The purpose of this section of the study of American Airlines (AA) is to examine the company's corporate culture and to conduct a political analysis and assessment. It will be argued that governance at AA is top-down rather than bottom-up, that shared decision-making has been threatened in recent years by conflict between labor and management over many of management's cost-reduction strategies, and that as a result, the firms culture has been changed dramatically. Issues related to this transformation include concerns regarding leadership activities and culture itself.
As the attached PowerPoint slide suggests, leadership and leaders themselves shape corporate culture by functioning as role models, by creating reward systems, through hiring decisions, and by developing a corporate structure and strategy.
Bolman and Deal (1991) have argued that leaders create, within corporate culture, a set of "frames" or lenses through which culture is established, manipulated, modified, and affirmed. At American Airlines, the dramatic shifts in leadership in recent years, coupled with the growing antagonism between unionized labor and management over layoffs and salary caps or reductions, has damaged the capacity of leaders to create and maintain a practice corporate culture.
A relevant definition of what constitutes leadership was offered by Joseph Rost (1991, p. 26) who says that:
à leadership is an influence relationship among leaders and followers who intend real changes that reflect their mutual purposes.
This contemporary definition is composed of four basic components, each of which is essential and must be present if a particular relationship is to be called leadership. The relationship is based on influence. This influence is multidirectional, meaning that influence can go any which way (not necessarily top-down), and the influence attempts must not be coercive. Therefore, the relationship is not based on authority,...