“It really helps to know what success is before you get there, and if you know, then you can head right for it. For some people, it's the most money. For some, it's the most power. For some, it's the most girlfriends. Everybody's got a measure. For me, I guess it's having the respect and admiration of your peers” by Gordon M. Bethune (Bethune, 1999) “Most businesses fail because they want the right things but measure the wrong things, and they get the wrong results” (Bethune, 1999).There are major companies all over the world that are failing because of unethical leadership, poor performance or declining demand for service. One such company that is predicted to fail soon is American Airlines (AA) (Finger, 2013). This major company is failing due to employee-management relations, financial decision making and operations. In order to get American Airlines out of this rut, a change manager needs to be selected. In this presentation, American Airline’s points of failure will be analyzed and a successful change manager will be selected in order to turn things around for this failing business. The selected change manager’s personality and past leadership history will be presented. In addition, appropriate changes to the organizational structure and culture based upon the proposed leader’s past leadership history and organizational needs will be discussed.
In order to better understand a failing company, history can help the points of failure materialize. American Airlines, first known as American Airways, was created in 1930 (Associated Press, 2013). In 1998, AA started its downward spiral following the acquisition of bankrupt TWA assets, which, in result, left the company with broken aircraft and too many employees. In 2001, two A...
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...ntract. Because of this, American pilots weren’t allowed to strike over voiding their contracts, so instead they started deliberately calling in every little maintenance complaint and calling in sick 20% more than (Yglesias, 2012). The results were catastrophic causing insurmountable flight delays and cancellations (2012).
In conclusion, through the transition of merging into the world’s largest airline, American Airlines is in need of help. They have failed through employee-management relations, financial decision making, and operations. With the help of Gordon Bethune’s philosophy and experience, the merger with US Airways will go seamlessly without crushing employee wages or benefits, cutting relations between employees and management, causing another bankruptcy and keeping customer satisfaction positive with continuing smooth airline operations.
This book carries great discussions and uplifts our perspectives regarding business management in various ways. Frequent and common mistakes that were encountered by the managers was a key element for the ¡§eight mistakes of managing changes.¡§ Many follow others¡¦ common mistakes and fail from changing while reforming their organization. The possibility of failure is that they perceive the methods from those whom were successful, but they never understood the reasons why some people fail to change.
We have all heard the phrase, time is money, and for the airline industry this is literally true. Herb Kelleher knew that corporate management needed to be as unobtrusive as possible to allow for the quick turning of planes at the gate. He also realized that an open climate of communication, and decentralized day to day decision making, would motivate employees towards a shared goal of accomplishing this task. Employees viewed themselves as part of the team and by working together they would ultimately produce greater customer satisfaction and loyalty. At Southwest, employees experienced a high degree of work motivation, satisfaction, and performance as defined in McGregor’s theory Y. Employees at SWA were able to perform a variety of skills, and had a degree of au...
Retrieved June 17, 2015, from http://money.cnn.com/infographic/news/companies/airline-merger/ Lawrence, H. (2004).
The PATCO strike began on August 3, 1981 with over 13,000 people walking out. This "illegal" act was met with a quick response from President Ronald Reagan (Sconberger p 1). Reagan told the strikers, "Either return to work within 48 hours or be fired from government service for breaking the 'oath of office' not to strike (Sconberger, special report, p. 12). While roughly 1,200 workers returned to work, another 12,000 remained on strike and were promptly fired (Sconberger p 1). This caused a serious safety problem for the airlines, inconveniences for many Americans, and lost profits for many businesses. Controllers needed to be replaced and it needed to be done fast. As a result, their were many questions on the safety of airlines. In order to understand the effects of the strike on the safety of airlines, an understanding of the PATCO movement is necessary.
One of the main drivers of the merger between American Airlines and U.S. Airways is the American Airlines Chapter 11 bankruptcy filing on November 29, 2011. American considered merging with another airline as a critical aspect of their reorganization. Early in the bankruptcy proceedings creditors expressed concern about their stand-alone restructuring plan. Some of American Airlines largest creditors were their labor unions. The unions, who pushed for the merger with US Airways, believed it would give the new larger company a stronger competitive advantage over the rest of the market, including other recent mega mergers. 12
“Without change there is no innovation, creativity, or incentive for improvement. Those who initiate change will have a better opportunity to manage the change that is inevitable.” William Pollard’s, a 20th century physicist, words show us the power of being proactive, and igniting change to strengthen a company’s productive climate (Sellers, Boone, Harper, 2011). Acme Airlines flight attendants lacked incentive to improve the quality of their work, as a result of distrustful management and overall frustration within the company. Acme took successful steps to rebuild their FA program into a more relationship oriented work environment. Through an understanding of effective leadership, we will use the
In his book, Leading Change, Dr. John P. Kotter communicates why organizations fail or succeed based on ten years of conducting research on more than 100 companies to see what contributed to their successful transformations and what hindered those transformations. “In October 2001 Business Week magazine reported a survey they conducted of 504 enterprises that rated Professor Kotter the number one “leading guru” in America.” The two significant aspects I took from this book were the reasons why change initiatives fail and an eight-stage process to lead the organization through a successful transformation.
In today’s ever changing world people must adapt to change. If an organization wants to be successful or remain successful they must embrace change. This book helps us identify why people succeed and or fail at large scale change. A lot of companies have a problem with integrating change, The Heart of Change, outlines ways a company can integrate change. The text book Ivanceich’s Organizational Behavior and Kotter and Cohen’s The Heart of Change outlines how change can be a good thing within an organization. The Heart of Change introduces its readers to eight steps the authors feel are important in introducing a large scale organizational change. Today’s organizations have to deal with leadership change, change in the economy,
Good to Great: Responding to Change. I think that Jim Collins' book is essential for future entrepreneurs, managers, and leaders in the Philippines. The tips given by the author are useful in the dynamic, ever-changing, and constantly fluctuating business environment of the Philippines. Jim Collins described the kind of leader who can address these changes as a Level 5 leader "a paradoxical blend of personal humility and professional will." The Level 5 leader is not the "corporate savior" or "turnaround expert". Most of the CEOs of the Good To Great companies as they made the transition were company insiders. They were more concerned about what they could "build, create and contribute" than what they could "get - fame, fortune, adulation, power, whatever". No Ken Lay of Enron or Carly Fiorina of HP, the larger-than-life CEO, led a Good To Great company. This kind of executive is "concerned more with their own reputation for personal greatness" than they are with "setting the company up for success in the next generation". Transformations from Good to Great start when a company finds a CEO who is humble but iron-willed, and who is ambitious for the company, not necessarily for himself or herself.
This case study demonstrates a young woman leader, Toby Johnson, who used to serve in the military as a pilot and attended Harvard Business School, joined PepsiCo’s Leadership Development Program (LDP), and was working in the management team at the Williamsport plant. She determined to forge ahead, and led the plant to achieve the Level 3 CI and also won the Doolin Award, which the Williamsport plant had never achieved before. The problem that Johnson encounters currently is that if the plant should continue to forge ahead and achieve the ultimate Level 4 CI, which will cost huge amount of money and efforts with the risk of her sudden leave of plant.
The change agents of British Airways behaved like coaches. They deliberately shaped the BA’s capabilities, created the proper set of values and skills to reach the intended outcomes. During the implementation of change, John King and Colin Marshall acted like coaches as they assisted to “structure activities to help the organization members solve their own problems and learn to do that better” (French & Bell, 1995, p.4).
“Leading Change: Why Transformation Efforts Fail” is an article written by John P. Kotter in the Harvard Business Review, which outlines eight critical factors to help leaders successfully transform a business. Since leading requires the ability to influence other people to reach a goal, the leadership needs to take steps to cope with a new, more challenging global market environment. Kotter emphasizes the mistakes corporations make when implementing change and why those efforts create failure; therefore, it is essential that leaders learn to apply change effectively in order for it to be beneficial in the long-term (Kotter).
Organizational change is a very big risk for organizations. The process of change can be very difficult for employees as well as the leaders implementing the changes. The changes are usually planned to improve the company. However, sometimes change can destroy a company when things don’t go as planned. From a change in management to a change in the company structure, or way of doing daily task, organizations must carefully execute the process of change and use change strategies that will ensure success.
Southwest Airlines has come from an underdog to being one of the best airlines in the industry. This reputation translates from its strategic management of resources. The Co-founder and former CEO, Herb Kelleher, established a unique corporate culture that leads to high customer satisfaction, employees’ morale, and one of the most profitable airlines in the industry (Jackson et al., 2012). The corporate culture concentrates on empowerment the workforce. It shows through Southwest Airlines core values that “happy employees lead to happy customers, which create happy shareholders” (Jackson et al., 2012). Since its first grand opening in 1971, Southwest Airlines has shown steady growth, and now carries more passengers than any other low-cost carrier in the world (Wharton, 2010). To expand the business operations, Southwest Airlines took over AirTran in 2010 as a strategy to gain more market share for the Southeast region and international flights. However, the acquisition of AirTran brought upcoming challenges both internally and externally for Southwest Airlines. In this case analysis, the objectives are focusing on the change process post the merger with AirTran, and evaluating alternatives to address the impacts of the merger.
1- Issues The main issue of this case is the lack of profits of the airline industry, an industry that should be more than profitable due to the large amount of customers, the necessity of using airlines’ services and the high prices charged by most of these airlines. What we are going to deal with is, why is this happening? And how is American airlines dealing with this problem?. To be able to discuss how American airlines wants to regain profitability, we must identify and analyse different issues such as, the company’s background, the airline industry as a whole, the demand for air travel, the marketing strategies, the distribution systems, pricing policies etc.