whether the regulatory process is fundamentally flawed. As planes become more technologically advanced, the rules, even when they are followed, may not be enough to ensure safety. The new software played a role in both disasters, involving Lion Air and Ethiopian Airlines, which together killed 346 people. "Did MCAS get the attention it needed? That's one of the things we're looking at," said Chris Hart, the former chairman of the National Transportation Safety Board, who is now leading a multiagency task force investigating how the Max was approved. \"As it evolved from a less robust system to a more powerful system, were the certifiers aware of the changes?" Boeing needed the approval process on the Max to go swiftly. Months behind its rival Airbus, the company was racing to finish the plane, a more fuel-efficient version or its best-selling 7'37. The regulator's hands-off approach was pivotal. At crucial moments in the Max's development, the agency operated in the background, mainly monitoring Boeing's progress and checking papennrork. The nation's largest aerospace manufacturer, Boeing was treated as a client, with F.A.A. officials making decisions based on the company's deadlines and budget. It has long been a cozy relationship. Top agency officials have shuffled between the government and the industry. During the Max certification, senior leaders at the F.A.A. sometimes overruled their own staff members' recommendations after Boeing pushed back. For safety reasons, many agency engineers wanted Boeing to redesign a pair of cables, part of a major system unrelated to MCAS. The company resisted, and F.A.A. managers took Boeing's side, according to internal agency documents. After the crash of the Lion Air plane last October, F.A.A. engineers were shocked to discover they didn't have a complete analysis of MCAS. The safety review in their files didn't mention that the system could aggressively push down the nose of the plane and trigger repeatedly, making it difficult to regain control of the aircraft, as it did on the doomed Lion Air flight. Despite their hazy understanding of the system, F.A.A. officials decided against grounding the 1'3? Max. Instead, they published a notice reminding pilots of existing emergency procedures. The notice didn't describe how MCAS worked. At the last minute, an F.A.A. manager told agency engineers to remove the only mention of the system, according to internal agency documents and two people with knowledge of the matter. Instead, airlines leamed about it from Boeing. 'He really wanted abdication.' The F.A.A. department that oversaw the Max development had such a singular focus that it was named after the company: The Boeing Aviation Safety Oversight Office. Many F.A.A. veterans came to see the department, created in 2009, as a symbol of the agency's close relationship with the manufacturer. The top official in Seattle at the time, All Bahrami, had a tough time persuading employees to join, according to three current and former employees. Some engineers believed that Mr. Bahrami had installed managers in the office who would defer to Boeing. "He didn't put enough checks and balances in the system," Mike Mthae, a former F.A.A. engineer, said of Mr. Bahrami. "He really wanted abdication. He didn't want delegation.\" Before the certification of the Max began, Mr. Bahrami called a group of F.A.A engineers into his office, the current and former employees said, and asked some of them to join the group. Many didn't want to change jobs, according to a complaint filed by the National Air Traffic Controllers Association, the union representing F.A.A. engineers. "I got dragged kicking and screaming," said Flichard Fteed, a former systems engineer at the F.A.A. Mr. Fteed said he had just left surgery when agency officials called to ask whether he would work in the office. \"I always claimed that l was on drugs when I said Ives-ll! The F.A.A. said in a statement that Mr. Bahrami "dedicated his career to the advancement of aviation safety in both the private and public sectors." For decades, the F.A.A. relied on engineers inside Boeing to help certify aircraft. But after intense lobbying to Congress by industry, the agency adopted rules in 2005 that would give manufacturers like Boeing even more control. Previously, the agency selected the company engineers to work on its behalf; under the new regulation s, Boeing could choose them, though the F.A.A. has veto power. Many of the agency's top leaders embraced the approach. It would allow the F.A.A. to certify planes more efficiently and stretch its limited resources. The regulator had also been finding it harder to compete for talented engineers, their government salaries unable to keep up with the going rates in the industry. For Boeing, the changes meant shedding a layer of bureaucracy. "The process was working well,'| said Tom Heineman, a retired Boeing engineer who worked on the Max. "The F.A.A. was delegating more of the work and the review and the oversight to the manufacturers than it used to." But some F.A.A. engineers were concerned that they were no longer able to effectively monitor what was happening inside Boeing. In a PowerPoint presentation to agency managers in 2016, union representatives raised concerns about a "brain drain" and the "inability to hire and retain qualified personnel.\" By 2018, the FAA. was letting the company certify 96 percent of its own work, according to an agency official. Nicole Potter, an F.A.A. propulsion and fuel systems engineer who worked on the Max, said supervisors repeatedly asked her to give up the right to approve safety documents. She often had to fight to keep the work. "Leadership was targeting a high level of delegation," Ms. Potter said. When F.A.A. employees didn't have time to approve a critical document, she said, "managers could delegate it back to Boeing." It was a process Mr. Bahrami championed to lawmakers. After spending more than two decades at the F.A.A., he left the agency in 2013 and took a job at the Aerospace Industries Association, a trade group that represents Boeing and other manufacturers. "We urge the FAA. to allow maximum use of delegation," Mr. Bahrami told Congress in his new lobbying role, arguing it would help American manufacturers compete. In 201 1', Mr. Bahrami returned to the FAA. as the head of safety. An internal battle at the F.A.A. With Boeing taking more control, FAA engineers found they had little power, even when they did raise concerns. Early on, engineers at the F.A.A. discovered a problem with one of the most important new features of the Max: its engines. The Max, the latest version of the 50-year-old 1'31 featured more fuel-efficient engines, with a larger fan and a high-pressure turbine. But the bigger, more complex engines could do more damage if they broke apart midair. The F.A.A. engineers were particularly concerned about pieces hitting the cables that control the rudder, according to five people with knowledge of the matter and internal agency documents. A cable severed during takeoff would make it difficult for pilots to regain control, potentially bringing down the jet. The F.A.A. engineers suggested a couple solutions, three of the people said. The company could add a second set of cables or install a computerized system for controlling the rudder. Boeing did not want to make a change, according to internal F.A.A. documents reviewed by The Times. A redesign could have caused delays. Company engineers argued that it was unlikely that an engine would break apart and shrapnel would hit the rudder cable. Most of the F.A.A. engineers working on the issue insisted the change was necessary for safety reasons, according to internal agency emails and documents. But their supervisors balked. In a July 2015 meeting, Jeff Duven, who replaced Mr. Bahrami as the head of the F.AA.'s Seattle operation, sided with Boeing, said two current employees at the agency. F.A.A. managers conceded that the Max "does not meet" agency guidelines "for protecting flight controls,\" according to an agency document. But in another document, they added that they had to consider whether any requested changes would interfere with Boeing's timeline. The managers wrote that it would be \"impractical at this late point in the program," for the company to resolve the issue. Mr. Duven at the F.A.A. also said the decision was based on the safety record of the plane. Engineers at the agency were demoralized, the two agency employees said. One engineer submitted an anonymous complaint to an internal F.A.A. safety board, which was reviewed by The Times. "During meetings regarding this issue the cost to Boeing to upgrade the design was discussed,ll the engineer wrote. \"The comment was made that there may be better places for Boeing to spend their safety dollars.\" An F.A.A. panel investigated the complaint. It found managers siding with Boeing had created "an environment of mistrust that hampers the ability of the agency to work effectively," the panel said in a 201 ? report, which was reviewed by The Times. The panel cautioned against allowing Boeing to handle this kind of approval, saying "the company has a vested interest in minimizing costs and schedule impact." By then, the panel's findings were moot. Managers at the agency had already given Boeing the right to approve the cables, and they were installed on the Max. Playing down risks In the middle of the Max's development, two of the most seasoned engineers in the F.A.A.'s Boeing office left. The engineers, who had a combined 50 years of experience, had joined the office at its creation, taking on responsibility for flight control systems, including MCAS. But they both grew frustrated with the work, which they saw as mostly paper pushing, according to two people with knowledge of the staff changes. In their place, the F.A.A. appointed an engineer who had little experience in flight controls, and a new hire who had gotten his master's degree three years earlier. People who worked with the two engineers said they seemed ill-equipped to identify any problems in a complex system like MCAS. And Boeing played down the importance of MCAS from the outset. An early review by the company didn't consider the system risky, and it didn't prompt additional scrutiny from the F.A.A. engineers, according to two agency officials. The review described a system that would activate only in rare situations, when a plane was making a sharp turn at high speeds. The F.A.A. engineers who had been overseeing MCAS never received another safety assessment. As Boeing raced to finish the Max in 2016, agency managers gave the company the power to approve a batch of safety assessments -- some of the most important documents in any certification. They believed the issues were low risk. One of the managers, Julie Alger, delegated the review of MCAS. Previously, the F.A.A. had the final say over the system. The F.A.A. said that decision reflected the consensus of the team. Boeing was in the middle of overhauling MCAS. To help pilots control the plane and avoid a stall, the company allowed MCAS to trigger at low speeds, rather than just at high speeds. The overhauled version would move the stabilizer by as much as 2.5 degrees each time it triggered, significantly pushing down the nose of the plane. The earlier version moved the stabilizer by 0.6 degrees. When company engineers analyzed the change, they figured that the system had not become any riskier, according to two people familiar with Boeing's discussions on the matter. They assumed that pilots would respond to a malfunction in three seconds, quickly bringing the nose of the plane back up. In their view, any problems would be less dangerous at low speeds. So the company never submitted an updated safety assessment of those changes to the agency. In several briefings in 2016, an F.A.A. test pilot learned the details of the system from Boeing. But the two F.A.A. engineers didn't understand that MCAS could move the tail as much as 2.5 degrees, according to two people familiar with their thinking. Under the impression the system was insignificant, officials didn't require Boeing to tell pilots about MCAS. When the company asked to remove mention of MCAS from the pilot's manual, the agency agreed. The F.A.A. also did not mention the software in 30 pages of detailed descriptions noting differences between the Max and the previous iteration of the 737. Days after the Lion Air crash, the agency invited Boeing executives to the F.A.A.'s Seattle headquarters, according to two people with knowledge of the matter. The officials sat incredulous as Boeing executives explained details about the system that they didn't know. In the middle of the conversation, an F.A.A. employee, one of the people said, interrupted to ask a question on the minds of several agency engineers: Why hadn't Boeing updated the safety analysis of a system that had become so dangerous? CAPTION(S): PHOTOS: Boeing's 737 Max fleet is grounded, and it remains unclear when it will fly again. (A1); Boeing Max planes in Renton, Wash., above. The company played down risks of its MCAS software to federal officials. Right, F.A.A. offices in Des Moines, Wash. The way the agency dealt with Boeing is said to have demoralized some of its engineers. (PHOTOGRAPHS BY RUTH FREMSON/THE NEW YORK TIMES); While Ali Bahrami was the Federal Aviation Administration's top official in Seattle, some engineers at the agency believed that he had installed managers who would be deferential to Boeing. (PHOTOGRAPH BY JONATHAN ERNST/BLOOMBERG) (A17) Copyright: COPYRIGHT 2019 The New York Times Company http://www.nytimes.com Source Citation (MLA 9th Edition) Kitroeff, Natalie, et al. "Relaxed F.A.A. Oversight At Root of Boeing's Crisis." New York Times, 28 July 2019, p. A1(L). The New York Times, link.gale.com/apps/doc/A594710725/SPN.SP24?u=mlin_s_masscomm&sid=bookmark-SPN.SP24&xid=9d2aea21. Accessed 24 Sept. 2021. Gale Document Number: GALEIA594710725Congressional Report Faults Boeing on MAX Design, FAA for Lax Oversight WSJ wsj.com/articles/congressional-report-says-max-crashes-stemmed-from-boeings-design-failures-and-lax-faa- oversight-11583519145 By Andy Pasztor March 6, 2020 Boeing Co. BA-3.72%'s engineering mistakes and "culture of concealment," coupled with insufficient federal safety oversight, led to two fatal crashes of the plane maker's 737 MAX aircraft, House investigators said in a report released Friday. The preliminary findings, issued by Democrats on the House Transportation Committee, describe in stark terms the engineering and regulatory lapses revealed in five public hearings over the past year into the design and certification of the MAX, which was grounded around the world last March following a second crash of the passenger jet. The crashes of the Ethiopian Airlines flight and the Lion Air flight five months earlierclaimed a total of 346 lives. The protracted grounding continues as Boeing works on software fixes and develops pilot- training requirements that will win the approval of regulators. Boeing halted the aircraft's production in January. Friday's report details Boeing's determination at various levels-years before the MAX was approved by the Federal Aviation Administration-to avoid putting pilots through costly ground-simulator training. That single-minded goal was evident across Boeing's engineering, marketing and management ranks, according to the report, and resulted in various efforts to mislead or withhold information from FAA officials during the lengthy certification process. Both crashes occurred after pilots failed to counteract a new automated flight-control feature-details of which they didn't know-that misfired to repeatedly and aggressively push down the nose of their aircraft. The 13-page congressional report offers new details about what it described as Boeing's improper conduct related to MAX, including fresh insight into the period during the plane's development and in the weeks after the first crash. In July 2014, three years before the MAX started flying passengers and two years before the FAA made a decision regarding the extent of mandatory pilot training, the report says Boeing issued a press release seemingly predetermining the regulatory process. The company said pilots already flying earlier 737 models "will not require a simulator course to transition to the 737 MAX." According to the report, Boeing made the same pledge to airliner customers, including Ethiopian Airlines. During the plane's development, Boeing successfully argued to remove references to the flight-control system, known as MCAS, from official manuals. As the House committee revealed earlier, the company also went to great lengths to keep FAA officials from scrutinizing and potentially recognizing the hazards of the system, even referring to it by another name. The FAA's oversight effort was "grossly insufficient and...the FAA failed in its duty to identify key safety problems," according to the report. 1/3The FAA said the agency welcomes the scrutiny and the lessons from the two crashes would bolster aviation safety. A Boeing spokesman said, \"We have cooperated extensively for the past year with the committee's investigation; we will review this preliminary report.\" The report offered fresh insight into Boeing's actions after the rst crash in Indonesia. The panel concluded that Boeing continued to minimize the importance of MCASand persisted in deecting the need for additional pilot trainingeven in the wake of the Lion Air crash in October 2018 and stepped- up FAA assessments of the system's hazards. Based on hundreds of thousands of pages of internal documents and other material Boeing turned over to the committee, the report spells out steps Boeing took to defend itself in the weeks after the Lion Air crash. At the time, the report indicates, Boeing maintained that design changes that had made MCAS more powerful complied with all safety rules and requirements. Despite the Lion Air crash and the public outcry it created, Boeing sought to persuade the FAA to downgrade training requirements on MAX jets in general, according to House investigators. Their report says the effort by Boeing came in the face of regulators' warnings that the company's technical evaluation of the issue was at odds with the views of FAA experts. The report reiterates earlier complaints by lawmakers that the Chicago-based aerospace giant was able to exert undue inuence over the FAA, partly because regulators delegated much of their oversight responsibilities to Boeing employees authorized to act on the govemment's behalf. It also detailed examples of FAA managers overruling safety concerns of their own technical experts related to another Boeing airliner, the Boeing 787. The Democratic-controlled House committee intends to continue its probe, but Rep. Peter DeFazio, the Oregon Democrat who chairs the panel, surprised some industry ofcials and prompted blowback from Republican members by opting to release a preliminary report. Coming days before the anniversary of the Ethiopian Airlines MAX crash in March 2019, Democrats hope the material will provide momentum for signicant legislative changes tightening FAA oversight. Rep. DeFazio sought to avoid a partisan rupture during the committee hearings. But hours after the report came out, a pair of senior GOP panel members issued a rebuttal suggesting its conclusions were premature and potentially biased. The Republican statement said other reviews of the FAA's approval process for new aircraft designs haven't concluded the \"system is broken or in need of wholesale dismantlement.\" The minority report said that rather than rushing out a report to meet an articial timeline, \"we need to get this right\" and \"x the problems that need to be xed to make our fundamentally safe system even safer.\" While the document lays out a pattern of Boeing moves \"to obfuscate information about the operation of the aircraft,\" it equally targets the FAA for inadequate safeguards and disjointed internal communications. Even following the Lion Air crash, according to House investigators, the FAA missed red flags that should have alerted it about the extent of Boeing's previous failure to adequately test the combined impact of various sensor and other malfunctions that could result in MCAS activation. Boeing and the FAA quickly agreed the system's software needed a major redesign, though the report indicates FAA officials allowed the plane to keep flying despite multiple prior certification blunders pertaining to the MAX. Separately, in Boeing's latest reported production lapse, the FAA on Friday proposed a $19.7 million penalty against the company for installing unapproved sensors on nearly 800 jetliners, including 173 of its 737 MAX models. The alleged missteps, extending from mid-2015 to the spring of 2019, highlight Boeing failures to comply with its own quality-control rules covering aircraft production. The proposed civil penalty, at the upper end of what regulators could seek based on the number of affected aircraft, also reflects increased FAA scrutiny of Boeing's assembly-line safeguards. Covering more than 600 earlier 737 models, the enforcement case stems from alleged Boeing slip-ups in failing to ensure sensors associated with certain windshield cockpit displays had been approved by regulators for specific applications. The letter to Boeing laying out the details, dated Friday, doesn't indicate any operational safety incidents as a result of the alleged violations. A Boeing spokesman said the company has done a thorough internal review and implemented changes to address the FAA's concerns. Write to Andy Pasztor at andy.pasztor@wsj.com Copyright @2020 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7bicdeb8