Management of Delta Airlines - Case Study Example

Introduction Delta Airlines can be considered as the second largest organization in the global airline industry. The organization is pop0ular for its differentiated services. Delta Airlines generally provide services to the tourists and business executive travelers. Leisure and travel industry are the major target operating industries of this organization. The organization has a strong global presence. Strong client base and business differentiation strategies are the major core competencies of this organization. In addition to this, effective merger and acquisition strategy has helped the organization to ensure potential competitive advantages over the competitors. The adoption of merger and acquisition has helped the organization to overcome the issues related to the international market entry process. Overall, this particular strategy has helped the organization to overcome the threat of intense market competition in global market place. Global airline industry is becoming highly competitive. On the other hand, the demand for high quality, differentiated and cost-effective services has increased significantly among the target customers. Therefore, the consumers have the option to switch over other brand from an existing brand in case of any dissatisfaction. This aspect has inspired and forced the management of Delta Airlines to adopt and implement different types of business level and corporate level strategy in global business operation process to secure its global market share. However, the organization is facing strategies management, human resource and corporate governance issues in business operation process. This assignment will identify and discuss the issues; lastly, the assignment will address the ongoing issues with suitable recommendation plans. Discussion Human resource can be considered as one of the important departments of an organization. A multinational corporation in service providing industry needs to strengthen its human resource department by ensuring effective workplace environment and good relationship between the employees and top level management. The organization is facing serious HRM issues. The employees of the organization are not happy with the developed policies by the management. Too much centralization affected the workplace environment of the organization as lack of employee motivation and employee satisfaction is the major consequence of this. The employee union has opposed some developed policies due to lack of integrity and engagement. Moreover, inadequate compensation benefit for the pilots affected the business operation process of the organization. In addition to this, the management of the organization is losing its customers and clients to other competitors due to lack of effective implementation of turnaround strategy in business operation process. Global business performance can be considered as critical and serious consideration of the organization. Moreover, being a service provider; it is highly important for the organization to take care of needs and satisfaction level of the customers by ensuring effective customer service management process. Delta Airlines recently emerged from so called bankruptcy issues. It is true that the organization has become one of the leading and profitable carriers in the global airline industry. However, the organization is competing in an uncertain global economic environment. Most importantly, service portfolio, cost structure, affected brand loyalty and poor debt crisis management may hamper the overall business operation process of the organization. In addition to this, it may affect the sustainability of the organization. Following recommendation plans will help the organization to overcome above mentioned issues. Recommendations First of all, it is highly important for the management of the organization to consider the issues related to the human resource department. Employees are considered as the major growth drivers of an organization. Therefore, motivation and satisfaction level of the employees needs to be taken care of by the organizational leaders and management of the organization. Ground staffs and pilots are considered as the major or important individuals in airline business operation process. Therefore, the organization needs to motivate these individuals in order to meet their satisfaction and expectation level. Employees give their full-effort towards the organizational operation process against a standard and satisfied compensation aspect. It is clear from the discussion and provided case study that the organization is facing issues regarding compensation benefit aspects of pilots. Pilots generally play a major role in the successful business performance of airlines. However, de-motivation of pilots and other employees created huge issues for the human resource management department of the organization. Looking into this particular issue, it can be recommended that the management of the organization needs to unionize its employees to boost the motivation level of each and every employee. Union of employees will take care of the needs, issues and challenges faced by employees in the organization. In addition to this, it will help the organization to make an effective and clear communication process between the employees and top level management of the organization (Hax, 2009). Effective performance appraisal, adequate performance evaluation and effective compensation distribution generally motivates pilots to give full effort. Effective leadership style needs to be integrated in the human resource management process by the management of the organization in order to overcome the current HRM issues. It is true that integration of democratic leadership style will help the organization to motivate employees as this type of leadership style helps to take care of the strengths and weaknesses of an employee within the workplace. In addition to this, this specific leadership style helps to improve the communication process between the employees and employer. In addition to this, it will help the human resource management of Delta Airlines to consider and implement workplace diversity aspect in the workplace environment, which will enhance knowledge sharing aspect among the employees of all departments. Last but not the least; the management of the organization needs to adopt and implement decentralization i9n the strategy development and implementation process. Decentralization will help the organization to engage important stakeholders in the strategy development and decision making process. This aspect will help the organization to gain different types of strategic options to overcome ongoing HRM issues. Therefore, it can be stated that effective performance appraisal, establishment of employee union, implementation of democratic leadership style and better compensation distribution approach will help to motivate employees. As a result, it will help to solve workplace related issues that are faced by the management of Delta Airlines. It is true that global economic environment has become highly uncertain due to the recent financial crisis and global economic recession. Low disposable income and limited purchasing power of common people are the major consequences of this recent economic slowdown. Now-a-days, people are trying to save more money instead of purchasing of goods and services. Airline industry can be considered as a service providing industry and this specific industry is significantly linked with hospitality industry in which clients and customers pay for effective service. However, recent economic slowdown affected the growth of both the airline and global hospitality industry. These issues affected the sales growth rate of airlines. The business growth rate of delta Airline also has been affected due to this aspect. Moreover, several uncertain issues and challenges, such as terrorist attack, global politics and natural calamities also affected the sales growth rate of the organization. Therefore, it is highly important for the organization to consider these aspects while develop9ing any strategy and making any decision. First of all, it is highly important for the management of Delta Airlines to focus on the adoption and implementation of business level strategy in the business operation process. Porter’s generic strategy can be considered as one of the important and effective business level strategies that may help the organization to overcome ongoing strategic management issues. The generic strategy consists of three different strategies, such as cost leadership strategy, differentiation strategy and focus strategy. The management of Delta Airlines should try to develop and implement the combination of both cost leadership and differentiation strategy. Consideration of cost leadership strategy will help the organization to offer high quality services at economic and competitive price level. Knowing that the global economic environment is becoming challenging for the organizations; cost leadership strategy will help to reduce and minimize unnecessary business operation cost. It is clear from the case study that high cost structure of Delta Airlines may affect the business performance of the organization in near future. However, cost leadership strategy will help the management to evaluate the current cost structure and improve its cost structure by minimizing unnecessary business operation cost (Hoffman and Hunger 6). Therefore, it will help the organization to offer high quality services to the target customers and it will help the organization to improve its brand loyalty. Consideration of differentiation strategy will help the organization to offer differentiated service portfolios to the target customers. The global airline industry has become highly competitive as several organizations within the industry are trying to develop and offer differentiated services to the target customers. It may affect the developed customer base of the organization. As a whole, it may hamper the profitability of the organization. In addition to this, it will affect the global market share of Delta Airlines. Therefore, adoption of differentiation strategy will help the organization to secure its potential and large customer base. In addition to this, it will also help to acquire new customers towards the developed differentiated service options (Nevin, 2014). Overall, the combination of both cost leadership and differentiation strategy will help the organization to focus on both economic and business diversification issues. Most importantly, it will help to increase global market share of the organization. Customer service management process can be considered as one of the most important aspects in airline industry. It is true that several organizations in the global airline industry are trying to focus on the increase in frequency of number f flights between two places. However, Delta Airline has ensured this aspect in order to meet the satisfaction level of the target customers. Turnaround timing between two flights has become one of the prime concerns for the management of Delta Airlines. Therefore, it is highly important for the management of the organization to focus on these things in order to take care of the satisfaction level of the target customers. The management of the organization needs to ensure effective turnaround strategy between two flights in order to overcome the issue of flight delay. It creates a negative effect in the minds of the passengers. In addition to this, it increases the possibility of brand switch over. Most importantly, it has hampered the brand loyalty of the organization. First of all, the management of the organization needs to ensure effective training and development programs for the employees in order to ensure effective turnaround timing between two flights. Secondly, the organizational management needs to hire skilled and effective employees who are efficient in handling stress and workplace pressure. These aspects will help the organization to maintain effective turnaround timing in the business operation process. Several leading organizations around the globe are trying to capitalize on the potential business operation opportunities that are developed due to globalization and technological advancement. It is true that the management of Delta Airlines has rightly adopted and implemented technological resources and applications in business operation process. It is the first ever organization that used jet engine in order to bring efficiency in service management process. But, in some develop0ing or underdeveloped countries, the management of the organization is facing difficulty to get high quality technological resources. It may increase business operation time and cost to outsource these resources (Ray, 2009). Therefore, it is highly important for the management of the organization to develop manufacturing units in few countries that find difficult to prepare and provide required resources. Last but not the least; it is highly important for the management of Delta Airlines to focus on green and sustainable corporate governance aspect. It is true that global business environment is becoming highly competitive. Therefore, each and every organization is seeking for effective stakeholder support in the strategy development and decision making process. Effective stakeholder engagement will help the management of the organization to ensure transparent corporate governance. The management of the organization should try to provide each and every business operation and business output details in its annual report. The organization should also try to make effective relationship with the suppliers and will try to source environmental friendly and less-emission fuel in order to maintain environmental sustainability. These specific approaches and steps will help the management of Delta Airlines to overcome the ongoing issues and maintain a good and strong position in global market place. Conclusion It is clear from the above discussion that Delta Airline is suffering from several strategic management issues, such as HRM issues, business operation issues and corporate governance issues. Both external and internal challenges can hamper the business performance and global market share of Delta Airline in near future. Therefore, it is highly important for the management of the organization to overcome these issues with suitable recommendation plans. The organizational management needs to consider effective democratic leadership style in order to overcome employee motivational issues. In addition to this, the organization needs to take care of the needs and satisfaction level of employees as the pilots have not received co0mpensation benefits for a longer period of time. It may affect overall workplace environment. In addition to this, the organization needs to consider the combination of cost leadership and differentiation strategy in order to offer high quality and differentiated services at economic price level. Last but not the least; the management of the organization needs to improve turnaround timing of the flights by improving training and development process for the employees. In addition to this, effective and ethical corporate governance will help the organization to overcome the ongoing ethical issues in organization. Works Cited Hax, Arnoldo. Delta Airlines Business Model. New Jersey: Pearson, 2009, Print. Hoffman, N. Allan, David, J. Hunger. Delta Airlines (2012): navigating Uncertain Environment. New York: Springer, 2012. Print. Nevin, Mike. The Strategic Alliance Handbook. Stamford: Cengage Learning, 2014. Print. Ray, Sally. Strategic Options in Crisis management. New York: Oxford University Press, 2009. Print. Read More