Boeing 737 Max 8 Crisis: A Corporate Communication Analysis Report

This report critically analyzes the Boeing 737 Max 8 crisis, focusing on corporate communication failures. It examines the sequence of events following two fatal crashes, the key stakeholders involved (including pilots, regulators, and the media), and the communication strategies employed by Boeing. The analysis delves into the role of the Maneuvering Characteristics Augmentation System (MCAS), the lack of pilot training, and the impact of media coverage on customer perception and the company's reputation. The report evaluates the crisis's impact on Boeing's market value, stakeholder relationships, and regulatory scrutiny. It also discusses the interplay between traditional and social media in amplifying the crisis. The conclusion provides recommendations on how Boeing could have improved its crisis management and communication to mitigate negative outcomes, considering aspects like transparency, stakeholder engagement, and proactive risk communication.

Running head: MANAGEMENT
Corporate communications
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Table of contents
Introduction................................................................................................................................2
Situation.....................................................................................................................................2
Problem......................................................................................................................................3
Evaluation..................................................................................................................................5
Conclusion and recommendation...............................................................................................7
References..................................................................................................................................9

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Introduction
Corporate communication is the act of cultivating the ways in which the brand image
can be enhanced. This is through the means of strategic alliances with the associate agencies
and partners. Typical example in this can be offshore marketing through emails and news
updates on websites and social networking sites, which enhances the awareness abpour the
specific needs, demands and requirements of the clients. These aspects reflect the dynamics
of sender-receiver response process, indicating the dissemination of information from the
internal to the external environment. This assignment attempts to critically evaluate the crisis,
which Boeing 737-800 Air Max 8 underwent.
Situation
After three years of the first flight, Boeing 737 Max 8 jets encountered the tragic fate.
On Oct 29, Lion Air crashed, compelling 189 people to die in Jakarta and Indonesia. On
March 10, Ethiopian Airlines crashed, taking a toll on 157 people outside Addis Ababa. Since
1966, none of the aircrafts encountered such tragic incidents. After the second crash,
investigators have been compelled to put on thinking caps regarding flying the jet services
(Nytimes.com 2019). Incapability of excavating the root causes of the incident, the
investigators informed the personnel to take the decision of grounding the jet services. This
was in terms of averting further loss of lives and property.
Media coverage have aggravated the complexities of the passengers regarding
availing the jet services. As a result of this, the Boeing personnel are facing severe challenges
in the form of customer turnover. One of the striking results in this direction is the fissures,
which have erupted in the strategic alliance between Boeing and the US regulators. The root
causes of the incident have not yet been discovered. According to the results published by the
black box data, there are similarities between Ethiopian and Lion Air crashes (Bbc.com
2019).

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Problem
Just after the take offs, the planes encountered troubles. Upon interrogation, the pilots
confessed that they were unable to control the flight. In case of the controllers, complaints
regarding erratic, up down patterns were reported. The misssteps from the pilots and
controllers have led to 737 Max crash phones. According to the evidences, the safety feature,
Maneuvering Characteristics Augmentation System (MCAS) resulted in fatal flight services,
compelling the pilots to struggle a lot. Upon detection of the imminent stall, MCAS
automatically takes the direction of the nose of the plane downwards. This is through the
means of a sensor, which, at times, sends faulty signals, indicating the plane to dive in a
repeated manner (Smh.com.au 2019). Installation of software on the planes is an example of
technological advancement, however, not informing the pilots and controllers about its
functions devalues the software in terms of enhancing the efficiency in the flight services.
The warning light on the cockpit was a mechanical fault. Absence of optional safety
failure in the Lion Air plane aggravated the complexities. According to the Reuters report,
plans are being made for installing warning lights for which additional financial resources are
required. The angular readings of the flight was erroneous, which triggered the MCAS
unnecessarily. The pilots were provided training regarding flying the Boeing 737 Max, which
consisted of iPad lesson for one hour. This relates with the issue of improper management
techniques, shunning the communication between the pilots and the ground controllers of
Boeing 737 Max, staining the reputation of the brand image.
FAA planned for variants in the training regarding 737 Max 8. In this case, the pilots
who were certified to fly the older planes, possessed only one hour of training. Neither in the
lesson nor the training materials, there was no mention of MCAS (Channelnewsasia.com
2019). This deprived the personnel from the knowledge of the new features of Max 8. As per

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the claims of the pilots, they only learnt about the system after the crash incident of the Lion
Air. In this context, one of the other challenge is that of the smartphone connectivity, which
aggravated the complexities of media and news channels regarding reporting the crisis to the
audience. In such a situation, the anxiety and worries of the customers gets neglected in an
attempt to portray the real time crisis events on the social media and the websites.
A global satellite network compelled Boeing 737 Max to ground the services. Dozens
of countries banned Boeing 737 Max shortly after the incident of Ethiopian Airlines crash.
Mention can be made of US Federal Aviation Administration, who waited for three days, as
no specific systematic performance issue was identified. US regulators can finally be
convinced by satellite data, for which strategic alliance was formed with Aireon. This was
helpful for monitoring the flight operations in the remote areas through the help of the
sensors. After repeated telephonic conversations with the US regulators and Boeing
executives, US president produced claims regarding grounding for 737 Max 8 and 9. In his
statements, he confessed that delaying the process of undertaking the decision was acceptable
both psychologically and in other ways (Dailymail.co.uk 2019). Later, FAA administrator
Dan Elwell clarified that the decision was taken on the basis of the available facts and the
new satellite data, which they got in early morning of March 13. These issues reflects the
personalization of the actual news by the media, which is an interplay with the specific
requirements, which the clients demands.
Upgradation of the software was delayed. It was originally expected in January.
However, engineering challenges delayed the process. The major drive behind this delay was
differentiation of opinions between Federal and Boeing officials. Along with this, 35 day
government shutdown was one of the other reasons, which resulted in differentiation of
opinions. This can be correlated with the issue of Initial Public Offering (IPO), which can be
problematic in terms of gaining trust, loyalty and dependence from the customers.

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Exchange of monetary resources between Boeing and the US government is an
important issue in this direction. However, governmental intervention in this case attains an
interrogative parameter in terms of the decisions undertaken. As a matter of specification,
there were enough ambiguities regarding the basis of the decision, relating to the public
interests or influence on the relationships (Business.financialpost.com 2019). This was in
response to the claims of Brendan Fishcher, the watchdog of Campaign Legal Center. In this,
non-integration of the technology with the communication strategies is a matter of concern.
This reflects the lack of understanding towards the needs, demands and requirements of the
stakeholders, absence of audits for gaining an insight into the way the events are interpreted.
Evaluation
According to the data of commercial fleets compiled by DVB bank, the instances of
crashes are the first since the inauguration of the jet services by Boeing in 1966. Overall,
3065 fatalities have been reported onboard in case of the Russian Tupolev Tu 154. Boeing
737-200 and 747-200 occupy the second and the third position on the list of the jet flight
services offered by Boeing (Dvbbank.com 2019). The perceptions of the passengers have
been modified by the media agencies and associations, which acts as a deviation from their
actual needs, demands and requirements. This issues reflects the lack of improper corporate
communication gaps between the pilot and the ground controllers, raising doubts on strategic
management.
Since the Ethiopian Airlines crash, Boeing encountered severe loss in the market
value by billions and dollars. Regulatory fines and lawsuit class actions have defamed the
hard earned glory. Before the incident, Boeing used to rule the market with the high demand
wave in the services of 737 Max. Now, saturated markets with losses in the ground services
along with the scrutinized regulation have stalled the productivity of the jet business. It was
in the era of 2006, that Boeing recovered from the massive loss (Dailymail.co.uk 2019).

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However, the tension was not over yet, as it was accused of corporate espionage and strategic
alliance with Pentagon official.
As a result of the crash incidents, the share price of Boeing was adversely affected.
This compelled them to miss the opportunity regarding accumulation of Dow Jones industrial
Average. Share price of Boeing is comprised of many multiples of every other company
enlisted in the stock index. The market share volume is outstripped only in terms of the
comparison with Apple and Microsoft. Outsized influence on Dow with the weightage of
11% is one of the main reasons the influence on the market price.
The relationship between Boeing and Ethiopia Airlines are over 60 years. The plans
for assisting the carrier services of Africa is accounted within the plans for introducing new
fleets in the world. The instances of crash expanded the scope and arena of the business from
regional investments to the global ones (Channelnewsasia.com 2019). Media coverage for the
instances of plane crash publicized the events and the trends of the company, spoiling the
hard earned reputation. . The purchases of Ethiopian related to the flight services from the
rival companies, Airbus, can be considered as an attempt to reduce the intensity of the
competition levels. According to the instances, it is unlikely that Boeing would switch over in
terms of the alliance. 21 orders were booked for the grounded Boeing 737 Max in the sales
pipeline. The starting price of these services are $74 million. However, the crisis indicates a
turnover in the customer and clients, drastically declining the sales revenue and the profit
margin of Boeing 737-800 Max.
The person in charge of sharing the information considered the grounds of anonymity,
as the communications were not released publically. It was a fault on the part of the
controllers regarding concluding even before the emergency message was rolled out from the
captain. Regulatory authorities of US and Canada agree on the point that there were

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similarities regarding the trajectories of the plane crash incidents. Agreements are also
proposed in favour of differentiation in the causes of the crash. One of the other aspects,
which can be brought in this context is the availability of the public data regarding the radar
readings (Bbc.com 2019). According to these readings, the readings went far beyond the
standard practices, indicating ambiguity in the flight controlling operations.
Media coverage like No survivors on crashed Boeing 737 generated terror within the
passengers (Bbc.com 2019). Such messages aggravated the tensions and worries of the
passengers for the safety and wellbeing of their loved ones. The passengers created pressure
on the company officials for conducting investigations. However, they waited for the
instructions of the international regulations for proceeding with the investigation process.
This type of approach reflects the lackadaisical approach of the official regarding taking
measures for ensuring the safety of the stakeholders, the passengers, associated partners,
suppliers and the distributors (Channelnewsasia.com 2019).
The instances of plane crash by Boeing 737 Max 8 defamed the reputation of the
company. Technical faults were the main reason for the crash, as the communication between
the pilot and the controller shunned, aggravating the complexities in controlling the flight
directions. One of the striking issues in this direction is the security issues, compelling the
passengers to switch over brands. As a result of these issues, the market share and volume of
Boeing was severely affected. The strategic alliance with US regulators was also shunned,
compelling the company to encounter downmarket scenario, devoid of all the basic
necessities. Faulty MCAS led to wrong signals, which were misinterepreted. In this case,
planning for the release of a software update pitch is beneficial. This is in terms of limiting
the number of times the MCAS would direct the direction of the plane downwards. This
installation would simplify the troubleshooting problems for the pilots and the controllers.

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Conclusion and recommendation
Corporate communication standardizes the business operations according to the
requirements. Adopting communication channels like Facebook media agencies and others is
apt for enhancing the stability in the professional relations. Discussions through the form of
meetings is crucial for assessing the feasibility of the strategies in terms of the identified
requirements. These aspects seemed to be negative in case of Boeing 737 Max resulting in
the crisis. The major drive behind this is the technical faults, which generated communication
gaps between the pilots and the ground controllers. The news coverage of the crisis was
personified, which acted interplay with the safety issues and concerns of the passengers. This
personification is a violation of the legislations related to the Public relations.

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References
Bbc.com 2019. Ethiopian airlines: No survivors on crashed Boeing 737. Available at:
https://www.bbc.com/news/world-africa-47513508 [Accessed on 6th May 2019]
Business.financialpost.com 2019. Boeing shares, vanguard of the Dow, crushed after second
737 MAX crash. Available at:
https://business.financialpost.com/transportation/airlines/update-1-boeing-shares-down-10-
pct-after-second-crash-involving-737-max-8 [Accessed on 6th May 2019]
Channelnewsasia.com 2019. Boeing 737 MAX safety record questioned after two tragedies.
Available at: https://www.channelnewsasia.com/news/world/boeing-737-max-safety-record-
questioned-ethiopian-airlines-11330490 [Accessed on 6th May 2019]
Dailymail.co.uk 2019. Passengers' revolt against death jet: Airlines face backlash over
refusal to ground Boeing 737 Max 8 planes after Ethiopia crash. Available at:
https://www.dailymail.co.uk/news/article-6797727/Holiday-giant-TUI-refuses-ground-fleet-
Boeing-737-Max-8-planes.html [Accessed on 6th May 2019]
Dvbbank.com 2019. Airfinance Annual Report 2018-2019. Available at:
https://www.dvbbank.com/~/media/Files/D/dvbbank-corp/dvb-in-press/2018/Airfinance-
Annual-2018-2019.pdf [Accessed on 25th May 2019]
Nytimes.com 2019. Boeing 737 Max Hit Trouble Right Away, Pilot’s Tense Radio Messages
Show. Available at: https://www.nytimes.com/2019/03/14/world/boeing-737-max-ethiopian-
airlines.html [Accessed on 6th May 2019]
Smh.com.au 2019. The countries and carriers that have grounded the Boeing 737 Max.
Available at: https://www.smh.com.au/business/companies/the-countries-and-carriers-that-
have-grounded-the-boeing-737-max-20190313-p5140l.html [Accessed on 6th May 2019]

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