Analysis of Change Management
Table of Contents
Organizational change is an inevitable part of the organizational structure in the business environment today. There are a number of factors that lead to change which are mostly stimulated by external forces. These may include decreased market capitalization, major cuts in funding, economic changes like depressions and inflation, changes in consumer behavior, natural disasters, employee strikes, violence, terrorism and actions of suppliers. Whenever there is an agent triggering the need for a certain change, an organization must appraise its strategies, structure and techniques in order to determine the best course of action. The ultimate aim of this is to ensure that the organization can move to a different level in its lifecycle. For example, if an organization is highly reactive, it may choose to change its strategy to a more stable and proactive environment.
This paper will analyze the changes that have been and still being undertaken in AirTran on its journey to a merger with Southwest Airlines airline. The changes are strategic and are aimed at countering the negative effects of the recent economic downturn and the continued competition from other major airlines. AirTran’s competitive advantage can be assessed through Porter’s five forces (Porter 2008). The major external threats are from established airlines that have also merged and consolidated their businesses like Delta and Northwest, United airlines and Continental, and US airways and American airlines. New entrants are also coming into the market especially careers from other developing regions like Etihad in the UAE whereas advances in other modes of transportation are threatening to decrease passenger numbers like electric high-speed trains. Additionally, there are threats from within the company including the bargaining power of suppliers and customers.
Mergers are not always easy and despite that of southwest and AirTran entering its fourth year, there are still systems that need synchronizing. Customers often find themselves delayed and need rebooking when they have AirTran tickets on Southwest flights and vice versa. There are also different prices for different seats that are different in both airlines. Frequent-flier credits are still separate whereas companion passes awarded to frequent fliers by Southwest cannot be used in AirTran flights (McCartney 2013). The changes were not meant to be one off but the airlines envisage that they will have synchronized their systems within the next three years.
The most fundamental force for change has been due to the competitive nature of the business environment today. There have been strategic realignments in AirTran due to the need for maintaining a competitive advantage (Carnall 2003). Technology has played a large part in leading the change movement which has made nearly all AirTran activities computerized. All these activities and improvements have necessitated the presence of a better financial portfolio to bankroll the changes. Since AirTran was relatively small on its own with a few planes and limited destinations, it felt the need to grow and actualized this dream by merging with Southwest Airlines. Additionally, Southwest Airlines was a big company that had curved a niche in the American domestic market and had a good reputation (Ranson 2011). It was therefore strategically advantageous for AirTran to merge with an already established company in order to grow its portfolio (Luecke 2003).
Apart from the strategic need for competitive advantage, the presence of a more informed customer has also occasioned major changes in AirTran (Nelson 2003). Education and the media are credited with the evolution of a knowledgeable customer and have also led to more empowered employees who have transformed expectations in the aviation industry in general. Media, in particular the internet and social media, has increased connectivity between people consequently increasing travel (Burnes 2004). Additionally, the globalization process has ensured that businesses have to be coordinated from multiple frontiers thus increasing the demand for more air travel (Graetz 2000). On the overall, people have become more open to flying as compared to other modes of transport as it is considered safest. This increase in the need for travel has led to the growth in destinations that airlines fly to. Thus, instead of people making many connecting flights, there has been a need for direct flights between destinations that were traditionally not directly connected. This increase in direct flights necessitated an increase in the number of flights that AirTran needed to make in order to break even. As a result, the company chose to merge with Southwest Airlines rather than embark on procuring more planes to meet increased demand (Gutierrez 2012).
Another force of change is the constantly evolving business practice (Anderson & Anderson 2001). Those that were viable a decade ago may be irrelevant today. The changing practices commensurate with the clamor for competitive advantage. Thus, AirTran has had to adapt. The difference however between success and failure has been the speed at which organizations have identified need gaps and the subsequent speed with which they have sought to plug those gaps (Taylor & Hirst 2001). Thus, the overall strategy that organizations should effect should be built on the desire to be proactive, measured and aggressive in a flexible manner (DeWit & Meyer 2004). This has led to AirTran seeking to merge with Southwest Airlines in a bid to spread its reach and compete on a larger scale (Smith 2010).
The aviation industry is one that is charged with the responsibility of offering speedy transport from and to different destinations in an increasingly connected global business environment. In this age of technology, people are more interconnected which means that they are very knowledgeable and aware of what they want. The use of social media in particular has been an integral part in sharing experiences and driving interactions between people. Therefore, players in this industry must have the best services and products so that they are guaranteed patronage.
Changes resulting from the merger between AirTran and Southwest Airlines have come from both directions. Those from within AirTran have been found to be easily accepted in the workplace (Hammer & Champey 1993). AirTran employees have been given the autonomy to manage their own routes rather than be controlled by Southwest Airlines. There are numerous commensurate advantages to these changes. One of the greatest benefits is increased motivation for employees. Employees feel they own the change and this makes the change more likely to be permanent and to have a positive outlook for the organization. Assimilation of this change into the organization’s norm and practice is easy, making it highly effective.
A large portion of change has been created from Southwest Airlines. This type of change has been found to be necessary when there has been a need for rapid change. This external change has been preferred where AirTran has been found unprepared nullifying any possibility for success in internal implementation. One of the more immediate changes was the consolidation of the company hierarchy with that of Southwest Airline. The major advantage of external change is that it is more likely to jumpstart an organization in decline than any other source of the change (Jick 2003). In today’s business environment, companies continually merge in order to improve their bottomlines, widen their customer bases and increase their competitiveness. Since AirTran was not performing to the best of its capacity due to numerous constraints, merging with Southwest Airlines was meant to make it perform better. Naturally, organizations reach a plateau phase where they do not grow or grow at a very slow pace. If this phase is left unchecked for long, the management and staff will get comfortable and will stop seeking out new ways of improving their present conditions. Thus, where internal change is not forthcoming, external change is the only alternative and the most likely to succeed.
Since the world is rapidly changing, AirTran has found it prudent to be proactive in order to meet present needs and also determine the future needs of customers (Daykin 2007). The aviation industry has been revolutionized in the last couple of years with improvements being made to airplanes and airports. These changes have also triggered the need for change in airlines. However, not all the changes have been necessitated by external forces. In order to be the organizations of choice, AirTran has established specialized programs for its staff to ensure that they are well trained and skilled in meeting the needs of customers. One of the advantages of this organizational change is that it will ultimately leads to overall improvement. Eventually, changes will lead to costs being cut, revenues being increased, staff being motivated and customers being satisfied.
Change is also very empowering (Robbins 2005). The need for organizational change in AirTran insinuates anticipated directional change which will necessitate changes in product and service offerings, overall organizational strategies and management. These initiatives will require the involvement of different levels of management and other staff. Thus creation of teams charged with specialized responsibilities will give employees a chance to have a profound impact on the organization’s decision-making structure. The chosen employees will get opportunities to hone their skills and competencies which will empower them. This will have an overall outlook on the organization as empowered employees are very motivated and thus very productive for the organization’s bottomline.
The ongoing merger between AirTran and Southwest Airlines is good. However, if the envisaged changes are not done in a comprehensive manner, where communication of intentions is not done to all the necessary stakeholders, the change will be an impediment to the organization. Employees have a very integral part to play in implementing envisaged changes. Thus, their complete involvement should be a priority for all both organizations. Disadvantages of change can be best understood in terms of internal (those from within AirTran) and external sources (those from Southwest Airlines). Internal change can be very detrimental for the organization (Mabey & Mayon-White 1993). This is because it may be based on an established hierarchy that is counterproductive and completely different from that of Southwest Airlines. If for example one member of the team charged with the change is domineering, the outcome of the group effort may be as a result of that singular mind ultimately narrowing down the focus of the organization.
Another disadvantage of internal organizational change is that it may be as a result of group think. When people have been working together for so long, they may develop a groupthink that may lead them to believe that the change they want is the right one for the organization. However, the change may be unproductive which may compromise the organization’s performance. In this case, what may be the right change for AirTran may not be the right one for Southwest Airlines.
Many employees have translated the external changes as a vindication of their complacency or incompetence. Some have adopted very hard-line stances against the proposed changes. Whereas externally imposed changes can be highly effective in the short term, they may have negative results in the long term (Senior & Swailes 2010). Southwest Airline’s managers may enforce the change for a while but when they move on to other responsibilities, AirTran will revert back to its previous ways of doing things. One of the more direct results of the merger is the deliberate sabotage by employees which may cause upheavals and reduce the profitability of the organizations in the long run.
Employees are sometimes very rigid and have different reasons for resisting organizational change. The sources of resistance may either be personal or organizational. Individual factors include: economic realities, fear of the unknown, security, habits and selective processing of available information. Organizational sources of resistance on the other hand include: threats to established allocations of resources, group inertia, structural inertia, threat to expertise, threat to established power relationships and balances, and limited focus of change (Hardy 1994). Employees use an array of different mechanisms in order to communicate their displeasure towards a proposed change. These communications may either be overt or implicit and might be immediate or deferred. Overt and immediate actions involve voicing complaints and participating in job actions like strikes and go-slows. Conversely, implicit and deferred opposition may manifest in loss of employee motivation and loyalty, increased absenteeism and increase in the number of mistakes and errors they commit (Mintzberg et al. 2003).
Resistance to the proposed merger between AirTran and Southwest Airlines is rife. People’s own perceptions are playing a key role in resisting the inevitable changes (Stacey 2003). Ignorance is also playing a major part in these perceptions. Most employees resisting changes in the airline are doing so due to their failure to understand the situation as it is. The resistance may also be due to mistrust of the motives of the change hence handling it with suspicion.
Some employees have been overly opinionated such that they do not believe that the proposed changes will work. This stems from repeated performance of a job to the point that they are convinced that the only and best way of doing something is what they are used to (Grint 1997). This might also be due to the feeling that the proposed change will alter the power balances in the organization. Those in power are especially resisting the changes since they are threatened of sharing it with others. They understand that the change will come at a cost to their status. Others not in power are resisting it due to perceived inadequacies of the proposed change. They may weigh the envisaged benefits against the cost or against their previous benefits which have led them to the conclusion that the changes are not good.
Some employees have the conviction that the way they are used to doing things is the right way. These employees are usually afraid of being unable to cope with the new situations. For example, employees that are engrossed in the technology at AirTran such that when the need for change to that of Southwest Airlines arises they will be disoriented.
In the aviation industry, there are many different standards, for example in dressing, which set organizations from each other. The inevitable change of the airline’s dress code is a source of resistance as ultimately, what the managers or decision makers may want their staff to wear is not what they prefer. Thus, the comparison between one choice and a preferred alternative is set to cause rifts and resistance.
The organization is using a number of mechanisms to ensure that this resistance to change is adequately managed. It has been observed that most of the resistance is due to the lack of pertinent information about the proposed changes in the organization (Campbell & Sommers-Luchs 1998). Therefore, the most important step in attempting to bridge this information gap is to educate the employees. This is primarily being done through training (Simonson 2005). Training is integral in reorienting the employees towards AirTran’s changing focus in order to reflect the new reality. Formerly, the company operated under the auspices of a singular management but presently, the inclusion of Southwest Airlines necessitates a change. Training can be on the new ways of doing things, which is relatively similar to the old way as well as on the new destinations that the company will cover due to increased outreach. As such, offering this service to the employees will help them view it as an opportunity rather than as a threat to their jobs.
Communication is a very integral part in relaying information regarding the proposed changes. A variety of different communication channels is being applied including notices, written reports, meetings and online correspondence. There is a calming effect on people generally when they are directly informed of a change rather than gathering information through the grapevine. Relying on official channels of communication ensured that the message is controlled and the reactions can be checked. However, failure at a comprehensive method of relaying information of proposed changes can lead to reliance on rumors which may propel discontent and eventually resistance to change. Preferably, employees should be notified of the changes directly by the management during meetings. Lack of controlled information dispensation has led to the resistance in AirTran since employees feel excluded from the company’s plans.
Another way of managing resistance to change is through increased involvement and participation in the workplace. Employees should be encouraged to take an active role in the implementation of the changes by being consulted on the ways of improving services. Upper level management has formulated an overall blueprint for the airline leaving the middle and subordinate levels to actualize the changes. Thus, there is an opportunity present where employees can express their grievances, opposition and ideas to the management for consideration. Additionally, the management should ensure that there is an open door policy that is accessible to desiring employees at all times and using a variety of channels. Some employees may feel that expressing their displeasure may lead to reprisals. However, a management provision for discontents to be expressed anonymously could do the trick and quash any simmering resistance to change on account of unresolved opposition.
Some of the employees are resisting the proposed changes due to anxiety and uncertainty of the future. The management thought it prudent to reassure them by facilitating and supporting them (Mcshane & Von Glinow 2005). In most instances, the anxiety and uncertainty has been due to the changing economic nature where some of the employees feel that their financial futures are not guaranteed. In reassuring them, the management has ensured that it has comprehensive schemes for assisting those that are being negatively affected.
The envisaged changes have largely been guided by both internal and external forces. As mentioned above, the need for guaranteed safety and security has warranted some radical changes in the way that passengers and baggage are handled. Competition has also played a major part in pushing for change. There are numerous airlines today with multiple destinations in many places in the world. These players have been keeping AirTran on its toes ensuring that the customer needs are met. Promptness of service and comfort are some of the most basic necessities of passengers that have been considered (Bamber et al. 2009).
Employees ultimately resist changes due to different underlying reasons. However, most of the resistance comes from ignorance, mistrust or fear. Employees of AirTran have resisted change mostly because they cannot see into the envisaged future of the merged company. Others have resisted change because they are rigid to the ways of performing their duties to the point that they are skeptical of new ideas as they feel they are inferior to the old ones. As stated in the discussion above, it is easy for resistance to be sparked by very trivial matters like dress code. It is therefore prudent that management of AirTran ensure that it communicates its vision vividly to the employees so that they buy into it. In order to manage this resistance, management must adequately communicate the changes to them including the envisaged benefits and shortcomings. All in all, the major reason for having change is to make sure that the organization stays competitive while conforming to the laws and regulations.
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