Boeing Case Analysis

1. What is the case all about? (Briefly summarize it)

A shocking news article was released in March 2005 stating that the Boeing Company's board of directors asked for and received the resignation of the company's CEO, Harry Stonecipher, because of his romantic relationship with a female executive.

The board has agreed that this is not a direct violation of the company's code of conduct and the relationship was consensual and was proved that the lady hasn't taken any advantage of the CEO's position to raise her career or benefits. However, "the board concluded that the facts reflected poorly on Harry's judgment and would impair his ability to lead the company."

2. What are the strategic management issues that are raised in the case?

This case has raised three issues of strategic management:

a) Corporate Governance:

The case focuses directly on the BOD relationship with the CEO and indirectly with other stakeholders. The BOD has replaced the prior CEO with Stonecipher in order to improve the company's position after the scandal and fired Stonecipher because of his breach of the company's code of conduct. These two actions by the board enhance the company's reputation and image in the stakeholder's mind which raise their trust and confidence to invest in the company.

b) Social Responsibility:

First, the CEO has practiced an unethical action by having this romantic affair that would affect the company's ethical culture negatively.

Second, the CEO has breached the company's code of conduct and the BOD has followed the rules and procedures that should be applied with any other employee of any level at the company. This means that employees are all equal.

c) Executive Leadership:

The case clearly shows that during stonecipher's employment at Boeing, the company has witnessed many improvements; the company's stock price rose 53.4% and a 20-month suspension of three business units was resolved. This positive change is an obvious evidence...