Survival Strategies at City International Airways - Case Study Example

EFFECTIVE HUMAN RESOURCE PRACTICE – INTERNATIONAL AIRWAY Table of Contents Introduction 3 Company Background 3 Company Achievements 4 Changing fortunes at the company 4 Surviving in the competitive industry 5 Human resource functions in the airline industry 5 Survival strategies at City International Airways 6 Establishing an efficient front line system 6 Regaining market position 7 Human resource policies needed in the company 7 Recruitment and retention policies 8 Compensation Policies 8 Changes needed in the company 8 How to get support from leadership teams 9 Leadership Teams change plan 10 Bibliography 12 Introduction In the past, researchers that have shown interest in the strategic human resource field have passionately expressed their support for effective human resource practices in firms, terming them as a single strategy for effective performance. In fact, various literature reviews that have been made on this subject indicate that proper human resource systems in an organisation play a huge role in creating sustainable competitive advantages for business organisations. This is because the systems that are used in effective human functioning are often unique from one industry to another (Warner 2005). However, it is important to point out that strategies in effective human functioning can only be reliable if they can effectively support the existing competencies and resources in the firm (Sivatte & Guadamillas 2011). For this reason, reliable human resource practices should be critical in the process of identifying points of competitive advantage to the firm and supporting these resources. Such a turbulent business environment puts a premium on the business top management in terms of both quality and speed of business operation. This paper examines the effectiveness of human resource practices at City International Airways, an airline company that offers aviation services. It examines various ways the company should use in devising strategies for the effective performance of its human capital, survive in a competitive market and regain its market position. Company Background City International Airways is an airline company that has been in operation for a period spanning 60 years, during which it prospered and established itself as a giant in the airline industry. The airline is headquartered in the United Kingdom, but due to expansion and favourable market conditions with sound management structures, the company managed to establish several other offices in other parts of the world. The company enjoyed a good market presence, managing to fly to various destinations across the world. At present, the company flies to over 250 destinations across the world, with plans to expand its operations and reach many other destinations. Company Achievements City International Airways boasts of its work environment that comprises of employees from various places across the world. The company has an organisational culture that has allowed people from all cultures to work in its offices that are located in many places across the globe. In addition, the company has had a reliable and effective human resource structure that has been very responsive to the needs of all its employees, making them comfortable and discharging their duties effectively. At one point in time, the company’s best work practices and structures made it receive international recognition by being voted as the airline of choice by passengers who acknowledged the excellence with which the company was discharging its services. This was the time the company was highly famed and renowned for its excellence and effective performance Changing fortunes at the company Recently the company has been experiencing changing fortunes; it has been heavily affected by the increasing operating costs. For this reason; it has been facing high operational difficulties, with a total decline in its profits. In the recent times, the company has been highly scrutinized because of various environmental campaigns worldwide; this has been in its major base at the Heathrow airport in London. The company has been making changes in its strategies in order to regain its once held market position. In its new model, the company has been aiming at reducing its overhead costs to increase its competitive advantage and efficiency. In addition, the strategies being adopted are aiming at eliminating work practices that have been deemed ineffective and inefficient. This way, the company looks forward to improving its brand image that once it global ranking and a favorite for clients. Surviving in the competitive industry One of the ways for any company to survive in a competitive business environment is reliance on strategies and policies that enhance the speed and quality of information in its operations (Kanki 2010). One of the sources of this critical information is in the social networks that are established by the company’s top management and employees, including other players in the external business environment (Sistare 2009 27; Heracleous & Wirtz 2006, 23). In this case, the networks that are established in both the internal and external business environments are good sources of a company’s competitive advantage for such high-tech firms, including those in the aviation industry. Human resource functions in the airline industry Employees in the service industry are an essential component in the process of creating and achieving excellence and performance. Both of these are important sources of competitive advantages for any firm that operates in this industry (Castro, Armario & Ruiz 2004). Front line jobs are some of the most demanding in the service industry comprises; employees are often expected to be very efficient and fast in the process of executing their operational functions. In addition, employees in the service industry are expected to be friendly to both their colleagues at work and when attending to clients (Scarpello 2008). In this case, the main challenge, which not only affects the airline industry, but also other service industries is the ability to get the right human resources (Morley 2006). Most of the firms that have been successful in the service industry have often relied on the commitment to effective human resource management. Survival strategies at City International Airways Establishing an efficient front line system After having suffered from poor performance in the past, the company’s main endeavour ha been to survive and regain its market position once again. The human resource department at the airline has a great responsibility to ensure that it gets the right staff that understand the company’s prevailing needs and can easily fit in the company’s work practices and organizational culture (Lovelock & Wirtz 2007). The human resource department will be required to perform its functions fast and effectively in order to save the company’s dwindling fortunes. The department needs to create an effective front line service, which is an essential source of company differentiation and competitive advantage. It is important to understand that the capability of a company’s front-line employee association is an essential component that drives customer loyalty. For this reason, the human resource department at City international Airways should recruit workers that are able to handle this important function. In addition, there will be the need to create policies and other strategies by which company employees will be taken through the company’s short and long-term needs. The intuitive significance that is characteristic of employees in the service industry on customer loyalty has been emphasised in many research conducted on human resource functions (Heracleous, Wirtz & Pangarkar 2006). In many of these research reports, there is a direct relationship that has been found to exist between staff satisfaction, the value of services, employee retention and loyalty, a company’s revenue growth as well as general profitability. Front line employees in the airline and other companies in the service industry are always in constant interaction with customers. At the same, other findings have shown that a close correlation exists between employee satisfaction in the company and customer satisfaction. For this reason, front line employees at City International Airways will be required to offer excellent services to its customers to encourage them to prefer the company. Regaining market position The airline industry is very competitive because of globalisation, which has enhanced the need for travelling and transacting in various places of the world. For this, reason, there are still many opportunities for companies venturing in the industry with strategic plans for effective performance and excellent service delivery. Despite the company’s dwindled fortunes, City International Airways can still create itself a favorable market position by use of strategies that can enhance its effectiveness and excellent service delivery. One of the company’s strengths in regaining its competitiveness should be in navigating between the poles that companies find to be distinct. This will be achieved through effective and efficient service delivery that is cost-effective to its customers and internal processes. One of the challenges that the company stands to face while creating and executing its strategies is the proper alignment and management of reliable, functional strategies, which includes marketing, human resource, distribution among others. The main point of focus in this case should be in how the company’s human resource department can be designed to take these challenges and ensure that City International Airways regains its market position. Human resource policies needed in the company In the company’s growth patterns, creating human resource policies will be essential in guiding business functions in both the internal and external environment. This will enable the company to meet its ethics, training as well as diversity in the company’s process of corporate governance relating to its employees effectiveness. Recruitment and retention policies These are guidelines that will direct the process of staff recruitment as well as retention and dismissing of workers that are not deemed to be effective. The policies, when well implemented will outline staff retention approaches, something that will encourage the company’s efficiency (Heracleous, Wirtz & Johnston 2004). The policies also outline the motivation approaches that the company should use in enhancing effective performance from its staff. The company should ensure that proper legal requirements will be followed in dismissing workers while giving them their legal benefits they deserve after working for the company among other considerations. Compensation Policies These policies are designed to appreciate workers with suitable remuneration packages that are commensurate with their services and efforts in the company. It is prudent for company to appreciate workers through good salaries and other benefits to encourage effective service performance. City international airways will need to outline clearly its compensation policies in order to attract efficient and reliable workforce into the company. The company will be expected among other things, to address health benefits, retirement among others that are necessary for enhancing the welfare of its workers. Changes needed in the company In order for the company to be successful in achievement of its strategies, there are certain changes that have to be made, first; the company needs to assess the strategies that have been used in the past. By doing so, it will be in a good position to know how to integrate its new strategies to enhance effectiveness and efficiency. Job evaluation The human resource department should undertake a job evaluation in order to establish the actual needs that the company has to fulfill in its change process (Kingi & Dutta 2003). The reason for making a job evaluation is to know the exact positions that will be needed in order to implement other strategies for the company’s efficiency. Management structure For instance, the company may be needed to overhaul its top management and bring on board people who understand the current needs of the airline industry. It is important to understand that the service industry is one of those that are characterized with various changes; this includes customer’s preferences and tastes, changes in technology as well as the general external business environment. Work practice and organisation culture In addition, there is the need for the company to change its work practices including aspects of the organizational culture that have resulted in its dwindling fortunes in the recent past. For instance, the company may adopt different systems that enhance teamwork and effective communication so that changes in business practices can be communicated on time for action to be taken. How to get support from leadership teams Creating effective reward systems Creating support systems in a company for service excellence requires that leaders have successful teams to achieve set goals and objectives. City International Airways has to create proper teamwork structures upon which they can achieve its set goals and objectives. One of the things that ought to be done besides having effective teamwork structures is establishing reward systems to recognize the effort of the workers (Wirtz & Johnston 2003 18). Reward systems are used in different companies in order to recognize and honor excellence among the workers. Most of the airline companies that have been successful in this industry have been characterized by efficient work practices and value for its workers. Creating effective communication mechanisms In addition, creating functional and effective teams in an organisation requires that reliable communication practices be in place (Klimoski & Dugan 2014). For this reason, as a leader in the company, one of the things that can be done to enhance service delivery is putting up communication structures. Suitable communication channels in any company are responsible for ensuring that workers are able to air their grievances and offer feedback to various work practices that are implemented in the company. Leadership Teams change plan In the process of regaining its market position, City international Airways need to make some changes in its overall leadership structures. In a company, the prevailing leadership structure is essential in directing work practices. It is important to understand that the success of any leadership lies in having the right people, and for this reason, right people in a company are assets. Source: (Collins & Clark 2007) On the other hand, people that cannot execute proper company policies can sometimes become liabilities (Lawler & Boudreau 2012). City International airways will have to change its leadership structure and adopt proper systems that can manage the extreme competition existing in this industry. The company needs to invest in the following five practices in the process of surviving and regaining its once held position in the market. Conclusion The human resource department is critical in the growth and development of any business organization, the department is responsible for the management of people, who are the most important resources for any business. City International Airways has to make various changes in order to be effective and efficient in its business endeavours. Change is inevitable in all systems of life; in this case, the success of City International requires an overhaul of all management structures that have been responsible for the decline in the company’s growth and performance. The external business environment presents various factors that can be strengths and opportunities for business growth, depending on how the business is strategically positioned. On the other hand, they can also be sources of threats and potential poor performance, just as it was for this airline company. The success and failure of any business is depended on the people that are tasked with creation and implementation of management policies and structures. Due to this, there has to be proper human resources policies to preside over recruitment, retention and supervision of work practices in a company for effectiveness and efficiency for growth and development. Bibliography Astro, C.B., Armario, E.M. & Ruiz, D.M. 2004. 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