United Airlines: PR Disaste

Date: Dec 20, 2018

Executive Summary

United Airlines is among a number of companies that have suffered from mistakes made with regards to their customer care services. The organization was at the wrong side of a popular parody which tainted its corporate image by putting its customer service department in the spotlight and highlighting the shortcomings of its baggage handling department. The broken guitar story got so many people focused on the flaws of the organization so that it became not only a talking point but also a learning experience for the organization. This business report examines both the context and the circumstances of the broken guitar in order to establish what really went wrong and what could have been done to prevent that PR disaster. The report is addressed to the management of United Airlines and it covers the question of what went wrong and how similar mistakes can be completely avoided in the company’s future. In this report, it is established that the main mistakes made by the company was having a poor baggage handling system and being unable to engage the customer with regards to acknowledging the mistake and offering an apology alongside the required compensation. To avoid these mistakes in the future, the company has to base their decisions on criteria like the company’s reputation with regards to baggage handling, the consistency of the decision to be made with company’s corporate strategy and the cost of the decision to the company in both the long and the short terms. Basically, the mistakes made by the organization could have been avoided if the people in the decision making positions had taken their time to think it through.

Introduction

United Airlines, along with other players in the aviation industry have been going through a hard time since the 9/11 attack with regards to financial performance. And while the passenger and cargo traffic may have increased, the operational costs also went up resulting in very unfavorable profit margins for most aviation companies. In response to the tough economic times these companies implemented a number of cost cutting measures to minimize their expenditure and get the most in terms of profits. However, some of these companies were a little too desperate in their run to minimize expenses that they ended up losing more than they gained. United Airlines is one of these companies. This paper examines how the company handled the broken guitar case and how it could have handled it differently.

Issues

As a service provider, United Airlines is expected to value its consumers more than anything else. In the transport industry, customer service is among the pillars of success and United Airlines staff must have known this. When a customer’s guitar was damaged while being handled in the organization, the least they could have done was to offer an apology to the consumer and arrange compensation as per the organization’s baggage handling policies . Responding to a consumer’s complaint or suggestion is a vital aspect of an organization’s Public Relations initiative especially in an industry where the consumer takes center stage. The damage to the guitar had already been done when the customer reported it to the organization, and thus they could not necessarily have reversed the situation. However, the customer needed the organization to own up and make amends by issuing an apology and probably offering to replace the broken guitar or simply to pay for its repair. Bad baggage handling was the initial PR disaster and it could have been handled effectively through an apology and a simple show of remorse as well as compensation and an assurance that it would never happen again. Consumers often trust their choices when it comes to service providers and thus a clear communication could have gone a long way. The issues in this case are thus that first, the customer’s baggage was mishandled and thus damaged while in the care of the company, and secondly, no one within the company was willing to acknowledge the mistake and issue an apology let alone compensation.

Causes

The aviation industry was in trouble despite the high passenger and cargo traffic. With such small profit margins the companies thought it in their interest to cut costs as much as they could. For this reason, the idea of compensating a customer for a guitar that was damaged in the baggage handling department seemed an extravagance that they could not afford. And while they may have acknowledged that the guitar had indeed been damaged while in the custody of the airline, the fact that they did not do anything to compensate for the damage implied that they were not considerate towards their customers. They only cared about their dwindling profit margins, and this is the main cause for the PR disaster. Rather than owning up to the mistakes made in the baggage handling unit with respect to the damaged guitar, the company’s personnel kept allocating blame to others until the customer got fed up and launched a retaliation on the social media.

To avoid future PR disasters, the organization should make it a point to ensure that baggage is handled appropriately and that in case there is a complaint that is verifiable, an apology is issued without delay even when compensation seems impossible. Owning up to a mistake is reassuring to the customer and it somehow makes the organization more careful in that area.

Decision Criteria

When deciding on what to do in a case like the broken guitar one, there are a number of criteria that should guide the executives of the company. First, in a service industry like the aviation industry the reputation of the organization is extremely important. The company must be able to convince the consumers to purchase the services on offer by presenting themselves as great service providers who are able to take care of the clients. A company with a reputation of safety in terms of both passenger and baggage would attract more clients than one with a bad reputation in these fields .

  • The first decision criterion that should have been used by United Airlines is thus the impact of their decision on the reputation of the firm in terms of their ability to handle baggage well.
  • The second decision criterion would be the consistency of the decision with corporate strategy. In a very competitive airline market, United Airlines had to position themselves not only as cheap but also as relatively more reliable in terms of safety and care with regards to how they handle the customers’ baggage. The market was extremely competitive and in order to survive the corporate strategy designed had to provide some competitive advantage for the company’s sustainability in the aviation industry. This means that a key component with regards to the decision making should have been ensuring consistency with the corporate strategy.
  • The third decision criterion would have been the cost of the compensation and apology to the organization. It may have taken swallowing some corporate pride to admit that the mistake had been made on the airlines’ side and issue an apology to that it effect, but it ended up costing the organization more than just pride in trying to save face and ignoring the whole issue. Considering that crossing a consumer is likely to damage the organization’s long term relationship with that one consumer along with all their connections and everyone that they could reach out to with information on how they were mistreated by the company, it would be more advisable for a company to handle every consumer complaint adequately to avoid such damages in reputation, especially where customer service is concerned . The benefits in such an instance often outweigh the cost, both in the short term and in the long term.

Alternative Solutions

For the issue of the mishandled baggage, the company could punish the staff members who were responsible for the breaking of the guitar or they could initiate a training program to improve the baggage handling processes used by the staff. This means that, on one hand, the blame can be placed solely on the people who are seen to have caused the problem in the first place, or the problem could be seen as a stepping stone and an opportunity to better the organization as a whole and add on to the knowledge pool through creating new knowledge on baggage handling.

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For the issue of acknowledging the mistake and issuing an apology, the company could simply relieve the customer service managers of their duties as they are the ones who failed to address this issue in the first place. The company could also just put in place new customer relationships management systems that would ensure that the grievances of the consumers are addressed more adequately and easily. Rather than lashing out and blaming the customer service team, owning up and creating an improved customer engagement option is also an alternative solution, more so in a case where customer relations is key.

Recommended Solution

Good leadership is judged based on the ability to turn challenges and obstacles into opportunities. And while firing those that were responsible for the damaged guitar may seem like a logical course of action, it is just as futile in the long term as it is in the short term. This means that the better solution would be to use the incident as an example of what could happen if the baggage handling department is not equipped with adequate training for their tasks. The recommended solution for this issue would thus be initiating a training program that would improve the organization’s performance with respect to the safety of the customers’ baggage. Firing the responsible baggage handlers would only serve to increase the organization’s expenses with regards to recruiting and training new staff members . Considering that the root of this problem was the need to save money on the airline’s side, it would be more practical if the organization avoided any course of action that would entail unnecessary long expenses like hiring new baggage handlers.

For companies in the service industry, customer service is everything. The fact that United Airlines expected to get away with ignoring their most important asset is shocking to say the least. The right thing to do in such a situation is to acknowledge the mistake and chart a way forward together with the affected customer. For the case of the broken guitar, rather than ignoring the client and throwing the blame for the damage back and forth, it would have been a better solution for all the involved parties if the organization simply acknowledged the mistake and apologized to the customer. Apportioning blame to other departments would be like telling the customers and the competition that the company is not operating as one . The fact that each department is struggling to appear innocent implies that the internal relations are inadequate in terms of cohesion and cooperation. This will only serve to alienate the customers and strengthen the competition as wrangles can be easily taken for weaknesses and thus used to destroy the reputation of the business.

Implementation

Efficiency is a basic concept in service delivery that requires adequate training and commitment to excellence. In the case of United Airlines, the baggage handlers may have been lacking in either skill or commitment to the job. The fact that something as delicate as a guitar was broken within the department brings up questions on the baggage handling capabilities of the organization’s staff. Considering that the preferred solution is a training program to improve the baggage handling skills of the staff, it can be stated that baggage handling is an area of operations within the airlines that needs improvement and as such it qualifies for an effective baggage handling training program .

Customer service is a key concept in the service industry as well. This implies that the organization needs to be more willing to engage the customers in confronting and solving their complaints at all times. To do this, the customer relationships management department should be more accessible and thus more practical within the organization so that customers’ issues are easily captured and addressed before they become PR disasters.

Conclusion

The broken guitar saga may have in so many ways tarnished the image of United Airlines in as far as the company’s customer service is concerned, but the management is still capable of turning the experience into a learning opportunity for better performance in the future. This will only require objective consideration for the company’s decision criteria before any critical choices are made especially with regards to customer relations.

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