Strategic Human Resource Management 102 CHAPTER 2 The present state of Delta plu
ID: 393566 • Letter: S
Question
Strategic Human Resource Management 102 CHAPTER 2 The present state of Delta plummeted. Since it began its cost cutting, i price more than doubled in just over two years and its stock to these cond famyent and rank complaints about dirty airplanes rose from 219 in 1993 to 358 in 1994 and 634 in 1995. On-time performance employees broker, both the flight attendants and the contract that will place and-fil its debt was upgraded. On the other hand, customer solved anWithides Doesn't Bver Leave The Airport." Delta slipped from with ounion fourth to seventh among the top gage so bad that passengers joked that Delta stands for Delta had toainaploee hat 10 carriers in bag- addition, labor costs have been handling. Employee morale hit an all-time low, of the union activity. Thedrien unions were beginning to make headway toward year them ae ive them at the highest pay recenly v some of Delta's employee groups. In 1996 in the industry. In an f drive, the mechanics ort to head off CEO Alen was quoted as saying This has tested our ing CEO Allen was qu people. There have been some morale problems. But similarly put them at the i attendan less of, but certainly enco leading pay gad- by, the unlon drive be it. You go back to the question of survival, and it The Delta Air Shortly after, employees began donning cynical ers stirring blue-collar discontent, employee morale a in droves. Less than one year later, Allen was makes the decision very easy Lines story provides a perfet example of the perils adequately address h 'so be it" buttons. Delta's board saw union organiz- n await frms er uman resource issues in the fot customer service reputation in near mulation and implementation of strategy. shambles, and senior managers exiting the com- QUESTIONS Delta's financial turnaround. His firing 1. How does the experience of Delta was 'not because the company was going broke, but trate the interdependence beteens sions of "how to compete and "with because its spirit was broken." to Delta's Leadership 7.5 strategy destroyed the firm's compete"? Consider this with regard to both strat a highly experienced, highly formulation and strategy implementation. egy skilled, and highly committed workforce that delivered 2. IE you were in charge of HRM for Delta Air Lines the highest quality customer service in the industry. now, what would be your major priorities HRM might have affected the strategy by pointing out soURCES M. Brannigan and E. De Lse Ct Cutgt Dela the negative impact that this strategy would have on Raises the Stock Price but Lowers the Service, The Wall Sthet Jorunal the firm. Given the strategy and competitive environ- June 20, 1996, PP.Al, A&: M. Bennrigan and J. White, "So Bele Wahy ment, Delta might have sought to implement the cost Deita Air Lines Dedided It Was Time for CHO to Take OETe g differently to reduce the cost structure but pre- Street Journal, May 30, 1997, P-AL. serve its source of differentiation. Is Dell Too Big for Michael Dell? the come may have the tough- Exchange Commission andaUS.attomey for acount Michael. Don't get too comfortable. usiness. Welcome back, ing irregularities As recently as last November, Dell insisted to Bast inter- By ing departing chief executive Kevin Rollins, founder view the top job at Dell Inc, replac- ness Week that Rollins's job was safe. Now, in an Rollins, founder view, he insists the decision to push Rolins out started ms.been perhaps the toughest job in with him. "I recommended to ell and Rollins we ter industry, Since mid-2005 the PC maker our board that I become has battiled problems with customer service, quality, held up as the CBo effectiveness of its direct-sales model. Lately, in-a-boxt tep.ollins tdvals HewlettPackard Co. and Apple Inc have been worked togeth er it was CHO, whet sined aim gaining in sales and market share. On January 31, the management structure, in which two leadens day Rollins's departure was announced, the Round moted to CBOo quarter earnings and sales would fall short of analyst a while now under scrutiny by the Securities dent, anpany disclosed that its fourth- But financial performance hait apa 2004, Mi estimates. I's also been deteriorating for & patience in light of the latest disappointment. Peog and Michael Dell apparens in lightExplanation / Answer
Delta Airlines:
Answer: 1- The experience of Delta Air lines illustrate the interdependence between the strategic decisions of 'How to compete" and "With what to compete. To improve the situation and to overcome the crisis. Under "Strategy implementation" they have used this strategy to reduce the cost of available seat.Under this strategy ,They have taken various steps such as : -They have replaced Its experienced work force with the outside contractors to decrease the cost of its work force-and to reduce the wage rate.
-They have also decreased the no. of workers and has gone for Outsourcing option.-By replacing its experienced employees they have compromised the quality of work because new employees were not able to work properly and maintain the quality. So, finally this strategy did not work and was failed .Failure of the formulation and implementation of strategy it lead to decrease in employees moral and also company's moral as well and ultimately lead to the situation where employees don't care about the company's image and not even care about the customers and services that they providing to the customers so, customers also were very disappointed and dissatisfiedTo overcome this problem, Delta airlines has increased the wages of employees as the unions were forced the management decision to raise the per the wages that lead to the situation where Delta was providing the highest wage rate to their employees.
Answer:2-If i were the incharge of HRM for delta Air lines my major priorities would be:
1) To deal with the employees problem
2) To improve the customer service
Main problem of the Delta airlines was high operational cost that includes the labour cost, High fuel prices ,High taxes and security payments, no trust in management and labour and high executive incentives.To deal with these problems, HR mangers has to work on the management and employees relation first because it the the workforce that produces the best quality for customers.HR would have encouraged the employees suggestions to deal with the situation and also could have consider the unions in this situations.Under this management could have discussed the different steps to reduce the cost and if the employees ,union and management would have come to the solution of pay cuts and to deal with the problems and If this was the case, then it would have lead to improve the customers services and cost cutting objectives would have also got fulfilled as well.It wouldn't have led to the situation where company has to make decision of providing highest wage rate in industry.
Michael Dell:
Answer-1-The case describe the dell's transformed strategy over the years in terms of where to compete, how to compete and with what to compete;
Under where to compete; Dell is facing the situation
where Dell has lost its position of cost leader because the C.E.O of the company has left his position and now the Michael dell has to handle the situation.
Under "How to compete": As given in case Dell was competing in the PC market with its direct-sales strategy But now they are facing the situation where their market share is continuously decreasing. It is the hazardous position for the dell, to deal with the situation Dell has decided to invest more on its R&D, services and they are considering to go for retail strategy and leave the direct-sales model but that does not seem to improve the situation in the market. So, dell has decided to deal with the situation by transforming the company’s strategy.
Under "with what to compete": Dell's HR department would help by explaining the current requirements of hiring the new executives and , attracting and improving the existing executive team to improve their efficiency so , that they can meet the future expectations of the customers. Michael dell has to work and plan according to the situation.