Analysis of engineering management characteristics employed in the defense industry

Abstract

An analysis of the engineering management characteristics present in companies in the defense industry was performed. These aspects include the organization characteristics of structure, hierarchy, and standards and procedures, as well as various features of company culture. This study revealed that the companies that make up most of the defense industry, Raytheon, Lockheed Martin, Boeing, and Northrop Grumman, have very similar organization characteristics. They mostly use a matrix structure to run their businesses. They exhibit group relationships, employ an intermediate degree of centralization, and issue a decreasing span of control with increasing power. Moreover, they follow the Department of Defense Acquisition Model, apply engineering management consistent with military standards, and use Capability Maturity Model Integration. However, defense companies are set apart by their cultures. Raytheon has the culture that is most conducive to running a successful company. It places a strong emphasis on its Six Sigma management philosophy, which is a major driving force for the whole organization's operations. Its culture also includes a great value placed on training and graduate education, a confident and customer-focused attitude, and a high regard for ethics. This has led it to have a net income per employee of $23,000 in 2008, the highest out of all four contractors. It also has the highest gross profit margin and revenue growth. While Lockheed Martin, Boeing, and Northrop Grumman also exhibit positive company culture traits, they do not measure up to Raytheon's. The differences in culture have influenced each company's position in the market.