Organizational Transformation at Hughes Electronics Corporation

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Case Details:

Case Code : BSTR087
Case Length : 17 Pages
Period : 1994 - 2003
Organization : Hughes Electronic Corporation
Pub Date : 2004
Teaching Note :Not Available
Countries : USA
Industry : Electronics & Communication

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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Background Note

HEC's origins can be traced back to 1932 when the Hughes Aircraft Company (HAC) was formed by Howard Hughes Jr. (HH). This company was set up as a division of Hughes Tool Company, a machine tool business built by HH's father.

HAC built racer planes - the first one built by the company was the H-1 racer. The H-1 racer was equipped with several innovative features that helped overcome many of the technical shortcomings of existing racer planes. It stabilized the airflow, flew at greater speeds and helped the aircraft glide safely in the air. Other interesting features of the new design were retractable landing gear,3 flush rivets and joints (used for joining different aircraft body parts), and a fully enclosed cockpit. At that time, HH's racer planes were regarded as an outstanding example of streamlining.4 In 1937, HH flew the H-1 and set a record for the fastest transcontinental flight. This event marked the beginning of HH's involvement in the avionics5 business.

During late 1930s, the company began building electronic systems and devices for space communication systems through Hughes Space Systems and other small ventures. In 1939, HH became the principal stock holder in Transcontinental & Western Air, Inc (TWA), a leading airmail and passenger carrier.

He played a major role in finalizing the design specifications of the Boeing Stratoliner and Lockheed L-049 Constellation (both aircrafts used for long distance routes) which were acquired for TWA. In 1944, when the aircrafts were ready for testing, HH flew the Lockheed L-049 Constellation for seven hours without stopping, breaking his own previous record of the fastest transcontinental flight. The Lockheed L-049 Constellation was considered to be an advancement over the regular cross country passenger service airplanes as it saved the time wasted due to frequent breaks needed in between flights (for refilling fuel). During the early 1940s, HH and Henry J Kaiser, a well known ship builder at that time, came up with the idea of building a wooden seaplane which could be used in the ongoing Second World War...

Excerpts >>

3] Landing gear is the structure under a plane's fuselage that allows it to land safely. Landing gear can either be fixed or retractable. Small planes or aircraft usually have fixed landing gear. Large planes have retractable landing gear that can be folded into the body of the plane. Retractable landing gear allows the plane to fly smoothly by reducing its resistance to motion.

4] Streamlining refers to 'the shaping of an object such as an aircraft body or wing, to reduce the amount of drag or resistance to motion through a stream of air.' A curved shape allows air to flow smoothly around it, while a flat shape fights the air flow. Streamlining thus reduces the amount of resistance and increases lift.

5] Avionics is the science (and technology) of designing and building electronic systems/devices for aeronautics and astronautics.


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