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Continental's Quest For A Fair Market: Continental Airlines slammed the idea of an American Airlines-British Airways alliance in a December 18, 2001 news release. The comments were filed with the U.S. Department of Transportation (DOT). Continental warned that an alliance of that size would deal an overwhelming blow to the transatlantic competition, with anticompetitive spillover effects in other markets. This alliance would make competition impossible for other airlines to compete effectively between the U.S., U.K., and Europe. Another alliance of United, the second largest airline in the U.S., and bmi, with their strength at London Heathrow, would make competition between the U.S. and the U.K. or Europe nearly impossible. With American Airlines being the largest airline company in the U.S., United second, and with British Airways and bmi both some of the largest in Europe, opportunity for any other company would be unattainable. Basically, there would be a monopoly of the U.S. and Europe flights. Customer tickets prices would rise do to the lack of domestic competition. A day after the Continental news release the U.S. Department of Justice (DOJ) voiced its opinion of opposition of the alliance. The (DOJ) concluded that the American-British alliance would have a staggering effect on competition, which would likely result in higher fares and reduced service. Continental added that with the tragedies of September 11 still affecting airlines, the merging of the two powerhouse companies would be detramental. This (DOJ) opposition of the American Airlines-British Airways is consistent with its response from 1998 when American and British abandoned a similar merging plan. The Conflict And Its Relation To Mintzberg's Managerial Roles: The conflict of the American Airlines-British Airways alliance could cause a serious problem in the aviation industry. This problem could affect the airline companies, its employees, and most importantly, the customer. That is why a decision must be made about whether or not the alliance should take place. Henry Mintzberg lists out 10 specific managerial roles. These roles are separated into three categories; interpersonal, informational, and decisional. Even though we are dealing with separate organizations, they all play a part in the aviation industry. Each company relates to its own role in the decisional category of Mintzberg's 10 Managerial Roles. First, the American-British merge is a new project that would improve their two companies. Unfortunately, this improvement would cost the rest of the industry. American Airlines and British Airway take the entrepreneur role. The two companies are initiating a new idea of an improvement project. This new project would deeply hurt Continental Airlines, among others. In order to stop the alliance, Continental filed its complaints to the U.S. Department of Transportation. Continental assumed the role of the negotiator. They were representing the interests of not only themselves, but the entire aviation industry. The U.S. Department of Transportation (DOT) is responsible for transportation within the U.S. They have the responsibility to keep certain industries alive. The airline industry is defiantly one of them. The (DOT) distributed money to the airline industry after the September 11 crisis. The resource allocator also decides who gets what resources. That is how the (DOJ) performed the as a resource allocator. Finally, the U.S. Department of Justice (DOJ) is the powerful leader of these companies. Even though the companies operate independently of the (DOJ), the (DOJ), if necessary, has the power to step in a fix a crisis. The American-British merge would have obviously created a crisis in the airline industry. So the (DOJ) acted as a disturbance handler and took corrective action and resolved the matter before this crisis could occur. |