The Strategy of Qantas Airline Company - Case Study Example

Managing Organizational Change Name Professor Institution Course Date Managing Organizational Change Introduction With globalization, information technology improvement, growing pressure from external forces, and retail and service organization improvement, managers have forced to rethink their strategies to sustain change (Graetz & Smith 2010, p.136). The business environment has changed a great deal and management style that was used in the last century has become irrelevant to contemporary managers. Business executive must be updated on the current to be able grasp issues and also satisfy the needs of the customers. Stoltzfus, Stohl & Seibold (2011, p.3) claim that organization change is a critical strategy in ensuring that company gains the market advantage through its efficient and effective staff, quality product and outstanding performance. In light of the information, this report analyzes how organization change management can improve poor performance of work staff, products or the entire organization. The paper will use Qantas Airline Company in its case to provide example. 1. What will change As stated before, organization change is remain a tactful strategy of poor performances, or even at the time the organization faces performance gap. One of the companies that have been force to implement change is Qantas Airline Company. Qantas was founded in 1920 and has grown and now serves 41 destinations (Gelineau 2011). Qantas is regarded as largest airline company in Australia due to its high quality service and exemplary performance. However, the performance dropped tremendously due to increased competition and economic dwindling in 2011. Gelineau (2011) reports that in 2011, Qantas Airline announced they would make key structural changes because of financial losses and decrease of market share. The changes that took place were downsizing its staff, stating budget airlines for low class referred to as Jetstar Japan (Gelineau 2011). This means the company was targeting a new market segment outside its known targets including International Business Class, Premium economy class and Economy class. 2. why the change was needed The change was needed because financial loses the company had incurred due to competition and fuel price increase. Fickling & Wang (2012) argue that Singapore and Emirate Airlines had become stiff competitors and other routes were also deregulated. The change was aimed at recovering A$200 million the company had incurred in 2011. 3. Consequences if the change is not made Change is normally effected with an aim of achieving positive performance in term of operation and finance (Stoltzfus, Stohl & Seibold 2011, p.3). If change if not conducted in the ever changing business environment, consequences are always severe and to the extent of organization collapse. For instance, if the excess employees at Qantas Airline were not laid-off it would mean the company would continue paying large sums of money to yet the company is not performing well in terms of revenue. This would drain the company down to collapse. Qantas Airline financial performance for the year 2011 had already declined (Gelineau 2011), implying continuing to with status quo would mean the company would still get the same result which is a lose. Ignoring change would have made it difficult for the company and staff to compete with other market players such as Emirates and British airlines. 4. The end status Organizational change is recognized to have broad effects on the productivity (Graetz & Smith 2010, p.139). The end result is that the company would have maximized its profits and compensate for its low revenue that was reported in the previous year. Gelineau (2011) states that Qantas Airline created new product called Jetstar Japan for its low income customers. It had realized other known segmented such as business class, Premium economy class and Economy class were exhausted hence the company launched budget class. 5. the benefits are there for customers and employees if the change is made In respect to Qantas airline, the customers benefited in two ways; the people who had financial constraints had the chance to fly to their destinations and also their customers existing customers who facing financial difficulties had the chance to use cost effective flights (Fickling & Wang 2012). However, employees never benefited from change due to job losses and cost cutting. However at the end the company remained a lean organizational with small number of employees which is easy to manage and remunerate. 6. Obstacles do you see in making the changes Normally, organizational change is marred with resistant from employees and executives, and a restructuring at Qantas Airline would not be exceptional. Similarly, inadequate management planning and resources can be an obstacle to organizational change (Stoltzfus, Stohl & Seibold 2011, p.3). In perspective, the company was facing financial difficulty, hence decided to lay-off some its employees. Obviously this was met with resistant from employees. The company also launched budget to a new route. The employees found it challenging to cope because of cultural diversity between Japan and Australia. The company to some extent found it difficult to implement change at the time the company had just reported in its revenues. 7. Need for communication to whom, how and by when When executing organizational change, it is critical for top management to prepare employees for the change process (Beerel 2009). This is often done through communication to staff to be prepared change. The resistance and opposition the Qantas Airline faced at the period of organization change were because change process was not communicated on time to give opportunity to prepare for it. In fact, workers union opposed it vehemently because the announcement was made on the same year change process was to start (Gelineau 2011). Communication should be done two years in advance to allow the employees who would be laid off to look for jobs elsewhere, and for the ones remaining to look for information and practice how new system works. Dyer (2010, p.29) contends that change should be communicated through internal memo, mails and letters. 8. Whether the organization has the right leadership and "buy-in" support for the proposed change Qantas Airline CEO can be claimed to have applied the authoritarian form of leadership. This is because he went ahead to announce change that would take place including lay-offs without giving workers a chance to communicate their thoughts about such changes (Gelineau 2011). In a nutshell, the leadership did not allow employees to ‘buy in’ their idea of bring change. Organizational behavior experts hold that managers need to use democratic leadership in their daily operations which allow for employees involvement and prevents resistant to change (Beerel 2009). 9. Strategic plan aligned with change According to Graetz & Smith (2010, p.145) Business environment is changing rapidly prompting to rethink their strategies to sustain change. For that reason, the proposed change at Qantas Airline was aligned with strategic plan to counter competition coming from other market players. The strategic plan was to launch a cost effective flight rather than lowering cost each and every time as this would be more convincing to customers. Another strategic plan is laying-off extra employees so as to reduce. 10. Implications and barriers to successful implementation The implementation of change does not often come easily because, but faces barriers such as competition, inadequate resources and resistance which take legal turn. Inadequate resources such as lack of technical know-how are known to hinder implementation of change (Stoltzfus, Stohl & Seibold 2011, p.3). For that reason, a company must first have competent employees who understand the market needs. 11. The inherent risks/costs of not embracing the change Cotemporary business environment is so competitive that every manager must seek to implement change. This means ignoring change has a dare risk such as losing customers, lack of competition and miss of opportunity. Graetz & Smith (2010, p.147) argue that companies that are in business to stay must develop new products and improve the existing ones. Failure to this will make a company lose its customers to the competitor with better products. Qantas Airline noticed this aspect of business and proposed to develop new product (Jetstar Japan) targeting low income owners (Gelineau 2011). Without this change it would have difficult for Qantas Airline to compete with other market players who had since embraced low cost flights. The company that does not embrace will miss out new opportunity like technology and new marketing ideas. 12. Processes that one need to change or introduce Processes that need to change customer services and times of operation. Customer service determines the success of business. In the recent past Qantas Airline has been recording poor financial performance portraying poor customer service or economic dwindling (Fickling & Wang 2012). Therefore, operations managers ought to improve the customer service to attract new clients. Technology needs to improve because it is now the platform which companies draw their competitive advantages (Stoltzfus, Stohl & Seibold 2011, p.3). Qantas Airline has an online presence, but they have to improve their marketing process through social media to win back its customers, 13. How success will be measured and the value success will have for the business and individual Success by which the individuals will be judged depends on the performance of the company. Positive performance both by staff and product is a sign that leadership has adopted the right strategy (Stoltzfus, Stohl & Seibold 2011, p.3). Success also can be measured by how successful individual ideas and task are. For instance, the success of Qantas Airline CEO and the general company will be measured by how the new product Jetstar Japan performs. 14. How to change people's behaviour Behavior change at the workplace normally starts with communication. Managers must institute proper communication and build effective rapport with employees to create long lasting relationship (Beerel 2009). This will help employee integrate into the existing organization culture and focus on the organizational goals. During change process, employees tend to resist vehemently. Such behavior can only be changed through time communication and involvement of employees in such decisions (Dyer 2010, p.30). Conclusion In conclusion, contemporary managers must understand that change takes place rapidly in every sector they operate in today. Therefore they must move with speed to counter competition in order to gain competitive advantage. Qantas Airline as a market leader in Australia has faced stiff competition from other market players such as Virgin Australia. To retain the market, managers ought to strategize, implement change and ease the competition. Resistance to change is always a reality and the company should make sure that employees are highly information and involved to reduce opposition in future. References Beerel, A 2009, Leadership and Change Management, SAGE Publications Ltd Dyer, K 2010, Communicating through difficult change at British Airways, Strategic Communication Management, Vol.14, No.3, pp.28-31 Fickling, D & Wang, J 2012, Qantas, China Eastern Plan Cheap Flights for Asia Middle, Bloomberg Gelineau, K 2011, Qantas to slash 1,000 jobs, start new Asian airline, Globe and Mail (Canada) Graetz, f & Smith, A. T 2010, Managing Organizational Change: A Philosophies of Change Approach, Journal Of Change Management, Vol.10, No.2, pp.135-154 Stoltzfus, K, Stohl, C & Seibold, D.R 2011, Managing organizational change: paradoxical problems, solutions, and consequences, Journal of organizational change management, Vol.24, p.3 Read More