When Boeing launched the B737 Max project in 2011, the management was keen on introducing to the global market the most cost-effective airplane that would compete favourably against Airbus A320 series. According to Kuşhan (2018), the top management of Boeing was concerned that some of its major customers were opting to buy the Airbus because of its cost effectiveness. On 30 August 2011, the new project was approved by the board of directors and a team of engineers started the program by early 2013 (Chittum, 2017). In 2016, the company conducted flight testing of the new plane, which then received the approval of the Federal Aviation Authority. The new plane gained massive popularity in the local and global market because of its cost effectiveness. The company was rushing to meet the huge order as many airlines wanted to introduce it into their fleet. However, the success story did not last long as the B737 MAX was hit by a major crisis. Lion Air Flight 610 and Ethiopian Airlines Flight 302 accidents, which happened in quick successions, left Boeing on the defensive. In this paper, the researcher seeks to critically analyse Boeing’s response to the B737 Max crisis and the impact it had to the reputation and legitimacy of the company as well as the strategic steps it took in their attempt to contain the crisis.
The approach that a company takes to manage a crisis defines its ability to overcome it and win the trust of its customers. It is normal for a company to face major challenges that may make its clients and other stakeholders to doubt its capabilities. However, Ziomek (2018) warns that it is important for a firm to demonstrate its trustworthiness and commitment to its customers even when faced with major crisis.
The introduction of Boeing’s B737 MAX had just helped the company to regain its dominance in the global market and sales were soaring. However, disaster struck on October 29, 2018 when Lion Air Flight 610, a 737 MAX 8, went down in Java Sea only 13 minutes after takeoff (Huntley, 2020). All the 189 passengers and crew members on board died in the accident. Boeing issued a manual guidance on how to address similar errors in cockpit readings and the aviation society was willing to let it pass as just another case of pilots’ inexperience when disaster struck again. On March 10, 2019, the Ethiopian Airline Flight 302, another 737 MAX 8, took off from Addis Ababa in Ethiopia and was scheduled to land in Nairobi, Kenya (Miller, 2020). However, it crashed just 6 minutes after takeoff, killing all the 157 people on board.
The pattern of events in the two accidents was eerily similar and so was the outcome. At this point, pilot error or inexperience could not be blamed for the two accidents that happened on similar planes, about six months apart. Investigations revealed that there was a major software problem with the new plane that made it to pitch down abruptly without any reason. Correcting that catastrophic error was not easy for many pilots who were used to other types of planes. Boeing had a major crisis to deal with in order to not only protect its sales and dominance in the market but also its image.
Evaluation of the Response and its Impact on Reputation and Legitimacy of Boeing
The approach that a company takes to manage crisis depends on so many factors. One of these factors is the image of the company and how must of a trust it will earn after the problem is addressed. In the aviation industry, the most important factor for all the stakeholders is the safety of passengers and crew members. Chittum (2018) explains that it is always the expectation of everyone that every time a plane takes off, it will land safely at the end of a destination. When the safety of travellers and crew members is not guaranteed, no one would want to use this form of transport. The two major competitors, Boeing and Airbus, have been competing on the premise of safety, cost-effectiveness, and comfort of passengers as the main selling points. As such, when Lion Air Flight 610 went down, killing everyone on board, one of the major concerns of the company was its reputation.
The company chose to deny any wrongdoing. It went ahead and cited a similar incident that had occurred in the same aircraft earlier, and how easily one of the pilots was able to correct the mistake without an incidence. Finger and Button (2017) explains that denial is always one of the most common responses to crisis. It takes blame away from the company to other parties. This was the initial response that the company took, and it was apparent that the aviation community went along. The problem with this approach of responding to a crisis is that it does not facilitate effective investigation of the problem. The company issues a simple operations guideline manual on how pilots should respond to such errors, hoping that this was an isolated case and a similar incident was highly unlikely to occur.
When Ethiopian Airline Flight 302, another 737 MAX 8 went down about 6 months later, it was evident that the two cases were related and pilot error or inexperience was not the primary cause of the accidents. At this point, Boeing could no longer continue shifting the blame. Major airlines around the world, especially in Europe, North America, and Asia, were grounding their 737 MAX 8s for fear of a similar incident. Those that had made orders for the plane were cancelling these orders because of a similar concern. The company had a major crisis that it had to effectively deal with to protect its sales and reputation. The company had to admit that indeed was a software effort that caused the two accidents.
The admission meant that the company was willing to take the relevant measures to correct the mistake. It supported the grounding of all B737 MAX 8s as it focused on finding the source of the problem and a solution to it. It stopped further production of this model of aircraft to find a proper solution. It made a public apology, admitting that an engineering error was responsible for the mistake (Coffee, 2020). The management of Boeing also made a commitment to compensate the airlines and families of the passengers who were involved in the two accidents. It announced that a progress was underway to address the problem and ensure that air travellers’ safety is guaranteed. The internal integration and coherence in addressing this problem was bold but unavoidable. The company could no longer continue hiding from the problem as the pressure was mounting. The response had a negative impact on the company’s reputation and legitimacy. The fact that it tried to push the blame to the pilot created a sense of insincerity (Tafoya, 2020). Some of its loyal customers questioned the willingness of Boeing to admit its mistakes and to take appropriate corrective measures.
It is important to evaluate the response that the company took from a theoretical point of view. Situational crisis communication theory has always been an important concept that is used to respond to crisis. It holds the view that crisis managers need to match strategic responses to crisis to the level of responsibility that arises, and reputational threat that it poses to the firm (Ma and Zhan, 2016). When using this theory to manage crisis, a firm has to take into consideration the magnitude of the problem. When it is a simple problem affecting a few employees within a given department, the departmental head or a supervisor will be able to solve it. However, when addressing a major crisis that threatens the very existence of the company, it is essential for the top managers to take the responsibility of managing it.
This theory emphasises on the need to communicate with the relevant stakeholders at the right time when managing the crisis. Comparing and contrasting the principles of this theory with the approach that the company took may help in this investigation. The management failed to follow some of these principles when it made late communication and tried to shift the problem at first. However, when it became apparent that the problem was threatening sales of the company’s planes and its reputation, its top managers took control of managing the crisis, just as it is recommended in the theory. The concept of involving senior most managers is meant to demonstrate the commitment of the company to find a lasting solution to the problem. The management delved deep into solving the problem not only with its current products which were in production line but also those that were already in the market. The accident elicited heated debate as the company was blamed for late response. For instance, before Boeing could advise its customers to stop operating the B737 MAX 8 because of the identified problem, many aviation authorities in North America, Europe, and Asia had already issued directives grounding the plane. It created the perception that the company was slow to respond to major emergencies.
The Boeing B737 MAX crisis is one of the major challenges that the company has ever faced in the recent times. It came at a time when the company was fighting to maintain its dominance in the global market against stiff competition from its primary rival, Airbus. The analysis shows that the first response of the company was denial and an effort to shift blames. When it became apparent that the company could not ignore the problem any longer, it was forced to accept the responsibility of the two accidents. The company accepted to pay the affected airlines and families who lost their loved ones based on the agreements with the parties. Most importantly, the top management announced that Boeing was committed to solving the software problem in this model of its planes before it can be put back to use again.
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