Continental Airlines and United Airlines plan to merge operations. While the business deal has yet to receive approval from the Justice Department and the Federal Aviation Administration, the two entities are already making plans for the transition. This includes developing interim structures and leadership to govern the transition process.

QUESTIONS:

1. Begin by reviewing the definitions for mechanistic design and organic design. Now think about Continental Airlines and United Airlines. What design do these organizations utilize? Why? Is there anything about the airline industry that might dictate one form over the other?
2. Now consider the proposed merger of Continental and United. Why is it important to develop a formal structure even before the merger has been approved? What are the benefits of a well-defined formal structure?
3. The resulting merged company will utilize a functional structure. What functional areas have been identified? What is the common problem associated with a functional structure? How might this be exaggerated after the merger?

SOURCE: S. Carey, “Continental, United Agree on Merger Integration Leadership Team,” Wall Street Journal (Retrievable online at http://online.wsj.com/article/SB10001424052748703691804575254822825228064.html)