Unknown natural disaster strikes Thailand, affecting the Phuket area, where Fritidsresor has 4,500 customers and 50 employees. According to the company's communication officer, Fritidsresor has 10,000 to 15,000 Swedes in Thailand, with 800 reported missing in Khao Lak. Around the same time, the organization has planned for 25,000 of its clients to leave over the disaster's holiday week (Joshua, Vincent &Sjoman, 2007). Thailand remains Fritidsresor's most lucrative destination. In this situation, however, the company must consider whether to cancel the flights and lose KE 2 million or to evacuate 5000 people from Thailand.
Analysis of the Case using PEAS Format
Problem
Fritidsresor operation in Thailand and South Asia is affected by the unknown disaster that has strike the area. The company is having a difficult time framing and analyzing the situation. The faces the problem of putting together the fact of the disaster.
Evidence
The disaster has left 800 Fritidsresor customers missing in Khao Lak. The 4500 customers and 50 staffs in Phuket areas of Thailand are also likely affected by the disaster. The company is also concern about the 10,000 to 15,000 Swedes in Thailand (Joshua et al., 2007).The presence of fragmented information from its foreign operations such as Khao Lak and Phuket make it challenging to access the level of damage as well as communicate to the press and affected families.
Analysis
The company has various alternatives to address the situation. First, the company would have to evacuate everyone affected in Thailand. Such approach would require that it fly home at least 5000 people. Even though evacuation can help save the life of customers and staffs, it comes at a high financial cost and may not be practical. The agency also had to decide whether to seek government support of to handle the crisis itself. Secondly, Fritidsresor could have decided to cancel the flights to prevent further uncertainty. However, such move would lead to a loss of SEK 2million (Joshua et al., 2007). Furthermore, the cancellation was by the emergency manager could only possible up to SEK 250000 above that required a member of the executive. The company could also release the information at hand to the media and assure of availing much information as they become available. The approach would help to eliminate anxiety but could also damage the company reputation should it occur that the given information was not accurate.
Solution
Fritidsresor should also cancel flights until it verifies with it appropriate persons on the ground. It should confirm the situation in in Phuket and other areas affected in Thailand. It is not wise to create more disaster by sending more persons to Thailand. It is also prudent for the company not to cancel the rest of week flights until it verifies the magnitude the tragedy and how it affects the Fritidsresor. Meanwhile, it should do try to find out what is happening in Khao Lak by contacting the embassy and foreign operations. These actions are taken as a result of uncertainty arising from the situation. The company should also issue Media announcement on the information it has at hand on the incident in Thailand. The company has no proper contact with Khao Lak, and it can hardly verify the 800 missing persons. It is wise to inform the press and the families that more information will be availed to them when they reach the company.
Risk Facing Fritidsresor
Fritidsresor faces the economic risk of losing SEK 2million through reimbursement for canceled flights to Thailand. It also faces the threat of high cost of evacuating 5000 people should it opt for evacuation (Joshua et al., 2007). It also faces an ethical risk of generating unnecessary panic if it releases worse scenario to the press. Lastly, The company is facing an unknown legal risk of suits should it fail to take actions to prevent any further damages that it can control such as failing to evacuate people.
Leadership challenges facing Fritidsresor
The company has to decide whether to evacuate people from the affected areas of Thailand. It is a challenge to carry out evacuation due to uncertainty on the practicality and financial cost of the entire plan. It also has a problem of deciding whether to cancel the flights to Thailand or not. Terminating of the flights lead to SEK 2million loss and may affect it loyal customers should it occur that the company is overreacting (Joshua et al., 2007). Finally, it faces the challenge of releasing information to press. Releasing information can reduce anxiety at the same time can lead to unnecessary panic.
Fritidsresor CEO's leadership
Lundgren is doing well in his hands-off approach accompanied by guidance. He is also doing well in delegating responsibilities and ensuring that right individuals handle the situation (Zhang et al., 2017). The CEO has focused on the most critical task and has established a proper system to deal with the disaster. Lundgren has shown that he can strike a balance between the right levels of delegation of responsibility as well as still serve as CEO. However, Lundgren needs to work with Knutson find the best approach to dealing with the press. He also needs to inform Clement on whether to cancel the flights or start evacuation plan. He also needs to assist the subordinates in making particular decisions so that they do not feel that the ultimate decision rest on their shoulder.
Recommendations to Lundgren
Lundgren should also cancel flights for 2-3 days to confirm the situation on the ground before resuming. Lundgren should ensure Knutson inform make announcement on the information that the company has at hand to reduce the level of uncertainty. However, he should avoid cancelling the flights for the rest of the weeks until the company has adequate information from Thailand.
References
Zhang, X., Qian, J., Wang, B., Jin, Z., Wang, J., & Wang, Y. (2017). Leaders’ Behaviors Matter: The role of delegation in promoting employees’ feedback-seeking behavior. Frontiers in Psychology, 8, 920
Joshua, M. Vincent, D., &Sjoman, A.( 2007, August 29). Fritidsresor Under Pressure (A): The First 10 Hours. Retrieved from https://hbr.org/product/fritidsresor-under-pressure-a-the-first-10-hours/407007-HCB-ENG
