"Airbus Moves to Rewire Its Management First"
This article addresses the issues that Airbus, a European airplane manufacturing company, is facing in the midst of the worst management crisis of its history. The company, which was formed in 1970 jointly by France and Germany to compete with American rival Boeing, is experiencing production difficulties that are preventing Airbus from releasing the model A380 plane into service on schedule. The main technical problem lies in both defective wiring and incompatible software between the Hamburg and Toulouse sites. However, the real issue is the inability of the company's management to fix the mechanical problem at hand that is delaying the release of the A380 model. The article implies that under competent management, the problem could be fixed rather easily, but Airbus is still trying to fill the CEO position with someone who is capable of returning the company to a profitable status.
Corporate governance is defined as the distribution of power in the company. In the 1990s, the great success of US economy let to the efforts to understand and copy American management methods.
The Anglo-American view of corporate governance derives from generating long term economic gain to enhance shareholder value. An outside board of directors is hired. The boards of US companies are made up of friends and acquaintances of the CEO. The use of ?stock options' is another feature introduced so that management would focus on the shareholder's interest in a high share price by allowing managers to benefit from the share price increase as well. Compensation programs for US CEOs are elaborate and include tax reimbursements, housing allowances, access to company cars and aircraft, bonuses, huge pension benefits. All these ...