Continental Airlines: The Go Forward Plan

Published 14 Oct 2009
Reference 5565
Region North America
Length 5 page(s)

In 1994, CEO Gordon Bethune inherited an airline on the brink of its third bankruptcy. The case describes his turnaround plan, focusing on (a) the goal to dramatically improve on-time performance, and (b) the team-based bonus he believed would convince his cynical and demotivated employees to execute the plan.

Teaching objectives

(1) Illustrate a group incentive system ? one that ties a financial reward to a measure of group, rather than individual, performance; (2) introduce the concepts of ?implicit?, or ?relational?, contracts and basic game theory tools for analysing these contracts; (3) illustrate links between cultural/communication initiatives and formal incentives.

  • Incentives
  • Teams
  • Group-based rewards
  • Team-based rewards
  • Compensation
  • Implicit Contracts
  • Game Theory
  • Repeated Prisoner's Dilemma
  • RD0909
  • AR2009
  • AR0910