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MGT 212 Case Study 2 (Fall 2021) - 1

JAL was once Japan's leading airline in the 1980s, but poor strategic decisions caused it to fall into serious financial trouble. It overinvested in areas outside its core business when the Japanese economy was declining. The SARS outbreak and 9/11 attacks further hurt business. In 2010, JAL filed for bankruptcy. A monk-turned-CEO, Kazuo Inamori, was hired and implemented his "Amoeba Philosophy" focused on empowering employees. He cut costs significantly and prioritized customer service and safety. These changes helped revive the struggling airline.

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Akhrar Faiyaz Nahian 2111250630
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138 views4 pages

MGT 212 Case Study 2 (Fall 2021) - 1

JAL was once Japan's leading airline in the 1980s, but poor strategic decisions caused it to fall into serious financial trouble. It overinvested in areas outside its core business when the Japanese economy was declining. The SARS outbreak and 9/11 attacks further hurt business. In 2010, JAL filed for bankruptcy. A monk-turned-CEO, Kazuo Inamori, was hired and implemented his "Amoeba Philosophy" focused on empowering employees. He cut costs significantly and prioritized customer service and safety. These changes helped revive the struggling airline.

Uploaded by

Akhrar Faiyaz Nahian 2111250630
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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North South University

Dept of Management
Case Study # 2
Fall 2021 Semester
Course: MGT 212 Organizational Management
Section: 3
Name: Akhrar Faiyaz Nahian ID: 2111250630
Name: Fariha Faiza ID: 2012437630
Name: Mohammed Rizwan Abedin ID: 2131160630
Instructions: You must use this word document to complete this case study. Do
not change the format of this document. Only one student from the group should
upload it once done. You are to form a group of three students and discuss the
video case with your peers following the link below. Once ready then answer
the questions within the word limits (300 words) using this document and turn it
in Google class work within the deadline. You can also search the case in
YouTube as “How Japan Airlines nearly collapsed| Inside the storm| Full
episode”

Video case link:

https://www.youtube.com/watch?v=zpmX3BrLn-E

Question: Explain how a high performing company like Japan Airlines fell into
serious financial trouble due to wrong strategic movement and also explain how
a monk turned into CEO saved this company from near collapse and revived it
again with unique leadership and management style. Also tell me in one
sentence what lesson we can learn from this case as students of Management?
(350 words)

Answer:
JAL, Japan’s first commercial airline, became the leader in passenger and
freight transportation for five consecutive years in the 1980s. (Paulo, 2018) It
was the only international flight from Japan at that time so the competition was
limited. For branding and marketing, the airline did zero investment by offering
premium services at economy prices. JAL had a unique homegrown advantage
because of its low-interest rate and attracted more customers keeping the costs
down and fares low. (CNA,2018)

But in 2010 JAL filed for bankruptcy. The reason behind JAL’s bankruptcy was
unceasing lavish overspending, mismanagement, and investing in the area of
incompetence. JAL invested money in hotels and resorts to augment global
brand equity. JAL began investing in the growing businesses linked to the
aviation industry just when the Japanese economy was about to crumble.

As the JAL employers got cost-conscious, they invested in domestic routes and
bought major stakes. However, the company had neither adeptness nor the
persistence to maintain different types of domestic airlines and their subsequent
specialized crews.

The global outbreak ‘SARS’ plummeted the number of passengers.


Furthermore, the attack on the World Trade Center in 2001 and the Iraq war in
2003 blew the aviation industry apart. To undo the past mistakes, the company
hired a monk-turned CEO. (JiJi, 2020)

Mr. Kazuo Inamori took the position of CEO in JAL with no salary initially
which influenced the staff as they knew what his priorities were. Under his
leadership, JAL reduced employee numbers by over 30%, cut back on employee
benefits, and reduced unprofitable routes. (Leaders We Deserve Exploring
leadership stories in business, politics and sports, 2015)

To overcome JAL’s problems, Mr. Inamori used the Amoeba Philosophy.


Instead of top-down decision-making, the airline’s workforce was divided into
small units, each with a leader given a degree of freedom that flew in the face of
Japanese tradition. He was a very employee-oriented leader and their welfare
was one of his biggest priorities. The idea of his philosophy is that the
employees do their best, and as a result, they contribute to society. So,
employees were naturally giving their best effort for him.

Mr. Inamori was very confident and thorough with figures. So, no units were
able to hide poor performance. Customer service and safety remain the airline’s
top priorities. (Paulo, 2018)

Reference:

1. Paulo D. A. 15 (2018, December), How a Buddhist monk turned CEO


revived Japan Airlines from bankruptcy, CNA, Retrieved from:

https://www.channelnewsasia.com/cnainsider/buddhist-monk-ceo-
kazuo-inamori-save-japan-airlines-jal-bankrupt-913931

2. CNA. (2018, September 20). How Japan Airlines nearly collapsed


[video]. YouTube. https://youtu.be/zpmX3BrLn-E

3. JiJi, (2020, January 19), A decade after Japan Airlines' went bankrupt,
criticisms over the government bailout remain, The Japan Times the
Independent Voice in Asia, 5, Retrieved from:
https://www.japantimes.co.jp/news/2020/01/19/business/corporate-
business/10-years-japan-airlines-bankruptcy-
bailout/?fbclid=IwAR3gfVFK_dXTW8UWc3XBID8d5iJVKHivzca8Ax
kBcgLuEckYVEqJG3phHeg

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