IMPORTANT LEADERSHIP ASPECTS OF FRANK BORMAN

AND FRANK LORENZO OF EASTERN AIRLINES

By
JAMES CROWSON
Bachelor of Arts in Political Science
The University of Oklahoma
Norman, OK
1998
Master of Public Administration
The University of Oklahoma
Norman, OK
2010

Submitted to the Faculty of the

Administration of Aviation Administrations
of the Oklahoma State University
in partial fulfillment of
the requirements for
the Degree of
DOCTOR OF EDUCATION
March 16, 2012

IMPORTANT LEADERSHIP ASPECTS OF FRANK BORMAN AND FRANK LORENZO OF

EASTERN AIRLINES

Introduction
This paper is about the leadership of Frank Borman and Frank Lorenzo set
within the context of the demise of Eastern Airlines (EA). Eastern was a
company that once thrived in the commercial airline industry. At one point in
its history from 19XX to 19XX, it was among the most profitable and successful
of all US commercial airline companies. In part because of Frank Bormans
inability to lead the company through the challenges presented by deregulation
and his challenges with the unions, the company starting dying. It became a
prime target for Frank Lorenzo who envisioned a commercial aviation empire.
Lorenzos Texas Air International (TXI) corporation bought it in 19XX. It was
only a matter of years before Lorenzo had worked the legal loopholes to his
advantage siphoning off hundreds of millions of dollars of assets and cash into
the coffers of TXI. Now lets talk general organization of this paper.
Organization of This Paper
The primary source text is Aaron Bernsteins Grounded: Frank Lorenzo and the
destruction of Eastern Airlines. The structure and theory of this paper is
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adapted from Peter G. Northouses Leadership: Theory and practice. There are
XX sections. Each section contains variations of questions found in Northouses
end of chapter questions and exercises. This is a unique method of addressing
important details about the leadership aspects of Borman and Lorenzo.
Examples of Herb Kellehers excellent leadership at Southwest Airlines are used
when helpful to contrast the poor leadership of both Borman and Lorenzo at
Eastern Airlines. The sections include understanding what leadership is, both
good and bad; biographical information on Borman and Lorenzo; and
Northouses leadership theories including the trait, skills, style, situational,
contingency, and leadership ethics.
Definition of Leadership
Before we launch into our full discussion of Borman and Lorenzo, let us define
our leadership term. First, there is no simple definition of leadership.
Nevertheless, here are a few examples from leading scholars. According to
Northouse (2007), leadership is a process used by a person to influence people
of like-mindedness to pursue a common goal. Within this definition are three
components: influence, groups, and goals (p. 3). NEED TRANSITION SENTENCE
HERE.
Introducing Borman and Lorenzo
It sounds like a basic point, but leaders are supposed to lead, and followers
follow. If a leader turns around, and notices no one is following, then no
leadership is occurring. With this in mind, two large points are important to
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understand from the start of this paper. First, in the matter of Frank Borman,
one can argue that he was ineffective in leadership. Faced with the challenges
presented by problems and resistance with the stiff-necked unions who nearly
completely refused to offer concessions, was Borman successful as a leader? If
the vision was to destroy an airline, then yes. To the contrary, the overall goal
in business is to stay in business and earn profits. This was not the end result.
The end result was selling out to TXI and Frank Lorenzo. We will look at Borman
closer a little later, but for now lets transition to a brief discussion about
Lorenzo.
Second, Frank Lorenzo might have been successful but he saw opportunity in
taking millions of dollars from one corporate entity, EA, to another, TXI. An
interesting point about Lorenzo is that it seems that he trusted no one. He
refused to turn over the operations of Eastern Airlines to more competent and
qualified personnel.
Neither Borman nor Lorenzo were capable to lead the company passed its
difficulties with the unions and the challenges deregulation presented. This
paper adapts questions from Peter Northouses Leadership: Theory and
practice and provides answers from the Borman and Lorenzo examples. In a
few places where helpful, both men are compared to Herb Kelleher, of Eastern
Airlines, to show differences in leadership effectiveness.
Basic Biographical Details about Borman

Bormans leadership style was influenced predominantly by his experience in

the US military. Born in Gary, IN, in 1928, and raised in Arizona, he graduated
from the US Military Academy in 1950 and accepted a commission into the US
Air Force. At the academy, he earned his Bachelor of Science degree and a
Master of Science degree from California Institute of Technology in aeronautical
engineering. This is a man whose list of accomplishments is truly impressive. In
addition to status as a military officer, he was a test pilot and NASA astronaut.
He rose through the ranks and earned numerous awards including the
Congressional Space Medal of Honor. In 1970, he retired from the Air Force as a
colonel and accepted employment with Eastern Airlines. He was promoted to
CEO after about six years. He left Eastern in 1986 after TXI and Lorenzo bought
out the company. There is no question that Borman is an excellent example of
a leader to emulate in basic terms of goal accomplishment. Yet clearly he was
not accustomed to the behavior of unions in corporate America.
Basic Biographical Details about Lorenzo
Lorenzos leadership style was influenced by his family upbringing and
education. He was born in New Jersey in 1940 and raised in Queens, NY, to
average Spanish immigrant parents. His father earned his living by owning and
operating a beauty salon. From his youth through his teenage years, he worked
in the salon. With airplanes flying overhead from the NEW YORK CITY AIRPORT,
there is little wonder why, instead of a future with his father in salon
operations, he saw a future in aviation. Lorenzos education is important to
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mention. He earned his undergraduate degree in economics from Columbia

University in 1961 and an MBA from Harvard University in 1963. There is a high
degree of likelihood that he was influenced by one of his business professors,
Roland Christianson, to turn companies around and to understand them in
simple terms of dollars and cents (INSERT THE BERSTEIN REF HERE).
Lorenzo worked for Eastern Airlines briefly during his time at Harvard (p. 65). A
few years after graduating from Harvard, he formed Jet Capital Corporation
with a friend, an aviation-related consulting firm (p. 65). For the next fifteen
years or so their corporate entities would buy and/or takeover at least four
airlines. A key point to understand about Lorenzo is that he had visions of
owning the largest airline conglomerate in America (SOURCE).
Now that we have discussed some brief details about Borman and Lorenzo,
which can help us to understand leadership, lets transition and apply a few
Northouse (2007) theories to their examples.
Borman and Lorenzo through the Lens of Northouse
Northouse offers several theories to understand leadership. This section focuses
briefly on leadership traits, skills, style, situational, contingency, and ethics.
Trait approach
The trait approach is leader-centric and seeks to explain leader behavior by
looking at certain fixed, innate personality characteristics such as selfconfidence, initiative, insight, responsibility, alertness, persistence,
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intelligence, and sociability (Northouse, 2007, p. 16). Using this basic

information about traits, how big a part did Bormans and Lorenzos traits play
in the build-up to and the eventual downfall of Eastern Airlines? TALK ABOUT
BORMANS MILITARY GRUFFNESS (Bernstein, 1990, p. 21) AS A TRAIT and
LORENZOS IVY LEAGUE EDUCATION AS CREATING IN HIM TRAITS OF LACK OF
SOCIABILITY WITH OTHERS NOT OF THE SAME UPPER CRUST, EVEN THOUGH HE
WAS RAISED IN QUEENS BY A SALON-OWNING FATHER.
To compare and contrast leadership traits, how big a part did Kellehers traits
play in the success of Southwest Airlines?
Would each leader be a leader in other business contexts?
Skills approach
The skills approach is a way to understand leadership by focusing on the skills
that can be learned and developed. Katz (1955, p. 34) divides leadership skills
into three parts: technical, human, and conceptual (Northouse, 2007, p. 40).
Bormans reputation as the colonel (Bernstein, 1990, p. 22) at Eastern
Airlines did not work to his benefit to be a likable leader. His interpersonal
relationship with the main mechanic union steward Charlie Bryan was
unproductive; therefore, he loses points in the human relations area.
Even before Lorenzo bought and arrived at Eastern Airlines, he had a reputation
for breaking unions power. The human aspect of leadership is important to
understand. The examples of Borman and Lorenzo show that interpersonal
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human skills are an important part of leadership and must not be overlooked.
In the case of Kelleher, this is an area that he mastered, exemplified, and
taught to his entire organization at Southwest Airlines. The contrasts are
significant.
Based on the skills model, assess each leaders ability to meet the challenges
during their respective company challenges?
Assess Bormans and Lorenzos ability to meet the tasks they faced regarding
their challenges with the union?
Style approach
We can understand the actions of Borman and Lorenzo better with the style
approach. The style approach is
From the style perspective, how would you describe leaders leadership?
Discuss the different styles of each leader in terms of task orientation and
relationship orientation.
What score would each leader likely receive on Blake and Moutons grid?
Situational approach
Place the three leaders be placed in regard to the levels of development in the
SLII model.

If I were either Borman or Lorenzo, would I act the same toward Charlie Bryan,
the head union steward of Eastern Airlines?
Contingency approach
What category does Bormans and Lorenzos overall leadership fall into at
Eastern Airlines? And Kellehers at Southwest Airlines?
If it had been Kelleher, i.e., Southwest Airlines, instead of Lorenzo, what would
be different if anything? (basically from q2)
What barriers did Borman and Lorenzo encounter with their efforts to save
Eastern Airlines?
Is there anything different that Borman or Lorenzo should have done
concerning their differences with the Eastern Airlines unions?
What could the organization do to foster the effectiveness of all four
managers?
Leadership ethics
Discuss Lorenzos actions in terms of leadership ethics.
Concluding Thoughts
So, what does it take to be successful as an aviation industry leader? Is it a
focusing on balance sheets and profitability like a hawk?

REFERENCES

Bernstein, A. (1990). Grounded: Frank Lorenzo and the destruction of Eastern

Airlines. New York City, NY: Simon & Schuster.
Northouse, P. G. (2007). Leadership: Theory and practice. Thousand Oaks, CA:
Sage Publications, Inc.