Deregulation of the airlines in 1978 forced the industry to rethink their business strategy in order to be successful during a period of widespread operating losses due to an economic recession, striking air traffic controllers and brutal price wars. The poster child for innovation during this period was Astro Airlines founded in 1980 by its charismatic leader, Arthur Burton. Enthusiasm, excitement and optimism were watch words used to describe the atmosphere at Astro Airlines in the initial years. This case analysis will discuss; Burton’s leadership behavior;
Burton as a charismatic leader, and;
Dysfunctional aspects of Burton’s charismatic leadership style. Central to this this case analysis is Astro’s inability to sustain itself long term under a charismatic leader after a very successful start-up period. Organizational effectiveness is the long term prosperity and survival of the organization. It was ultimately the lack of organizational effectiveness of Burton that led to the demise of the company. Earlier success and adulation by many subordinates may cause the leader to become over confident about his or her judgement. In a persistent quest to attain the vision, a charismatic leader may ignore or reject early signs that it is unrealistic. The charismatic vision, influencing and communication ability of Burton started the airlines discussed in Parts 1 & 2, with reduced fare, innovative ticketing style, low cost service to all who could not afford high price. Both enjoyed immediate successes where innovative strategy and the vision of leadership were hallmarks. They performed well under mounting industry pressures. Astro adapted to its early growth and survived. The airlines in Burton’s charge could not, however, transition from start-up to organizational effectiveness due in large part to Burton’s inability to recognize that operating problems and declining customer service were alienating customers and eroding the company’s reputation and...
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