functionalanalysisofbusiness_aylorbonnie_finalpaper_unit10a1

MAINTAINING BOUNDARIES DURING IMPROVEMENT

A Functional Analysis of Lockheed Martin Corporation

By: Bonnie Aylor 2030815

For: BMGT8006 / Fall 2014 / Dr. Tracy Elazier / Unit10a1

Maintaining Boundaries - By Bonnie Aylor Thursday, December 18, 2014 Page 1 of 22

Table of Contents

Abstract ............................................................................................................................... 2

Introduction ......................................................................................................................... 3

What is Lockheed Martin? .................................................................................................. 3

What Does Lockheed Martin Do ........................................................................................ 4

Functional Units inside Lockheed Martin ........................................................................... 4

How do Functional Areas Interact and Communicate .................................................... 6

Classical Management System ....................................................................................... 7

Psychic Prison ................................................................................................................. 8

Current Trends and Best Practices ...................................................................................... 9

External Knowledge Integration ..................................................................................... 9

Communities of Practice ............................................................................................... 10

Digital Innovations........................................................................................................ 11

Other Trends ................................................................................................................. 13

Improving Business Performance at Lockheed Martin .................................................... 13

Integrating Communities of Practice ............................................................................ 13

Effect on External Knowledge Integration ................................................................... 14

Research and Development vs Communities of Practice ............................................. 16

Integrating Other Trends ............................................................................................... 16

Conclusion ........................................................................................................................ 17

References ......................................................................................................................... 19


Abstract

Lockheed Martin is a top aerospace and information technologies firm among

engineering industries (Lockheed, 2014). The company provides services to a range of clientele,

including local and international governments, military defense programs and common

consumers (Lockheed, What, 2014). The company has one set of business units that produce

specific products and services per unit, while maintaining an entirely different set of functional

departments that hold horizontal positions among geographically separated business units

(Lockheed, Career, 2014). While communication between these units may not be ideal, there are

still specific events and activities within the organizations that encourages minimal levels of

communications.

Current trends in the aerospace industry lean towards the integrations of knowledge

through external communications (Carolla et’al, 2012) as well as internal communities of

practice (Wolf et’al, 2011). These knowledge integration system could be implemented properly

to increase the efficiency of digital innovations among dominant designs (Hylving, 2012), such

as airplanes, spacecraft and missiles. Knowledge integration could also assist with the smooth

flow of sustainability practices, compliance audits, best practice materials locations, lean

processes and just in time delivery, and component security systems (Gao et’al, 2014; Wong,

2013). With the proper boundaries structures in place, Lockheed Martin could benefit from

technologically integrated communities of practice in order to enhance internal knowledge

sharing practices.


Introduction

Lockheed Martin is one of the top engineering firms across the globe (Lockheed, Who,

2014). The company works to provide aerospace and missile defense products to the defense

system. They also work on research and design of technological information products,

nanotechnology, space crafts, some vehicles and other related products servicing multiple sectors

(Lockheed, What, 2014). This paper discusses who Lockheed Martin is, what the company

accomplishes, and what types of functional structures are implemented at the company.

Furthermore, some current trends in functional systems are introduced with a slight discussion

about how these trends could be integrated into the business of Lockheed Martin to improve

processes. Finally, the paper ends with a statement of new procedures that could be implemented

at Lockheed Martin to improve upon current business management functions. The company will

benefit from the implementation of communities of practice within its internal foundations that

can implement automatic information sharing for audit data, new technologies, best practices,

and other integral process design systems, to be shared across global functional units in order to

increase factors of competition within the organization.

What is Lockheed Martin?

Lockheed Martin operates many diverse engineering businesses in multiple geographic

locations that allow the company to provide a broad array of services to the company’s clientele.

The company is an aerospace and securities firm that specializes in five major areas of the field:

aeronautics, information systems and global solutions, missiles and fire control, mission systems

and training, and space systems (Lockheed, Who, 2014). The company has clientele in the

United States Government, mostly the defense system, international governments, and some

commercial consumer sectors (Lockheed Martin, 2014). Lockheed Martin operates service,

manufacturing, and research and design branches all over the world. In 2013, the company


maintained sales of $45.4 billion USD on the New York Stock Exchange (Lockheed, Who,

2014), indicating that Lockheed Martin has gained enough market strength to be able to handle

market flux while operating a healthy portfolio of products and services that will last through

market turbulence.

What Does Lockheed Martin Do

Lockheed Martin provides a large variety of products and services to its clientele. The

company categorizes its functions under five general business areas: aerospace and defense,

information and technology, space, emerging technologies, and contract vehicles and GSA

schedules (Lockheed, What, 2014). In the aerospace and defense sector Lockheed produces

products and services related to aircraft, tactile vehicles, missiles, sensors, security, and other

technologies that are used in defense systems. The information technologies business unit

produces products and services in data analytics and cyber security for a number of different

industries. The space business unit works with space technologies, space exploration and human

space transportation. Lockheed operates an emerging technologies business unit that works to

innovate new products geared towards leading the future in their industry sector. Finally,

Lockheed Martin operates an independent business unit for organizing, tracking and scheduling

eligible contracts related to the company’s products and services (Lockheed, What, 2014). As

evidenced by these varied types of businesses operated by Lockheed Martin, it can be concluded

that Lockheed Martin provides engineering, research and design, and flight maintenance services

for various organizations in the government, defense and commercial markets.

Functional Units inside Lockheed Martin

Even though Lockheed Martin operates specialized business units related to specific

products and services, functional areas are arranged under a completely different organization

through human resources (Lockheed, Career, 2014). These different functional units are re-


arranged so that they also become categories within the business unit each member of a

functional department provides labor for. Functional areas maintain a horizontal categorization

structure as companywide departments that transcend the boundaries of each business unit, while

their placement within business units allows for organization of labor at each separate location.

The functional units are specified as such: aeronautical engineering, business development,

communications, contracts, electrical engineering, energy, environment, safety and health,

facility's, administration and support, finance and business operations, human resources,

information technologies, intelligence analysis, legal; mechanical engineering, operations and

production, quality, science, research and development, security, skilled labor and technicians,

software engineering, supply chain operations, and systems engineering (Lockheed, Career,

2014). There are many different types of functions that provide opportunities for employment at

Lockheed Martin.

While these functional areas are arranged as individual departments for human resources

purposes, individual employee’s placement into separate business units creates large barriers

between the different employees of each functional area (Morgan, 2006; Levin & Gottlieb,

2009). This psychological barrier can be attributed to the fact that each separate business unit

operates in its own individual geographical location (Lockheed, Career, 2014). The separate

product or service area at each location creates a situation such that while each employee is

maintaining duties related to the same type of work, the actual outlet for doing work is different

between each unit (Levin & Gottlieb, 2009; Lockheed, Career, 2014). This means that

employees in each department have individual specializations and can only find common ground

among best practices.


Each separate Lockheed Martin location operates according to a distinct scope of

responsibility for units and functions at specific locations. This distinction creates a separation

of duties between employees in each department, and allows the company to secure information

for each project to only those involved in the tasks required to fill out the project. For instance,

the Cape Canaveral unit specializes in space systems and is the main location offering

employment for mechanical engineering student researchers (Lockheed, Career, 2014). While

the students aren't able to work directly on aircraft and defense systems projects, they are able to

gain the basic concepts associated with flight, flight command and large rocket vessels for future

integration into the defense systems designs produced by the company. Communication of new

research and design specifications between employees of the same functional area proves to be

complicated due to the geographical boundaries of different business units. However, the

company operates liaison positions that allow trusted employees to communicate integral

information from one department to another between units to make sure processes run smoothly

(Lockheed, Career, 2014). Through separation of products and services and placement of

employees in distinct locations, and with the assistance of liaison communication, Lockheed

Martin is able to sufficiently reinforce a general scope of duties among employees of different

specialties.

How do Functional Areas Interact and Communicate

Security of information is a top concern at an engineering firm like Lockheed Martin.

Lockheed competes in the industry by maintaining a unique quality of products and services,

implementing design processes in competitive time frames (Lockheed, 2014). In order to stay

competitive, process, design, and consumer data need to be kept confidential from contender

organizations. The company also has to stay confidential regarding defense mechanisms sold

between regions maintaining separate military forces. Confidentiality is partly accomplished


through the operation of business units within the organizations that the products and services are

being delivered to (Lockheed, 2014; O’Conner, 1999). This way, services that are provided on

the products delivered to client facilities are kept completely separate from manufacturing and

design processes, and clients aren’t able to find out anything about the company’s proprietary

data except the information required for products to be kept in good maintenance. This system is

further backed by the use of liaison engineers that go between the main office and client hosted

offices to share information that is pertinent only to the part of the project being administered at

the client hosted office (Lockheed, Careers, 2014; Metcalf, 2014). Normally, the administered

services at client locations are related to product set up, safety and maintenance (Lockheed,

Career, 2014). This separation of duties between Lockheed Martin facilities and that conducted

at client facilities provides a level of information security that also reinforces the need for quality

in client focused customer service.

Classical Management System

Although this business structure may appear bureaucratic (Morgan, 2006), the fact that

the organization utilizes student researchers, liaisons, and clear communication with client

organizations shows that there is some integration between departments, allowing for a more

flexible structure with some room for the sharing of knowledge within the organization (Gao

et’al, 2014; Zhuo & Li, 2012). The company displays signs of the classical management

organization as in its ability to use strong boundaries of communication between departments

with an apparent hierarchical type structure, yet still integrate some information sharing and

collaboration between functions - while the company does not operate as a tight bureaucracy, it

still operates tight boundaries of communication between employees (Morgan, 2006). Lockheed

Martin also displays some techniques from Morgan's (2006) brain metaphor, which focuses on

the idea of knowledge sharing throughout organizations where knowledge may transcend


through different functional areas according to different ways of seeing the system as a whole.

The company exercises a comprehensive system of knowledge integration throughout the

organization.

This knowledge integration can be evidenced through some basic practices operated

within Lockheed Martin. While most of the individual business units are kept separate from one

another, tools, products, and processes from one unit may be carried over to another to enhance

product design or create more efficient outcomes. Each year Lockheed engages in an annual

open house where employees set up stations for other employees and their families to gain a

small knowledge of what each department does (Lockheed, Employee, 2014). These stations

provide knowledge of tools, work atmosphere, work techniques, and safety measures across

different departments. Sometimes, employees are also able to share information about best

practices (Lockheed, Employee, 2014). This information sharing is clear evidence of knowledge

integration practices.

Psychic Prison

Lockheed Martin can also be compared to the psychic prison metaphor, which looks at

psychoanalytic barriers to change that create natural groupings within an organization so that

boundaries are formed internally rather than just through physical associations (Morgan, 2006).

In other words, the company is able to effectively create impressed boundaries between

employees, outside of the physical boundaries expressed at each specific geographical location

(Carr & Lapp, 2009). Boundaries among groups are reinforced through similar intelligences,

tasks, behaviors, and symbolisms (Manfred & Kets, 2001). Although each business unit is

separate by a geographical boundary, employees are hired under business functions, called work

areas, which transcend those business unit boundaries (Cudwig & Cilliers, 2011). Benefits,

uniforms, employee engagement, training, and other such practices are grouped by those


functional areas rather than by the business unit itself (Allcorn & Godkin, 2011; Lockheed,

Career, 2014). The only difference between the individual employees of each functional

department is the product that they are working on.

Internal boundaries are reinforced a second time by a global lack of knowledge towards

products and services of other business units, drawing a specific kind of togetherness into the

practices of the individual business unit (Cudwig & Cilliers, 2011; Manfred & Kets, 2001).

Effected employees have to wait until annual open house meetings to integrate knowledge within

functions (Lockheed, Employee, 2014). Practices within the business units reinforce loyalty

amongst employees of those individual units and between immediate local functional

departments. There are solid functions related to safety and planning that require each employee

of a single business unit to take circular shifts in which they lay aside regular duties to operate

that specific need during their allocated block of time, sharing that block of time with other

employees of varying functional areas (Lockheed, Leadership, 2014). Boundaries and cultures

are mixed during times of high risk, and internal feelings of security maintain the desire to

withhold unrelated knowledge until scheduled times for sharing allowed intelligences (Carr &

Lapp, 2009). Through the structure of practices at Lockheed Martin, employees are trained to

maintain loyalty to one another within their units while also maintaining barriers regarding their

specific work functions.

Current Trends and Best Practices

External Knowledge Integration

There are a few current trends in business functions that can be useful to a working

aerospace engineering organization like Lockheed Martin. First of all, businesses are

increasingly utilizing knowledge integration through external contacts (Caroll et’al, 2012) as

well as internal communications (Wolf et’al, 2011). In the external knowledge integration


environment, a major concern is in the management of information security. Businesses have to

decide how much and what type of knowledge is going to be shared through external partners

during shared projects (Caroll et’al, 2012). When deciding information sharing techniques,

businesses also have to decide how employees operating in the external platform are to access

proprietary knowledge without sharing information that reaches across company boundaries

(Diamond, 2013). Methods are utilized such as technology boundaries, passwords, employee

codes, functional codes, and information codes (Caroll et’al, 2012). This coding allows

information technologies to be operated in an external atmosphere while still reinforcing

boundaries of the company regarding information sharing among its employees (Diamond,

2013).

Communities of Practice

A second trend deals with the sharing of knowledge through internal communications

among different business units. Trends in internal knowledge sharing can be attributed to many

different areas of employment management (Zhuo et’al, 2012). One common trend that looks to

integrate numerous aspects of internal knowledge integration is that of Communities of Practice

(Wolf et’al, 2011). Communities of Practice are groups of employees that operate the same sort

of function within an organization that periodically meet to go over shared best practices. They

also might utilize a regularly disseminated newspaper to talk about current events related to that

function, changes in company policy, and information about efficiency measures or recent best

practices shared by other employees (Wolf et’al, 2011). Sometimes these communities will also

share practices from outside organizations that might be useful for internal processes. Many

times they will operate an intranet system so that information remains up to date, also allowing

for information databases to be globally updated (Gao et’al, 2014). These communities work

together to share integral information that could enhance the prosperity of the firm.


When managed properly, these communities of practice can enhance the formation of

boundaries, reinforcing current boundary structures within organizations. When engaged in the

communities, mployees are stepping away from their business unit isolation and communicating

through corporate horizontal departments to share integral information related to the enhanced

success of the organization (Morgan, 2006). Research conducted by Wolf et’al (2011) showed

that the best performing communities of practice required flexible boundaries, sharing of best

practices, active participation by all employees, ability of such communities to participate in

decision-making practices, a fun, engaging atmosphere, and the ability to network with external

communities of practice to share ideas about how to integrate internally. Manfred & Kets (2001)

mention these characteristics as integral parts of the group boundary forming process, especially

during times of change. These characteristics could create a new attractor system and allow

knowledge communities to form as non-interrupting groups that continuously evolve with new

information.

Digital Innovations

A third trend related to functional designs within aerospace industry engineering firms is

that of the integration of digital innovations within dominant designs (Hylving et’al, 2012).

Dominant designs are like the airplane structures that are generally updated every five years, or

at least annually. However, digital innovations are more like computerized systems that are

easily programmable, and reprogrammable via computer interactions (Hylving et’al, 2012),

making them more flexible for the quick integration of new designs. The main management

issue within this function deals with the need to have different identifying parts numbers for even

the smallest variation - such as signal color from reprogramming of a digital device. Sometimes

these small changes will even require different identifying marks on the products themselves in

order to specify one product from another (Hylving et’al, 2012). This means that for each small


change in signal coloring, there will need to be new catalogs printed and new updates to

marketing information systems and other data collections systems within the firm.

Another complication of the digital innovation relates to the fact that the varying pretexts

also require the use of different specifications data, resulting in separate marketing data that

effect project development decisions. Some small changes have to be accompanied by changes

in the color of the body of the product in order to match the change, or the use of varied decals

that indicate the differences from one product color to the next. All of these special

customizations can be time consuming and the new innovation turns out less efficient than

originally planned (Hylving et’al, 2012). Digital function management systems are required to

ensure that digital innovations can keep up with market pace without causing systematic chaos or

price barriers (Gao et’al, 2014). Otherwise, integration of all of the extra processes required to

accommodate that small change could cause the actual production to slow, which would decrease

its profitability.

Digital function management systems allow for automation of the procedures required to

integrate digital innovations, simplifying the process for all involved. These systems allow for

more efficient temporal processes in changing fonts, languages, and colors for global innovations

(Hylving et’al, 2012). They also allow for tracking of different practices so that decision-making

processes run smoother and don't unintentionally intermix between separate similar projects

(Gao et’al, 2014). Engineers can use this information to determine global product trends in order

to enhance their creativity towards local project designs (Zhuo & Li, 2012). Many systems are

designed so that when digital innovations occur, employees can be immediately updated on

features of the new design that could affect their work flow (Hylving et’al, 2012). In the age of


digital innovations, these digital management systems have become an integral part of the

product innovation practice.

Other Trends

There are a few other recent trends related to aerospace industry management systems,

however internal and external knowledge integration and digital innovations systems have to be

integrated first in order for these other trends to process smoothly. Other trends include the

newest versions of lean process designs, including just in time delivery of supplies and goods

(Dostaler, 2013). Also, materials innovations - including attempts to reduce the weight of

materials, and the creation of longer lasting materials with productive end-life (Aerospace, 2011;

Bromsgrove, 2012). A common trend across all industries concerns the use of sustainable

business practices (Wong, 2013). Finally, the integration of security among all business

practices, even driving systems such as electrical grids and automatic machine moderator

systems, has become a multi-industry best practice (Lazo & Secundo, 2012). With the proper

system in place to manage smooth processing of these trends, integration of these trends into

common business practices would be an asset to any aerospace organization dealing in the

competitive market of aerospace products engineering.

Improving Business Performance at Lockheed Martin

Integrating Communities of Practice

In light of recent business trends, there are steps that Lockheed Martin could take to

remain more competitive. In order to more effectively discuss these integrative practices, first it

is important to look at Lockheed Martin’s current involvement with these recent trends.

Although the company does not currently operate communities of practice on a large scale

(Lockheed, Career, 2014), there are some similar practices within the organization. During

annual employee festivals, employees of different divisional practices within various business

units have to interact as a small community in order to plan and design for displays (Lockheed,


Employee, 2014). This includes collaborating knowledge from experience, communicating and

making decisions together, and then sharing knowledge with other areas of practice at the actual

event (Wolf et’al, 2011). The sort of knowledge sharing found as functional groups join together

in preparation of displaying at these festivals is similar in design to communities of practice.

Expanding a program like the employee festival would require minimal effort among

company personnel. The only set back would fall in line with the current boundary structure

enacted through Lockheed Martin that ensures the security of information (Allcorn & Godkin,

2013; Lockheed, Leadership, 2014). Engaging in regular meetings and other knowledge sharing

practices within the internal organization might produce a shift in the attractor system related to

information clearance dynamics (Burnes, 2005; Carr & Lapp, 2009). Employees may become

more distant with their separate business units and become engrossed within the horizontal

function. The company would need to integrate new types of boundaries that would reinforce

the current level of attraction towards classification of specific information (Manfred & Kets,

2001). One way to do this is to exercise edge of chaos methods related to the consumption of

that information by requiring supervisor permission for access to certain knowledge programs

(Burnes, 2005; Kay, 2001). Employees would feel insecure about their permissions to join the

information sharing system, unless they complied with company policies already in practice.

With the right management structure in place, current employee engagement features already set

the basic foundation for implementation of communities of practice.

Effect on External Knowledge Integration

The integration of communities of practice could cause an effect on the structure of

communications with external partners. This phenomenon is similar to the idea of autopieosis

mentioned by Kay (2001) in which an action placed towards A will have an equal effect on B, C

and D occurring in the same temporal region. In other words, a change in one system will cause


an equal change in all systems at the same time. Lockheed Martin currently works in various

ways with many external partners for the design of new products (Lockheed, 2014). They work

in external business units in order to integrate products into client facilities, training them in

proper use, maintenance, and safety practices (Lockheed, Career, 2014). For the fulfillment of

ongoing contracts, business units become permanent structures within the external organization.

This allows Lockheed to keep product design practices and manufacturing practices separate

from testing and product maintenance (Santos & Eiswenhardt, 2005). This level of information

security is enhanced by the fact that Lockheed is constantly updating their data analysis and

security systems as new practices are developed through company R&D functions (Lockheed,

What, 2014). An effect like autpieosis on external practices could be detrimental to these

organizational structures, effecting competitiveness levels related to the confidentiality of

information.

While Lockheed Martin currently practices superior information security functions, some

of the systems may undergo change if the company integrates activities such as internal

communities of practice (Kay, 2001). Much of the company's information security systems

exercised during contracts with external partners were originally practiced as systems governing

internal processes (Lockheed, Career, 2014). Shifts in the internal structure of knowledge sharing

may transform management views of information sharing, eventually effecting external

processes (Cacciope & Edwards, 2005). This reinforces the need for edge of chaos practices

(Morgan, 2006) during implementation of communities of practice procedures so that

information sharing attitudes do not foster the sharing of information beyond already established

boundaries. Lockheed will need to use these internal security systems to safeguard sensitive data

about practices, procedures, and new design innovations.


Research and Development vs Communities of Practice

One other important consideration regarding the development of communities of practice

within a firm such as Lockheed Martin has to do with Lockheed’s categorical isolation of the

research and development processes from all other processes (Lockheed, Career, 2014). Many

times the community of practice structure is used to enhance design creativity within functions

using the various techniques that are shared (Wolf et’al. 2011). Since Lockheed Martin has an

independent research and design unit, the company will need to place boundaries within the

knowledge sharing structure so that such creativity is practiced only within the research and

design unit (Gao et’al, 2014). Knowledge sharing should not encourage creative design practices

amongst employees designated for integrating the new designs into product creation.

Communities of practice boundaries should be formed such that the focus is geared more

towards best practices within different functional areas, rather than technological specifications

or resource capabilities - except when working to achieve process efficiency.

Integrating Other Trends

The other emerging trends are already a common part of the work performed by

Lockheed Martin during their research and design process (Lockheed, What, 2014). Once

knowledge communities are formed within the internal organization, digital innovations will

display a much smoother level of integration because employees will have more familiarity using

the information systems required to maintain them (Wolf et’al, 2011; Wong, 2013). Information

security is always at the forefront of program planning at Lockheed Martin (What, 2014) and can

be used to maintain boundaries within the knowledge integration database. Management of

communities of practice will create a knowledge base that could enhance the efficiency of

compliance audit processes without compromising information security systems (Wong, 2013).

This is because knowledge will be collaborated throughout functional areas and practices related


to the compliance audits will have a level of automation of information sharing during

monitoring and control processes. With these sorts of knowledge sharing programs, the location

of best practice materials will be optimized among all business units (Zhuo & Li, 2012). This is

because there will be a knowledge base of information showing what materials generated results

that provided efficient outcomes. Knowledge sharing and digital innovation management

systems are important practices for maintaining the competitiveness of the engineering firm.

These two practices will help to enhance the performance of the other emerging trends as they

are utilized in Lockheed Martin’s design process.

Conclusion

Lockheed Martin is one of the most popular aerospace and technology corporations,

holding 52nd place among Fortune Magazine's top 300 firms (Lockheed, Who, 2014). The

company's first priority, beyond new innovation and customer interface, deals with information

security (Lockheed, 2014). This focus creates an atmosphere inside of the organization in which

business units are geographically separated and employees are bounded to specific departmental

areas that transcend those units (Kundu, 2010). There are currently some knowledge integration

practices that are evident within the internal organization (Lockheed, Career, 2014). However,

these practices are exercised at minimal levels, to a very low degree, with lots of time in between

each integrative activity.

In order to optimize current trends, the creation of communities of practice could

influence the knowledge sharing systems within the organization so that departmental areas are

more capable of practicing process efficiency and LEAN business trends, such as just in time

delivery (Wolf et’al, 2011; Wong, 2013). It is important that systems implemented to support

commonplace Communities of Practice do not affect the company focus on information security

when dealing with external collaborators (Carolla et’al, 2012). Lockheed Martin will need to


integrate boundary techniques - such as edge of chaos initiation of learning programs (Burnes,

2005; Carr & Lapp, 2009). Implemented properly, a community of practice knowledge

integration program will contribute to organizational success through sharing of best practice

techniques, best practice materials, and smoother processing of compliance audits.


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functional units

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