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Abstract

Japan Airlines Corporation (JAL), founded in 1952, was the oldest airline company of Japan. JAL had been running its business as a monopoly in an environment highly regulated by the Japanese government. However, with the subsequent deregulation of the Japanese aviation industry in 1985, it had to face competition from other airlines. A series of highly publicised safety gaffes forced its customers to switch to competitors'' services, endangering JAL''s survival. An internal power struggle, which had been brewing for some time, coupled with harsh media-led criticism eventually led to a change of leadership in the company. Though the new leadership formulated a restructuring package, scepticism ran high about the success of the restructuring process. The case is structured to enable students to: (1) discuss the effects that changes in environment has on a corporation''s fortunes; (2) discuss the management problems that government-owned companies face post privatisation; (3) discuss the evolution of the Japanese aviation industry, and the competitive environment that ensued subsequent to the deregulation of the industry; (4) discuss the problems that JAL was facing and their causes; and (5) discuss JAL''s restructuring strategy and its potential success. A structured assignment ''306-315-4'' is available to accompany the case.
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March 2006

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Abstract

Japan Airlines Corporation (JAL), founded in 1952, was the oldest airline company of Japan. JAL had been running its business as a monopoly in an environment highly regulated by the Japanese government. However, with the subsequent deregulation of the Japanese aviation industry in 1985, it had to face competition from other airlines. A series of highly publicised safety gaffes forced its customers to switch to competitors'' services, endangering JAL''s survival. An internal power struggle, which had been brewing for some time, coupled with harsh media-led criticism eventually led to a change of leadership in the company. Though the new leadership formulated a restructuring package, scepticism ran high about the success of the restructuring process. The case is structured to enable students to: (1) discuss the effects that changes in environment has on a corporation''s fortunes; (2) discuss the management problems that government-owned companies face post privatisation; (3) discuss the evolution of the Japanese aviation industry, and the competitive environment that ensued subsequent to the deregulation of the industry; (4) discuss the problems that JAL was facing and their causes; and (5) discuss JAL''s restructuring strategy and its potential success. A structured assignment ''306-315-4'' is available to accompany the case.

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Location:
Industry:
Other setting(s):
March 2006

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