Transformational Leadership a Case Study in Organisational Change by Jan Carlzon
Abstract

The paper is an analysis of transformational leadership style of Jan Carlzon in his tenure as the CEO of SAS airlines since 1981 whereby his unconventional approach which was a complete abandonment of hierarchical leadership style led to one of the most phenomenal company turn arounds in the history of aviation.

At the time when Carlzon took over in charge, SAS was losing 17million a year and it came 14 th out of 17 biggest European Airlines regarding punctuality. Over a period of systematic processes of empowerment of front line staffs, the breakage of bureaucracy, as well as the establishment of customer-oriented training among others, Carlsson turned SAS to become the most punctual airline company in Europe and also posted 54 million dollar profit within one year. The paper uses various theoretical concepts such as Transformational Leadership Theory, Kotter Eight-Stage Change Model, principles of servant leadership and empowerment theory in analyzing the reasons behind such a successful change.

It is in the above discussion that one can re-read Carlzon management style to show how it was able to cross a threshold of the command and control management having in its place a culture of distributed decision-making which in its turn made even the most lowly staff empowered to serve the customers in the best way possible. The case has lessons that apply to all industrial sectors even though the aviation sector was the passion of the case authors.

Introduction
Leadership styles and their relation with organizational change success used to become one of the primary issues in management literature decades ago and continue being so today. Although there have been many theories developed to show how leaders may support their respective organs to go through times of transformation, no other case is as dramatic in illustrating the theories in practices as it happens in the case of Jan Carlzon leading SAS Airlines in the 1980s. The style adopted by Carlzon can be described as a paradigm shift in as far as the traditional hierarchical agency of management is concerned to a less rigid empowerment-based management model that has become more applicable in the current transformative business setting.

The significance of studying Carlzon’s leadership extends beyond historical interest. His technique provides a concrete instance of ways theoretical frameworks may be efficaciously implemented in actual-international organizational contexts, particularly when dealing with existential threats to business survival. The velocity and magnitude of SAS’s transformation beneath Carlzon’s leadership offer precious classes for present day leaders grappling with comparable demanding situations of organizational inertia, bureaucratic inefficiency, and the need for cultural transformation.

This paper pursuits to investigate Carlzon’s management method thru the lens of mounted theoretical frameworks, examining how his strategies align with and contribute to our expertise of transformational management, alternate management, and organizational empowerment. By connecting concept to exercise, this analysis seeks to extract actionable insights which could tell current leadership exercise and organizational development projects.

Literature Review
The theoretical background against which we can comprehend the leadership style of Carlzon is based upon the various reading paths of management literature, which are interrelated to each other. The major theory on which analysis will be based, however, is the Transformational Leadership Theory, formatted by Burns (1978) and subsequently enhanced by Bass (1985). This theory underlines the capacity of the leader to give inspiration to the followers through vision, intellectual pride, individual consideration and idealized influence. The transformational leaders are defined as having the ability to raise the aspirations of the followers and generate the developmental shifts in organizational culture, and performance.

Kotter Eight stage change Model (1996) proposes a step-by-step way of comprehension of the process of change in an organization. The model stresses the value of ensuring the sense of urgency, developing coalitions, developing a strong sense of vision, communicating change, enabling action, creating short-term victories, maintaining acceleration, and institutionalizing the new way to do things. This model gives a systematic perspective through which one can look at the change implementation strategy of Carlzon.

Servant Leadership Theory which was proposed by Greenleaf (1977) brings about a concept of leaders being servants in the first place which centres on human growth and life betterment. It is focused on these themes: empowerment, stewardship, and making other people better leaders. The theme of serving the other people and community in the theory blends well with the philosophy of empowerment of Carlzon.

The Empowerment Theory, especially as explained by Spreitzer (1995) analyzes the psychological and structural elements that make people feel empowered in their places of work. The theory employs four aspects of empowerment being meaning, competence, self-determination and impact. Decoding these dimensions is very much important in examining the way the approach implemented by Carlzon actually empowered people other than just simply delegating.

Other more recent studies also touched upon the subject of communication of leadership during organizational change (Saraswati et al., 2025) and the most usual traps that fail change initiatives (Deuschel et al., 2024). These more modern views add more context to the analysis of methods that were proposed by Carlzon and their applicability to this day.

Case Description
In 1981, Jan Carlzon became the CEO of SAS airline at a time when the airline was going through a crisis threatening its survival. This organization was losing 17 million dollars a year and this was an enormous figure, which indicated there were more structural and cultural issues. The performance outcomes of the airline drew a scenario of a company on the descent with punctuality coming in at the 14 th position among the 17 most successful

European companies. Such low performance has been indicative of greater organizational malaise typified by stiff hierarchical framework, slow decision-making, management insensitivity to what customers desired.
The pre-change situation in SAS reflected the situation in most large organizations that have existed over time. Bureaucracy became an obstacle to responsive customer service buying, and both the frontline employees and the customers perceived that they had no power to negotiate customer issues and resolve them without going through bureaucratic procedures. Its centralized decision-making system implied that the smallest service problems had to be brought up through several organizational grades which resulted in time wastage and frustration of customers and employees.

Attack strategy to implement as initiated by Carlzon was radical and systematic. He did not make any incremental changes instead he decided to overhaul the way power was structured in the organization. He was focused on a philosophy he called the Tear Down the Pyramids which opposed the old idea of hierarchy and handed the decision making power to the employees who would be in contact with the customers. This emboldened also to cabin crew and ground staff whereby they were all of a sudden permitted to solve customer problems on the spot without having to inquire with their supervisors.

The cultural transformation was achieved through the use of the training program called the Putting People First. This was more than a customer service training as it was a transformation in how the employees perceived their roles and what they could be responsible to their clients. The program also highlighted how order-takers has become decision-makers who were given the authority to make customers happy.

Carlzon indeed achieved great results in terms of both the speed and the magnitude of the results he achieved through intervention. Within one year SAS became the most punctual airline in Europe, which was previously one of the least punctual. The turnaround in the financials was also rather dramatic as the company made a $17 million loss in 1980 and turned a profit of 54 million the following year in 1982. These gains did not just reflect the rise and falls in the organization but were representative of continuous organizational change that made SAS a leader in the field of aviation in Europe.

Analysis of Leadership Style and Theory
The leadership style used by Carlzon is full of the essence of Transformational Leadership Theory in many respects. The inspirational motivation element of transformational leadership is evidenced by his capacity to develop and present the vision that was focused on customer satisfaction and reduction of bureaucracy. Through the articulation of its obvious differentiation towards the status quo of organizational model, Carlzon has offered purpose to the employees that extended beyond the scope of their actual line of work.

This element of transformational leadership the intellectual stimulation could be seen in the way Carlzon challenged the existing beliefs in the organization. His teaching of Tear Down the Pyramids obliged to reexamine basic assumptions of power, decision-making as well as organization structure by all levels of employees. This cognitive exercise produced an atmosphere in which creative thinking and problem-solving was encouraged and rewarded.

Personalization of consideration can also be illustrated in the perspective of Carlzon, who acknowledged that among the frontline staffs were people who had useful knowledge about customer needs and the problems of operations. Making these employees more responsible and delegating the authority to them not only respected their opinions and judgement and but also gave a feeling of individual significance and contribution which had not existed before.

Considered in accordance with the Eight-Stage Change Model developed by Kotter, the approach used by Carlzon is quite satisfactory in accordance with the available change model. The creation of urgency was inherent in SAS’s financial crisis, but Carlzon effectively communicated this urgency throughout the organization. His formation of a change coalition included not just senior management but extended to frontline employees who became champions of the new approach.

The creation and sharing of vision was fundamental in the strategy of Carlzon. The philosophy of “Putting People First home office” was a simple concept that was easy to remember and something that could be well accepted by employees. The engagement of staff to make quick decisions was the symbol of shifting aside the barriers to modification, whereas lightning speed and profitability progress were the short-term victories that it required to continue going through the momentum of change.

Reflective Thinking and Things Learned
The experience of Carlzon in SAS can shed much light in the modern change endeavors within organizations. To begin with, the case shows that empowerment should not be artificial. Carlzon would not talk to his employees about being empowered, but he would give them the liberty, ability, and means to make significant decisions. This difference is essential among contemporary leaders who can be fully empowering in their speech but there are still controlling managerial processes.

Second, the case shows the necessity of the correspondence between the organization pattern and proclaimed values and goals. Hierarchical barriers have been broken down by Carlzon but this was not an empty gesture but rather the establishment of the right conditions so that his philosophy of empowerment can work. Such congruence of espoused values and system in the organization is primary in achieving genuine cultural change.
The rate of change at SAS can also give us some understanding of the prospect of fast organizational change when it comes to full leadership engagement as well as all-inclusive approach. But this fast evolution will also imply the possibility of risks and limit conditions to be taken into account.

It is also possible that not every organization could achieve such a radical change and the approach may not be as successful in the environment where the urgency of crisis is not high.
The issue seems to be especially urgent in the scope of digital transformation and AI adaptation problems. With the same way Carlzon would entrust the frontline staff to make customer-related decisions, the modern leader needs to think about the way the employees will be enabled to not just work with the AI-based technologies but also preserve their sense of human judgment and creativity.

Conclusion
The leadership of Jan Carlzon that SAS Airlines experienced is an embodiment of transformational leadership and organizational change management. He managed to integrate theories with practice so his strategy can work as the example that still be the source of important lessons to modern leaders. The case shows the importance of more than vision and communication to organizational change it needs other things like fundamentals of restructuring power relationships and organizational systems.

The theoretical perspectives discussed in the current analysis are good sources of learning how Carlzon was able to achieve success. The Transformational Leadership Theory can be used to describe how he sought to motivate and encourage the employees whilst Change Model developed by Kotter explains the systematic nature of transformations. What is the philosophical background of his approach? Such a question is answered by his Servant Leadership and Empowerment Theory.

There are a few important suggestions that Carlzon case can provide to modern organizations having the same set of issues with transformation and adaptation. Leaders should have the capability to upset the status quo and they should decentralize decision making. They need to invest in a well-rounded training and development program that will facilitate cultural change. Above all, they should make sure that the organizational systems and structures do not compromise values and goals mentioned.

Carlzon approach will forever remain relevant because it is based on a general idea of empowerment, customer focus and systematic change management rather than specific tactics. The principles are just as applicable now as they were during the 1980s making them a source of organizational transformation during an age of radical change and unknown.

References

Al-Quraan, A.B. (2016). The Impact of Transformational Leadership on Employee Performance: A Case Study of Jordan Ahli Bank. The Times of India.

Armenakis, A.A. & Bedeian, A.G. (1999). Organizational change: A review of theory and research. Journal of Management, 25(3), 293-315.

Bass, B.M. (1985). Leadership and Performance Beyond Expectations. Free Press.

Becker, S.D., Reuter, M., & Durand, R. (2025). Nexans: Orchestrating sustainable business transformation. Harvard Business Review, 103(1), 89-97.

Burns, J.M. (1978). Leadership. Harper & Row.

Cameron, E. & Green, M. (2015). Making Sense of Change Management (4th ed.). Kogan Page.

Davenport, T.H., & Redman, T.C. (2025). AI and Organizational Transformation. Harvard Business Review, 103(2), 112-121.

De Freitas, J. (2024). Why People Resist Embracing AI. Harvard Business Review, 102(6), 45-53.

Deuschel, N.T., Langan, R., & Gómez-Rico, C.R. (2024). 3 Reasons Change Initiatives Fail. Harvard Business Review, 102(5), 78-86.

Greenleaf, R.K. (1977). Servant Leadership: A Journey into the Nature of Legitimate Power and Greatness. Paulist Press.

Jan Carlzon. (2024). Wikipedia. Retrieved from https://en.wikipedia.org/wiki/Jan_Carlzon

Kerr, W.R. (2025). Case Study: Do We Reskill or Replace Workers in the Age of AI? Harvard Business Review, 103(1), 134-142.

Kotter, J.P. (1996). Leading Change. Harvard Business School Press.

Kouzes, J.M. & Posner, B.Z. (2017). The Leadership Challenge: How to Make Extraordinary Things Happen in Organizations (6th ed.). Jossey-Bass.

Pascale, R. (1984). The “Honda Effect” Revisited. California Management Review, 26(4), 78-117.

Saraswati, P.W., et al. (2025). Leadership Communication During Organizational Change: A Systematic Review. JISEM Journal, 15(2), 234-251.

Spreitzer, G.M. (1995). Psychological empowerment in the workplace: Dimensions, measurement, and validation. Academy of Management Journal, 38(5), 1442-1465.