Case Analysis and Presentation Split Operations at Sky and Arrow Airlines I.

Synthesis Jack works as one of the rampers in Sky Airlines (Sky) which has been in the industry for the past 25 years. Part of his job description is to assist the incoming and outgoing aircrafts in the airport in bringing in bags and air cargo inside the airplane / aircraft. For the past few years, he really enjoyed working with the rest of his team in Sky. He has developed teamwork among his colleagues and is able to finish the job with dignity and respect. In fact, if he gets any free time, Jack makes it a point to spend the rest day with his colleagues by having dinner together, watching movies, and the like. Camaraderie, teamwork, and sense of synergy are some of the things that can best describe the corporate culture of Sky. These are the same reasons why its employees, especially Jack and his team enjoy working with the company. Sky also gives full autonomy and empowerment to Jack, being a senior worker, when it comes to making decisions on the day to day ground operations. This was the case until Sky Airlines was bought by Arrow Airlines (Arrow) and the two companies merged its operations in Santa Clara airport. To distinguish it from Sky, Arrow follows a more formal way of managing its business. Aside from the fact that most employees are older compared to Jacks team, Arrow employees also consider themselves as professional rampers. As part of the merger agreement, Arrow management decided to split the operations between the two companies. Arrow will handle ticketing, check-in, and boarding of passengers; while Sky will handle all the ramp work, bag loading, unloading, deplaning, and assisting Arrow to begin the boarding procedure and parking of aircraft. The new arrangement seemed basic and easy enough to understand. However, the transition brought confusion among its employees and resulted to several problems encountered like delays, flight cancellations, conflict on flight priorities, and disputes among its employees for both companies (Sky and Arrow). These problems resulted to several complaints like missed bags in some flights, aircrafts sent too early, and aircraft delay. Arrow took no responsibility and fixed the blame to Sky employees. Sky in return continued to complain against their supervisors and managers.

After a few months of implementing the split operations between Arrow and Sky, upper management decided to lay-off employees of the latter. Initially, the plan was to lay-off only 1/3 of Sky employees. But during the actual execution, all of the Sky employees were laid off. Arrow decided to handle the whole operations thereafter. II. Point of View While the case is narrated on the point of view of Jack, a ramp worker of Sky Airlines, our group is taking the perspective of the President/CEO because this person is in the position to take action on the most imperative issues as result of the merger between Sky and Arrow. III.Statement of the Problem What is the most effective way of establishing organizational change for newly-merged companies? corporate and

The merger between Arrow and Sky Airlines seemed profitable for the entire organization at the time it was instigated, creating an impression that a bigger airline company was now available to serve more passengers with more flights. Like most mergers, the merger between Arrow and Sky focused mainly on the financial aspect giving less attention to the human element. The merger was implemented without the establishment of a more concrete, pro-employee system which resulted to damage in business operations and employee morale. Because upper management failed to make the split operations work not only for its external customers but most importantly for those internal to the company, attrition has become the very obvious aftermath of the merger. If the deciding stakeholders fail to further address the concerns of Sky employees with regards to operations, the fiasco may not only result to an anticipated lay off, but a perceived destructive company in the airline industry. IV. Statement Objectives To identify root of the conflict existing between Arrow and Sky after the merger; To determine ways on how to successfully implement changes in the organization; To direct the problem to stakeholders responsible for keeping the company en masse despite differences in corporate cultures and employee personalities; and To minimize probable attrition among Sky employees.

V. Areas of Consideration

A.

Culture of Sky and Arrow Airlines Sky Airlines Emphasis was placed on having fun at work Camaraderie among employees is reinforced through company functions Sense of synergy Autonomy and Empowerment for employees Arrow Airlines Much more formal than Sky Professionalism is practiced sternly Individual responsibilities were more defined Work procedures assigned strict accountabilities among employees

Management must take into consideration the two opposing culture of the company in order to successfully combine their strengths and mitigate the weaknesses. An understanding of the behavior of both employees and how it can be used to the companys advantage is one of the first steps that must be taken. B. Split Operations

1. Effect on Processes Mergers will cause some or major changes in the normal operations of the business. The two companies have different ways of handling and performing their jobs. The merger of Sky and Arrow Airlines at Santa Clara Airport fashioned issues among employees, specifically on ramp employees, which results to hampered operations. The key issues are as follows: Sky employees think that Arrow employees use of belt loaders on every flight, even on much smaller planes, is silly; Procedures, in many cases were unclear and conflict escalated; and Flight priorities were significantly affected. As part of the merger, Arrow management decided that operations would be split between the two companies, thus responsibilities among employees were also split as follows: Sky employees Handle all ramp work, such as bag loading and unloading, deplaning, and giving Arrow's gate the goahead to begin boarding, parking, and sending the aircraft Arrow employees Handle all ticket, checkin, and board all passengers

2. Effect on Employees Employee issues include: C. Sky employees felt arrogance portrayed by Arrow employees; Arrow employees refer to themselves as professional rampers, while Sky employees perceive professional as carrying out their duties with a stern face. Job responsibility became the epicenter of conflict between employees of the two companies; There was no cooperation between the two companies; and Disputes surfaced on which company was responsible for performance failures.

Other Issues

After approximately three months into the split operations, rumors of Arrow taking over all ground operations began to surface. These rumors lead to speculations and opinions about what would happen escalated among Sky employees. Talk of layoffs began to worry and affect Sky employees. After only a few months into the split operations, management decided to scrap the plan and lay everyone off. VI. Alternative Courses of Action A. Establish and implement standard guidelines on the split operations; procedures and upper

Pros Job responsibilities are well-defined, enabling employees from both Arrow and Sky to focus on their individual accountabilities; Culpabilities may be eliminated among employees from the two airline companies. Cons Sky employees may not easily adapt to this organizational change as they are used to practicing autonomy and empowerment and as a result, diminutive concerns may arise from their end.

B. Develop full-scale operations operations) or implement work departmentalization

(rather than specialization

split and

Pros Operations become more solid in terms of duties and responsibilities; Team-work may be expected in the long run as a result of two different groups working for the same objectives; and Knowledge of the whole operations Cons It may be tedious for the upper management and they could decide on stalling for that matter: Positions commissioned to do certain task may appear redundant in the process and could still result to future lay-offs. C. Let Arrow take over all ground operations and layoff all Sky ground employees; Pros Overall operations could be more manageable for the higher ups; Modification of existing corporate policies may no longer be necessary. Cons All Sky employees lose their jobs as a result of solely retaining Arrow employees; Loss of talented and experienced employees VII. Recommendation

In every change in an organization, all stakeholders involved must exert effort to adapt to the changes for the benefit of the majority. In this regard, our group recommends ACA B which is to develop full-scale operations (rather than split operations) or implement work specialization and departmentalization. Given its pros and cons, if both employees from Arrow and Sky will exert effort to work together harmoniously, then teamwork will be achieved later on. The synergy resulting from combined strengths and efforts of the two companies will lead to the companys success. Thus, employees of both parties must establish a give-and-take relationship to accomplish the objectives of the merged airlines. Communication between these parties is also strongly recommended to avoid misunderstandings and conflicts in the organization. It is important for

the management to include employees in the decision making and make them a strategic partner because they are the ones who will be most affected by the change. Furthermore, the supervisors and managers must organize team building activities for their employees to increase trust and openness among team members. By doing so, camaraderie, teamwork and sense of synergy will be attained and barriers of cultural differences will be eradicated. VIII. Implementation Plan 1. Discuss the companys plans regarding the merger/Inform the Internal Stakeholders Merging two companies with their different policies, procedures, and culture will create stress for all the people involved so the first thing that management must do is to talk to the employees of both Arrow and Sky about the merger. The organization, particularly the employees, must be convinced of the need for change. Communicate the plans to all staff and give them the opportunity to feed in their contributions. Make them feel that they have joint ownership of the change being implemented. The fear of the unknown causes stress for employees which make them more resistant to change. To successfully manage the merger and to get the commitment and support of the employees, it is important to provide some motivators. Discuss what will be the benefits of the merger and how their job will be affected and probably improved. It is equally important to discuss the disadvantages of the merger. The company must be honest to inform employees of the potential drawbacks of the merger. 2. Assessment of Existing Workforce Cost savings through combining redundant tasks is a common goal for mergers. So it is important for the company to assess their workforce. The idea is to release the individuals least well equipped to contribute in the new organization and to hold on to the best people. The evaluation of the best people for the job must look at both companies' people equally. The company would not want to lose a great person from Sky just so they can keep a mediocre person from Arrow. 3. Devise New Vision, Mission, Objective and Job Assignments After determining who gets to go and who stays in the company, the organization must develop a new vision, mission and objective. This will

serve as a guide for the newly merged company in their operations. A more specific and clear job assignments and responsibilities must be set so that conflicts would be minimized. 4. Provide Training for All Employees Since the course of action is to develop a full-scale operation, it is important to provide training for all employees in order to prepare them for their job and adjust to the changes to be implemented with the company. This will help them familiarize themselves with the new procedures and with their colleagues as well. Knowing that their skill will be enhanced, employees will be more motivated to work. It is also an opportune time for the company to form an interaction between the employees of Arrow and Sky. Since there will be no more split operations where one company will just do their own job and not cooperate with the other, teamwork will be established. If they learn the importance of each ones responsibilities in the overall success of the company, they will be more welcoming of the change that is about to take place. However, the company must provide ample time for the employees to work through the changes and get back up to full speed. Managers must help employees focus on change one step at a time. If the company believes that people are the most important asset, they need to be treated that way. The merger will give the company an opportunity to do well through their employees. The company must be honest with them, keeping them in the loop, and giving them all the information we can as early as possible. 5. Provide for Feedback Mechanism Once the company has implemented the change, it is important to provide a feedback mechanism where employees will be able to pinpoint the areas of strength and the areas for improvement. In this way, the organization will be able to address the issues and look for ways on how to solve them. IX. Learning Points Organizational Change and Change Management Practice effective communication to avoid misinformation and misunderstandings; Let employees participate in making change decision; Build support for the employees so they will be emotionally committed to the change rather than embrace the status quo;

 Develop positive relationships so employees will trust the managers implementing change/s; and Implement change consistently and fairly to minimize negative impact to employees