Final 197 Paper

University of the Philippines Cebu

Business Management Cluster

A Comprehensive Paper on

The Case of the Team Spirit Tailspin

In partial fulfillment

of the requirements in

MGT 197- Special Topics in Management

Submitted to

Prof. Leahliz Sia

28 November 2014

Submitted by

Ruth F. Melicor

Case Summary

Upon taking on leadership of a struggling regional airline called, Century Air, Robert

Johnson, the new CEO, concluded from extensive situational analysis, that the survival of the

airline rested on exceptional customer service, which in turn is a direct result or reinforced

workforce commitment from the firm’s employees. However, there seemed to a lack in the

latter factor. Due to its limited capacity, the airline had stopped hiring new employees and

had frozen the wages of its current ones for the past two years. This resulted to demotivated

employees who believed that they were given more workload and less pay.

In order to remedy low employee morale, Mr. Johnson along with representatives

from different levels of management designed what he called the Century Spirit Program.

This program was comprised of four areas, namely: (1) cross-functional task force, (2) open

communication task force, (3) recognition committees, and (4) individual initiatives. A few

months into the program, the task forces were effectively trained, the recognition committee

had given out due rewards to deserving employees, and the last area of the program involved

a group of flight attendants who started a company-wide newspaper called The Plane Truth.

However, environmental factors were not on the company’s side. The Iraq-Kuwait

War, caused fuel prices to double, along with less travel mileage. This prompted the firm to

demand more of its employees to avoid net loss for that specific quarter. Furthermore, to

preserve jobs, management had to ask certain employees to cut back on work hours, in order

to avoid laying-off workers. The tense environment was soon reflected on the company

newspaper. Articles which were anti-management were soon published and circulated around

the company, with a threat of leakage to the outside. In addition, the paper also posted articles

about the inefficiency of other workers, specifically the maintenance crew, due to long

turnovers and the like. What was intended to be a morale booster, has seemed to lose its

control, and has become a potential disaster altogether for what the management intended it

to actually be.

HR Best Practices

This section will be comprised of the Best practices actually done by the organization in the

case, and the best practices which I believe they should have done and should do in order to

rectify the problem.

Best Practices Done

Direct Communication

It was stated in the case, that upon launching the Century Spirit Program, Mr. Johnson

wrote a direct letter to all employees stating the intentions, goals, and ambitions of the

program. According to Cabulay and Carpio (2010), doing such actually weakens the power of

the company grapevine, which more often than not bring inaccurate information along with it

to the bottom line employees

Inter-level involvement

I believe the reason why most of the areas under the program worked, was due to the

design itself, or rather the proponents behind it. In coming up with the program, Mr. Johnson

collaborated with people from various level of the organization, in order to bring a fresh and

relevant perspective for the achievement of the program’s goals.

Emphasis on Human Resources

In the tourism industry, customer satisfaction truly is key. As Mr. J.W. always says,

“Take care of your employees, and they will take care of your customers.” There should

always be a sense of internal service within the firm, and that start with top management.

More and more firms are starting to realize that being employee centric certainly pays off in

the long run. Upon being confronted with operational problems, Mr. Johnson directly shifted

his efforts to the root of the issue, where it really had the greatest effect – the employees.

Best Practices that Should Be Done

Role-modeling

Considering that every manager is technically an HR manager, the CEO is expected to

be a role model. In the implementation of the Spirit program, Management must give its full

support. By shutting down the paper, management fails to model what it wanted to achieve

with its employees. To have Spirit, management must model SPIRIT. The company would

truly fail to motivate its employees by removing its empowering support, once tensions are

not favorable placed against them

Consistent Communication

At the start of the case, Mr. Johnson clearly explained why he decided to implement

the SPIRIT program; however when it came to the cut-backs on job time, wages, and other

relevant decisions, the communication suddenly stopped. At the end of the day, this was done

due to environmental factors, in order to avoid firing employees. Management should

consider being open with their employees in this aspect. One cannot expect workers to

understand, when they are only given one side of the picture. According to the CEO of

Northwest Airlines, he started having discussion with large groups of employees, where he

would first explain certain decisions and implementations, and these employees would then

be given a chance to voice out what they thought or any other questions that they might have.

In this particular situation, he noticed that the regular vicious newsletters seemed to have

tamed down naturally on its own.

Lastly, communication is essential in this particular industry, since its employees are

displaced and most have no set physical workplace. Thus, by clearly established

communication pathways, there is additional sense of security which would cushion any

vicious anti-management remarks, which were made out of ignorance.

Empowerment Balance

According to Simmons, as cited by Beecher (2007), employee empowerment should

be implemented along with four systems, specifically: belief systems, diagnostic control

systems, boundary systems, and interactive control systems. Belief systems effectively

communicate the purpose of what needs to be done. Diagnostic systems involve setting target

in order for employees to check if the independent decisions they make have the desired

impact on the organization. Boundary systems set the standards for acceptable actions, while

interactive control systems serve as warning detectors to show employees that they are

getting off track in terms of objectives.

I believe Century Airlines, failed to establish such systems when they implemented

the individual initiative opportunity for their employees, which resulted to the dilemma

surrounding The Plane Truth. The organization should have set a proper belief system, there

should have been constant reiteration on why the Century Spirit Program was implemented,

which was in order to boost employee morale, not create disunity within the organization. A

diagnostic system should have been set, along with proper targets, in order for well-meaning

employees to be guided and made aware of the progress their efforts seem to be making. This

is somewhat synonymous to employee feedback and evaluation. Furthermore, a boundary

system should have been established. These flight attendant who run the paper should be

properly informed that a great deal of empowerment comes with a great deal of

responsibility, wherein what they write have direct effects on the firm and on individual

employees as well. They should be made aware of proper ethical standards to follow, in order

to avoid sticky situations. Lastly, an interactive control system should be established, where

management should monitor the individual efforts of employees in the Spirit program in

order to keep the program and its objectives in line to what was originally set.

Personal Conclusion

In the case mentioned above, management was only made aware of the rough

situation when a flight attendant left a copy of The Plane Truth in the first class section of the

airline, which was found by a member for the Board of Directors. This is a reflection of poor

role modeling, considering that the firm implemented a program but failed to monitor its

concrete actions afterwards, which shows that there was no interactive control system set in

its proper place. However, it is to be noted, that despite the crisis the firm is facing, it is on

the right track in making immediate decisions, which is to focus on its human resources.

Despite its failings in implementation, at the root of it all, Mr. Johnson is aware that his

employees comprise the greater and more valuable amount of the airline’s capital.

Considering that Century Airlines are currently on the right track by focusing on motivating

its human resources, they merely need to take a greater control of the vehicle in order to reach

their goals.

References:

Becher, R. (2007). Balancing Control and Empowerment. Retrieved from:

http://jonathanbecher.com/2007/08/06/balancing-control-and-empowerment/

Cabulay, D., Carpio, C., (2010). Human Resource Management in the Tourism and

Hospitality Industry. Rex Publishing. Sampaloc, Manila.

Foster, D. (1991). The Case of the Team-Spirit Tailspin. Harvard Business Review.

Jan/Feb1991, Vol. 69 Issue 1, p14-25