The Importance of Change within Qantas and Emirates - Case Study Example

Using the theories, tools to analysis the change of a company Table of Contents Introduction 3 Discussion 4 Brief overview of Qantas and Emirates 4 The type of change that took place in Qantas and Emirates and its reasons for implementation 4 The context in which the alliance took place 5 The process of strategic change 5 Analysis 6 Assess the change through Kurt Lewin force-field theory and Stake holders mapping 6 Findings 7 Analyse the degree of success of the strategic change 7 Conclusion 7 References 9 10 Introduction In this age of extreme competitive rivalry and bargaining power, sustainability seems extremely tough. This is because; the demands and preferences of the customers are changing at a rapid pace in this age, due to numerous substitute options. Due to which, the level of reliability and consistency of the customers over any specific brand, operating in any segments is declining at a significant rate. As a result of which, the brand image and reputation of that brand or organization is declining thereby reducing its market share and position among many other rival players. However, in order to cope up with such a business challenge, maximum extent of the organizations desire to implement varied types of changes such as restructuring, merger or strategic alliance. This might prove effective for both the organizations in enhancing its brand image and competitive position in the market among others. Similar scenario is seen in case of the strategic alliance within two most reputed airlines, named Qantas and Emirates. This change helped both the organizations in amplifying its profitability and market value to a significant extent as compared to many other rival players. This essay is divided into five phrases mainly highlighting the importance of change within an organization. Along with this, it also describes the reasons for which the strategic alliance took place within the organizations of Qantas and Emirates. The context in which, such a change took place in the organizations of Qantas and Emirates as well as the process of such a strategic alliance. In addition, the essay also describes the extent to which, the strategic alliance is successful or not after implementation (Schuler & Jackson, S. 2001, pp. 890-913). Discussion Brief overview of Qantas and Emirates Qantas is recognised as one of the most reputed airlines carrier of Australia. It is the largest airline of Australia among others comprising of a market share of more than 65 percent in the entire segment of airlines. It is mainly due to its wide range of customers that enhanced its revenues and net income by a$15.9 billion and a$6 million by the end of 2013. Hence, being headquartered in the region of Mascot of New South Wales of Australia, it expanded its wings to 65 domestic locations and 27 international destinations. This proved extremely effective for the organization of Qantas Airlines to enhance its profitability and total equity as well among others. Similarly, Emirates is another well-known Airlines based in the region of Dubai of United Arab Emirates. In a very small time-frame, it enhanced its revenue by US$100 million each year that amplified its reliability and brand image to a significant extent among others. The type of change that took place in Qantas and Emirates and its reasons for implementation In order to enhance the market share and brand image of Qantas, the CEO of the organization, Mr. Alan Joyce decided for a strategic alliance with the popular airways, Emirates. However, the prime intention behind such an alliance is mainly to reduce the burden of debts and loans that Qantas had to bear due to hike in oil prices. Apart from this, Alan Joyce and Tim Clark announced such an alliance in order to enhance their network coverage such as in Middle East and North Africa. In addition, such an alliance also helped to enhance the competitive positioning and dominance of these airlines over the entire globe thereby amplifying its global branding to a significant extent. Due to these underlining reasons such a strategic alliance for restructuring took place (Evans & et. al. 2002, pp. 97-107) The context in which the alliance took place The management and CEO of Qantas, Mr. Alan Joyce undertook vivid conversation with one-anther before implementing the strategic alliance. This is because; the organization of Qantas is bearing huge loss mainly due to instant rise in prices of the fuels. Therefore, in order to substantiate the cost of fuels, it enhanced its air fares (Moddle.plc. 2013). Due to which, maximum extent of the travellers desired to travel through middle-east, Europe or London. As a result of which, the demand of the middle-east competitors like Emirates and Ethihad increased that over-shadowed the image and reputation of Qantas. In addition, global economic recession and high demand of the middle class customers forced the management of Qantas to joined hands with the best airline of the world, Emirates (Calabrese, 2003, pp. 7-13). The process of strategic change Qantas is one of the popular flag-carrier airways of Australia, operating both in domestic and international regions. Although it attained a significant amount of profit in domestic level in the year 2012 but, it had to bear a loss of $450m in international level or ‘long haul’ flights. In order to transform the loss into profit, the CEO of the organization, Mr. Alan Joyce undertook extreme negotiation with Tim Clark to implement the restructuring or strategic alliance. Due to such an alliance, not only the frequency of flights increased but also the range of customers enhanced (Sims, 1998, pp. 57-58). It is mainly due to its competitive fares in long-haul flights. Thus, such a renewal strategy proved extremely effective for the organizations thereby amplifying its profitability and image to a significant extent in the entire globe (Erkama, 2010, pp. 151-165). Analysis Assess the change through Kurt Lewin force-field theory and Stake holders mapping In order to enhance the level of brand image and productivity of the organization of Qantas, it implemented a strategic alliance with Emirates. Apart from this, due to high financial loss and high debt, the management decided to cut-off a huge range of employees. Along with this, the management also reduced the remuneration costs of the staffs to a significant cost that created a conflicting environment with the organization of Qantas (Johnson & et. al. 2008, pp. 178-216). Then, in order to cope up with such financial dilemma, the realised the necessity of such a strategic change as mentioned by their CEO, Alan Joyce, previously. This stage is quite similar to the first phrase of Kurt Lewins change management theory. It is also recognised as unfreeze stage. After realising the necessity, all the employees tried to accept the change and acted according to the new set of rules and regulations as mentioned in the stage of transition (Burnes, 2009, pp. 110-118). This proved extremely effective for the organization of Qantas in the market among others. The last stage is known as freeze, which means to get accustomed to the policies of the change. Just like, the employees of Qantas tried to offer more attention over customer satisfaction as compared to others as it is the prime aim of the president of Emirates, Mr. Tim Clark. Therefore, from the above paragraphs, it might be clearly revealed that, as the change is uniformly accepted by the employees so it transformed the loss into profitability for Qantas (Bussell & Farrow, 2011, pp. 392-401). On the other hand, as per stakeholders mapping theory, the CEO of Qantas tried to inform all the stakeholders of the organization, including employees and trade unions, directors and government as well as customers and suppliers, through internal discussions or media’s. As a result of which, the level of interest and power of all the stakeholders both primary, secondary played an active role in implementing the above mentioned strategic change. The trade unions played a vital part in changing the mental setup of the employees and others thereby enhancing the effectiveness of the change (Bruckman, 2008, pp. 211-219). This is because; all of them are well-versed with the positive effects of this change and so all accepted it successfully. Findings Analyse the degree of success of the strategic change As the stakeholders and employees of the organization of Qantas realized the positive effects of this strategic alliance, all of them tried to accept its ways and policies. As a result of which, the level of inner conflicts reduced and the rate of attritions or terminations also declined to a significant extent (Buchanan & et al. 2005, pp. 189-205). Apart from this, the number of airbuses and flights increased in Europe, Asia, Middle East and others that attracted a wide range of customers towards this brand among others. This proved extremely effective for the organization of Qantas thereby reducing its high level of debts and losses resulting in amplification of its competitive position and market share. Moreover, the organization decided to offer extra facilities of discounts and competitive fares to the customers that acted as a boon for the organization thereby amplifying its profitability and net income to a significant height. However, all those positive effects are viewed mainly due to coordinated and consistent efforts of all the employees of Qantas and Emirates. So, this change presented flying colours to the organization (Briody & et.al. 2012, pp 67-87). Conclusion Conclusively, it might be stated that a change is extremely essential for any organization o retain its portfolio or sustainability in the market. However, it might become successful, only if all the employees of the organization accept it and act according to its rules and policies. Just as, the strategic change of Qantas and Emirates proved successful only due to the extreme support and coordination of its employees, directors, trade unions, customers, government and many others. Otherwise it may not presented positive results to the organization of Qantas and its debt might never be recovered in the market. Thus, a well-accepted change would surely enhance the market position and brand value of the organization among other rival players. References Briody, E & et. al. 2012. A story’s impact on organizational culture change. Journal of Organizational Change Management, Vol. 25(1), pp. 67-87. Buchanan, F & et al. 2005. No going back: a review of the literature on sustaining organizational change. International Journal of Management Reviews, Vol. 7, pp. 189-205. Bruckman, J. C. 2008. Overcoming resistance to change: causal factors, interventions, and critical values. The Psychologist-Manager Journal, Vol. 11, pp. 211-219. Bussell, S. & Farrow, J. 2011. Practitioner Review: Continuity and change: The Fair Work Act in Aviation. Journal of Industrial Relations, Vol. 53(3), pp. 392-401. Burnes, B. 2009. Managing Change, 5 th ed. London, FT Prentice Hall. Calabrese, R. 2003. The ethical imperative to lead change: Overcoming the resistance to change. The International Journal of Education Management, Vol. 17(1), pp. 7-13. Erkama, N. 2010. Power and resistance in a multinational organization: Discursive struggles over organizational restructuring. Scandinavian Journal of Management, Vol. 26, pp. 151-165. Evans, P. & et. al. 2002. The Global Challenge: Frameworks for International Human Resource Management. New York: McGraw Hill. Johnson, G. & et. al. 2008. Exploring Corporate Strategy ṷ Texts and Cases , 8 th ed. New York: Harlow, Pearson. Moddle.plc. 2013. The Long Haul: The QAN TAS – Emirates Alliance. [Online] Available at: http://moodle.plc.nsw.edu.au/pluginfile.php/6370/mod_page/content/4/Vol%2021%20No%203.pdf [Accessed on 12th February, 2014]. Sims, R. R. 1998. Reinventing Training and Development. New York: Springer. Schuler, R. S. & Jackson, S. 2001. HR Issues and Activities in Mergers and Acquisitions. 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