United Airlines Inc.: The Manhandling Incident
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Case Code: BSTR568 Case Length: 15 Pages Period: 2017-2018 Pub Date: 2019 Teaching Note: Available |
Price: Rs.400 Organization: United Airlines Inc. Industry: Media & entertainment Countries: United States Themes: Conflicts of Interest, Stakeholder Management |
Abstract Case Intro 1 Case Intro 2 Excerpts
Abstract
This case was a finalist in the prestigious Dark Side Case Competition, and was presented at the Academy of Management Annual Meeting at Chicago, USA, August 2018. The case highlights the airline industry’s practice of overbooking seats and the ordeal of Dr. David Dao (Dao), a 69-year-old Chinese-American doctor who was violently removed from a United Airlines plane on April 9, 2017. United Airlines Inc. (UAL) had overbooked the flight, which is a standard practice in the airline industry, but then failed to convince enough people to give up their seats even after offering as much as US$800 to anyone who would volunteer. The airline then resorted to its involuntary denial-of-boarding process and Dao was one of those picked to give up his seat. Dao, however, refused to give up his seat, and was physically forced out of the aircraft. The video of the incident showing Dao being manhandled and his bloodied limp body carried out of the plane by the police went viral, inciting global outrage. UAL CEO Oscar Munoz’s non-apologetic response to the incident came under criticism. It sparked a debate in the media worldwide regarding the state of contemporary capitalism, where powerful corporations could act in an arrogant manner by not only bumping a customer but causing him physical harm in the process and getting away with it. This case offers students the opportunity to debate and discuss the consequences of this egregious incident in the context of limited liability, moral hazard and ethics, system justification theory, and managerial decisions in contemporary capitalism.
Issues
The case is structured to achieve the following teaching objectives:
- Comprehend leadership behavior and decision making in crisis situations through the lenses of system justification theory and contemporary capitalism
- Apply two competing theoretical frameworks (i.e. Friedman’s view of business responsibility vs Carroll's CSR)
- Evaluate the performance of an organization using multiple tools, financial analytical methods and tools
- Discuss the consequences faced by the company following the customer manhandling incident and explore the actions that the organization can take to address the challenges
- Understand the need for developing an ethical and socially responsive strategy in a digitally connected global economy
Contents
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Introduction
Backround Note
The Practice of Overbooking
The Incident
Global Outrage
UAL's Reponse
Exhibits
Keywords
crisis management, limited liability, moral hazard, ethics, system justification theory, contemporary capitalism, leadership, CSR, Corporate power, stakeholder model, financial analysis, financial ratios, Overbooking, demand management, airlines industry
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