Back to search

Continental Airlines: The Go Forward Plan

By Douglas Frank
Published 14 Oct 2009
Reference 5565
Topic Leadership & Organisations
Industry Airlines/Aviation,  Transportation/Trucking/Railroad
Region North America
Length 5 page(s)
Language English
Inspection copy
Teaching note
6.00
Add to cart
Summary

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.

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

Douglas Frank


Recommended Cases

Aeroflot Turnaround: From the Airline to Avoid to the Passengers' Darling in Five Years

By  Stanislav Shekshnia,  Veronika Zagieva
Add to cart
This case examines the turnaround of Aeroflot, a former Soviet carrier, into one of Europe's leading airlines in customer service. It describes the period between 2009 and 2015, when a new CEO rescues the company from bankruptcy. Under his leadership, a new team of top managers successfully changes the culture of the organization to make it more consumer-focused.
    View case

    Leading and Creating Resilience in Good and Bad Times: Indian Hotels Company Limited (IHCL) and the COVID-19 Pandemic

    By  Quy Huy,  Daniel Mack,  Ramana Murthy PV
    Add to cart
    When Puneet Chhatwal took over as CEO of Taj Hotels in 2018, he faced an onerous task: improving the financials in a hyper-competitive environment marked by the arrival of foreigners such as Starwood Hotels and online entrants Airbnb and OYO.
      View case

      GO Telecom: From Zero to Hero – A Turnaround Tale

      By  Claudia Zeisberger,  David Munro
      Add to cart new
      This case focuses on the reasons for the 12-year deterioration of a major Saudi telecommunications company, the attempt to revive its fortunes by hiring a veteran telco executive as CEO, and the twists, turns, inventions and machinations of the top team that took the company from near-death to a growth story. The first part of the story looks at how ineffective management, lack of planning, indisc
        View case