TOOL S1 -Role

1. Who are we? We are the new CEO of Sabena Belgian World Airlines, which is Pierre Godfroid.
2. Who are the key players? [Link] Weytjens, a new employee who had the task of fixing the
dishwashing department, 2. Luc Cloetens, the vice president of catering for Sabena, 3. Pierre
Godfroid, the new CEO and Chairman of Sabena, and 4. The government of Belgian.
3. What is the situation? Sabena is in a lot of debt, and the new CEO, Pierre, is trying to make the
company profitable, but the employees do not have trust that Pierre can pull it off.
TOOL S4- 2X2 Matrix of Tools
1. Organizational Health- I would rate organizational health as a 3/10.
Airline workers liked the plan but did not think Godfroid could pull it off . “The people you have
around you are the people who brought us to defeat.” The employees said to Godfroid why should
we believe things will be different. Godfroid then replaced two thirds of the executive committee,
with many newcomers excited by the challenge. Union believes management was exploiting
employees, only focusing on profit. With such management, distrust, there were frequent strikes.
Most workers were worried of pay cuts and lay offs and believed it was them and the union against
management. It was uncommon for a month of operations without a strike. Work schedules were
sensitive, and product was prone to spoilage, so even a strike as long as an hour causes major effects
to operation. There was a major issue with dishwashing area. Maintenance crews and dishwashing
department keep blaming each other for the issue.
2. Organizational Performance- I would rate them as A 2/10 for organizational performance.
For last 7 years Sabena has been losing money, Deficit of over $3B Belgian francs (US$98Million)
in 1991. Sabena had virtually no financial capacity as its equity was seriously depleted and its debt
load onerous. They are going to issue a stock offering so they can raise money and reduce the deficit.
The Government has bailed out Sabena more than once already. Government made it clear this
would be the last time for a bail-out. The government saw this as a sufficient amount of funds to
stabilize the company and it was up to management to maintain.
Based off my analysis of Organizational health and Performance I would put Sabena Belgian World
Airlines company in quadrant 4 for the performance matrix meaning they are in crisis mode.
TOOL S5 -Strategy Triangle
Product Market Focus: Their target market is people who enjoy Belgian cuisine and appreciate the
friendliness of the Belgian people.
Goals: The company wants to become profitable again so that it can stay in business. The new CEO,
Pierre Godfroid, is very optimistic that he can achieve this.
Value Proposition: Price: Sabena was going to set its price higher, but it wanted to prove to the
customer why it needed to do that. Features: customer values such as good Belgian cuisine and
friendly staff. Execution: They need to execute this plan within the next 2 years.
Core Activities: Some of the product the company sold where beverages, food , merchandise,
newspapers, and magazines on the airplane for people to enjoy while on the flight. The main product
sold is airline tickets.
Pre-Work questions
1) What is the decision context that Erik faces?
Erik was given the responsibility to solve a major logistics problem in the dishwashing department.
The washing machines keep breaking down and this is causing huge delays in the cleaning process.
The dishwashing department blames the maintenance crews for slow and unreliable repairs and the
maintenance crews blame the dishwashing department for nor properly preparing dishes for the
machines. Erik is required to look at the context of the different roles in this issue and each of their
responsibilities in order to get the dishwashing department back on schedule.
2) What personal, business, and environmental factors influence Erik’s actions?
a. Personal:
Maintaining a good relationship with both the dishwashing department and maintenance crew.
Has another job waiting for him and does not need a reference so he may shirk on his
responsibilities. The relationship on the maintenance crew and the dishwashing department as a
whole. You do not want to start off on a bad note that can cause an unhealthy relationship in the
future. Another personal factor is that he has a guaranteed job at McKinsey that does not depend on
this current job. Hence, he is acting in his own interest and wants to develop more of his own skills
b. Business: The unions will have an impact on Erik’s decisions as he does not want to
cause a labour strike. The frequency of the strikes is one of the reasons why Sabena is not doing well
financially.
c. Environmental: Other airlines that need services from Sabena Catering may put pressure
on Erik to solve the problems so that they get higher quality service. The government wanted Sabena
to become profitable, so this also puts pressure on Erik.
3) What is your assessment of the situation at Sabena catering?
The situation at Sabena Catering is very bad. The Sabena airline has not made a profit for 7 years
and has just had its worst deficit of almost $100 million USD, but this does not indicate that SNC is
not running with profits from its contributions. There was high tension because the unions believing
that eventually the workers would have to pay the price of declining airline profitability through
experiencing lay-offs salary, cuts, and reduced benefits. Also, there are frequently strikes that vary
from short outburst to long and drawn-out out events. This all shows that SNCS currently has low
organizational health and performance.
4) How ready is the organization for change?
a. Management:
Is ready for change, have recruited an ambitious new team of senior managers that are motivated to
bring the company back to being profitable.
Upper levels of management are more ready than the lower levels for change.
Strikes make it hard for the organization to change because the management can not implement the
changes they need if they employees are on strike.
b. Employees:
Not ready, they are always fighting with management and think as though the managers do not care
about them. The employees are focused on their short-term position and not at the long-term
strategy that the new management team is trying to implement.
5) What specific actions should Erik take to resolve the problems?
Erik should have increased training sessions for the dishwashing department so to ensure everyone
knows the correct way to use the machines. He should also have the maintenance crews have a log
to record what they are fixing. This will show if the same thing is being fixed every time it may be
due to dishwashing departments mistakes. But if many different things are breaking it could just be
time to get new machines. To resolve the dishwashing problem, Erik should have the maintenance
crew fix the dishwashing machines as well as create a guide on how to use the machines effectively
that will cause fewer break downs. Read the guide and make any necessary changes, then have a
training session with the dishwashing department and make sure they know how to operate the
machinery effectively. This way, it will start to solve the behavioural problems between the
mechanics and dishwashers and eventually solve the rest of the problems. On the other hand, he can
also negotiate with the unions before he approaches the employees and try to maintain a neutral
relationship with them, so another strike does not happen. Then, inform the employees about the
necessary change and why they are necessary and assure them that their salaries would not be
affected, and their jobs would remain secure.