Managing Complex Change
As you explore different types of change initiatives (e.g., large-scale enterprise transformations, strategy, M&A, crisis/emergency, operational/technical change), and the characteristics and challenges of each, answer the following questions:
- Which of these are part of the “Merging American Airlines and US Airways” case?
- Based on your readings, as well as your own experience, which of these change initiatives are the easiest to successfully implement, and which are the most difficult? Why?
- Based on the examples in the case, and drawing on the course materials as well as on your own experience, are there some types of change initiatives that HR should stay out of? What are they and why?
Post your initial response by Wednesday, midnight of your time zone, and reply to at least 2 of your classmates’ initial posts by Sunday, midnight of your time zone.
1 response
Good afternoon everyone,
US Airways merger with American Airlines in 2013 is certainly one of the most publicized M&As of the last decade as it effectively made the industry an oligopoly. Southwest Airlines, Delta Airlines, United Airlines, and American Airlines Group (AAL) effectively took control over 86 percent of the market (Siegert & Ulbricht, 2020). However, what was more interesting about this merger is that a small player took over a much larger one. This type of merger is generally rare and has unique challenges and characteristics. In the “Merging American Airlines and US Airways” case, two major change initiatives were evident: large-scale enterprise transformation and operational change (Groysberg, Lee, Price & Cheng, 2018). Concerning the latter, the two companies were polar opposites when it came to culture. At American Airlines, captains were known to wait for customers who were late for their flights. In contrast, at US Airways, management discouraged this behavior, noting it had direct and indirect implications that could snowball into major problems. Another difference was the organizational structure. US Airways had a flat system that made it easy for employees to interact with executives. The company, for example, had free parking zones where a flight controller could park next to a vice president. At American Airlines, the executive was removed from the rest of the group and rarely mingled with employees (Fubini, Garvin & Knoop, 2017). They had separate parking and one had to get security clearance to meet the CEO.
In my view, technical change was the easiest to implement since the company followed guidelines that have been proven to work. For example, it oversaw thorough and effective training, was transparent about team selection and integration, and maintained consistent communication across both entities. The most difficult was large-scale enterprise transformation as it touched on cultural change. Integration meant doing away with practices that created inefficiencies and conflict and embracing ones that enhanced the relationship between the two groups.
Though HR certainly played a major role in this effort, there are areas where it would be better if they avoided. Revenue accounting and procurement stand out because they largely rely on systems rather than interactions among individuals.
Fubini, D.G., Garvin, D.A., & Knoop, C. (December 4, 2017). Merging American Airlines and
US Airways (A). Harvard Business Review.
Groysberg, G., Lee, J., Price, J., & Cheng, Y. (2018). The leaders guide to corporate culture:
How to manage the eight critical elements of organizational life. Harvard Business Review.
Siegert, C., & Ulbricht, R. (2020). Dynamic oligopoly pricing: Evidence from the airline
industry. International Journal of Industrial Organization, 71, 102639.
Nathalie S.
2nd response
Hi Class and Professor,
Reading the case about American Airlines and US Airways, I can conclude that the change initiatives involved are crisis/emergency, M&A, and operational/technical change. In this case, the emergency was AA going into bankruptcy and losing so much money that the only opportunity they had to save the company was to merge with US Airways that did so much better profits that same year. The operational/technical change came into play by that these companies had to make sure that all workers had the same attitude and work that the combative would have to change their behaviors to work with different people in the opposite company, even if there wasn’t shared values at the moment (Fubini, et al. 1).
Out of all the change initiatives in the lecture notes, the easiest one I think would be strategic change because this basically looking at all the workers involved and evaluating their job roles. This is important because for this merger to be successful leaders have to understand which employees are best in the job roles provided whether tenure or not. I think the hardest would be a transformational change because the merger is so big and involves so many players that leaders have to strategize on cultural change that can have shared values, the mission, and vision that can be agreed upon by both company leaders, etc. There is just so much to focus on to make sure that both sides can work together and agree upon big issues that it seems that it would be a difficult task to get buy-in from everyone (JWI556 Week 7 Lecture Notes, 2).
I feel we’ve learned anything from the previous class that it is important to stay involved in things going on at the lower levels of the company. HR has had this role that they usually don’t get involved on these levels with strategy and operations that are usually taken care of by low-management. I do think that HR has a role in all these change initiatives because they have this role of taking care of the people and all of these are about people-first. It only makes sense for HR to play a big role in making sure that the leaders are doing what is expected and making sure behaviors are being changed by communicating why the changes are occurring. Transparency is always important in gaining employees’ trust and allowing open communication of different opinions.
1. David G. Fubini, et. al. Merging American Airlines and US Airways. HBP. 2017.
2. JWI556. Week 7 Lecture Notes. 2021.
