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Magic Carpet Airlines - Case Study Example

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Three cultural issues operating in the situation included Magic Carpet Airline’s low wage rates for its flight attendants as compared to other airline companies. Another cultural issue in this situation was the lack of payment for overtime work. The third cultural issue in…
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Magic Carpet Airlines
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Collective Bargaining At Magic Carpet Airlines: A Union Perspective (A) Collective Bargaining At Magic Carpet Airlines: A Union Perspective (A)
Magic Carpet Airline’s flight attendants, through the League of Flight Attendants, negotiated for the improvement of some of the things that they were not comfortable with in the company.
Cultural issues
Three cultural issues operating in the situation included Magic Carpet Airline’s low wage rates for its flight attendants as compared to other airline companies. Another cultural issue in this situation was the lack of payment for overtime work. The third cultural issue in Magic Carpet Airline’s negotiation was the lack of adequate holiday for flight attendants. The flight attendants felt that the company needed to add them another holiday in which they expected to be paid (Shell, 2006).
Stakeholders
Flight attendants were one of the stakeholders in the Magic Carpet Airlines negotiation. They used the League of Flight Attendants to articulate their issues with the management. The other stakeholder in the case was Magic Carpet Airlines team that represented the company with whom these issues were being addressed (Kennedy, 2007).
Major problems
Compensation was one of the major problems in this situation. The base wages for Magic Carpet Airline’s flight attendants were relatively low and the data that they collected from Monthly Labor Review helped them conclude that the base wage was not matching the cost of living that had gone up. The airline’s flight attendants observed that the company’s wage scheme was fixed and was contended for a five-year wage review (Guasco, 2007).
Job security was the other major issue in this situation. The flight attendants felt that they risked losing their seniority if the deal between Magic Carpet Airline and RCA went through. The company did not provide a clear way of reassuring its flight attendants that their contract was binding and this made them feel like they could lose their jobs anytime (Kennedy, 2007).
The third major problem in this situation was working conditions. The company assigned its flight attendants a prolonged trip trading lead-time of five days but they felt that it should be reduced to one day. The company provided $6 monthly for the maintenance of flight attendants’ uniforms but they felt that the about needed to be raised to $20 (Shell, 2006).
The fourth major problem in the negotiations was the disparity between the wages and wok rules, and Magic Carpet Airline’s financial performance. The league of flight attendants demanded for the harmonization of the company’s wages with its financial performance.
Recommendations
I would recommend that the League of Flight Attendants utilize quarterly meetings with the board of directors of the company in order to discuss their issues. This would provide a platform for them to air their grievances before they escalate. Secondly, I would recommend that the company assign a team that would look into the welfare of its flight attendants. This team would make recommendations to the company advising it on the areas to improve (Guasco, 2007).
Union’s primary objectives and strategies
One of the union’s primary objectives was change in which they sought to see improvement in the company’s compensation scheme and working conditions. They used an opening offer that was drafted from the existing average working conditions and wages rates as the strategy to achieve this change. Another primary objective of the union was to seek clarification. The strategy they utilized to attain this objective was to present a proposed pilot’s contract to the company (Kennedy, 2007).
The company’s primary objectives and strategies
One of the objectives of the company was to maintain good relations with its flight attendants. Whereas the company did not readily accept the proposed changes of the League of Flight Attendants, it later used compliance as the strategy to maintain good relations with them. The second primary objective of the company was to safeguard the profitability of the company. It set wages that could not hurt the company’s performance as the strategy to achieve this objective (Shell, 2006).
The strategies that Dixie used
Dixie used the separation of the bargaining subjects as a main strategy in the negotiation. This helped avoid duplication of grievances and increase pressure on the company. Another strategy that Dixie used was to ensure that he was the one to articulate the issues of union members in order to avoid the union members approaching the issue with excessive emotional reaction (Guasco, 2007).
Likely outcomes if action steps were taken
If action steps were taken, the flight attendants’ wage would have been increased and would be revised after every five years. Magic Carpet Airlines would have granted its flight attendants one-hour pay for every two hours of duty under the FLA’s Duty Rig Pay Proposal. The company would have adopted and signed a binding contract with its flight attendants assuring them of job security. Finally, if action steps were taken, the company would have reduced the trip trading lead-time from five days to one day, granted $100 for shoe allowance, catered for winter coat expenses and increased the uniform maintenance fund to $20 per month (Kennedy, 2007).
In conclusion, the grievances of the flight attendants were granted.
References
Guasco, M. (2007). Principles of negotiation: strategies, tactics, techniques to reach agreements. Irvine: Entrepreneur Press.
Kennedy, G. (2007). Strategic negotiation: an opportunity for change. Burlington, VT: Ashgate Publications Company.
Shell, G. (2006). Bargaining for advantage: negotiation strategies for reasonable people. New York, NY: Penguin Books. Read More
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