Organizational Change And Its Effect On Qantas Airlines: An Essay.

Discuss about the Theoretical Flavours of Organizational Change Research.

Organizational change involves the shift of a company from its present situation to a desired future state. Currently, it is essential that organizations undergo change if they are to remain competitive due to the changes in markets’ globalization as well as the evolving technological changes. Mostly, organizational changes are as a result of issues that the organization faces. Some of the areas that undergo change include the strategy, structure, technology, people, as well as power. The above-mentioned areas are all related and if an organization is seeking to make a change in one, change must be instituted in all the other areas. Strategic change involves the shift of an organization’s resources to take up a new line of a venture. Technological change results from a change in strategy and should be incorporated into the company’s system. The structural change also results from strategic changes or operational changes. People change can result from other changes. However, an organization may only want to change employees’ attitude to enhance effectiveness. Organizational changes may result in mental stress, loss of loyalty, and changes the life of the employees. On an organization’s perspective, organizational changes may result to enhanced competitive advantage, increased growth, and boosts the market dynamic.

Queensland and Northern Territory Aerial Service (QANTAS) was established in 1920 in Queensland and is considered to be the world’s second oldest and eleventh largest. The primary duty of the organization is air transportation using two airlines, Qantas, and Jetstar (Bateh, Castaneda, and Farah, 2013, pp.113). The organization’s primary goal is delivering sustainable returns to its stakeholders. Regarding its financial data, the organization has recorded a profit tax of $1.03 billion compared to $557 million a year ago. The company has a high market share following that Qantas enjoys a market share of 36% while Jetstar has a market share of 24%. The structuring of Qantas’ operations is divided into three groups: customer and marketing, commercial, and operations. Also, the company faces competition from its own company Jetstar as well as other new market entrants. This has resulted in the company losing a significant market share over the years.

The research methodology used in this case study includes analysis of documents such as journals that have been published recently regarding the changes that Qantas Australia has undergone. Additionally, evidence has been drawn from one of the group members who had a direct experience with the organizational changes at Qantas.

Research methodology

There are many needs that have led to Qantas’ organizational change. The change has been initiated by the company’s CEO, Mr. Joyce. The most crucial factor is the political factor. In the last years, there has been a change in laws regarding taxation and regulations. However, Qantas has been in a position to predict these changes in taxation and developed mechanisms to cope with them (Belias and Koustelios, 2014, pp.75). Additionally, it is worth noting that the Australian government set policies to deregulate the domestic airline industry. As a result, this has created opportunities for other airlines to carry out their business in Australia. This poses a threat to Qantas because the regulation has attracted new market players in the market who are regarded to be low-cost carriers. Nonetheless, the company may take this as an opportunity to make changes in its strategy through differentiation and become distinct from the other local airlines. Becoming distinct means that Qantas becomes the only domestic airline that offers a premium service (Brown, 2012, pp.571). The Australian government has also issued a policy regarding aviation whereby Qantas’ main rival, Virgin, was allowed to be possessed by three government airlines that invested in the airline regardless of its losses. Due to this, the domestic capacity of this airline has significantly increased thus influencing Qantas’ internal environment which requires the need to change its operations.

Nuguid (2011) notes that the recent Global Financial Crisis has immensely influenced the airline industry, including Qantas Australia. This has resulted in a significant downturn in the airline industry. This poses a threat to the airline and raises some questions as to whether Qantas may feel that quality the services premium’s price is not fully satisfactory in making clients want to remain loyal to the company (Carter, Armenakis, Field, and Mossholder, 2013, pp.942). The aging Australian population, as well as other factors, are limiting Qantas growth as there are also concerns from the customers regarding their safety when using the airline. The company could as well use this as an opportunity to gain a competitive advantage. Qantas can do this by offering high-quality services as well as improving the airline’s security rating. Many technologies can be used to ensure quality service at Qantas such as the use of the regional jet (Chung, Du, and Choi, 2014, pp.80). This technology would improve the company’s services by ensuring that they are of high quality as well as improving the flight frequency. Adoption of all these technologies would improve Qantas’ competitiveness. Nonetheless, there are high fuel costs that necessitate a change to take place if Qantas is to become competitive. For instance, studies indicate that Qantas’ income was affected by the soaring fuel prices as a result of the financial crisis in the year 2009.

Factors driving organizational change in Qantas

There is also need for change to take place at Qantas Australia as a result of issues arising from its Human Resource Management. The primary objective of this department is to make sure that there is a successful change in management as well as conducting job analysis and design (Fernandez, et al, 2012, pp.36). It is evident that Qantas has undergone a significant change in its management where the company was deregulated by the government through privatization. Since the company was government-owned, it had a cost base that was not competitive compared to other airline industries. To save the company and maintain its competitiveness, Qantas restructured itself whereby 1,000 jobs were slashed (Fugate, Prussia, and Kinicki, 2012, pp.893). The main focus of the Human Resource Management during the changes in management was to cut on costs which include labor which would result to improved productivity, make sure that the employees’ salary was moderate as well as introducing flexible organizational structures. Nonetheless, the department has failed in ensuring that there is an effective and a non-biased change in management (Herranz, Colomo-Palacios, and Amescua-Seco, 2013, pp.130). Under this change, the HRM would have ensured that the workers’ remuneration was successful. It is worth noting that the company has been unable to ensure that its employees are well-taken care. As a result, these unsolved salaries have caused workers’ outcry as well as being the cause of several scandals within the company.

According to McDonald (2012), the 3000 employees at Qantas were dissatisfied with the company's Human Resource Management. The pilots themselves have protested over small salaries that they receive while the union workers have continuously been engaged in demonstrations regarding the pay inequality. This group argues that they receive a payment that is 25% less that of the colleagues in Victoria. There are several staff problems that have threatened Qantas (Hornstein, 2015, pp.293). Thus, the company would improve its performance if it came up with a change management model, for example, the ADKAR model that will assist in catering for the employees’ interests as well as enable Qantas to focus its operations on specific business results. The company has heavily invested in the HRM to facilitate training, job design, and analysis. Despite this, it is evident that the Human Resource Management department made the wrong selection while identifying their candidates as indicated by the in-flight incident that resulted in the death of 129 customers while others were injured which was caused by specious commands. Additionally, it is observed that Qantas’ pilots overshoot their destinations by 150 miles due to their incompetence and failure to know how to use the stick shaker and stall recovery hence resulting to serious accidents on the customers (Jacobs, van Witteloostuijn, and Christe-Zeyse, 2013, pp.774). This shows that the department leaves a lot to be desired since incidences have intensified, hence the need for change. Qantas has the goodwill of developing its people but it appears that it does not know how to do it. Several changes have taken place including cutting on costs, training programs’ development, outsourcing working rules, as well engaging in collaborations with unions. However, the problem seems to escalate further (Cojocaru, 2012, pp.122). The HRM has thus been observed to be incompetent in hiring qualified personnel and dealing with the workers. Sandilands (2011) indicates that the current situation has also had a negative impact on the customers and workers because they tend to have low confidence in Qantas’ management.

Impact of external factors on Qantas

With all these issues, there is need of coming up with an action plan. All the company’s stakeholders should hold sessions to discuss and solve this crisis by managing change. During their meeting, they should focus on changing communication as well as the training model and formulate rational models which are oriented on the employees (Breese, 2012, pp.342). The Human Resource Management will then implement the developed processes and engage other stakeholders to avail their ideas on the measures that can be adopted to solve issues relating to salary and training (Kickert, 2014, pp.700). The study indicates that the change meeting would take place as of 1st to 28th November in Qantas’ boardroom. In conducting the process, workers will be interviewed to demonstrate some changes that they would need. Qantas’ entire workforce and the managers will also be provided with data concerning the changed plan. The current issues that involve the Human Resource Management have resulted in a financial crisis in the company. Nonetheless, the company’s website indicates that they are committed to avail jobs that are meaningful and have salaries that are competitive and of superior benefits (Kuipers, et al, 2014, pp. 17). The company has however failed in meeting their promise as demonstrated by strikes. Also, they assert that the company provides targeted and quality training to its workforce as well as helping to improve skills. A major gap in the training strategy has been demonstrated by reported accidents.

The airline industry is considered to be a tough business to operate. This is because there are high costs while the profits margins are determined by fuel’s price over a given period (Langley, et al, 2013, pp. 11). However, one of the crucial areas that have proven to be efficient in differentiating rivals in the industry and low the costs as well as encourage the brand loyalty is focusing on technology investment as well as digital strategy. There are many theories that assist in explaining organizational change which depends upon the framework design in the change criteria as well as the unit of change criteria (Pardo-del-Val, et al, 2012, pp.1843). The four theories that explain organizational change include: first is the lifecycle theory that involves regulating change and adopts the metaphor of organic growth to an organizational framework that explains several stages of growth by using theories such as developmentalism, ontogenesis as well as metamorphosis. Second is the evolutionary theory that focuses on changes in an organization due to competition. The third theory is the dialectical theory that involves change due to conflict. Last is the teleological theory that involves intentional change (Pieterse, Caniëls, and Homan, 2012, pp.800). The main changes currently experienced at Qantas can be grouped under the dialectical and the evolutionary theories.

Challenges in Human Resource Management at Qantas

The high competition that Qantas is facing as a result of emerging airlines has resulted to the adoption of the evolutionary theory whereby it aims to enhance its competitiveness. The company has rolled out a transformation program on its technology with the focus of luring more clients. This technology includes adoption of a new and advanced system that will assist in lowering flight delays, SMS check-in, as well as developing a mobile travel app (SEO, et al, 2012, pp.141). The company is also on the verge of introducing free Wi-Fi on its passenger planes while it targets at removing the in-flight entertainment screens. This would help people in streaming through Netflix hence facilitating the clients to bring their personal subscriptions. This is a great change because it will assist in reducing the plane’s weight. It is assumed that half the weight that is carried by an aircraft includes the fuel which Qantas is trying to research on how this weight can further be reduced. By doing so, it would mean that the planes’ speed would be increased hence reducing the time taken by the customers to travel. Further, the advantages associated with Wi-Fi among the pilots is huge because they can gain access to a real-time weather forecast (Sharif and Scandura, 2014, pp.185). Additionally, the company is also testing engines which are capable of flying using fuel that is made from recycled waste, thus assist in reducing the aviation’s role in contributing to CO2 induced global warming. Nonetheless, in improving its competitive position, it has introduced the Direct Perth-London services thus increasing WA’s inbound tourism. The company argues that this change will be beneficial to everyone because it will reduce the time of travel for many passengers. The company has also partnered with the University of Sydney in trying to identify measures to reimage how to interact with their clients (Tomprou, Nikolaou, and Vakola, 2012, pp.385). This involves making changes in the meals they offer during long-haul flights as well as finding mechanisms of keeping the customers refreshed such as using mood lighting. Qantas’ Boeing 787 Dreamliner has been specifically designed to facilitate all these. Additionally, with the intention of being more competitive, the company has cut down on flight costs. This has been as a result of technological changes, and the benefits that result from these changes are directly transferred to the customers.

Additionally, based on the evolutionary theory, Qantas branded airline, Jestar is still aimed at differentiated reduced fares. Additionally, it is entitled to provide product and services that are of high standard as well as innovating and investing in new technology and rolling out the B787 (van der Smissen, Schalk, and Freese, 2013, pp.1075). The customers’ experience is also being enhanced through improved self-service that includes automated bag-drops as well as kiosk check-in. This is resulting to cost benefits for the organization. The company’s revenue growth is also being facilitated by investing in next-generation booking engines as well as online retailing abilities. Qantas has gone a step further to acquire loyalty program to fliers who fly frequently (Bresciani, Thrassou, and Vrontis, 2013, pp.200). This is important because it facilitates the airline to use customer data in offering personalized services and assists in tracking the client’s journey. To add insight to its clients and improve the revenue stream, the company has purchased a controlling stake to be used in actuarial as well as in data analytics consulting.

Action plan for managing change and improving performance

Dialectical theory results from change due to conflict. Qantas has had many conflicts due to the employees’ salaries among other issues. However, there has been a turn-around for the company’s 25,000 employees whereby they receive a one-off bonus of $3,000 for those who work on a full-time basis (Worley and Mohrman, 2014, pp210). This involves the employees that are covered by the enterprise contract which resulted in an 18- month freeze of pay. The employees get bonuses, shareholders acquire dividends as well as capital returns by purchasing shares while the company’s customers become more pleased as the company continues to make investments in new products as well as technology.

Conclusion

Organizational change is inevitable in this era of advancements in technology, globalization, as well as the increased rates of competition. Some of the theories associated with organizational change include dialectical theory, lifecycle theory, and evolutionary, as well as teleological theory. Some of the recommendation that Qantas would adapt to become more competitive include: by ensuring that the Human Resource Management’s communication is effective, it would immensely enhance teamwork, safety, learning, productivity, as well as innovation in the company. The Human Resource Management should as well concentrate on its pilot candidates and makes sure that they acquire the necessary training. Developing a communication model that is Human Resource strategic oriented is necessary in guaranteeing that the workers meet the company’s standards and requirements. This will be beneficial in discussing the critical problems that impact on the company’s daily operations.  After fit has been sustained between communication and training mode in accordance to the Human Resource Management role, the company should then develop a tactical plan that defines the criteria of managing employees that will be applied by the HRM to make sure that there are limited scandals (Wetzel and Van Gorp, 2014, pp.131). To ensure that their employees align themselves with Qantas’ needs, the Human Resource Management should be completely involved in the company’s daily activates. Nonetheless, the HRM should develop a performance management plan which is essential in determining employees’ performance. Being transparent in its strategy should be the objective of the HRM. Qantas’ operational as well as the strategic agenda should be clearly communicated to the employees and should be accepted. As a result, this will facilitate in ensuring that the workers’ needs are satisfied and ensures that there are no operational issues. Additionally, Qantas’ mission should be clearly and effectively shared with the other stakeholders to ensure that they are focused on correcting and building the company’s image. The company’s success will depend on how well it focuses on its employees’ needs regardless of if they are personal or professional. This will end up motivating employees in delivering good work. In this instance, the number of accidents will be minimal as well as help in ensuring that there no remuneration challenges that are facing Qantas. Despite the training sessions, the Human Resource should as well aim at changing its employees’ attitude towards the company, specifically work as well as educate them on how they can develop a positive attitude towards their job. This will be helpful because it will motivate the employees and encourage them to use the correct channels in airing their grievances such as through dialogue.

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