How Algorithms and Authoritarianism Created a Corporate Nightmare at United

United Airlines forcibly removed a man from an “overbooked” flight.  The incident was captured on video by other passengers and the story went viral on the social networks.  United flubbed its response to incident, adding fuel to the anger.  The story went global overnight, sparking massive outrage (hundreds of millions of views in China, an important market for United).  The next day, United stock gets hammered, losing ~$1.4 billion off its stock price by midday.   What happened?

 This incident is a pretty good example of how rigid algorithmic and authoritarian decision making can create corporate disasters in an age dominated by social networking.

Algorithms

Here’s how the algorithmic decision making created the incident on United.

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