Boeing crisis and the recent pandemic that has shaken the world
Executive Summary
The assignment is to create a comparison report study of two disastrous cases of the recent past from which one is the Boeing crisis of 737 Max jet crash, and the other one is the outbreak of Nobel Coronavirus 19. The study id to show that it has handled the situation better and find out the effect on the brand and its reputation in the crisis.
Introduction
The assignment is focused on reviewing the Boeing crisis and compare with the recent pandemic that has shaken the world. To analysis whether the cases were correctly handled and what are the effects, it exerted on the environment and different brands. Theories are put forward to explain the causes adequately. Apart from that, how the media has perceived the case, how the organization has communicated in media, all these criteria are to be considered while progressing in the assignment. Moreover, the PR responses are also given essential and finally ending with recommendations for handling such cases with ease in the future.
Discussion
The world was shocked when occurred cases of crashing of two Boeing 737 Max jets within the span of just five months, the people all over the country wondered why the Boeing does not put the effect of resisting the aircraft to the grounds. And also how Southeast Airlines and American Airlines were continuing to fly them until President Trump declared to land both the planes. Was that an act to revise the past decision of the Federal Aviation Administration was in question. Such a situation can act as an atrial of fire for many leaders. Also, there was no clear evidence where a second jet is known as Ethiopian Airlines flight, crashed in a similar time of March 10th. After the incident, regulations were observed to get split, and the Asian and Europeans are relatively found to be moving to ground the 737 Max 8 jets as fast as possible.
Meanwhile, the US maintained its show of review, delivering no system issues in the performance and found on the basis of grounding the aircraft. Politicians and Dennis Muilenburg, the CEO of Boeing, took the matter into their hand and questioned Present Trumph to provide assurance about the safety of the company’s plane, after which Trump posted a tweet writing how complex the airplanes at present days are becoming. Where alongside the complaint, he sarcastically said he does not want Albert Einstein to be his pilot. All this give rise to utter confusion, which did good to none- it proved to be a setback time not only for the companies involved but also for the employees and passengers.
The situation could have been better tackled if the company’s leaders were efficient enough to frame their jobs better in such cases of crisis. Most of the leaders have one common task to be fulfilled at the starting point of any disaster that is utilizing the art of knowing how to frame the nature of the problem and describe it in the best way possible that the organization faces. Frames from the leader successfully help in thinking about the prevailing problematic situation better and also in analyzing the opportunities. The framework helps In categorizing the problems that the current situation is dealing with. Hence, when with the help of a framework, the identification of the problem is made, it becomes easy to apply the seeds of action and appropriate response.
It has been reported that Boeing CEO Muilenburg has requested to the president to make the aircrafts a more safer place for the passages and employees. There is training where the pilots are taught to identify and override the automatic airplane controls if, by chance, those controls mistakenly lead to some mishaps. So the Muilenburg’s frame appears to be where he states, “ this is basically a technical problem which can be taken care of by providing proper pilot training.” It can be said that it was a standard enough frame for nay of the product manufacturing representatives. However, there is still no evidence where it can be cleared whether the two aircraft crashes were a coincident or it was the sign of the common problem that was faced by both the aircraft.
Moreover, the framework missed an important crucial point of addressing the hundreds of human lives that were lost because of the clashes that took place, and the others who are severely injured and at the risk of life, and also the regulation in several countries of grounding their airplanes. Regulators’ work must incorporate a frame that reflects the safety of human lives at its priority. In contrast, the Boeing case is asking its people to accept the high uncertainty and risk.
According to Boeing, a better framework is stated as ” this is a technical problem that has not been understood correctly. In the light of uncertainty it was declared the grounding of 737 Max 8s and 9s until the reason was found of what is causing the clashes of the airplanes, and henceforth to satisfy the company team and the global regulation about the safety of flying in the aircraft again. The framework has lead to clearer paths of action and an acknowledgment of the regulator’s partnership who are responsible for taking charge and save and protect human lives. And it would have been a better move if Boeing came to a conclusion before the president did.
Boeing decreased more than 12,000 jobs because of the rise of the COVID-19 pandemic, which has led to the crisis of the aircraft industries. Hence the US working is severely affected by the outbreak of the virus, which has also lead to a high drop in the demands of the planes, which directly hit the plane makers. America’s largest aircraft manufacturing center announces their losses because of the outbreak of the COVID19 pandemic. The actions of stopping the spread of the epidemic needed the traveling to be ceased along with many countries closing their borders for any external entry and enforcing themselves in the quarantine mode.
This has massively hit the demand for new aircraft from Boeing in comparison to its competitor Airbus and other similar manufacturers around the world. The chief executive of Boeing Dave Calhoun has shown his concern to his employees through an email where he mentions that he wished if there were some other measures and ways. Additionally, he also mentioned pandemic devastation on the airline industry would hit the manufacturing of the commercial aircraft deeply along with the services that they are used to in offering to its customers would not be the same for the next couple of years, which can be concluded that there would be the availability of lesser jobs in the air force lines and in its offices.
Boeing said that there an approval made where 5,520 employees are redundant voluntarily and are more likely that they would suppose to leave the companies in the following week. Moreover, 6,770 workers have also been stated that they are also at the risk of losing their jobs. Most of the employees are expected from the areas of Seattle, where basically the Boeing’s commercial airplane business is mainly based. Boeing also addressed that more job cuts are expected to be done in international locations but did no provided further notice about the same.
It is seen that the stability of the defense of the company and the space division may soften the blow in the coming months for the company to save it from falling short of the commercial demands. The manufactures of the company said, “there are several thousand remaining layoffs” are supposed to be taken place in the coming few months but still did not mentioned where.
By the month of April, this year, Boeing has intended to cut down nearly 10% of the air force to withstand the massive fall in the demands of airplane travel. Though he did not receive any order by the month of April hence, he was able to execute his plan by the month of May. Additionally, another 108 orders were being canceled for the aircraft 737 Max, which was grounded by the cases of two fatal airplane crashes.
In January, when the virus was not in the widespread, Boeing already posted the severe annual loss that they have faced in the last two decades. In the month of April, the biggest competitor of Boeing Airbus declared that “bleeding cash in an unpredictable speed” and the survival of airlines are at stake if immediate actions are not implemented.
The case of Boeing crises was handled way poorly, which was also called by many as the Boeing 737 Max Defense was a textbook mess. The two air crafts that occurred in the recent past with merely any gaps between the months. But here Boeing instead of stepping ahead of the problem seem to do the opposite. It was hardly seen tacking the hard things are taking the immediate charges of the losses. There has been lots of conversation on the topic of Boeing Max aircraft 737 recent clash, and the reasons to do so are also evident as more than a hundred lives are lost in the accident, which should boast even the lowest statistical probability even the mere industries. Though Boeing should not be considered as the sole blame person here. There are still researches that are being gone on regarding the matter, but it does not deny the fact that it has been the costlier PR mistakes that have been made in the history of aviation. The mistakes that are committed by Boeing and how come they can be avoided –
The first thing that is to be noticed here that the leaders should not be moving ahead of the problems. Two accidents by the same manufacturer should be enough for the leader to jump out in front. Even if the incident is caused where there was not wrong in Boeing production, but this should be taken into consideration as many lives are lost, which may require the cost of money depending on the size of the company, which may arise to million or billions of dollars. But the effect of the proactive is estimated far to outweigh the invested cost in the initial times, more importantly, human safety would be assured. But despite doing that, Boeing asked for the help of the President to continue running their planes, avoiding any safety concerns for the people with their PR.
If there has been navigation error, then that is considered to be the leader’s fault for not staying with the engineer’s team, Documentation error again the leader’s fault of not working with the communication team, error in production still the failure of the leader of not working with the manufactures team. When an owner takes the responsibility, they build trust with his people, the customers, as mentioned earlier. Hence a clear message is expected to be sent by the leader who would state that the problem has been tackled and the customers can feel secure as they are in the right hands.
Revisiting the visions and living up to them is what most of the great leaders of big companies do. Unexpected incidents are most likely to occur in business. Great companies let the vision of the company guide them in creating values in economics. It must be considered as a nightmare for the PR surrounding the Boeing crisis. The incident has taken a significant drive costing the company a staggering 22 billion dollars in value and around $600 billion in orders outstanding.
In comparison to that, the COVID 19 was handled excellence by Chinese company Master Kong a leading instant noodle and beverage producer company. Numerous Asian companies, along with Western companies, were able to tackle the effect of the virus to a considerable extent in their revenue. Still, Master Kong did a fantastic job of handling the situation. Chinese company Master Kong was able to develop successful strategies, at least in battling the pandemic, and sustained its market position. The WHO said that Covid-19 would not have been successfully tackled if the world did not corporate with each other in dealing with inequalities and coming forward together. Although the nations of the world were able to ebb away the virus eventually but it would take time to come back to a normal state of life unless some significant investments are made in the departments of the health system, and the inequalities of the world are taken care of according to a report said by Adhanom Ghebreyesus.Master Kong believes that there are opportunities for every company to learn from different regions at the time of the pandemic. Chinese companies, in general, have always been in the early stages of an economic rebound, as per the report of analysis of high-frequency data on goods, production, people, and confidence. Hence though recovery could be vulnerable when a new epidemic emerges where the Chinese companies like Master Kong were able to move beyond the crisis response in recover and post recover plans. Any crisis has a highly dynamic nature, which most of the time, requires a constant reframing with the current appropriate models and plans. Hence in comparison to the Boeing crisis, the Master Kong company was able to address the crisis fast- therefore, the CEO of the company prevented the company from getting structured in one place of the complex international process of coordination and avoided being slow in responding to the currently prevailing circumstances.
Master Kong was one of the fastest recovering companies in China from the pandemic of Coronavirus. The company was proactively looked forward and anticipated such shifts. Though there are reports where around almost 5 billion people might suffer for the lack of essential health services post-pandemic. The United States of America was reported to be the most affected center of the epidemic in a global scenario with almost 71,000 fatalities and more than 1.2 million confirmed cases from Covid -19, questioning America’s health care system. Boeing organization business was severely hit after by Covid 19, as mentioned earlier, due to the massive decrease in demand due to the consecutive two plane crashes. Then the pandemic outbreaks have resulted in enormous losses of the company. Master Kong reviewed the dynamics of the pandemic on a daily basis and kept track daily. Thus helped in anticipating the stockouts and hoarding and hence directed its focus towards the offline means where large retail channels through online to offline, smaller stores, e-commerce, etc. thus it showed continuous retail outlets tracking and reframing the plans, adapting the supply chain is highly flexible manner has made the company cope up with the crisis situation much easily unlike the Boeing crisis. Hence the Master Kong was able to recover more than 50% from their supply chain in just a few weeks in the crisis situation, and they continued their supply up to 60% through the stores that were reopened during this time when compared to Master Kong’s competitors it was as high as three times with its strongest competitors.
The Boeing case failed in the Crisis management theory severely. After the two successive plane crashes of the same jet model. The reputation damaged faced by the organization has to lead it to knock down 13% off the share price of the Boeing, which is equal to the market value of $32 billion. Apart from that, the backlash from the customers eventually leads to huge losses resulting in benefiting the rival Airbus.
From the discussions made above and from the crisis management theory standpoint, the procrastinate the product recall has to lead to unpleasant repercussions. As from the theory, it is known that the timespan when a recall is issued, and the beginning of a crisis is negatively related to the post recall attitude of the brand. Although immediate action taken with no signs of hesitation is well perceived as behavior that is responsible according to empirical studies, thus the Boeing crisis might have mitigated a severe negative effect on the product harm crisis along with management crisis by the swiftly executed voluntary recall, which is mainly based on something that communicates corporate responsibility in all respects and is a concern of consumer well being. Numerous studies have shown that voluntary recalls are related positively to a companies post-crisis brand image as it conveys the values of an organization being accountable for the crisis and honest. In such a case, Boeing was slow and passive; it has not only failed in incorporating the crisis management theory correctly, and also its crisis management was additionally underdetermined by repeatedly insisting that their products are safe. It was a bad time for insisting on such a message when the media wants to know the analysis of the two crashes and similarities of the two. Thus from the strategic point of view, the behavior of Boeing in crisis management theory was extremely defensive and is linked negatively to post recall brand image.
The media coverage for both the cases of the Boeing crisis and Covid 19 on Master Kong as well. Though the Boeing organization was unable to communicate through the media properly, when the media and the world wanted to know the analysis of the crisis and the similarities between the two aircraft, the Boeing team was busy in just clarifying that their products and technical parts are safe without addressing the situation and hundreds of lives lost. The media coverage of Covid 19 of Master Kong delivered a dose of panic in individual companies, thus driving the crisis in the wrong direction. Instead, it should be more concerned about public health emergency, which requires the medical and dispassionate reporting.
The PR missteps that Boeing made in the crisis are compared and contrast after the Ethiopian Airlines Flight 302 incident. Dennis Muilenburg took a month firmly just to acknowledge and respond to the media and people on the cases of software installed in both the aircraft that faced successive accidents. This went against the value of addressing a mishap of significant crisis in a timely manner, which is expected to be within 24 to 48 hours. In the meanwhile, Muilenburg also apologized but the apologies perceived by many as shifty. Moreover, the CEO seemed to blame the pilots because of the jet crash, thus making the customers and the stakeholders distrustful. The CEO repeatedly insisted that there are no issues with the technical parts of the aircraft. Still, because of the ill-fated pilot who did not utilize the best possible practices, the mishap happened. These statements went against the PR tenets, which are expected to be empathic and honest in such a major crisis where hundreds of lives are lost.
Meanwhile, the CEO apology paved the way for contradictory information on the disaster, when it was found that 737’s software in the Ethiopian aircraft is the leading case of the crash. Here offering a non-contradictory approach would have been a significant step in the PR approach to address the crisis. Another mistake, when compared, can be seen that the Muilenburg apology was a pre-recorded video distributed through social media and news networks. In such a crisis situation, a PR team must be allowing the media and reporters to ask questions directly to have a more productive conversation. Hence through such a conference, it might would have been possible for Boeing to build up its past brand perception.
Conclusion
It can be concluded that the assignment has provided a rigorous review of the Boeing crisis, addressing the points of how it is handled, where the organization went wrong, and its effects on the brand along with its relation with the Covid 19 pandemic. Frameworks are being used to explain the crisis; apart from that, media coverage and PR responses are also critically analyzed in the assignment. Lastly, the assignment is closed by opinions and recommendations for the crisis.
Recommendation and opinion
The main point that is to be suggested here is that the leaders should indulge themselves in hard thinking, especially for the serious cases like Boeing, where hundreds of human lives are at risk. It is foremost required to understand the kind of problem the current disastrous situation is facing and need to describe the same in clear language to allow the people to get aware and execute inside the company and even those who are judging the matter from outside. It helps the people in understanding the company is thinking about the problem that they are facing. Thus it can be said framing tools should be used and used consciously. If the framing is done well, it would bring an enormous difference in executing the responsible actions and thus create a ground of trust and values in the minds of the people for the company. In the case of Master Kong, the crisis situation was handled well. It took action spontaneously in a timely manner without wasting much time in acknowledging it. They kept on changing their frames and models according to the dynamic nature of the pandemic, which was a good move in keeping daily reports to understand the requirement of the organization better in such a major crisis period.