A Case Study on Boeing's 737 MAX Crisis on Account of Leadership Failure

Abstract

American multinational corporation Boeing is one of the reputed organizations in the field of aerospace manufacturing. Since its inception by William Boeing in Seattle, Washington in July 15th, 1916, it has surpassed several milestones and grown from strength to strength. It started its venture in areas such as designing and crafting airplanes, rotorcraft, rockets, satellites and also stepped into production of telecommunications equipment, missiles and made a mark in every field of operation. It has a revered status in Dow Jones Industrial Average and made a glaring presence in the Fortune Global 500 list. But the global recognition got eclipsed after fatal crashes in October 2018 and March 2019. Boeing 737 Max planes remained grounded across the world for more than a year. The culpability was overlooking of safety features, hiding the new anti-stall system from pilots, circumvention of standard certification rigours by Federal Aviation Administration, in the hustle of launching ill-prepared product into the market to beat arch rival Airbus. Product malfunction also hinted at systematic problems that needed to be addressed. The company thereby faced lawsuits and claims for compensation. The investigations by FBI began and the House and Senate panels too joined in the foray. Losses worth billions of dollars had been incurred along with displacement of trust and support of loyal customers, severe decline in share price and market capital and ignominy for being short-sighted and lackadaisical in its approach. The outbreak of global pandemic led to further delay in their recovery as demand for fuel efficient 737 Max plummeted due to fall in oil price and delay or cancellation by airlines in buying Boeing planes without being penalised.