University of the Philippines Cebu

Business Management Cluster

A Comprehensive Paper on
The Case of the Team Spirit Tailspin

In partial fulfillment
of the requirements in
MGT 197- Special Topics in Management

Submitted to
Prof. Leahliz Sia
28 November 2014

Submitted by
Ruth F. Melicor

Case Summary
Upon taking on leadership of a struggling regional airline called, Century Air, Robert
Johnson, the new CEO, concluded from extensive situational analysis, that the survival of the
airline rested on exceptional customer service, which in turn is a direct result or reinforced
workforce commitment from the firms employees. However, there seemed to a lack in the
latter factor. Due to its limited capacity, the airline had stopped hiring new employees and
had frozen the wages of its current ones for the past two years. This resulted to demotivated
employees who believed that they were given more workload and less pay.
In order to remedy low employee morale, Mr. Johnson along with representatives
from different levels of management designed what he called the Century Spirit Program.
This program was comprised of four areas, namely: (1) cross-functional task force, (2) open
communication task force, (3) recognition committees, and (4) individual initiatives. A few
months into the program, the task forces were effectively trained, the recognition committee
had given out due rewards to deserving employees, and the last area of the program involved
a group of flight attendants who started a company-wide newspaper called The Plane Truth.
However, environmental factors were not on the companys side. The Iraq-Kuwait
War, caused fuel prices to double, along with less travel mileage. This prompted the firm to
demand more of its employees to avoid net loss for that specific quarter. Furthermore, to
preserve jobs, management had to ask certain employees to cut back on work hours, in order
to avoid laying-off workers. The tense environment was soon reflected on the company
newspaper. Articles which were anti-management were soon published and circulated around
the company, with a threat of leakage to the outside. In addition, the paper also posted articles
about the inefficiency of other workers, specifically the maintenance crew, due to long
turnovers and the like. What was intended to be a morale booster, has seemed to lose its

control, and has become a potential disaster altogether for what the management intended it
to actually be.
HR Best Practices
This section will be comprised of the Best practices actually done by the organization in the
case, and the best practices which I believe they should have done and should do in order to
rectify the problem.
Best Practices Done
Direct Communication
It was stated in the case, that upon launching the Century Spirit Program, Mr. Johnson
wrote a direct letter to all employees stating the intentions, goals, and ambitions of the
program. According to Cabulay and Carpio (2010), doing such actually weakens the power of
the company grapevine, which more often than not bring inaccurate information along with it
to the bottom line employees
Inter-level involvement
I believe the reason why most of the areas under the program worked, was due to the
design itself, or rather the proponents behind it. In coming up with the program, Mr. Johnson
collaborated with people from various level of the organization, in order to bring a fresh and
relevant perspective for the achievement of the programs goals.
Emphasis on Human Resources
In the tourism industry, customer satisfaction truly is key. As Mr. J.W. always says,
Take care of your employees, and they will take care of your customers. There should
always be a sense of internal service within the firm, and that start with top management.

More and more firms are starting to realize that being employee centric certainly pays off in
the long run. Upon being confronted with operational problems, Mr. Johnson directly shifted
his efforts to the root of the issue, where it really had the greatest effect the employees.
Best Practices that Should Be Done
Role-modeling
Considering that every manager is technically an HR manager, the CEO is expected to
be a role model. In the implementation of the Spirit program, Management must give its full
support. By shutting down the paper, management fails to model what it wanted to achieve
with its employees. To have Spirit, management must model SPIRIT. The company would
truly fail to motivate its employees by removing its empowering support, once tensions are
not favorable placed against them
Consistent Communication
At the start of the case, Mr. Johnson clearly explained why he decided to implement
the SPIRIT program; however when it came to the cut-backs on job time, wages, and other
relevant decisions, the communication suddenly stopped. At the end of the day, this was done
due to environmental factors, in order to avoid firing employees. Management should
consider being open with their employees in this aspect. One cannot expect workers to
understand, when they are only given one side of the picture. According to the CEO of
Northwest Airlines, he started having discussion with large groups of employees, where he
would first explain certain decisions and implementations, and these employees would then
be given a chance to voice out what they thought or any other questions that they might have.
In this particular situation, he noticed that the regular vicious newsletters seemed to have
tamed down naturally on its own.

Lastly, communication is essential in this particular industry, since its employees are
displaced and most have no set physical workplace. Thus, by clearly established
communication pathways, there is additional sense of security which would cushion any
vicious anti-management remarks, which were made out of ignorance.
Empowerment Balance
According to Simmons, as cited by Beecher (2007), employee empowerment should
be implemented along with four systems, specifically: belief systems, diagnostic control
systems, boundary systems, and interactive control systems. Belief systems effectively
communicate the purpose of what needs to be done. Diagnostic systems involve setting target
in order for employees to check if the independent decisions they make have the desired
impact on the organization. Boundary systems set the standards for acceptable actions, while
interactive control systems serve as warning detectors to show employees that they are
getting off track in terms of objectives.
I believe Century Airlines, failed to establish such systems when they implemented
the individual initiative opportunity for their employees, which resulted to the dilemma
surrounding The Plane Truth. The organization should have set a proper belief system, there
should have been constant reiteration on why the Century Spirit Program was implemented,
which was in order to boost employee morale, not create disunity within the organization. A
diagnostic system should have been set, along with proper targets, in order for well-meaning
employees to be guided and made aware of the progress their efforts seem to be making. This
is somewhat synonymous to employee feedback and evaluation. Furthermore, a boundary
system should have been established. These flight attendant who run the paper should be
properly informed that a great deal of empowerment comes with a great deal of
responsibility, wherein what they write have direct effects on the firm and on individual

employees as well. They should be made aware of proper ethical standards to follow, in order
to avoid sticky situations. Lastly, an interactive control system should be established, where
management should monitor the individual efforts of employees in the Spirit program in
order to keep the program and its objectives in line to what was originally set.
Personal Conclusion
In the case mentioned above, management was only made aware of the rough
situation when a flight attendant left a copy of The Plane Truth in the first class section of the
airline, which was found by a member for the Board of Directors. This is a reflection of poor
role modeling, considering that the firm implemented a program but failed to monitor its
concrete actions afterwards, which shows that there was no interactive control system set in
its proper place. However, it is to be noted, that despite the crisis the firm is facing, it is on
the right track in making immediate decisions, which is to focus on its human resources.
Despite its failings in implementation, at the root of it all, Mr. Johnson is aware that his
employees comprise the greater and more valuable amount of the airlines capital.
Considering that Century Airlines are currently on the right track by focusing on motivating
its human resources, they merely need to take a greater control of the vehicle in order to reach
their goals.

References:
Becher, R. (2007). Balancing Control and Empowerment. Retrieved from:
http://jonathanbecher.com/2007/08/06/balancing-control-and-empowerment/
Cabulay, D., Carpio, C., (2010). Human Resource Management in the Tourism and
Hospitality Industry. Rex Publishing. Sampaloc, Manila.
Foster, D. (1991). The Case of the Team-Spirit Tailspin. Harvard Business Review.
Jan/Feb1991, Vol. 69 Issue 1, p14-25