Defense Industry-*Focus on aerospace - Essay Example

Analysis of Boeing, Airbus and BAE System Companies. Analysis of Boeing Company (USA) Today, the demand for aviation services is drastically increasing worldwide. With this increasing demand, there is need for products with better technology, which can be tuned to suit the needs of consumers. The defense industry has not been left out in ensuring that it gets the best of these services, from the best of the companies. Boeing in USA, Airbus in France and BAE System in U.K are among the best and widely known companies in the aviation industries.

The three companies have a wide-world reputation for being manufacturers and distributors of defense and security aircrafts, intelligence and network space systems. Boeing Company in the USA has been ranked among the most successful companies, and its defense, space and security unit has been termed a huge success, not just in USA but all over the world (Boeing). It not only operates locally but all through the world. Boeing supplies military and defense systems and aircrafts all over the world (Yahoo Finace).

This company has over 168,000 employees, a figure that shows how wide-spread and diverse its services and products are (Boeing). It attends uniquely to all customers, tailoring their brands to suit what the customer requirements are. The military unit is one that is quite sensitive as the weapons, electronics, logistics and training are not just sensitive, but also require a lot of innovativeness and creativity. The fact that it supplies to a worldwide consumer has made it very successful and has led it to maximize its revenues.

Regarding the company’s corporate governance, the management and the stakeholders are keen in ensuring that the company grows on a positive scale every day. With this in mind, business regarding the company is considered to be successful due to the involvement of employees, managers, a corporate officers group, all this functioning under the oversight of a Board of Governors in the company (Boeing). The governance Board and a nominating committee frequently engage in reviewing the principles and the practices put in place, monitoring the rate of development and growth.

This makes it easy for the company to remain focused and growth oriented. The company is also responsible in ensuring that the concerns of the people in the society, customers and employees are addressed. In addition, Boeing Company has a code of ethics drawn up which stipulates how all the people are to conduct themselves (Boeing).This code of conduct guide also directs the company in addressing any changes with regards to ethical issues, an important aspect in corporate governance, as Starbuck, notes (Starbuck, 18).

The code of conduct therefore helps in promoting a culture of honesty, transparency responsibility. It has a diverse and inclusion culture where its employees are drawn from all over the world. How effective is this style of governance? Has it promoted or hindered the growth and development of the company? It can be concluded that this form of governance in the company has been largely effective and has greatly aided the growth of this company. The oversight committee has ensured that transparency, accountability and responsibility have been upheld by all people in the company.

The aspect of diversity and inclusion has promoted the growth and development of society by including employees from all over. This has in turn given a chance for creativity and innovation to be developed through inclusion of the employees ideas. It efficiency and timely delivery has seen it being considered for huge contracts from different companies and countries (Boeing). We can therefore conclude that the corporate governance of Boeing Company has been beneficial and effective. Analysis of BAE System (U.K) This multinational defense and aerospace company has been recorded to be one of the world’s largest contractors of defense equipment.

The 2013 records indicate that it held the second position (BAE Systems). In U.K, which can be termed as its local home, the company is ranked the first in defense and security contracts. BAE Systems, due to its expansive operations and increased productivity has seen the growth of its employee number to over 89,000 (BAE Systems). The company does not serve its local or home environs only. It has a worldwide customer base. Some of its key markets include Australia, Saudi Arabia, The U.K and the United States of America (BAE Systems).

The success of this company can be reflected by its revenues that have been increasing yearly, and currently stands at $ 18.18 billion (Yahoo Finance; BAE Systems). This shows that it is way ahead in its operations and in securing contracts from all over. Compared to Boeing Company, BAE System has a higher regional cover and serves a wider customer volume. This has further led to an increase in its demand from many different countries for defense, security and aviation services. BAE Systems’ corporate governance is almost similar to that of Boeing Company.

One of the key values promoted and campaigned for in this company is good working relationships, whether it is between the employees and the managers, the managers and fellow managers or even between the BAE company and the government (BAE Systems). This is the value that determines its mode of operations as they believe that harmony among people leads to harmonized high quality products and services. The company is led by a chairman who serves beside two executive directors. In addition, it also has a group of non-executive directors who play a huge role in overseeing the operations of the company.

The chairman and the two executive directors are a symbol authority and are bestowed with the responsibility to make major decisions in the company (BAE Systems). Just like Boeing Company, BAE Systems has a culture of diversity and inclusion when selecting its employees. They are selected from all over the countries where BAE Systems have their operations extended to. The employees are treated as the greatest asset to the company and apart from being expected to treat each other with respect; they are expected to deliver their best, and to forward any creative and innovative ideas that might be of importance to the company.

This has contributed greatly to the growth and development of this multinational company. In addition, in the countries where this company has set up bases of operation, there are leaders who are selected and who answer to the superiors in the headquarters. If the yearly revenue records of the company are anything to go by, this mode of governance has been effective and has promoted the development of the company. The fact that there are people to whom one is answerable to greatly promotes accountability and responsibility as Starbuck advises (17).

All the people, including the employees, aim to do their best to ensure that the products and services are of high quality and the customers remain satisfied. This mode of governance has also established clear communication and this has further promoted its success. Analysis of Airbus (France) Just like the two companies discussed above, this France based company has customers spread all over the world. This company serves a smaller worldwide region as compared to Boeing and BAE Systems in the U.K. There is a very austere competition that has been going on between Boeing and Airbus, but Boeing has stood out a notch higher than Airbus.

Whereas its main market is in France, it also supplies its products and services to other countries and regions such as USA among others. Its military and defense equipment have been on demand due to their high quality and a loyalty from its customers. The diversity and expansion of its operations can be seen from the big number of customers, who total to about 143, 600 (Airbus). The recently formed Airbus Defense and space unit is also experiencing massive growth. Its corporate governance is slightly different from that of Boeing and BAE Systems in the U.K. it greatly promotes an internal corporate mechanism as opposed to the external mechanism in the two companies discussed above.

In the countries where it has already established operations, Airbus has an executive committee which is usually appointed by a board of directors (Airbus). This executive committee sees to the performance and activities of the company. In addition, the company has a set of six independent directors, 6 executive directors and also has its employees represented by 6 representatives (Airbus). A safety committee and a chairman are also included in the governance of this company. This ensures that all the operations of the company are not disrupted and that the needs of the employees are addressed.

The company also ensures that there is minimal external influence on its operations and this also promotes a smooth functioning. This mode of corporate governance is also effective. The fact that the employees are represented sees to it that their needs are addressed and hence, disruption arising in companies due to wrangles and dissatisfaction of employees is minimal (Starbuck, 19). Internal mechanism of corporate governance, however, has been termed as ineffective by scholars. Some argue that there is less accountability and responsibility due to the lack of external regulators and auditors (Starbuck, 19).

However, for Airbus, the internal mechanism has greatly promoted its growth. Works cited Airbus.com. Company Profile. Www.Airbus.com. 28th April 2014. Web. 28th April 2014. BAE Systems. Company Profile. Www.basesystem.com. 28th April 2014. Web. 28th April 2014. Boeing.com. The Boeing Company. Www.boeing.com. 28th April 2014. Web. 28th April 2014. Starbuck, William. Why corporate governance deserves a serious and creative thought. Academy of Management Perspectives, 28 (1), 15-21. 2014. Print.

Yahoo Finance. The Boeing Company. Yahoo Finance. 28th April 2014. Web. 28th April 2014.