ASTRO AIRLINES (case analysis)
NAME : MUSTAFA KAYNAKCI
DATE : 10.11.2011
Issue in the case
The main issue in the case is all about failing to manage success after successful beginning. The leader in Astro Airlines Arthur Burton could not maintain the growth of its company. Being visioner, dynamic, stirring speaker and inspirational leader of Burton could start the airlines with reduced fare, innovating ticketing style, low cost service to all who could not afford high price and the employee was ready to work even in the low salary then the standard of airlines industries. The company faced on immediate success with its innovative strategy and with the vision of its leader. It performed well even in the hard situation like economic resession and strike of air traffic controllers. It adapted to its early growth and find out the way for the crises. If we looked at the comany after early successes, we saw organizational problems and unsuccessful management. The airline could not operate successfully after picking up. It was due to the competency of leadership that could not effectively able to solve complex organizational problem lead to decline of the company. As growth was seen the airlines gain more and more customer and the situation changed ‘specific aptitude, ability or knowledge that is revelant to meeting the requirements of the successful performance in a particular setting’ the leader was not handling the situation according to the environmental setting or external demand due to which employee was facing the excessive workload and the new hired employed was not given the adequate training to provide quality service. The leader was unable to show both transformation and transactional leadership after the growth of company. We say that the rapid growth of the company created serial organizational problems.
If we look at profile of the background data at the first time; * Arthur Burton established Astro Airlines in 1980
* Burton was dynamic, stirring speaker, visioner, inspirational leader. * Burton’s vision has two key element
1- Low-cost, no-frills service, to make it possible to travel by air for people who formerly couldn’t afford . 2- Novel type organization based on team working, creativity and productivity * Organizational type is not typical bureacratic.
* Based on equality, informality, participative leadership, self-management. * No ‘status perks’, open to young and enthusiachic employee. * Employee can purchase share of stock at reduced price.
Strategy of company at the first half of the case
* Discount fares than competitors.
* Convenient schedules with frequent flights.
* Low operation costs.
* Lower salaries than competitors although generous benefit to employees. * Innovative applications (reconfiguring aircraft to carry more passenger) * Purchasing surplus flight at bargain rates.
* Flexible company
As a result of these characteristics ;
* Reaching 3000 employee, 22 plane, service to 20 cities, * Expanded passenger volume
* Immetiate success
If we look at second half of the case
We saw managerial problems and internal problems associated with employees. Such as ; * Preferring to promote current insufficient employees
* Declining customer service
* Intensely heavy workload of managers
* Increased communication problems in the company
* Taking too long to be made decisions
* Resigning of president and not filling position of president * Pilots quit due to exploited and mistreated
* Burton as a manipilator and dictator by employees.
As a result
* Alienated customer
* Eraded the company’s reputation
In the face of these problems Burton assumed president’s responsibility and he oppointed a task force composed of executives to develop for improving the organization. In short, Burton seemed unwilling to take the...
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