Lockheed Martin - Management Theories

Management Theories

Along with the Board, the CEO, COO and CFO lead Lockheed Martin and provide oversight of the corporation These executives sit at corporate headquarters and oversee Executive Vice Presidents (EVP) of four business areas. These EVPs are responsible for managing its major programs. Lockheed Martin separates its employees based on their assigned program. Each program uses an integrated product development model to organize its employees into four tiers: Tier1 –Program Manager/VP, Tier2-Functional Teams, Tier3-Integrated Product Teams (IPTs), and Tier4-detailed product development. The floor or touch workers are in a particular component assembly team that culminates in the final deliverable product. Lockheed Martin manages and maintains its relationship with these touch workers through its supervisors and unions. Having a well-defined hierarchy and a strong union presence exemplifies Richard Edwards’ bureaucratic and technical control in Lockheed Martin management practices.

Across the entire corporation, Lockheed Martin manages their employees through its Full Spectrum Leadership and LM21 programs. LM21 program relies on 6 Sigma principles, which are techniques to improve efficiency. Senior management makes up leadership excellence councils and assigns 6 Sigma Black Belts to facilitate Kaizen events, which target specific processes for improvement. A 6 Sigma Black Belt facilitates teams and processes stakeholders and suppliers to streamline process implementation, which has effectively maintained product quality while constraining cost and promoting creativity and career growth. Involving all levels of employees, the team aspect of Kaizen events to continually improve efficiency, helps employees feel more valued which parallels both Human Relations School and Human Commitment theory. Employees can satisfy the need for “emotional release” by providing their inputs similar to Mayo’s research on employees’ interviews. Kaizen events and the changing of processes based on teams’ input increase efficiency and improve worker commitment as they feel they have influence over their job. At Tier1, the program managers are responsible for the execution of the entire program: contract award, design, build delivery and post delivery sustainment. They work with a variety of customers on multiple contracts including end item delivery, design enhancements, support and training.

Tier2 Functional Leads (Finance, Chief Engineer, Quality, Operations, etc.) and Tier3 IPT Leads (Weapon System Development, Weapon System Integration, etc.) report to Tier1. Functional leads ensure appropriate resources are provided to programs. IPT leads are responsible for entire systems or products defined by the contract’s Statement of Work.

At Tier3, management separates employees into different lower level IPTs that are responsible for a subset of the Tier2 requirements. For example, the Tier3 Software Engineering IPT resides under Tier2 Weapon System Development. Tier3 IPTs develop major components under the Tier2 team management. IPT Leads oversee daily performance of the multi-functional IPTs. Engineers reside within the IPTs. Across the integrated product teams tasks such as quality assurance, subcontract, manufacturing and design are performed. To control quality, Lockheed Martin trains and builds IPT teams. Lockheed Martin ensures that work is executed correctly through a Technical Performance Measure (TPM) system which emphasizes Lockheed Martin’s Lean and 6 Sigma processes. Lockheed Martin middle management uses commitment mechanisms that parallel high commitment and human relations theory. Also, access to different levels of training allows IPT members to remain committed as outlined in the Human Commitment theory. Floor employees assemble aircraft by major parts, by Flow-to-takt lean manufacturing implementation process which uses properties from both division of labor and scientific management. By separating tasks based on parts, Lockheed Martin utilizes the division of labor theory, specialization on a specific area creates efficiency.