Introduction
Boeing is currently one of the leading manufacturers of aircraft, satellites, rockets, rotorcraft and missiles in the world today. Companies in the aviation industry can also hire or lease airplanes from this organisation. This corporation’s diversification strategy and business model explain why it continues to compete directly with Airbus. Unfortunately, the latest two crashes involving its B737 MAX have disoriented Boeing’s operations and its ability to maintain desirable public relations (PR) with some of its key stakeholders and customers in different parts of the world. This paper describes Boeing’s response to the B7373 MAX crisis, the strategic steps its top leaders undertook to contain the crisis and the impact of such actions on its legitimacy and reputation as a successful airplane designer, manufacturer and marketer.
Crisis Background
Companies operating in the aircraft manufacturing industry record increased profits whenever they design and deliver high-quality and competitive products in the market. Modern technologies are presently making it possible for such corporations to innovate and market new aircrafts that produce minimum emissions, are safer and faster (Crisis communication and reputation management in the digital age, n.d.). However, the size and nature of organisations in the sector explain why the occurrence of similar crises could jeopardise and disorient their overall performance and profitability. Othman and Yusoff (2020) define a crisis as a chain of outcomes and events that have negative consequences, such as claiming the lives of passengers, property damage and environmental destruction. Without proper management plans, companies can lose the trust of their respective customers and eventually become unsustainable and obsolete.
The current crisis at Boeing began on 29th October 2018 after Flight 610 operated by Lion Air crashed immediately after takeoff. The accident led to the death of all 189 crew and passengers on board. A few months later on 10th March 2019, another 737 Max 8 operated by the Ethiopian Airlines lost control and crashed a few minutes after takeoff. This accident occurred a few miles from Addis Ababa International Airport in Ethiopia. This disaster led to the death of 157 people on board. Experts revealed that such a disaster was as a result of faulty or flawed Maneuvering Characteristics Augmentation System (MCAS) fitted on the 737 MAX airplanes (Wang and Fitzpatrick, 2019). In the two accidents, investigators realised that the automated MCAS provided angle-of-attack (AoA) information that was erroneous, thereby commanding an automatic nose-down.
Following these accidents, many aviation authorities and countries grounded such aircrafts since they were believed to be insecure. Despite the company’s statement that the airplane was safe, the American Federal Aviation Authority (FAA) concluded that there were notable similarities between Lyon Air Flight 610 and Ethiopian Airlines Flight 302 (Wang and Fitzpatrick, 2019). In March 2019, authorities in different parts of the world grounded all 373 MAX aircrafts across the globe (Smith, 2020). By January 2020, around 400 new aircrafts were still undelivered to their respective customers due to the pending crisis (Smith, 2020). A proper crisis management strategy was needed to deal with such an issue.
Boeing’s Response
A crisis management and emergency response plan is an evidence-based strategy intended to tackle emerging issues that might tarnish the image of a given organisation while maintaining the established PR. The concept of legitimacy remains critical since it allows stakeholders to perceive and determine whether a given organisation is acting acceptably and following the established societal norms and expectations or not. Irrespective of the nature of the situation, the ultimate aim of crisis management (CM) plan should be to maintain credibility and protect the reputation of the organisation. Various attributes will determine the success of the crisis management plan of any given company in the aviation industry, including communication strategy, overall results, the concept of legitimacy and management response (Baker, 2019). Without a proper CM plan, a company could lose its stakeholders and eventually become less profitable.
Boeing’s response to the B737 MAX crisis was ineffective and inadequate from the beginning. The leaders of this company failed to consider the relevance of these three stages of CM: prevention, response and recovery (Baker, 2019). First, after the accident involving Lion Air Flight 610, Boeing chose to deny that the MCAS was defective and capable of feeding erroneous data to the flight control system. This failure ensured that all 737 MAXs continued to operate without considering the risks they were posing to millions of unsuspecting passengers (Aviation’s response to major disruption, n.d.). The company ignored and failed to take the necessary actions during the first phase to prevent the Addis Ababa disaster.
Second, Boeing failed to take the relevant measures after the crisis. During the response phase, the leaders chose to remain on the defensive as a way of ensuring that aircraft was back in service. The engagement of stakeholders is a process that the company’s top leaders ignored. This approach ensured that the family members of such victims and buyers of such aircrafts were uninvolved in the ongoing operations (Matthews, 2019). At the beginning, the company offered ambiguous responses and reports. The available information remained confusing and confusing. These malpractices encouraged different regulators and aviation authorities across the world to consider grounding all 737 MAX airplanes.
When accidents in the aviation industry occur, the manufacturer should be involved and remain cooperative throughout the investigation to learn more about the possible causes and provide timely solutions. Since the crisis was a reality, Boeing’s top leadership remained elusive and failed to offer timely responses to the involved stakeholders (Smith, 2020). For instance, Baker (2019) reveals that Boeing’s Chief Executive Officer (CEO), Dennis Muilenburg, only managed to apologise to all stakeholders around 26 days after the Ethiopian Airlines disaster in Addis Ababa. The company waited until the preliminary investigation concluded that the plane’s sensors were misfiring and failing. Muilenburg also added that the aircraft’s design was outstanding and revolutionary (Baker, 2019). He promised that new updates and changes would be considered to make all 737 MAX aircrafts safe and prevent similar accidents from taking place again in the future.
Third, Boeing has been slow to implement the recovery phase effectively, learn from the crisis and manage overall public perception. Matthews (2019) acknowledges that the two accidents involving its latest aircrafts within a year affected the company’s image, reputation and legitimacy in a negative manner. Without proper and timely updates, the media played a critical role that dictated the opinions and decisions of many stakeholders. Some of the leading television channels were keen to identify Boeing as a successful corporation that had failed to take responsibility and support investigators to resolve the crisis in a timely manner (Fickling, 2019). Consequently, this failure to engage stakeholders and involve family members of all victims will continue to increase the organisation’s overall losses. For instance, experts estimate that the losses arising from compensations and liabilities could be over 23 billion US dollars (Fickling, 2019). The delayed delivery of the 737 MAX series also means that the company will encounter additional challenges, a development that has the potential to disorient its outstanding business model and performance.
Impact to Reputation and Legitimacy
The above section has indicated that Boeing was slow to apologise and inform most of the stakeholders about the nature of the two accidents. Initially, the company sent some of its workers to inform possible buyers and airlines companies about the superior of the 737 Max and why there was a need to place more orders (Smith, 2020). This exercise continued even after the first fatal crash involving the aircraft in Jakarta. After the accident in Addis Ababa, the company relied on the use of a recorded video to apologise and inform more people about the crisis. Nonetheless, such a crisis management emergency response proved to be poor and inappropriate for Boeing.
This poor strategy forced airlines across the globe to mistrust Boeing and identify it as a corporation that was not supporting their business interests. Similarly, majority of the passengers had lost confidence and trust in Boeing and its latest plane (Baker, 2019). Different experts have gone further to reveal that Boeing failed to categorise the crisis as an operational problem and be willing to offer appropriate messages from the very beginning. The move to focus on the reputation of the company as the most critical issue led to increased fear and concern. The original strategy of maintaining silence and providing inadequate information to different stakeholders backfired. The main aim was to maintain the best relationships with airlines and governments while ignoring the expectations of all other key stakeholders.
The legitimacy of this company reduced significantly after the aftermath of the second accident. This outcome was a reality since the company did very little to be part of the process and provide timely information and the desire to accept the technological failure. The reasoning behind such an argument is that the company’s actions were unacceptable and inappropriate since its latest aircraft had led to the loss of around 350 lives (Smith, 2020). Delayed apologies and contradictory messages after the first accident left many people and analysts confused. Similarly, many players worried that Boeing was trying to remain elusive and fail to acknowledge that its latest plane was unsafe.
The CEO’s video message was unexpected and it deepened the existing level of mistrust. This outcome became a reality since the leader waited for 26 days before giving the much awaited information. From the very beginning, the company had tried to defend the safety of its new plane. Additionally, Boeing insisted that its product was of the highest quality even at a time when its leaders were apologising for the crashes. The pronouncement that Boeing was considering the need to update the plane’s MCAS software left more customers and stakeholders confused, thereby increasing the level of anxiety (Sucher, 2019). Since Boeing failed to act according to the expectations of different stakeholders, it is agreeable that its legitimacy declined significantly. The manufacturer failed to conform to the established norms and update all key partners in a timely manner. This company should avoid these malpractices in the future if it intends to increase its legitimacy.
Additionally, the mishandling of the crisis management plan affected Boeing’s reputation significantly. For instance, it indicated that its aircraft was of the highest quality and safe (Gates, 2020). The company lacked a proper mitigation plan to address the ongoing challenge and encourage more passengers and stakeholders to continue using the aircraft. During the period in question, Boeing found it hard to attract additional investors and customers. Instead, some of the airlines and companies began to cancel their original orders. The company had to wait for clearance from different authorities and regulators before it could continue manufacturing and marketing the 737 MAX. Due to such malpractices, Boeing was at a higher risk of facing stiff competition from other companies in the industry, such as Airbus.
Steps to Contain the Crisis: Recommendations
After the crisis, Boeing undertook various steps to contain it and ensure that more stakeholders were informed about the events. First, the company offered ambiguous and incoherent reports that complicated the situation much further. For instance, the CEO remained elusive and only offered a video tape explaining how the failed MCAS was responsible for the two accidents in questions. Second, Boeing decided to eventually engage some of the key stakeholders and regulators. This effort led to the grounding of all 737 MAX aircrafts that were in operation (Smith, 2020). Third, the company promised to act by reexamining and improving the software system of the craft to make it safer (Gates, 2020). However, there were some issues that disoriented the overall success of the implemented measures. For instance, the company defended the superiority of its new planes. The leaders at Boeing also ignored the importance of collaborating with airlines to effect proper training methods and ensure that all pilots were conversant with the new technological systems.
Some recommendations can make it possible for Boeing to handle crises more efficiently in the future. According to the crisis communication theory, stakeholders tend to perceive crisis and companies based on the issue of overall responsibility (Smith, 2020). Organisations should, therefore, protect their images and legitimacy by reducing stakeholders’ perceptions on their responsibilities (Safety management manual, 2018). Since Boeing does not have a past history of negative crises management approaches, the leaders should have considered the importance of allowing stakeholders to be involved and updating them accordingly. In the future, this corporation could consider the importance of establishing an environment of trust and implementing rapid and timely decisions that focus on the expectations of all key stakeholders (Aviation’s response to major disruption, n.d.). Finally, the lessons gained from the affected legitimacy and image should become evidence-based ideas for improving the way it handles similar crises in the future.
Conclusion
The above discussion has revealed that Boeing’s response to the B7373 MAX crisis was misleading, inappropriate and incapable of maximising stakeholder confidence. The strategic steps this organisation undertook to contain the crisis was also ineffective and failed to consider additional ways of engaging all key partners and ensuring that similar accidents never occurred in the future. Consequently, such malpractices affected this company’s legitimacy and reputation in a negative manner. Effective communication strategies, involvement of all key stakeholders and learning from the lessons of the current crisis are superior recommendations for ensuring that Boeing handles similar crisis more efficiently in the future.
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