Changes Virgin Blue Is Making - Case Study Example

Organizational Change Xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Name Xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Course Xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Lecturer Xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx 27th April, 2012. Executive summary The world in 2011 experienced a turbulent period where people lost their jobs while others had their salaries reduced. As a result of this turbulence volumes for economy Class travellers have reduced drastically affecting revenue for Budget airline Virgin Australia. In response to this crisis Virgin Australia are changing their operations and transforming their Organization so they can target business travellers who are less susceptible to economic turbulence but demand higher quality services. This report recommends that virgin Australia make the following adjustments so they can position themselves as the number one provider of business class travel services: Virgin Australia needs to have some additional lounges, new fabric and design for uniforms, implement a post flight feedback program, staff reward program, leadership mentoring program so that the changes can be continued in the future and finally they should give workers more autonomy over the tasks they perform. Table of Contents Executive summary 2 Table of Contents 3 Introduction 5 Why Virgin Blue is changing 5 Changes Virgin Blue is making 6 Kotter eight step model 8 i.Establish the need for urgency 8 ii.Form a guiding coalition 9 iii.Create a vision 10 iv.Communicate the vision 10 v.Empower others to act on the vision (remove obstacles) 11 vi.Create quick wins 12 vii. Build on the change 12 viii.Institutionalize the change 12 Recommendations 13 Virgin Australia needs to have some additional lounges this will ensure that they are able to handle a large customer base at one instance. Also through the addition of new lounges they will be able to cover a wide area since the lounges will be situated at diverse places thus targeting the customers using certain travel routes. Another recommendation is the use of new fabric as well as design for their staff. The current fabric that is been used in said to be ill fitting and is easily flammable this has a great impact on the safety of the employees also according to various employees they cannot be able to raise their hands above their shoulders in case of emergencies. Virgin Australia also needs to implement a post flight feedback program this will enable them in determining the impact of the changes that have been implemented in the organization. The organization also needs to have leadership mentoring program so that the changes can be continued in the future so as to make the organization more profitable and finally they should give workers more autonomy over the tasks they perform 13 Conclusion 14 Introduction This report sets out to identify the nature of change as well as the need for change airline firm Virgin Blue. The report also offers a list of change strategies that Virgin Blue would consider when making the changes. The report will also discuss the challenges that are likely to face the manager at Virgin Blue when they are initiating the change, and lastly the report will offer a list of strategies on how the managers at Virgin Blue can effectively manage the change process in the organization. Why Virgin Blue is changing Change is said to be inevitable and proper change is termed as a major contributing factor to the success of most enterprises. Changes mainly occur at various different times affecting a large group of people, yet a few individual are not able to cope with the change (Deci & Ryan 1985, pp. 56). Virgin Blue wants to implement and undertake various changes within their organizations. One of the major reasons why Virgin Blue is changing is due to the increasing market pressures. Companies with high market presence tend to gain more in terms of profit as compared to other companies with high market presence. Thus Virgin Blue wants to have a high market presence. The company mainly specializes in offering economy flight services to their customers. Based on the current condition individuals tend to lower costs related to leisure activities since some lose their jobs and due to the slow economic growth rate. Most individual when faced with financial difficulties tend to cut down costs related to luxuries. For Virgin Blue they are mainly changing so as to reduce their overdependence on economic leisure travelers as the main source of their incomes. Thus the company is changing so as to double their Business class market share in the future to ensure that they gain more long-term profitability. Another reason why Virgin Blue is changing is so as to improve the customer’s service for the business class. A great number of the business class travellers are delighted in travelling with airlines that provide stylish services to their services. In a bid to attract this lot of customer’s Virgin Blue is implementing certain changes so as to gain more. An example of such a change is the creation of airport lounges for their customers. This will go a long way in attracting and calling back earlier customers who had moved due to the stylish services been offered in the competitors airlines (Midena 2011). Changes Virgin Blue is making Based on the current situation in Virgin Blue of forecasted decrease in profit for the better half of the year 2011, the managers want to implement certain changes so as to ensure the success of the airline. One of the major changes that the managers are contemplating on implementing in the organization is the development of a new business class product. In regard to this change the company wants to deviate from there sole specialization that is leisure travel and incorporate into their system a new line of products (Thomsen-Moore 2005). The new product will target mainly the business class individuals going on business trips. In implementing the change the company aims at ensuring the have a competitive pricing strategy which will lead to a higher number of customers. Based on the company manager he thinks that the new business product is a better placed proposition for almost all corporate travelers. The corporate travelers will have to decide whether they want to travel using the business class or the economy class. With such flexibility the company will have a higher number of corporate customers. Another major change that Virgin Blue is implementing is the creation of new airport lounges. Airport lounges are said to have several benefits and this may seem as a better way to attract more customers to using the airline. Airport lounges reduces the risks of missing a flight and they offers several benefits to the users such as internet, drinks as well as food and snacks. The other change is in regard to the staff uniform. The airline revealed its new uniform for its flight attendants so as to bring back glamour to the airline industry. Though initially the uniforms looked good but over time there were several complaints in regard to the new uniform. Some of the complaints are that the new uniforms are causing rashes, flammable and they are also ill fitting (Domjen 2011). A large number of employees are complaining that the when wearing the uniforms they are unable to raise their hands in case of any emergencies. Based of number employees the designers were ignorant of their safety as well as comfort while designing the clothes. The airline also changed from Virgin Blue to Virgin Australia. The company’s name change replicates to some extent the more conventional move toward to the company’s branding as it makes plan to outdo Qantas and achieve a higher market share in the corporate market (Werr Stjernberg & Peter 1997, pp. 57) The rebranding of Virgin Blue to Virgin Australia is attributed to possess various benefits to the company. one benefit that the company will achieve upon rebranding is the a latent impact to the bottom line since the airline company core values as well as brand message will be conveyed to the customers. Also through rebranding the company will be able to make higher customer recalls which will ultimately lead to higher returns for the airline. Through rebranding the airline will be able to capture the business class market which is currently dominated by Qantas and the airline manager think that its brand seems not to be performing that well because most business travellers think that the brand is purely a budget airline. Virgin can adopt various change approaches in transforming their organization. The models they might consider to effectively implement the changes include: Kuebler-Ross model, 4-D process of appreciative inquiry, Kotter’s change model. In this case the Kotter change will be applied (Kotter 1995, pp. 60). Kotter eight step model i. Establish the need for urgency Based on the current market condition there is urgency for the airline to change. One of such urgency is the declining in leisure travel. The company is largely dependent on the leisure travel for most of their earning. With the decline been experienced to the economic condition a large number of individual are doing away with most leisure activities thus the company tend to lose since the number of customers going for leisure activities as well as trips are less. Also based on the decline in profit forecast the airline needs to change so as to remain in business. There is urgency for the airline to implement changes in their organization so as to counter the decrease in profits of the company. The company has achieved this by creating another travelling class and also through rebranding. Through the rebranding the company will be able to call back customers who had initially moved to other airlines. Virgin Blue is in a bid to expand and overtake Qantas. In essence Qantas have a practical monopoly in regard to the business market as compared to Virgin Blue which has only 10%, thus the management at Virgin Blue is seeing an opportunity to overtake as well as capture the rewarding untapped market that is the business class travellers. This is mainly attributed to the fact that most business travelers are not affected by the economic slow down affecting the country as compared to the leisure travelers who are greatly affected. The business travelers also tend to purchase more flexible air tickets which imply that they pay a higher cost for them. The technique that Virgin Blue applied was the change of name. Virgin Blue publically rebranded to Virgin Australia, there was also a change in uniform. ii. Form a guiding coalition Virgin Blue ought to create a strong and supportive group to deal with the changes been implemented in the airline. A selection will be made based on the effective change leaders in the airline, so as to lead the change. The selected team will comprise of staff members from all the departments in the airline and of different levels. I would ensure that the teams selected in implementing the changes at Virgin Blue have sufficient power so as to drive and achieve the desired change there. The coalition should adopt new colors over the old ones so as to create a new look to Virgin cabin staff. All influential staff members would be incorporated in the Virgin Australia project team so as to advise and inform the current employees of the upcoming changes in the airline. The project team will later be used to motivate fellow employees in accepting the recommend changes in the organization and since there is a good mix in employees selected in terms of levels as well as departments the change will be easily implemented in virgin. iii. Create a vision Since Virgin Blue is aiming at gaining a larger market share than the other airlines in regard to the corporate travelers, Virgin Australia ought to increase the number of lounges to at least five and they should be based in different locations so as to serve a larger customer base. Also based on their vision, they should a target market of about 50% come 2020. Virgin Australia will therefore challenge Qantas and take over as the major and mostly preferred corporate airline in Australia. iv. Communicate the vision Virgin Australia needs to pass the message of change to its employees, customers and the general air travel market. To make sure every employ understands the need to change the communication should be easy to understand and avoid use of technical and Buzz words. To make sure the workers internalize the change Virgin should repeat the vision message over and over again. One way of doing this would be to have visual images of the vision communication within every email message sent within the organization. The change communication must also employ every available channel of communication and should detail what role the employee receiving the change message can play in enabling the achievement of the vision (Kotter & Schlesinger 1979, pp. 110). In launching the new corporate look in Virgin Australia should have invited a number of top business men and celebrities and news personalities to publicize the event. To embed themselves in the minds of Business class travelers the business executives would have shown an interest in frequently experiencing the new superior Virgin Atlantic flight experience. v. Empower others to act on the vision (remove obstacles) One of the obstacles Virgin Australia may experience is the resistance to the introduction of new uniforms. The workers describe the new uniforms as being unsafe in case of emergencies as they are too tight and thus they constrain their physical movement. The clothes are also claimed to be flammable and to cause skin irritations to the workers because of their polyester fabric. The style of the new uniforms could be one of the obstacles that Virgin Australia will face in repositioning themselves (Dent & Goldberg 1999, pp. 89). Virgin Australia should negotiate with their workers so they can embrace the change of uniform: the management should be ready to make the changes in design that will make the new uniforms less restrictive to movement. Virgin Australia should also research into a fabric that can retain the elegance of polyester but still have the comfort of cotton (Cropanzano and NetLibrary Inc. 2001, pp 72). Another way Virgin Australia can enable its workforce to assist the realization of its vision is by giving them autonomy in their tasks and encourage them to come up with innovative ways of doing their task better and faster. The cabin crew may for example come up with new ways of packaging meals that is more presentable than the present method used. The management at Virgin Australia could have avoided the situation of workers not being satisfied with the new uniforms by trial running the uniforms before adopting them as the outfit for its cabin crews. Furthermore, Virgin Australia should have provided a mechanism where workers can voice their concern about the changes taking place in their organization. Virgin Australia can also help their workers accept the airlines makeover by taking them through training that makes them better workers and also counsel them on their life work balance. By providing training to its workers Virgin Australia can ensure that its workforce is more confident while carrying out its task and thus able to handle their tasks much better (Kelchner & Demand Media 2012). vi. Create quick wins Virgin Australia has created quick wins by providing its customers with two new very comfortable lounges where they can rest while awaiting their flights. They can also extend their ground services to include such services as shuttle services for their customers from airports to the city centers of the cities they are visiting. Virgin Australia can also establish a customer commentary program where customers comment about their in-flight experience and the treatment they receive from staff from the feedback Virgin obtain they can offer staff who offer exceptional services to customers a reward for example a holiday to an exotic place vii. Build on the change It is important that Virgin Australia doesn’t stop evolving once they start reaping the benefits of change they should carry on until they have completed the evolution. One of the methods they can employ is by offering top performers greater roles in implementing the changes (Gomez & Rosen 2001, pp. 60). The positive performance gained from change in processes, employee behavior and image can be used to fine tune the continuing change process. viii. Institutionalize the change Virgin Australia should make sure that the changes that it has made become permanent part of its organizational structure and can offer the company an edge over other airlines for many years. By this stage Virgin Australia should have an in-depth understanding of the links between the shift in operations and the success they would have achieved. Virgin should ensure that within its executive and managerial ranks it has young employees who have a high coherence level of the new approaches and would be in a position to continue the new approach when they finally ascend to head Virgin Australia (Hackman & Oldham 1976, pp. 257). Recommendations Virgin Australia needs to have some additional lounges this will ensure that they are able to handle a large customer base at one instance. Also through the addition of new lounges they will be able to cover a wide area since the lounges will be situated at diverse places thus targeting the customers using certain travel routes. Another recommendation is the use of new fabric as well as design for their staff. The current fabric that is been used in said to be ill fitting and is easily flammable this has a great impact on the safety of the employees also according to various employees they cannot be able to raise their hands above their shoulders in case of emergencies. Virgin Australia also needs to implement a post flight feedback program this will enable them in determining the impact of the changes that have been implemented in the organization. The organization also needs to have leadership mentoring program so that the changes can be continued in the future so as to make the organization more profitable and finally they should give workers more autonomy over the tasks they perform Conclusion Virgin Australia really needs to find new approaches if they are to survive and have a dominant market share in the Australia airline industries and more specifically the Business Class segment. Virgin Australia are initiating this change by changing their staff’s uniform, their brand name, moves seen to be angling for the premium market dominated by Qantas. Employees are the most important agents of change in any organization and thus Virgin Australia need their workers full backing for success of their new business approach, to achieve this backing Virgin Australia should apply and fully implement the Kotter 8-step model. By intensively applying the recommendation in the above section Virgin Australia can quickly gain an additional 40% share of the business class travelers. References Cropanzano, R., & NetLibrary Inc. 2001, Justice in the workplace: Vol. 2. From theory to practice, Lawrence Erlbaum Associates, Inc. Mahwah, NJ. Deci, E. L., & Ryan, R. M. 1985, Intrinsic motivation and self-determination in human behavior, Plenum, New York. Dent, E. B., & Goldberg, S. G. 1999, Challenging ‘‘resistance to change’’. Journal of Applied Behavioral Science, Volume 35, Issue 1, pp. 25 – 41. 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