Gordon Bethune and the Complete Transformation of Continental Airlines

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Case 02
Gordon Bethune and the complete transformation of Continental Airlines

Overview

When Gordon Bethune left his job at Boeing in February 1994 to accept the position of chief operating officer (COO) of Continental Airlines, the company was struggling to survive. Even though it was the fifth largest commercial airline in the United States, with revenues of nearly 6 billion dollars, the company had reported a net loss every year since 1985, and was ranked the last among the top ten commercial airlines in the United States in terms of operational performance and customer satisfaction-Continental was the last among the ten largest airlines in the United States in punctuality of arrivals, had the highest number of reports of mishandled baggage per 1,000 passengers, and a much larger number of complaints per 100,000 passengers, passenger complaints about different aspects of their experience in Continental flights were 30 percent higher than those of the airline ranked in ninth place , and three times the industry average.

Bethune was well informed that Continental Airlines had serious operational problems and, like most operating executives, seeking the challenge of solving problems and making the company to resume its path. However, Bethune was disappointed after four months on the job, because the President (CEO) most frustrated his efforts to improve the operations of the company. To ensure that you do not leave Bethune, Continental's board agreed to give greater authority and promotion to CEO a few months later.

When Bethune took over as CEO, knew that the road ahead was going to be difficult. In the previous decade, Continental had experienced ten different CEO. Employees were gone over numerous internal reorganizations, revitalization efforts and changes, and changes in strategy, despite the encouraging words of the overcharges and promises of change. Many employees were disillusioned and morale was low, most trying to do his job the best way possible and survive. Before the administration tried cleaning company unions during bankruptcy proceedings in 1993, wages and salaries had been cut. Errors and sick leave rates were quite high, and accidents at work were far above the industry average. There was a significant amount of infighting within groups of employees and departments. When there was a problem, who had raised the complaint often overwhelmed efforts to solve them and covered employees, emphasizing that procedures had been followed. The ticketing agents and staff spent many hours doors stressed, dealing with dissatisfied and angry passengers, the staff of Continental's airport, when they finished their shift and were on a break, took their company logo their uniforms to avoid having to answer uncomfortable questions from co-workers or customers. According to Gordon Bethune:

To put it bluntly, we were not Mother Teresa of Calcutta. This was the situation when I joined the company in 1994: a company with a bad product, annoying employees, low wages, a history of ineffective management ... This was a horrible place to work. Continental culture, after years of layoffs and salary freezes, cuts well, and unfulfilled promises, was a culture of gossip, mistrust, fear and loathing. People, to put it politely, they were happy to come to work. They seemed sullen with customers and each other, and ashamed of your company ...

In a company where cost cutting was the order of the day, the departments fought each other to die to get some scarce resources. In a company where management strategies, and management teams-changed overnight, employees conspired to protect themselves at the expense of their colleagues if necessary. Communication between departments was almost nonexistent. Everyone was trying to climb over the others so it was not unusual aircraft arrived late and the luggage was lost. The product was bad. The main reasons for this have nothing to do with flying airplanes properly, or keep them...
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