Alaska airline case analysis PDF

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Running Head: ALASKA AIRLINES: NAVIGATING CHANGE CASE ANALYSIS

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Introduction A 86 years old history of Alaska Airlines start in 1932 when two airlines named, “McGee Airways”, and “Star Air Service” enchorage ALSKA AIRLINES. In 1935 Star Air Service buy McGee Airways and start running commercial airline service throughout USA. Star air Service manage these two airlines till 1944 and then they finally adopt new name which we know today, “Alaska Airlines”. Their main headquarter is in Seattle, WA. Currently it serves more than 100 destination which includes USA, Mexico, Canada, Costa Rica. Alaska Airlines comes in top 5 largest airlines in USA. In 1986 Alaska airline start their own sister company named Horizon Air. Current CEO of Alaska Air group is Brad Tilden and COO is Ben Minicucci. Alaska Airlines is responsible for more than 21000 employees (Satterfield, 1981). Alaska Airlines has long history of success and failure from beginning till today. That means it fail many times mostly in early 20s and stand up to maintain their best customer service and reputation. Alaska Airline awarded 11 years by J.D. Power as highest satisfying rates of customers in history which prove them number one in US (Rayadmin, 2018). The challenges start from mid-1999 when the fuel cost affect US economy as well as Airline. In January 2000 their first plane crash. In 2001 the dot-com bubble burst and 9/11 attack. Then bankruptcy problems, employee unsatisfying issues because of outsourcing and bad performance ration, high customers unsatisfactory ratio, on field and airport problems, misplaced bags issue on airport etc. accrue from 2002 to 2006. In 2007 finally, airline come with new strategies to solve all the problem and improve their performance and customer satisfying ratio. All the efforts in 2007 to 2008 help airlines to come on top rank and gain their stakeholders trust (Avolio, Chelley, & Bradford, 2017).

Running Head: ALASKA AIRLINES: NAVIGATING CHANGE CASE ANALYSIS

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Question 1 The biggest mistake Alaska airlines did was over trusting their field employee. They could have solved this problem earlier then it last. Alaska airline’s upper level leader could have use some standard work measuring tools or process to track daily and hourly activity to increase their awareness and solve common problem of internal and external issue. They could have train their employee to measure their daily routine activities like working hours, activity hours, delay period, reason behind problems, etc. so they can track every activity on field and use them as future references. This kind of daily habits can help to measure baggage handler and missing problems which was highest issue at that time. The major mistake by their leader was avoiding unidentified problem which created by their own employee by blaming each other’s like airport gate person blame pilot for flight delay, pilot blame engineer for mechanic problem, engineer blame technical people for not supplying proper tools etc. If they could have follow activity tracker tools which help them everyone to track the problem, timing, activity etc. then this kind of issues can easily have avoided. All the operational issue could have been solved by using standard work process and mechanism for tracking daily performance earlier to increase the awareness in work environment of company (Lindsay, & Evans, 2010). Question 2 Alaska Airlines faced many problems during 1999 to 2007 which are as follow (Avolio, Chelley, & Bradford, 2017).: 

1999: Fuel cost price variation which affect their employee, manufacturing and customer satisfaction ratio

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2000: Plan crash accident in California by some mechanical problem.

Running Head: ALASKA AIRLINES: NAVIGATING CHANGE CASE ANALYSIS

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2001: This year they faced two major national problem. Dot-com bubble burst and 9/11 plan attack.

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Epidemic of another Airline bankruptcy during 2002 – 2008 which affect entire airline industry.

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Misplacing baggage’s high ratio.

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Flight delay problems by pilot, airport and mechanical issues.

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Employee strikes which include pilots, airport staff, flight attendant, baggage handlers.

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Outsourcing and top management problems.

Foreseeable Issues: A issue which are easy to identify by employee within work environment in given number of time and circumstances are known as Foreseeable issues (Galbraith, 1983). Following are some foreseeable issues faced by Alaska Airlines through 1999 to 2007 (Avolio, Chelley, & Bradford, 2017).: 

Mishandling baggage issue faced by Airline in early 2000 was foreseeable issue. It could have solved by simply following standers work process.

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Flight delay problem by pilot or other common mistake like delay in loading baggage’s, food or fuel. Mechanical problems.

Unpredictable issues: A issue which are out of stakeholder’s power or not easy to control. Some issues are created by nature or human but it’s not in our control are known as Unpredictable issues (Galbraith, 1983). Alaska Airline faced some of unpredictable issue in early 2000 which are as follow 2007 (Avolio, Chelley, & Bradford, 2017).:

Running Head: ALASKA AIRLINES: NAVIGATING CHANGE CASE ANALYSIS

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Variation in Fuel cost price which is unpredictable because it depends on source of fuel in land. Other factors like economy, political relation between two countries, nature also affect fuel price.

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Accident. Plan crash are unpredictable because it’s not under control of human. We can try to solve problem before accident but cannot fully control it.

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Economy crash is also unpredictable issue faced by Alaska airline in 2001.

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Terrorist attack like 9/11 are also not control under any company. Question 3

AA was facing some of the major problem in their history related to operation on airlines. 30 percent of flights were delay by time because of some issue and 7 bags out of 1000 passengers were reported misplace beg. This numbers sound high compare to other flight operation problems. The situation on ground was not on time, there were many problems were going on like ground crew handling baggage’s, food loading delay, performing ground service in between two flights. Alaska leaders were come to know all these problems and they were not able to figure out some of the question which create problem in customer services. They note all the problems and call meeting to figure out all this issue. They anticipate all this problem by very clever way of creating mind state by putting their self in other shoes. Leaders tell their staff that what other consulting company do if they takeover this company? How they solve this problem? What proposal they accept to solve this problem in given time? All the team member realize that they are having major issue in their operation which affect their customer services. They find out that they need to fix their Hub which is Seattle before they go for other problems.

Running Head: ALASKA AIRLINES: NAVIGATING CHANGE CASE ANALYSIS

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To solve these issues, they demand someone from higher level of management to give their 100 percent to solve all this problem. They hire VP to manage their operational issue and find out solution for ground team. Before this step they had individual team leader for each operation which was decentralized management system. It was hard to find problem in decentralized management because everyone works individually. From now on they had 1 VP for all these department. Everyone should response him for each activity. After adapting centralized management system, they find out more problem which could have solve way before they start (Child, 1972). Changing the management system was their first step towards solving all these operational problems. Question 4 The good things about Alaska airlines culture was best customer services which they must maintain to be in market. Second thing was their customers were loyal. 70% of their customer at that time were within their employee’s network. The other side of their culture was they were blaming each other or the system. If something happens in the company then blame other employee or the system for that damage. The other main cultural problem was employee union. Alaska pilots and flight attendant had strong union in US compare to other airlines. Small change in organization which affect employee cause strike and other employment problems. Leader in Alaska airline solve all these cultural problems by outsourcing some of the work. Which was the best decision taken by management. Outsourcing decision help Alaska leader to focus on other things like operation issue, communication issue. They start doing outsourcing of ground employee like baggage handlers, gate and airport employee etc.

Running Head: ALASKA AIRLINES: NAVIGATING CHANGE CASE ANALYSIS

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Communication change also affect Alaska Airlines culture. They start mandatory meeting every morning with all department head. Which help them to communicate daily activities which include progress, problems, planning etc. In result they come to know more issue and solution for each. These changes motive their employee to work in team. Question 5 In 20’s Alaska airline had major two week point which were poor internal communication and lake Operations management system (Avolio, Chelley, & Bradford, 2017). If I get chance to coach the top management then I may do the following things to improve their Internal communication and Operation management system. Internal Communication: The first step I take to improve their internal communication system is implement training workshops. Training workshop bring employee close to each other’s. Every employee has some weakness, training workshop help them to learn all the required skills, so they can perform well. It also helps employee keep up to date in company. Leaders can teach them how to solve problems and colleague can share their experience, so others can learn. Secondly, I try to create employee and management relation more transfer. Transparency between higher level and bottom level is most important in organization. Transfer relation between managers and employee help them to solve problems and work more efficiently. they can improve their relation through communication and daily activities like sharing routine, experience, workshop. Third, increase incentives. This can help to motive employee which result into efficient use of resources, less mistake, self-motivation, clear communication and good result. Incentive always help in result of work (Noe, Hollenbeck, Gerhart, & Wright, 2006).

Running Head: ALASKA AIRLINES: NAVIGATING CHANGE CASE ANALYSIS

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Operation Management: Outsourcing is good option to reduce some work in company but it’s not always good idea. Outsourcing also discourage existing employee. I try to decrease outsourcing is I get chance to coach their upper level management. Instead of outsourcing, Alaska airlines can train their employee and encourage them to do more productive work. Other thing I do is to balance their pay scale. They also problem of employee union, strike, lower pay. Instead of giving high pay in good time and low pay in bad time, I prefer to give them balance pay scale and other benefits like health insurance, flight benefits, paid holiday etc. which motive them more (Odiorne, 1965). Question 6 The typical factors contributed in Alaska airlines problems were improv relation with contractor. Before this contribution managers were not even aware of labor union in their organization. At the strike time, managers were scare to walk towards them because of lake of awareness and communication gap between them. Secondly, before new management all the department head used to do their own work and only focus on their own department. There was lake of communication and no one was sharing any information to other department. After new management they create stick rule of 90-minute meeting every morning. After this decision they start sharing their experience, problems and start finding solution for each problem together. Third, when Alaska was solving their operational problems they unprioritized other issues which cause unstatisfaction and angry customers, other stakeholders issues. To solve this, new management start balancing priority of issue (Avolio, Chelley, & Bradford, 2017). The unique factor contributed in Alaska airlines problems are adapting new techniques of management. First, Alaska airline adapt Report card system to solve operational problems and smoothen the all operation process. Report card matrix can help management to track all the

Running Head: ALASKA AIRLINES: NAVIGATING CHANGE CASE ANALYSIS

timing, problems, activities, hourly and daily track of all the records. The matrix system improves the operation system and it make easy for company to find issues. Second factor was lean technique. Alaska airlines introduce lean techniques in their daily activity and afterwards they start analyzing daily outcomes in their meeting. Managers start using video and report to observe live activities on airport and ground to make activities smother, faster and reliable. (Avolio, Chelley, & Bradford, 2017).

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Running Head: ALASKA AIRLINES: NAVIGATING CHANGE CASE ANALYSIS

References Avolio, B., Chelley, P., & Bradford, B. (2017). Alaska Airlines: Navigating Change. W14722. London: Ivey Publishing. Child, J. (1972). Organizational structure, environment and performance: The role of strategic choice. sociology, 6(1), 1-22. Galbraith, J. R. (1983). Strategy and organization planning. Lindsay, W. M., & Evans, J. R. (2010). The management and control of quality. South-Western Cengage Learning. Noe, R., Hollenbeck, J., Gerhart, B., & Wright, P. (2006). Human Resources Management: Gaining a Competitive Advantage, Tenth Global Edition. McGraw-Hill Education. Odiorne, G. S. (1965). Management by objectives: A system of managerial leadership. Pitman Pub. Corp.. Rayadmin (2018, May 30). North America Airline Satisfaction Study. Retrieved from https://www.jdpower.com/business/ratings/study/North-America-Airline-SatisfactionStudy/4012ENG/Traditional-Carrier/1269 Satterfield, A. (1981). The Alaska Airlines Story. Alaska Northwest Books.

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