Stakeholders and Crisis Management

Summary of the Crisis

A major crisis that occurred in 2019 was the Boeing’s 737 MAX disaster, where 346 people died when two aircraft crashed in Ethiopia and in Indonesia, which was about four months apart. This was an unprecedented alignment of several factors including product, leadership, governance, customers, and regulatory issues amongst others (HOLMES REPORT, 2020).  Failure in communication was a key factor contributing to the accident. Boeing was hence endured a huge scrutiny by various governments across the world, whose citizens died, and also by the affected families.  The huge crisis by Boeing was a major test, where the company’s repose would determine whether it was dedicated to quality service delivery and whether its employees and stakeholders had any regard for the lives and the dignity of their customers.

The response of the company

The Boeing Company did not have a great response to the disasters and the crisis that emerged.  The company completely denied claims that the deaths from the two accidents were stemmed from the flaws in the system fitted to the Boeing fleet (HOLMES REPORT, 2020). Nevertheless, there were damning reports that the company had been previously warned of the problems with its systems, but continually ignored the repeated warnings from the employees.  Nevertheless, the accidents could also have been contributed by port workmanship and pilot training, which could make it hard to sustain the argument about the prior warnings of the fleets system. The company also failed to have a good relationship with its key regulator, which was the FAA.  It is therefore likely that the regulator could have helped the airline understand the real courses of the accident and develop sustainable solutions, which could help it prevent a second one.

The airline also failed to admit that it had issues with its fleets, where the CEO insisted that they know that the fleet was safe.  As a result, multiple nations including the EU countries and China grounded their Boeing 737, Max, intending to inspect what the issue could be (HOLMES REPORT, 2020).  One of the key values of Boeing is caring for human life and wellbeing above everything else, a value which the airline clearly failed to abide by.   The 737 MAX fleet was hence grounded, to establish the key challenge to the fleet and ensure that such incidences do not occur again. Nevertheless, there was a disconnect between the value of the airline and its operational, cultural, and communication behaviors.

What the company should have done differently

An initial action that the company ought to have taken, was to comprehensively address the causes of the first accident, which would have helped in understanding the cause of the second one. Research on the first incidence would have instilled the consumers’ confidence in the planes and make them understand that the company cared about their wellbeing (Čelesnik, Radujković, & Vrečko, 2018). The communication strategy of the company was also wanting. There was a need for the firm to exhaustively explain to its consumers, the government, and the affected parties about what had transpired and issued an apology and a promise of getting to know what had transpired (Čelesnik, Radujković, & Vrečko, 2018). The company also needed to have a better relationship with its key stakeholders such as the government and its regulators as a way of combining efforts and ensuring that the issue at hand would be wall addressed, without any gaps and complaints as it was witnessed.

References

Čelesnik, G., Radujković, M., & Vrečko, I. (2018). Resolving Companies in Crisis: Agile Crisis Project Management. 51(4), 223-237.

HOLMES REPORT. (2020). Crisis Review: The Top 20 Crises Of 2019. Retrieved from https://www.provokemedia.com/long-reads/article/crisis-review-the-top-20-crises-of-2019-(part-1-of-3)

 

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