Introduction
Any company’s current sustainable development standards are calculated in financial terms and involve appropriate social and environmental responsibility. Much research has linked this kind of ethics, even at various costs, to positive long-term growth and reputation (Shabbir & Wisdom, 2020). As a result, various scandals dictated by organizations’ rules or the adopted code can significantly tarnish the reputation and affect capitalization and further operating activities. This paper considers an incident on board a United Airlines aircraft in 2017, which led to this kind of scandal.
Conditions Leading to Unethical Business Practices
A flurry of criticism fell on this organization after the case of the need to disembark a passenger from an overloaded plane from Chicago to Louisiana. Such a move was dictated by the urgent need for the company to transfer four crew members to this destination to carry out a flight that was threatened with cancellation (Yan et al., 2018). The choice fell on David Dao, a medical practitioner who refused to leave the plane, citing the need to see patients the following day by appointment. Video captured by other passengers showed that airline staff, led by a security officer, forcibly disembarked a passenger from the plane despite his protests (Yan et al., 2018). This case led to a vast scandal, which soon hit the media.
The practice of airlines, which in their policies often puts employees ahead of customers, is quite controversial. On the one hand, Southwest Airlines, the most active in promoting this approach, often reports high levels of employee satisfaction and performance, which makes jobs at this company attractive to professionals in this field (Harvey & Turnbull, 2020). On the other hand, such a technique increases the risks of ethical scandals when the organization’s interests become higher than the operational activities for providing direct transportation services to customers. A similar process also happened in this case: United Airlines needed to resolve a potentially canceled flight, which required the sacrifice of disembarking the passenger.
From the company’s point of view, this scandal was balanced by the fact that, in the event of maintaining a reputation with this flight and refusing to transport personnel, it could promise even more significant problems with the delay or cancellation of the flight in Louisiana. On the one hand, internal issues leading to similar consequences for many passengers in the event of a cancellation are not uncommon in this industry. Although they are mostly dictated by external factors, such as weather conditions, the lack of staff is a problem of the company, not other determinants. Consequently, the situation promised certain victims and a negative outcome, and United Airlines preferred a smaller number of dissatisfied customers.
On the other hand, the uniqueness of the process of choosing a disembarked passenger and the methods used are at odds with the current requirements of social responsibility, which has caused significant damage to the company in the long term. If, on the issue of choosing a minor victim in a difficult situation, the operational management acted as correctly as possible, then the solution to the problem on board did not carry a high level of quality.
United Airlines could have approached the issue of replacing a passenger more humanely by offering the fastest transportation on the next flight, as well as accommodation and food while waiting. In addition, the organization could seek a compromise immediately from a larger number of passengers, contacting them directly, as early as possible, and not immediately before departure. Despite an offer of $1,000 in compensation, there were no volunteers, and United Airlines had to forcefully drop the passenger at their discretion. A targeted choice with further use of force against its rules for treating customers and providing services led to a significant scandal and a deterioration in the company’s reputation.
Financial and Reputational Costs of Ethical Failures
The company suffered significant financial losses despite a public apology and the removal of the officer who used force. The aggressive behavior of David Dao dictated the motivation for such a move. Still, the excessive use of force was the defining event that formed the scandal. In addition to the compensation originally approved, which was a direct cost, United Airlines shares fell 4%, resulting in a nearly $1 billion loss in capitalization (Yan et al., 2018). The organization’s clients boycotted flights, slashed United Airlines credit cards, and expressed dissatisfaction with management in every possible way (Yan et al., 2018). This situation should serve as a lesson to all airlines that tolerate high-risk overbooking, leading to similar consequences.
Conclusion
Reputation is closely related to the financial health of even the strongest brands. Every operation that is associated with such negative experiences must be kept under high control and maintain a level of quality and ethics. The passenger’s aggressive behavior was regulated with the help of security officers, who followed the regulations and the law. Still, the critical mistake was the excessive use of force, which caused the client to end up in the hospital. Accordingly, United Airlines has acted up to this point in the best possible ethical manner, but one wrong action has led to devastating consequences. Experiences like this carry the moral that socially responsible actions must be followed until the problem is fully resolved – in this case, until David Dao is delivered to Louisiana on the next flight with all compensation claims.
References
Harvey, G., & Turnbull, P. (2020). Southwest Airlines. Case Studies in Work, Employment and Human Resource Management, 80.
Shabbir, M. S., & Wisdom, O. (2020). The relationship between corporate social responsibility, environmental investments and financial performance: evidence from manufacturing companies. Environmental Science and Pollution Research, 27, 39946-39957. Web.
Yan, H., Zdanowicz, C., Grinberg, E. (2018). Backlash erupts after United passenger gets yanked off overbooked flight. CNN Travel. Web.