Boeings Response to the B737 Max Crisis Analysis Assignment Sample

• Subject Name : Management

Crisis Management and Emergency Response Planning

Evaluation of Boeing's Response to the B737 Max Crisis

There were two crashes, one was Lion Air Flight 610 on October 29, 2018 and the other was Ethiopian Airlines Flight 302 on March 10, 2019 in which 346 people died. This has caused grounding of Boeing 737 Max in March 2019. The response of Boring to the 737 Max were confusing and created anxiety among people which made difficult to believe its apologies. The response of Boeing to the two consecutive deadly crashes of its 737 Max planes was characterized by late and unclear communication and apologies (Hobbs, 2020).

Boeing revealed that, Maneuvering Characteristics Augmentation System (MCAS) was introduced as a new software that can repeatedly push the plane nose down. This new automated flight control that Max could cause more accidents, if it is not changed.

An Emergency Response Exercise is to be conducted as a part of the Aviation Emergency Response Plan. The main aim of this is to test the preparedness of the company. There are different members in the Emergency Committee like chief pilot, COO, CFO, emergency response director, Safety manager and many more. Once in every two years, there will be full scale exercise and partial exercise in the year when full scale exercise is not conducted. In this case, ERD proposes a scenario and date to the Emergency Committee and the committee had to agree on that scenario and date. When the exercise is completed, the emergency committee members has to meet, discuss and suggest improvements to the Emergency Response Plan (Abeyratne, 2020).

The process where the organisation tries to deal with some major event which can have an impact on the stakeholders, public, environment or the organisation itself is known as crisis management. Basically, there are three important elements of crisis management:

• Major threat to thee organisation
• A surprise- Unexpected Event
• Very short decision making time

The crisis is managed in three phases:

1. Prevention Phase: It depends on how important management considers crisis prevention. According to that, crisis prevention efforts are taken by the airline. This is a false sense of security. Organisations should implement some degree of safety techniques which are not sufficient but are perceived as accurate at the time of implementation.
2. Response Phase: This phase is during the occurrence of the event of crisis. The organisation must try to reduce the harm done to its stakeholders, property, environment and the organisation. Decisions are made by the crisis managers on response. There is often limited, ambiguous and confusion information available at that time. There is threat to the organisation from media during this phase. If the organisation fails to act in a timely manner to the crisis, it is accused by the society/ media as acting not in a responsible way and ignoring the crisis.
3. Recovery Phase: The organisation learns from the event of crisis. In this phase, it manges the perception of the public and restores any damage to sustain the reputation and legitimacy of the airline.

Numerous experts believe that the crisis management by Boeing on the 737 Max crisis was not up to mark. There was questioning on the handling of the 737 Max crisis from Boeing and this also deepened the mistrust in Boeing. It was seen that Boeing was defending the safety of the plane as well as apologising for the crashes and promising to update the plane (Hatton and Rutkowski, 2019).

Impact of B737 Max Crisis on the Legitimacy and Reputation of the Organisation

The case of Boeing was called a crisis because it was a series of events that had adverse consequences harming the human lives and property. It had the element of surprise which a crisis has. As the triggering event was unexpected by the organisation, the organisation lost its control for some time (Macmillan, 2019).

As any of the crisis has an impact on one or more stakeholders, the Boeing’s 737 Max crisis also had an adverse impact on the stakeholders. Due to the impacts for stakeholders, crisis brought into picture the legal and ethical responsibilities of the company and the way these responsibilities are satisfied. Boeing took steps due to the high stakes and the risk that escalated during the crisis. There is a key role of organisation during the crisis to take action quickly so that control can be regained and the damage to the stakeholders are reduced.

An organisation is called as legitimate if it is seen by its stakeholders as operating in a correct manner, keeping to societies’ norms and standing up to the expectations of their stakeholders (Massey, 2001). The actions of Boeing's 737 Max had caused its stakeholders unacceptable harm. The organisation was considered as illegitimate by the victims and the stakeholders. It was very important for Boeing to handle the crisis events by reducing the negative impacts to the airline. This will in turn affect the reputation and legitimacy of the airline which is an important element for any airline and its managers. The legitimacy of the aviation industry is directly connected to how the airline handles safety. With the two crashes that happened, Boeing was asked questions about the legitimacy of the airline.

Boeing crisis leadership was considered inappropriate by many of the organisation. It should try to create an environment of trust and improve the mindset of organisation. The company should try to find out obvious and obscure vulnerabilities. The company is leading from the crisis to effect change. The company’s market share and revenues were affected.

Media also plays a key role during crisis. It is very important to look at how the airline communicates information and what actions it takes during or after a crisis. It is believed that crisis management and the communication affect the way stakeholders see the legitimacy of airlines. Media had a great impact in society’s perspective, reputation and legitimacy of the organisation. If the company is successful in Management Response Communication Strategy (MRCS), it helps to build organisation’s legitimacy.

Boeing was able to establish a family assistance team. The family members heard directly from the CEO of the affected organisation. The organisation apologised and gave technical briefings involved in response, rescue and recovery efforts. The organisation had a dynamic effective call centre after the accident. There were investigations for the cause of the accident and company records were sealed. Company staffs were interviewed and internal investigation team was built.

The CEO of Boeing, Denis Muilenburg, apologised in a video after 26 days of the second crash. Although, he vowed that this will not happen again but there were no plane orders as the airlines turned their backs after the 737 Max crashes. People felt that the company seem to be indifferent, perhaps, due to the late apology by the CEO. One of the golden rule in the aviation industry is that the organisation shouldn’t control the accident but it should control the response. The legitimacy of an airline could be seen as the perception of the stakeholders about whether the actions of the airline are:

• Appropriate
• Acceptable
• Keeping up to society’s norms and the expectations of the stakeholders

Legitimacy makes the airline work according to the expectations of the stakeholders. If the legitimacy of the airline is reduced, it will make the future of the airline uncertain as in the case of Boeing. After two crashes, the Max was grounded. It also affects the sales and the viability of the airline (Heikkinen, 2020).

Reputation is similar to legitimacy as it also arises from the perception if the stakeholders and evaluation of the airline. Reputation affects the finances, thus, it affects the asset. The reputation of the airlines could be affected by the way the crises is managed by the company. There are many benefits of developing and having a good reputation like:

• It attracts new customers and investors.
• Improves financial performance
• Increases sales
• Creates a competitive advantage

There were mixed comments on the way Boeing responded to its 737 Max crisis. Thus, the reputation of the company is at stake after the two crashes (Vargas-Hernández and Martínez, 2019).

Strategic Steps Taken by Boeing in their Attempt to Contain the Crisis

There are new safety risks under scrutiny which are introduced on Boeing's 737 Max. The company started to look at everything from wiring on the plane to its engines. Recently, it is observed that new problems are evolving as Boeing moves forward to get back the 737 Max.

The issues are not only restricted to just the software but it goes beyond it. It is known that software played a role in the two fatal crashes. The regulators and the company is trying hard to uncover the novel potential design flaws to return the Max to service. They are scrutinizing every aspect of the jet. In December, Boeing conducted an internal audit at the appeal of the Federal Aviation Administration. The appeal was to check on the time required by the pilots to respond to the emergencies given the new assumptions. This was to ensure whether it had properly checked the risks of the important systems. The unreported problems with the wiring which basically helps control the tail of the Max, were the most pressing issues discovered.

The company is trying to find whether the two packets of analytic wiring are too near with each other and could lead to short circuit. It is said that if the pilots did not reply in a correct way then, a short in that area can cause a crash. Thus, Boeing is taking steps to find out whether that situation could happen on a plane. If this occurs, then Boeing have to split up the wire packets in the 800 Max jets that are already constructed The company discussed about this potential vulnerability with the Federal Aviation Administration and are deciding on the possible changes to the wiring.

It is believed that company has to eventually look at the predecessor of the Max, that is, the 737 NG to find if the same problem exists there. There are about 6,800 of those planes in service. If there is emergence of new problems with the Max, there is a danger to extend the crisis. This crisis is affecting one of the America’s most influential companies and causing disruption in the global aviation business.

After the two crashes which killed 346 people, the Max has been grounded. The reason of the crashes was MCAS, the new software on the Max. This software triggered erroneously and sent the planes into nose dives. The fix for the software which has been developed by Boeing is not yet approved. Thus, the process of returning the plane into service has taken very long than expected by Boeing.

Max is the important plane of Boeing. There were about 5,000 planes which were ordered by airlines around the world. It was said by Boeing that it will temporarily shut down its 737 factory after the grounding has dragged on. This jolted thousands of suppliers and stoked the concern of President Trump.

After Boeing’s chief executive alienated the Federal Aviation Administration and the airline customers, he was abruptly fired. The company due to the grounding is facing tens of billions of dollars in charges and it's share prices has fallen by 21 per cent.

The company informed that it will take only 1 to 2 hours per plane to fix the problem of wiring bundles. Thus, regulators recommended that Max could be allowed to start its service by the spring. To ensure a safe and compliant design, Boeing is working with the Federal Aviation Administration and other regulators to perform the appropriate analysis. Rigorous and detailed certification process is being done to identify the problems as a role of that rigorous process.

The investigations done by international regulators showed that the reason for the two Max crashes was that the pilots of both planes did not respond quickly to the emergency. During the time of designing and evaluating the new software, MCAS, the company and the Federal Aviation Administration presumed using the accepted industry standards that the pilots would respond quickly and effectively (Travica, 2020).

Therefore, Boeing and Federal Aviation Administration decided to change the previous industry assumptions in developing a software update for the Max. They have to consider other options if the crew takes much time to act in case of emergencies. It was discovered that a catastrophic accident could occur if the two wire bundles are place together closely toward the rear of the plane. This discovery was done after taking into account the new set of assumptions of the reactions of the pilot. There was a connection of wiring with the stabilizer which is the horizontal fin on a plane’s tail. The wiring connects to the motor which controls the stabilizer. This stabilizer sends signals from the flight control computer which could push the nose down. It was discovered that as there were no quick actions taken by the pilots, the planes went into a nose dive. This was due to the software MCAS that forced the motor of the stabilizer to run uncontrollably (Herkert et al., 2020).

It is interesting to find that Boeing is still working to find what is the chance that wires could in actual short circuit because the company is reluctant to change the wiring. This is due to the fear of additional damage which could be done during a repair. Also, the regulators have made the engines on the Max a focus of scrutiny. Before the plane comes back to the service, the company is deciding to check a large number of Max engines. A manufacturing problem is also discovered by Boeing which would left the engines of the plane vulnerable to a lightning strike.

The agency have to make sure that all the safety related problems are addressed before the plane is approved for return to its service. There are signs of progress shown by Boeing toward getting the plane ready to fly again.

References for Crisis Management and Emergency Response Planning

Abeyratne, R. (2020). Digital Crisis and the Boeing 737 MAX 8 Aircraft. In Aviation in the Digital Age (pp. 75-107). Springer, Cham.

Heikkinen, P. (2020). Repairing the Company’s Image: Image Repair Strategies and Theme Structure in Boeing’s Press Releases Published after the Lion Air and Ethiopian Airlines Plane Accidents.

Herkert, J., Borenstein, J., & Miller, K. (2020). The Boeing 737 MAX: Lessons for Engineering Ethics. Science and Engineering Ethics, 1-18.

Hobbs, A. (2020). Can Boeing Regain Trust After Crisis?.

MACMILLAN, D. (2019). Safety was just a given”: Inside Boeing’s boardroom amid the 737 Max crisis. Washington Post, 5.

Hatton, L., & Rutkowski, A. (2019). " Lessons must be learned"-but are they?. IEEE software, 36(4), 91-95.

Travica, B. (2020). Mediating Realities: A Case of the Boeing 737 MAX. Informing Science: The International Journal of an Emerging Transdiscipline, 23, 25-47.

Vargas-Hernández, J. G., & Martínez, M. G. H. (2019). THE REPUTATION OF THE AEROSPACE COMPANY BOEING AND ITS REPERCUSSIONS IN THE MEXICAN MARKET. EFFECT OF THE CRISIS DUE TO ACCIDENTS IN 2019. Dr. Sandeep Marwah, 14.

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