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Responsible Leadership and Reputation Management During a Crisis: The Cases of Delta and United Airlines

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This study argues that actions taken during a crisis within the responsibility compass impacts reputation. The lens of responsible leadership was chosen from among the different foci of leadership scholarship because of its emphasis on relational and ethical dimensions. The focus of this study was the actions undertaken by the CEOs of United and Delta Airlines after the forceful removal of the passengers and its influence on the reputation capital as measured by the changes in the respective share prices of the airlines. The overarching question was whether there was clear statistical evidence that linked the actions undertaken as part of the crisis management efforts and the reputation of the airlines. Findings from this study suggest that actions taken as part of responsible leadership compass explained the variations in the share prices. In the case of United Airlines almost 70% of the variations in the share prices could be explained by responsible leadership, whereas in the case Delta airlines only 50.6% of the variations in the share value could be predicted based on the role of leadership in crisis management.
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Vol.:(0123456789)
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Journal of Business Ethics (2021) 173:29–45
https://doi.org/10.1007/s10551-020-04554-w
ORIGINAL PAPER
Responsible Leadership andReputation Management During aCrisis:
The Cases ofDelta andUnited Airlines
TulikaM.Varma1
Received: 1 March 2018 / Accepted: 9 June 2020 / Published online: 15 June 2020
© Springer Nature B.V. 2020
Abstract
This study argues that actions taken during a crisis within the responsibility compass impacts reputation. The lens of respon-
sible leadership was chosen from among the different foci of leadership scholarship because of its emphasis on relational and
ethical dimensions. The focus of this study was the actions undertaken by the CEOs of United and Delta Airlines after the
forceful removal of the passengers and its influence on the reputation capital as measured by the changes in the respective
share prices of the airlines. The overarching question was whether there was clear statistical evidence that linked the actions
undertaken as part of the crisis management efforts and the reputation of the airlines. Findings from this study suggest that
actions taken as part of responsible leadership compass explained the variations in the share prices. In the case of United
Airlines almost 70% of the variations in the share prices could be explained by responsible leadership, whereas in the case
Delta airlines only 50.6% of the variations in the share value could be predicted based on the role of leadership in crisis
management.
Keywords Crisis· Reputation· Responsible leadership· Airlines· Mixed methods
Introduction
On Sunday, April 9, 2017, a passenger was forcibly dragged
out of an overbooked United Airlines flight from Chicago
O’Hare International Airport to Louisville, Ky. David Dao,
a physician from Kentucky, who was already seated was
forcefully dragged after he refused to give up his seat to
make room for crewmembers. Dr. Dao suffered a significant
concussion and lost two of his front teeth and a broken nose.
Cellphone video of the disturbing incident went viral and
prompted widespread outrage. United CEO Oscar Munoz
issued multiple statements and ultimately apologized say-
ing it was a “truly horrific event. No one should ever be
mistreated this way,” Dr. Dao eventually settledwith the air-
line for an undisclosed amount on April 27, 2017 (Foxnews.
com).
In a similar incident involving Delta Airlines, a Southern
California family was booted from a red-eye Delta flight on
April 23, 2017 from Maui to Los Angeles after they declined
to give up a seat they had bought for their teenage son and
attempted to use the seat for their 2-year-old son instead.
Brian and Brittany Schear, of Huntington Beach, Calif., got
into an argument with airline officials and were threatened
with jail time and foster care for their children after they
refused to give up the seat. A flight agent told Schear that
according to Federal Aviation Administration regulations,
his 2-year-old son could not occupy a seat during the flight
and would need to sit in an adult’s lap. The FAA site how-
ever statesthat children are safer in government-approved
car seats and not on laps. Even Delta urges parents to pur-
chase seatsfor children younger than two-year old and to use
approved child-restraint systems during the flights (Bever
2017). Delta ultimately apologized and offered refunds and
undisclosed compensation to the Schear family on May 5.
The two incidents generated a lot of negative publicity for
the two airlines and negatively impacted their share prices.
An organization’s senior leadership is key during a crisis;
yet, there have been few studies that closely examine the
role of senior leadership in the management of a crisis and
its impact on the reputation of the organization. Leading
during a crisis can be extremely difficult and challenging
because decisions have to be made very quickly and without
much time for reflection (Klann 2003). It has been theorized
* Tulika M. Varma
tulika.varma@unf.edu
1 School ofCommunication, University ofNorth Florida, 1
UNF Dr., Jacksonville, FL32224, USA
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