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INTERGROUP RELATIONS AT ATLANTICA’S FLIGHT CENTERS

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Rick Oberweis stood on the observation deck of the Prudential Building, gazing through the plate-glass windows at the city of Boston spread below. It was a Sunday afternoon, in the fall of a year which proved turbulent for Rick, and he came to the top of the Pru as he often did to gather his thoughts and take stock. Though he worked at a desk now, Oberweis was a commercial and corporate pilot for many years, and so it didn’t surprise him when—of all the landmarks to look at— his absent gaze came to rest on Logan International Airport, visible in the gray distance of Boston
Harbor.
Oberweis was director of Flight Operations for Atlantica, Inc., a Boston-based technology firm. A St. Louis native, he came east to Boston a year ago to take this position, which Atlantica just created as part of an acquisition-driven restructuring.

East Versus West

NO

T

The last few years were good ones for Atlantica. Two years ago the company, flush with cash, acquired Pacific Industries, a high-tech company based in San Diego, which Wall Street analysts deemed an excellent “fit” for the Boston firm. The two companies’ product lines meshed nicely, and their areas of expertise were complementary. The only possible clash, the pundits worried, was culture: how would a free-thinking California company get along with its more conservative adoptive parent?

DO

The events of the following year bore out their concern. Synergies indeed developed, and
Atlantica seized a commanding position in the marketplace; but strains were emerging too. San
Diego employees could be heard complaining that Boston was stifling them with bureaucratic procedure, while the West Coast subsidiary’s iconoclastic spirit was viewed in Massachusetts as an unwillingness to “join the team.” Corporate aviation was not immune to this unrest: Oberweis’ job, in fact, was created to assuage it.

This case was prepared by Greg Bevan under the supervision of James G. Clawson, Associate Professor of Business
Administration. This case was written as a basis for class discussion rather than to illustrate effective or ineffective handling of an administrative situation. Copyright  1999 by the University of Virginia Darden School Foundation,
Charlottesville, VA. All rights reserved. To order copies, send an e-mail to sales@dardenpublishing.com. No part of this publication may be reproduced, stored in a retrieval system, used in a spreadsheet, or transmitted in any form or by any means—electronic, mechanical, photocopying, recording, or otherwise—without the permission of the Darden
School Foundation.

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Since Atlantica and Pacific each had its own flight department, one effect of the acquisition was that Atlantica got a revamped Division of Flight Operations, with two separate facilities: the
Eastern Flight Center (EFC) in Boston and the Western Flight Center (WFC) in San Diego. In the wake of a heavily leveraged acquisition, and wary of adding to its payroll with another layer of management, Atlantica simply decided that both flight-center managers would report directly to the company’s president.

CO

Senior management’s next decision, touted as a safety measure, was to reduce the mandatory retirement age at Flight Ops to 65. This forced WFC Manager/Chief Pilot (and formerly Pacific
Industries’ Aviation Director) Dale Moseby into his retirement party six months later. The EFC manager/chief pilot, meanwhile, was William Fendall, whose unquenchable ambition propelled him to the head of Atlantica’s Flight Ops in the pre-acquisition days. When senior management replaced
Dale with Gabe Childs, a Boston pilot who was Fendall’s protégé for the last few years, the San
Diego staff cried foul.

NO

T

All these moves, they said, bore Fendall’s fingerprints. He enjoyed being the head of
Atlantica’s flight department and was not about to share the spotlight with someone from San Diego, so he probably lobbied hard for Childs’ appointment to the WFC. Many West Coasters even suspected him of proposing the new retirement policy to senior management in order to force
Moseby out. Whether or not these charges were true—and from Fendall’s longstanding reputation at
Atlantica, Rick found it hard to dismiss them entirely—the EFC Manager became something of a villain to the San Diego staff, who referred to him as “William the Conqueror.”

DO

Senior management realized it needed to act. In other functional areas of the company, it became clear that many former Pacific Industries people felt like second-class Atlantica citizens, and no one at Boston headquarters wanted Flight Ops to experience the same rift. So the company created the director of Flight Operations position, and brought in Oberweis from outside the company to fill it. The EFC and WFC would both report to him; the centers, therefore, would be on equal footing.
At least, that was the way it was supposed to work. Oberweis was now with Atlantica for a full year, and on his last trip to San Diego the sense of disenfranchisement among the WFC staff was as palpable as ever.
The largest problem, it was clear, was Childs. He was no longer taking cues over the phone from Fendall, and he even worked to tone down his Boston accent and take an interest in windsurfing. But in the absence of his mentor it was plain that Childs was in over his head as WFC
Manager. Having flown for many years in the military before coming to Atlantica in his native
Boston, he had a limited corporate track record. In Boston his flight experience was limited to that facility’s fleet of three Citation aircraft; San Diego had three G-IVs instead. He also seemed reluctant to step into the leadership role that the manager/chief pilot position demanded.
In San Diego Oberweis heard all manner of complaints about Childs. “He can’t tell an aileron from an alligator,” said Chief of Maintenance Bradford White, in a rather large

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overstatement. “Gabe pawns off his work on everyone else and then takes credit for the results,” one of the pilots groused. “He doesn’t respect any of us,” said another. Morale was suffering at the
WFC, and what was particularly worrisome to Oberweis was the way the staff saw Childs: not as an individual manager with whom they were dissatisfied, but as a symbol of the East Coast company, of which they resented being a part.

Disagreements on a New Initiative

CO

Oberweis came home realizing that the East-West schism which his job was created to address was alive and well. With authority to make personnel decisions at both flight centers, he could change the lineup at the WFC if he saw fit, but a clear successor for Childs had not emerged.
Besides, there were two other issues in San Diego which were perhaps even more pressing. The
Maintenance Department, managed by White, was the setting for both of them.

T

Paperwork procedures at Maintenance got sloppy over the last few years. To hear White tell it, the problem was the undersized staff which resulted from years of belt-tightening. But Childs, aware of the legal requirements which surrounded documentation and the consequences of violating them, decided that a documentation initiative was in order. The problem was that no one in
Maintenance could agree on the exact measures to be taken.

DO

NO

The department quickly split into two camps: those who were conversant in computers and those who were not. The former group proposed a new, fully automated documentation scheme, but the latter group balked, insisting that “we’ve always done things the old way and we’re not about to change now.” Their stubbornness was pointed: many of them saw in the initiative—because Childs was behind it—the tyranny of Boston headquarters over the San Diego flight department. The procomputer camp was openly exasperated with this recalcitrance, and their attitude came across as condescension to the anti-computer camp. New hires to the department found themselves recruited by both sides in an effort to tip the scales one way or the other, like western states joining the Union in the years before the Civil War.
Oberweis was amazed that an issue like documentation procedure could have grown so contentious. The controversy seemed to support the view that leadership at the WFC was lacking.
Should Childs, or White, have simply decided on a new procedure, rather than hoping for consensus? Was White’s hands-off treatment of the controversy—which had no doubt allowed it to intensify—a sign that he was taking management cues from Childs? What should Oberweis do to resolve this problem and prevent new ones like it from cropping up?

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The Maintenance Techs and the Fuelers

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The other source of trouble at Maintenance was a long-simmering feud between the maintenance technicians and the fueler/clean-up personnel. The origins of the feud were obscure, but White reported that the three fuelers seemed to harbor a strong resentment toward the maintenance techs. They were friendly toward the pilots, but would turn off their cheer in the presence of the techs; the techs even complained that the fuelers were “playing games” with them.
When a fueler came into the hangar to move an aircraft, he would stop the tug and wait until the mechanics moved far away before hooking up the tow bar. One fueler even refused to use a certain tug after seeing a maintenance tech operate it.

CO

Childs thought it was up to White to resolve this vendetta. Nothing much was done, however. On his first trip to the WFC Oberweis talked informally with the fuelers and the techs, and their words were illuminating. “Ronnie’s got a real attitude problem,” one of the techs said of a fueler. “If I were Bradford [White] I’d write him up.” Ronnie offered a different perspective: “All the techs think they can order us around just because of those patches on their shirts. I’m nobody’s slave.” NO

T

It was clear to Oberweis that the fuelers felt like a lower class at the San Diego facility. To him it seemed that their grudge reflected in miniature the attitude of the WFC toward its Boston counterpart. He wasn’t sure, though, how this insight would help him suggest a solution to Childs and White. And a solution was what was needed, quickly: the feud was adding to the morale problems that Childs’ tenure at the WFC had brought on.

DO

Oberweis watched a commercial jet circle slowly in the Boston sky and remembered where he was. If the San Diego flight center accounted for all the major challenges of his job, he would have had plenty to think about. But the fact was that one additional difficulty faced him, and it developed right here in Boston, under Fendall’s watch.

Troubles with an Outside Contractor
Besides the different types of planes they operated, the Eastern and Western Flight Centers used different arrangements for aircraft maintenance. Whereas the WFC had an in-house maintenance department under White, the EFC used an outside contractor, Aviatech Ltd., for these needs: maintenance, hangar, ground services, and fueling. Maintenance engineers (MEs) from
Aviatech flew on all flights to and from Boston and proved diligent and knowledgeable. Oberweis felt the Aviatech facility was first-rate, and he thought that the outside-contractor arrangement was on the whole a good one for the EFC.
But things were changing. In recent months, growing Atlantica business in Europe called for greatly increased executive travel from Boston to the Continent. This meant that the MEs were traveling far greater distances than before, putting in longer hours with the client, and, in general, working more closely with Atlantica and less so with their own company.

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Aviatech did not seem happy about this development. Whenever Fendall contacted Quentin
Lott, the MEs’ supervisor at Aviatech, to request something he and an ME decided on, sparks would fly: that ME would come back reporting that Quentin berated him for insubordination. “The MEs just want to do the best job possible,” Fendall told Oberweis, “and if that means working on a project with one of us, fine. But their bosses are a different story. Maintenance is their stock-intrade, and they’re not about to let a pilot talk maintenance with them.”

CO

Oberweis spoke with several higher-ups at Aviatech, who explained that some
“communication problems” developed between them and the MEs, but they nonetheless expressed their satisfaction with the two companies’ working relationship. Meanwhile Fendall was clamoring for the dissolution of that relationship: he wanted the EFC to have its own in-house maintenance department like San Diego’s. Oberweis had reservations about that: along with the staffing requirements it would mean that Atlantica would have to move out of Aviatech’s hangar and purchase one of its own, a difficult proposal to sell to senior management in these cash-strapped times. And when he thought about it, he could imagine William the Conqueror’s discontent at not having his own maintenance department when the WFC boasted one—he could even imagine
Fendall embellishing some of the details of the maintenance feud in hopes of evening that score.

NO

T

A week before—as if to dispel any suspicion on Oberweis’ part that the entire controversy was a hoax—one of the MEs abruptly quit. There was friction between the MEs and the management at their company: Oberweis could see that plainly now. He still had little idea what to do. Could there be a way to get all groups involved in communicating with one another, before he began to think seriously about Fendall’s solution?

DO

“All groups involved:” the phrase rang in his head as he gazed down at the city. It was all a question of groups, wasn’t it? The west-coasters and the east-coasters; the pro-computer and anticomputer people; the maintenance techs and the fuelers; the MEs, their clients, and their bosses. He thought back on his past year at Atlantica: it was hard to come up with a job challenge he faced that hadn’t involved group dynamics in some way. He knew, of course, that managing groups was part of his job—he presided over nothing more than a group in Boston and a group in San Diego—but task objectives and guidelines always seemed to have him seeing his work in other terms. Now he turned and headed for the elevator, wondering if a simple change of perspective might lead him to unforeseen solutions.

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Exhibit 1
INTERGROUP RELATIONS AT ATLANTICA’S FLIGHT CENTERS

CO

Corporate
Management
Corporate
Management

PY

Abbreviated Organization Chart

Director of Flight Operations
Rick Oberweiss
Director of Flight Operations
Rick Oberweiss

Manager, Eastern Flight Center
Boston
Manager, Fendall Flight Center
William Eastern
Boston
William Fendall

T

Manager, Western Flight Center
San Diego
Manager, Western Flight Center
Gabe Childs
San Diego
Gabe Childs

Fuelers

NO

Chief of Maintenance
Bradford White
Chief of Maintenance
Bradford White

DO

Fuelers

Maintenance
Technicians
Maintenance
Technicians

Aviatech
Maintenance
Aviatech
Engineers
Maintenance
Engineers