Major changes required for the implementation of the recommended strategy
The proposed change in directional strategy is quite ambitious for a company that is going through a rough patch. However, the change in directional strategy is necessary in order to remove the company from the financial quagmire that the management steered the company into. In order to successfully implement the strategy change that is recommended, the senior management in the company needs to make some major adjustments in the running and the affairs of the company. These changes are pertinent to the successful implementation of the recommended strategy. The following are some of the major changes that the senior management ought to make.
Firstly, the senior management ought to change the personnel in the middle level management. This level of management is responsible for organizational and directional functions. They execute organizational plans that conform to the objectives and strategies defined by senior management. As the crop of management at the helm when the company plunged into financial oblivion, it cannot be expected of them to help deliver back the company to profitability.
Secondly, the senior management ought to conduct a rebranding exercise of the company. A company that has undergone rough financial times to the extent of filing for bankruptcy may not attract investors. The rebranding exercise will not only involve a change in the name of the company but also a change in the identity of the company. To this end, the company will formulate a new mission and vision statement and a company logo. The rebranding exercise will coincide with a marketing campaign in order to popularize the new brand name.
Modifications in the business-level strategy to support the new corporate strategy
In order to support the new corporate strategy, a series of business-level strategies ought to be modified. Firstly, due to the low business expected, old planes should be grounded in order to increase the efficiency of operations. This will give the customers better services thereby pointing the company in the right direction in terms of efficiency. Secondly, the company will need to reduce its wage bill. In order to facilitate this, employees will be laid off because of reduced operations in the company. Thirdly, the company should also pursue mergers with other aviation companies in different markets. This will expand its market and also bring on board more experienced managers from other markets hence ushering in new ideas. It is also proposed that the company acquires new planes. To this end, the company ought to change contractors especially where there have been bottlenecks before. This way, the company can be sure to eliminate any inefficiency brought about in the procurement and delivery process.
Staffing in the corporation
In staffing the organization, care will be exercised so that only the best are hired for a certain job. This is because as part of the new corporate strategy, efficiency is of paramount importance. The new corporate strategy also proposes the acquisition of new planes with better facilities. This is in line with the desired better service delivery. As such, the flight attendants and cabin crew ought to be well trained. However, the entire workforce will not be hired afresh. The existing workforce will be trained for increased competencies. This is because of the invaluable experience that they have, especially in the running of the company. Middle level management will be overhauled to incorporate new and fresh ideas. In the recruitment of new middle level managers, academic qualifications, experience and innovativeness will be given precedence (Shaw, 2012).
New core competencies and competitive capabilities
In order to support the new corporate strategy, new core competencies and competitive capabilities have to be developed. For instance, after the rebranding exercise is undertaken, massive marketing campaigns have to be instituted in order to popularize the new brand. However, even in the formation of a new identity, the old history of the corporation will not be entirely discarded. As such, it is important for the marketing department to develop marketing campaigns that use aspects of the prosperous past to spur the corporation ahead. In order to gain a competitive advantage over our competitors, it is important for the flight attendants and cabin crew to offer immaculate services that are commensurate to the high charges levied in different classes as envisioned in the corporate strategy. The luggage handling departments also have to ensure a smooth transition during transit in order to minimize the cases of lost luggage that could potentially cost the airline customer loyalty and money.
Restructuring
It is important that a restructuring of the corporation be undertaken in order to get the company out of bankruptcy. As part of the restricting, mass lay-offs will be instituted in order to reduce the operational costs of the corporation. A reduction in the operating costs will increase the revenue significantly. Every work group in the corporation, including the management group would receive a twenty percent pay cut. In addition, the corporation would suspend its pension plans for the period the corporation is under receivership. The operations of the corporation would also be downsized in order to reduce the operational costs. For instance, the number of flights would be reduced by grounding some planes. However, efforts to increase service delivery would be stepped up in order to enhance customer loyalty. The corporation would also be placed under a caretaker committee tasked with the responsibility of overseeing the operations of the corporation until it is back to profitability and full operation. The corporation will also explore for mergers with other airlines in various markets in order to increase the market share and number of routes (DePamphilis, 2011).
An Analysis of the Stakeholders
Company shareholders
It is expected that this group of stakeholders will mount considerable resistance to some aspects of the recommended strategy. For instance, there might not be a consensus on the decision to lay workers off or to suspend the pension plans. It is important that the entire shareholders are on board and buy into the endeavors of the caretaker committee to rescue the corporation that is on the brink of total collapse. To this end, a meeting featuring all the shareholders will be convened. During the meeting, all the changes and courses of actions in the corporation will be explained to the shareholders. This is in order to enlist their full support.
Company employees
This is the stakeholder group where the most resistance is expected. Some of the tough decisions that had to be made are expected to illicit some hard feelings among the employees. For instance, the overhaul of the middle management will not be welcomed well by the affected parties. The suspension of the pension plans will also cause a ruckus among the employees. The mass lay-offs will also cause considerable resistance. In order to reduce the expected resistance, it will be explained in details why such actions were taken and the foreseeable benefits. This is important because the support of the employees is important n keeping the operations in the corporation running. After the lay-offs, the remaining workforce will be motivated using relevant trainings in line with the need to develop new competencies and skills.
The customers
The customer group of stakeholders is not expected to mount a lot of resistance to the new direction of the corporation. Any complaints from the customers are expected in case of any loss of efficiency after the lay-offs or poor service delivery. To this end, contingency measures will be out in place in areas where there are delays due to shortage of personnel. This group of stakeholders is very important to the corporation. As such, no effort will be spared in ensuring that the customers are not affected by the changes in the corporation. The corporation will go to lengths to ensure that the level of service delivery does not dip.
References
DePamphilis, D. (2011). Mergers, Acquisitions, and Other Restructuring Activities: An Integrated Approach to Process, Tools, Cases, and Solutions. Burlington: Elsevier Science.
Shaw, S. (2012). Airline Marketing and Management. Burlington. Ashgate Publishing, Ltd.
