Week 2 Images Of Change HRM

1835 Words Apr 16th, 2015 8 Pages
CHANGE ANALYSIS- IMAGES OF CHANGE

Major Changes in American Airlines (AA)
The merger between AA and U.S Airways was necessary after chapter 11 of bankruptcy was filed. They had to get bankruptcy protection due to high cost of operation, labor relation problems, high fuel prices and a slowdown in travel demand. The merger was finalized in December 2013.
Prior to the merger, AA struggled with the decision to use chapter 11 to cut cost thinking it could come out of its higher labor cost. However, it finally accepted after pressures from its creditors committee and gave in to restructuring while having bankruptcy protection.
While they were under bankruptcy protection, the restructuring of operations and cost structure was a strategy they
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It only filed for bankruptcy in 2011.

In UA restructuring plan, they were careful to ensure its vision for change aligned with its company vision of upholding the united brand through employee engagement to organization’s vision and promise today. While for AA, one of the restructuring strategy
CHANGE ANALYSIS- IMAGES OF CHANGE

was its negotiation with labor unions to remove a substantial cost and time risk to improve stakeholder’s confidence that the merger was going to go through.
AA’s merger was executed as an all-stock deal allowing the company to move forward without having to raise new funds, helping to shape an image of financial viability and sustainability (Thomas 2014). UA on the other hand needed to raise funds by itself as loan sought for was not being approved. One way they did this was by terminating its pension plan

Images of Change as a Director
Both AA and UA had to make strategic decision which came from top to bottom that made them undertake activities such as planning, organizing, commanding and controlling (Palmer, Dunford and Akin 2009). Both faced external pressures with the possibility of losing market share and the risk of totally going out of business like Panam Air in the 1980’s both companies had a clear picture of intended outcomes by merging with U.S Airways and Continental Airlines.
Both companies had to make a change to their pension plan and the

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