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Assignment Activity Unit 5

Literature Review on the A380 Program Failure: An MBA Perspective

Ahmad Abedalghani

Department of Business Administration, University of the People

BUS 5910 - Management Capstone

Dr. Tahemina Pathan

July 25, 2024

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Literature Review on the A380 Program Failure: An MBA Perspective

The A380 program was one of the most ambitious projects ever initiated by Airbus.

Even though it had a revolutionary design and technological development, there were many

obstacles that led to its failure. This paper investigates the multidimensional factors that

played a role in bringing A380 down and tries to draw parallels with major business

administration subjects including operations management, marketing, ethics, human

resources, and quality control from them.

Operations Management, Marketing, and Ethics: Interconnected Challenges

Operations Management

Operations Management is defined as the overseeing of process design and quality

control, production planning and inventory control, forecasting, and capacity planning. It also

includes scheduling plus facilities location and design. In the case of A380, operations

management issues: complex supply chain logistics that led Airbus to face production delays

due to misalignments of resources.

According to Marathe (2014), the following are identified as causes of operational

problems in A380: Organizational Problems, Structural Problems, Partners grapple for

power, Huge payments to departing executives, Electrical system design problem,

Changeover of wiring from copper to aluminum, Extensive customization for different

airlines, Problems in section of fuselage, Production of parts in different countries, Logistics

for parts to France for final assembly, and Huge penalty for delay in delivery.

Marketing

Marketing! It's the lifeblood of understanding and satisfying customer needs. The

A380's marketing strategy sought to take advantage of its size and comfort, but it ran into
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problems due to changes in market demands plus other smaller aircraft that were more fuel

efficient (thus oversaturating the market). The plan was introducing their clients from Asia

and Middle East based on their future demand for the aviation market in the next two

decades, which would have seemed a very wise strategy to adopt with regards to placing

A380 in this industry where there is a growth gap of passengers. However, without proper

market research, this strategy turned out to be a very risky business indeed! Even though

A380 was positioned as a symbol of luxury and resourcefulness, it did not meet operational

suitability with cost effectiveness due to its size which again did not meet market needs for

passenger adoption because it affected sales significantly: this misalignment between what

Airbus offered and what customers wanted made sure that the A380 never reached its full

potential (Mussa, 2020). The purchase and operational costs of the A380 were very high,

which limited its customer base to only major airlines that are financially capable of investing

in such a large aircraft. In addition, economic downturns and fuel price fluctuations further

affected its attractiveness.

Ethics

Business ethics is a field of study that addresses moral principles and ethical standards

that govern behavior. Ethical issues in the A380 program were largely concerned with

stakeholder transparency and environmentally responsible management of available

resources. Airbus did not practice open communication in disclosing information about

production delays and technical challenges, trust issues emerged as a result not limited to

airlines and investors. Stakeholders raised concerns on environmental sustainability based on

the size of the A380 and fuel consumption indicators. The aviation industry was embracing

green technologies at that time when it later led to competitive disadvantage for the A380 as a

result of its high ecological footprint. Failure by Airbus to engage airlines and regulators
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stunted their ability to respond to emerging issues during changes within business

environment (Alagudagi, 2015).

Organizational Issues

Re-emphasize the organization issues from week one:

 Productivity: The A380 program suffered from productivity losses due to delays and

inefficiencies in the production process.

 Responsiveness: Airbus struggled to adapt quickly to market changes and customer

preferences for more flexible aircraft.

 Quality: Initial quality issues, including wiring problems, compromised the reputation of

the A380.

 Customer Satisfaction: The failure to deliver on time and meet promised specifications

affected customer satisfaction.

 Employee Engagement and Change Management: The project complexity caused low

employee morale which led to change resistance, making worse the program issues.

Quality Control: Analysis and Alternatives

The quality control problems of the A380 program were mostly because there wasn't

enough oversight and coordination in the international supply chain. This led to Airbus not

being able to have a uniform quality standard throughout its production, leading to delays and

more costs. The current quality controls suffered from lack of consistent quality checks,

absence of standardized processes and poor integration among the different quality

management systems (ASC Staff, 2018).

Alternative Quality Processes:

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 Six Sigma: A data-driven methodology addressed on decreasing defects and reducing

variability of processes. The implementation of Six Sigma would have helped Airbus to

find and eliminate quality problems as production moves on the root causes, simplifying

work and cutting down errors (Knowles, 2011).

 Total Quality Management (TQM): An approach aimed at quality improvements

holistically throughout organization. TQM notes customer satisfaction as the end goal;

emphasizes continuous improvement with changes led by management based on feedback

from employees, and an involved workforce all factors that could have nurtured a more

culture conscious of quality at Airbus (Duffy & Furterer, 2020).

 Standardization of Processes: Having clear quality expectations for the entire company

and standard procedures could have ensured sameness at all points.

Improving Quality with Six Sigma and TQM:

 DMAIC. The six Sigma process in action would lead to systematically detecting the

waste problems and removing them from A380 production line.

 TQM’s collaboration across different departments: continuous improvement is what it

takes. TQM could have been placed in Airbus to ensure proper communication, fit and

alignment for the whole of Airbus's global operations.

Human Resources Management (HRM) and Training

The role of Human Resources Management is essential: it helps to promote the

success of the organization through recruitment, training, and development of employees. In

relation to the A380 program, issues for HRM involved sustaining sufficient developmental

initiatives alongside proper training programs for leaders at the front line and establishing

uniform cultural and operational policies across different contexts (Proaction International,

2021).
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Training for Frontline Leaders:

 Privacy and Security Training is a must-have: it helps to stop privacy violations and

provides compliance with global regulations.

 Leadership and Change Management should be prioritized in training programs that aim

at developing leadership competencies, effective change management, and creation of

favorable organizational climate.

 Technical and Quality Control Training: specialized training that can lead to

improvement of technical skills as well as a better understanding of the quality control

process.

Importance of Supporting Frontline Leaders:

 Operation leaders are fundamentally strategic executors plus keeping high spirits is a

primary aspect of their duties. Equipping them with appropriate tools and training will

lead to higher quality problem solving and decision making (Proaction International,

2021).

 Harmonized policies and procedures drive consistency by ensuring all employees have a

plain vision of their roles, therefore reducing confusion while enhancing unity towards

quality as well as customer-oriented approach (Proaction International, 2021).

Impact on Costs and Customer Satisfaction

The demonstration of quality improvement and training effectiveness has shown to

lead to lower operational costs, higher customer satisfaction. Studies show that organizations

that invest in quality control and employee development tend to have lower numbers of

defects which means lower costs for rework and higher loyalty from customers.
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Costs can be greatly reduced by Six Sigma or TQM through minimization of

production costs due to defects and rework: these programs can reduce them significantly. On

the other hand, cost can be further lowered because well trained employees are more efficient

and able to handle low-occurrence tasks that do not carry a high risk, as well as being better

prepared on a technical level.

Product quality and customer service are the main components that determine

customer satisfaction. When customers are satisfied with the quality of the products they

receive, it is highly likely that they will also be loyal. The initial quality problems that were

noted for the A380 led to its decline among customers because any organization is always

rated according to their services provided. However, adopting a superior approach towards

quality management would have brought back confidence from clients who otherwise moved

to other companies. (Hayward, 2024).

Analysis and discussion

The demise of the Airbus A380 program resulted from operational inefficiencies plus

marketing miscalculations and ethical oversights. A multilevel supply chain, along with

production lagging behind schedules, hampered operational efficiency which in turn led to

the improper functioning of the plane's service. Misalignments between marketing strategies

and customer as well as market needs meant that there was little demand even after

production. Ethical dilemmas mostly related to transparency and environmental impact only

made things worse for the program.

Conclusion

A very good example of how vital integrated management operations, quality control

and human resources are the story of A380 program failure. It should have been taken into

account with a combined approach towards these major challenges in the organization a
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failure which could have been prevented if Airbus addressed the root causes through

methodologies like Six Sigma, TQM plus appropriate comprehensive training programs. The

downfall would not have happened in such magnitude had they implemented many of the

issues that led to it. This case study underscores executed on a high level the pivotal

importance of management practices for ensuring success large aviation projects and even

other industries require.

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References
Alagudagi, A. (2015, May 14). Mega Project Development of commercial aircraft – Airbus

A380. SlideShare. [Link]

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ASC Staff. (2018, January 29). FOCUS: The extraordinary A380 supply chain. Logistics

Middle East. [Link]

extraordinary-a380-supply-chain

Duffy, G. & Furterer, S. (2020). The ASQ Certified Quality Improvement Associate

Handbook. ASQ Quality Press. [Link]

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Hayward, J. (2024, March 31). The Rise And Fall Of The Airbus A380. Simple Flying.

[Link]

Knowles, G. (2011). Six sigma. [Link]. Six Sigma ([Link])

Marathe, P. (2014, October 5). Discussions ALP Team Project- Project Management

Method: Airbus A380. Academia.

[Link]

Mussa, S. (2020, February 11). AIRBUS A380 CASE STUDY. LinkedIn.

[Link]

Proaction International. (2021, September 16). Airbus Transforms Its Management Culture

and Boosts Performance at Its Mirabel Plant. Proaction International.

[Link]

mirabel-plant