Boeing Company Using the McKinsey 7s Model

BOEING

This paper is an analysis of the Boeing Company using the McKinsey 7S Model. Boeing is the largest manufacturer of military and commercial aircraft in the world (Boeing, 2015). A wide range of products has helped Boeing to become one of the most powerful companies in the world. In 2015 Boeing was ranked by Forbes Magazine as the 82nd most valuable brand in the world with a market cap of $105.6 billion dollars (Forbes, 2015).

This paper will analyze the commercial aircraft segment of the Boeing Company using the McKinsey 7S Model. Each element of the 7S Model will be examined as it pertains to the Boeing Company, from Executive management to the outsourcing of work to other countries. Data relationship and justification of the model will be included.

ANALYSIS

The McKinsey 7S Model basically says that organizations need to look at more than the structure of an organizations change. One also must look at the framework which includes many factors. The 7S Model uses seven different elements in its model: Strategy, Structure, Systems, Style, Shared Values, Staff, and Skills.

Strategy: The strategy of the Boeing Company was to down size their local (US) operations, and to move many of their operations out of the country to save on manufacturing costs. In one instance the outsourcing of the Boeing 787 was intended to reduce the development time from six years to four, and save development costs from ten to six billion dollars (Forbes, 2015).

Structure: The Boeing Company has long been involved with commercial and military contracts. This has put a stranglehold on the executive management of the company as it has had to fight through a lot of bureaucratic red tape.

Systems: Boeing has moved forward and is now developing new aircraft that generate profits for the company by the value it is giving its customers (Boeing, 2015). By outsourcing to other countries, Boeing has effectively lowered its production price and can pass those savings (still at a profit) to its customers.

Style: Many years ago the Boeing Company decided that to bring stability to its company it needed to diversify. This diversification came by moving into the Defense, Space and Security sectors. Boeing Capital Corporation is a financial solutions company that works with the Defense, Space and Security sector (Boeing, 2015).

Shared Values: This is the one aspect of the McKinsey 7S Model that is difficult to measure within the Boeing Company. The values of making a profit while keeping the employees happy. There is no doubt that the Boeing Company is a very profitable company and that their employees are well compensated. Boeing’s CEO last year made $29 Million dollars (Seattle times, 2015) and the employees are considered some of the highest paid