Airtex Aviation Case

While working on the AirTex Aviation case, we were observing a group of multiple main problems that we should focus on. The first problem we found was about the management qualification, because their qualification and their experience on the field are a bit low. The second issue that is obvious deals with the accounting manager and the centralization of the accounting information. This last issue brings also problem of the accounting system which is not understood and should be changed. Finally, we discussed the problem of the lack of motivation (not initiative, change resistant employees). There is also no decision making process so it closes a lot of profitable areas.

When analysing main control problems of AirTex on the theoretical background we can see a few main characteristics. Apart from the fact, that there was no working control system at the beginning, we can find diagnostic elements of control (since the only focus of the control was placed on results) and mostly functionalist view (e.g. power owned by one person) with unclear strategy and innovations not considered. We can see focus only on outcomes, not at all on actions done to reach them, which indicates no action control, no cultural or personnel control, just loose results control (no feedback included, unclear and undefined targets). We can easily recognize all of the three main control problems - lack of direction (unclear strategy and targets, no guidance), motivational problem (no incentive system, no rewards and punishments, no feedback or information about procedures for better understanding of situation given to employees) and also problem of personal limitations (unqualified departmental managers, person who is holding the power doesn't have knowledge in accounting that is needed and apparently does not have any managerial skills, employees are limited by lack of information).

After analyzing both the situation before and after the arrival of the new bosses; we pin pointed several aspects of their strategy that can be criticized. Indeed the new strategy imply important amount of risk taking while implementing the new control system.

The high level employees didn't have any managerial skills or educational knowledge to lead a whole department, especially in a crisis situation as AirTex one's. Ted and Frank decided to trust the managers with not only the leading and supervising of other employees - knowing they never did that before - but also with controlling the budget. Those managers were used to work without any direction and specific motivation. By transferring the power to them, and implementing an idea of loose control, they exposed themselves to uncertainty. What if the managers would have misjudged the objectives? The second big risk that the new heads of the company took was to decentralize the control system of the company from an Administrative one, focus around Sarah the accountant and the governance member of the company