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 Airline’s 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 leader’s 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 Organization71, 102639.

Nathalie S.