Reference no: EM133096439

IntraGlobal Airlines is a company going nowhere: its sales are flat, its passengers are complaining about dirty airplanes, and the company is increasingly having to cancel flights because its old Boeing 747s are breaking down so often. Managers responsible for fixing the ailing airline face an array of tough decisions. For example, they know they need to buy new planes, but don't know which models to buy or how to pay for them. They also know they need to change their route structure, but abandoning a city that's been loyal to the company will no doubt prove to be bad public relations. And the firm's image is so bad that managers believe they may even need to come up with a new name for the carrier, along with a new logo and color scheme for its planes.

But what makes IntraGlobal especially interesting as a business is that it really doesn't even exist! Indeed, it is simply the product of some fertile minds at Boeing, the largest aircraft manufacturer in the world. IntraGlobal is a case study that serves as the centerpiece of an intense two-week management development seminar that Boeing runs quarterly for airline executives from around the world. To date, around one thousand airline employees have taken part in the program, and it is booked for at least the next year.

IntraGlobal was developed to mirror as closely as possible the very real problems that once existed at airlines such as Pan American and National, before they ceased operations, and Continental, before its recent dramatic turn-around. But because the simulation isn't based on any single airline's problems and experiences, executives attending the seminar can't simply mimic what others managers did in the past. Instead, attendees have to closely study IntraGlobal's fictitious management structure, balance sheets and other financial indicators, route map and structure, and internal memoranda that are provided by the seminar's instructor.

Many senior managers from U.S airlines such as American, Delta, and Continental and international airlines like Lufthansa and JAI have already completed Boeing's seminar. Today the audience is primarily managers from small and medium-sized airlines in Latin America and Eastern Europe. Most of those who come are already specialists in one or more aspects of airline management, such as route management or finance. They come to Boeing to deepen their knowledge and to learn about functions involved in effective airline operations. And virtually everyone who attends the seminar walks away having learned new things. For example, in one recent session most attendees were surprised to learn that engineers can change the maximum power capabilities of an airplane engine. Others were surprised to hear that filling up all the seats on planes is not always a good thing full planes mean uncomfortable and disgruntled passengers and often drive customers to competitors. And still other participants learned to appreciate for the very first time the  importance of mission statements and the appearance of an airplane.

So how much does Boeing change airlines for running this program for their executives? Nothing! The only constraints imposed by Boeing are that no single airline can send more than two individuals to any given training session and that those who are sent are indeed senior managers. Boeing argues that it runs the training to provide a service for the industry. In addition, Boeing managers claim that by interacting with a variety of airline executives and hearing about what does and does not work for them, the firm learns how to build better airplanes. There is also the possibility, of course, that executives who go through the training program may be more inclined to favor Boeing the next time their airline needs to order new jets.

Case questions

1. What are the benefits and weaknesses of Boeing's training program from the standpoint of the airlines that send their executives to attend?

2. What are the pros and cons of the training from Boeing's point of view?

3. What other companies in different industries might consider providing training of the sort offered by Boeing?