NEW VISION – NEW CHALLENGES
To recap, the issues identified in the prior report are three of the most recent changes within the company that have been brought under scrutiny. The first and second one involves changes in the senior management positions of the company that required shifts in leadership. The third one involves the acquisition of a subsidiary (Air China) to form greater business cooperation in China. Although this is the situation in Cathay Pacific, the paper presented that there are still room for change programs which the company could adopt in the context of the environmental analysis presented in the paper in the light of these changes.
Vision for the organisation
The present expansion plans show the confidence that Cathay management has in their future and in the future of Hong Kong. While remaining single-minded in the company’s mission to deliver superior service and value to customers, to grow the business profitably and to strengthen Hong Kong as a global hub and gateway to Mainland China, the carrier should be able to deliver superior service and value to customers and to become the world’s most admired airline. The mission to have the quality of the service they provide to set the company apart from their competitors and the commitment to meeting Cathay’s on-time performance goals, maintaining and growing international route network, and increasing flight frequencies to meet market demand should be achievable as they strive to deliver ‘Service Straight from the Heart’. The company takes pride in making their customers feel safe, welcome, comfortable and, above all, reassured, and in line with that, it is anticipated that their customers’ needs and aim are not just met, but surpass their expectations. The mission to go beyond ensuring satisfaction in order to strengthen customer loyalty can enhance the profitability of the airline. Enhanced revenues will flow from the company, which, at time passes, is getting better at managing core competences like pricing, capacity, networks, and schedules. In order both to reduce costs and to improve service to customers, Cathay will have to increasingly use electronic commerce not only to sell and distribute their products, but also in their business-to-business relationships. E-commerce will in turn revolutionise the customer-airline relationship and put traditional travel agents and freight forwarders under pressure to adapt to a new reality.
Direction and scope of change
The changes in the organisation will take Cathay to a larger level of market scope, as they have coordinated their efforts with Air China who operates largely in Greater China. This change that the company has taken will bring them to new avenues opened up for growth, in the face of the increasingly boundless global market that the nature of the commercial aviation business is mercilessly made to put up with. The vision may not have led the company to a new direction, meaning it has not taken them to another level of business activity, but it certainly has widened the scope of their business activities into a whole new paradigm. Whereas before, they have purely operated on areas that they have already claimed as their own, Cathay now has a whole new region to operate in and increase their market number and at the bottom line, increase their chances at profitability.
Speed of Change
The change will last for about half of the current year, as the employees and management of Cathay Pacific settles into a new routine different from what they have been accustomed to prior to the change. This speed is normal in the commercial aviation business. Any longer and resistance may be present and any shorter, the change process may have not been carefully rolled out. PROPOSED ACTION
Alternatives
The alternatives for the first and second senior management changes are:
· Have them overtake the successors and source people from the outside instead.
· Have the company overtake the successors and employ people from within the organisation who have the potential to fill in the vacated spots due to the resignation or stepping down of the concerned senior management officers.
· Merge the other senior management positions with those already existing in order to downsize the number of people to employ.
· Follow who is the person-in line of succession, as is normal procedure for the company.
The alternatives for the third change, which is the consolidation of the efforts of the two giant commercial fliers, the alternatives for the change are:
§ Consolidate with other major fliers, one whose area of operation is wholly different from the one that Cathay is currently flying into.
§ Merge with Air China in order to have full control of the said company’s flight operations.
§ Forge on with the planned subsidiary venture.
Analysis of Solutions
In the first suggested alternative for the first and second senior management changes, finding people from the outside would be a more difficult job, as they have a vast workforce to choose from. Besides, they would have to start from scratch, since a person form the outside would have to learn everything that an insider of the company would have known all along. As for the second suggestion, people from the inside to replace the senior management officers who have stepped down will be overtaking the lines of authority that already exists in the established firm, so it is not a viable solution, although still a considerable one, in the event that those in-line would have no interest in taking over the vacant positions. As for the third alternative, the vacated positions are much too important and large a scope to merge into other positions who have people in them. This would not only change the very foundation of the organisational structure, it will also require a larger reorientation of the people involved. The last option offers the least complicated way of carrying on with a change in the senior management positions.
The first alternative for the third change, which is to consolidate with other major fliers, one whose area of operation is wholly different from the one that Cathay is currently flying into may not be the step to take at this point in time. Cathay may not have the sufficient funds to cover such larger expansion plans and besides, they already have previous business transactions with Air China, and making it more formal is the only way forward at this time. The problem of the second alternative to completely merge with Air China lies in forces beyond the company’s control. For reasons undisclosed, Air China has not taken the step to fully consolidate their business activities with Cathay this year. The last alternative is the one that Cathay already has taken as of the moment, but still remains to prove its worth with respect to the bottom line profits of the company.
Selection of the best alternative
As for the first and second changes, the last alternative therefore is the most feasible of all the other choices, as the successors have all the rights to the vacated positions and they have the sufficient experience and knowledge in handling issues that concern the said positions so there is no need for very elaborate orientations. In the third change, on the other hand, the best alternative is to forge on with the planned subsidiary venture, as it shows what the company has set limits for itself in the meantime, and is within the scope of their immediate goals, to conquer the Greater China region more extensively.
Leveraging Change
Strategies to overcome unexpected resistance. One effective strategy to overcome unexpected resistance is to think beyond it. Cathay management must attend to the more specific reasons for resistance, such as loss of control or loss of self-efficacy, to diagnose problems more accurately and to overcome them more efficiently and effectively. It must also be kept in mind the context of the change and focus on explanations other than individual resistance for why change may not be successfully implemented. Finally, senior management must think beyond the wisdom that people resist change by challenging themselves to consider the role they, as change leaders may play in creating and propagating resistance.
4 Improved quality of service for Cathay passengers
3 It is a current company policy (although not mandatory)
2
1 The management sees it as a potentially beneficial change.
1
2 Disruption in the normal business operations
3 No sufficient manpower for new department required.
4 Staff might be unwilling to implement change.
Figure 1. Force Field Analysis
Leverage. The desirable structure for the company is one that the company already has adopted, in that the successors take over the place of those who step down, which makes way for uninterrupted business operations due to the ease with which the new officers take their place. The ideal people for the change would be the ones that will not resist the change but instead accept such changes whole-heartedly as part of the strategy of the company to grow its business. This can be achieved through application of Lewin’s three-phase model, which consists of the unfreezing, transition and refreezing stages. In the unfreezing stage, unfreezing stage, show the Cathay staff hard evidence that supports the need for such changes, for example, statistics on how other firms have positively done when they started adopting similar changes and previous company performance showing how after a change in management people and a subsidiary venture improved the bottom line profits of the company while maintaining the quality of service that they are currently offering. Educating the staff about the need for change, how embracing change is a far more effective life strategy than staying where they are or resisting and understanding the whole process of change and what it could do for the staff, would sufficiently unfreeze them, making way for the second phase of the change process, which is transition.
As for the transition stage, there is the need to constantly update the staff regarding the achievements of the firm since the change was adopted. Emphasize the need for the scheme’s sustainability so that the staff will realize that the effectiveness of the program. Also, providing the necessary knowledge and skill needed to adjust to the new time frame of work to help the staff set their minds that a change has already taken place and that they need to adapt to such change will do the trick in the transition stage. In the refreezing stage, provide people with a steady stream of evidence that the change is indeed successful and is reaping benefits for all the Cathay staff. Finally, institutionalize change by incorporating the program into the formal fabric of the organization, making them mandatory, which the staff will become so used to that the tendency to resist it fades as they are bound to follow such policies.
Achieving Desirable Culture
According to (1993), ‘culture is the yardstick used to evaluate many behaviours and ideas, and it provides a basis for the development of goals and strategies’. As such, the achievement of a desirable culture is tantamount to the success of the changes which the company has adopted recently. Two integration programs are seen as useful for these types of changes: training & development and reinforcement. Because the company might need a new department to handle transactions involving the venture with China Air, training is a must for staff who will become involved in the said department. Reinforcement is necessary also, in which the staff will become so used to the changes that the tendency to resist it fades as they are bound to ultimately follow such policies if they are to stay in the organisation and contribute to its continued growth.
Leadership in times of Change
As mentioned in the first paper, the transformational model of leadership applies to Cathay Pacific, because as transformational leaders seek to motivate, influence, empower and develop the skills of others (1996), so does the management of Cathay. This type of transformational leadership is very apt for the organisation under analysis. Given that they are exposed to many changes in the duration of their operations, the nature of the civil aviation industry being dynamic, this type of leadership which can create with followers a vision for the organisation that is relevant for a specific organisational culture such that followers are empowered (1998), can definitely lead such changes in the company.
Communicating Change
Within the popular management literature, (1996) has put forward an eight-stage model on how to successfully manage change. This is very applicable to the situation in Cathay and comprises of: (1) communicating a sense of urgency; (2) creating a vision; (3) communicating the vision; (4) forming a powerful coalition; (5) empowering others to act; (6) planning short-term wins; (7) consolidating change and (8) institutionalising new approaches. He argues that change leaders should communicate their vision in many different forums over and over again if they wish to develop an effective implementation strategy.
CONCLUSION
There are no particular issues that the company will have a hard time dealing with given the right strategies and given their experience in handling such changes in the past. From all the analyses presented in the two papers, today's organisations as exemplified by Cathay Pacific Airways are reeling from the human impacts of the changes that have been forced on them by technology, international competition, and demographics. What is the prescription for this condition? More change. It is like taking the hair of the dog that bit you as a hangover remedy. And it is actually worse than that, for when Change 1 does not cure the hangover, the organization tries Change 2 and Change 3 in rapid succession. This is all the more important because if business has to know anything about the future, it is that it will be different from the present. Whatever is, will change. There's no way to avoid it. But it can be managed.
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