Andrea Fults Catherine Bollig Serves 160 million customers each year 70,000 employees 16,000 flights daily Hubs in Amsterdam, Atlanta, Cincinnati, Detroit, Memphis, Minneapolis-St. Paul, New York-JFK, ParisCharles de Gaulle, Salt Lake City, and TokyoNarita 541 destinations in 115 countries Headquarters: Atlanta, GA Frequent Flier Program: SkyMiles (established 1981); more than 74 million members 2008—Delta and Northwest Airlines merge, creating an airline with major operations in every region of the world Annual Revenues (2009):$28.1 billion Stock Price: $13.87 (as of 04/16/10) -52 Week High at $14.94 & 52 Week Low at $5.31 Do to the merger changes have been made ◦ Addition of another full airline staff ◦ Operation under a single operating certificate from Federal Aviation Administration ◦ Additional Terminals ◦ Changes in Check-in and gate locations ◦ Changes for flyers regarding booking check-in etc. Food service World perks program integrated into SkyMiles program The Burke-Litwin Model of Organizational Performance and Change Used for “OD interventions directed toward structure, management practices, and systems (policies and procedures) result in first order change; interventions directed toward mission and strategy, leadership, and organization change” (French and Bell, 1999) For the company to be successful, all aspects of the model need to function appropriately • External Environment – Current world economy • Organization Culture – Unionization Vs. Non-unionization • Systems – The combining of both NW and Delta employees • Work Unit Climate – Employees with a sense of non-involvement and devalue Current United States Economy ◦ United States Economy suffering from biggest recession since Great Depression Cost of Fuel is high Additional operational costs are raising Fewer people are traveling Fewer people choosing to fly while traveling • Survey of Current Customers – Determine why they choose to fly – What keeps them flying with Delta • Survey of potential Customers – Determine what customer expectations are – Why do they choose not to fly • • • Analyze data for truths Incorporate customer recommendations Publicize and promote new additions and changes Retain Current Customers Build a new Client base for the airline Educate customers on what Delta has to offer Help move the company forward Increase profitability for the airline Unionization Vs. Non-unionization -work groups' union representation, job security, pensions and seniority at the combined carrier in question -NW has had flight attendants and mechanics, as well as other airline personnel unionized for decades, Delta has not Walton’s Approach to Third Party Peacemaking is encouraged -Confrontation: two principals must be engaged and confront that conflict exists (French and Bell, 1999) -Third Party- diagnoses conflict situations Ground Rules Unions and Delta want a positive result in the situation- each has motivation to achieve this result Balance of power Dialogue is open Each can understand each other Confrontation efforts in synch 1. 2. 3. 4. - - Diagnostic Model Based on Four Basic Elements: Conflict issues Precipitating Circumstances Conflict- relevant acts of the principals Consequences of conflict Requires problem solving and bargaining behaviors Each party will have different goals and different needs Expectations can be highly influenced by differing goals and can hinder or help the process, if aligned (Chang and Sanders, 2009) Cooperation, competition and independence all must be factored in this type of intervention (Chang and Sanders, 2009) Specific deadline imposed to reached a decision on union status for each employee group by Delta and unions Pros and Cons of Unions, what happened in the past for NW, how can this help in the future for Delta? How will this affect employees? Bargaining for both sides Legal involvement? Agreement for both sides/less conflict Happier workforce Representation of Union Understanding Everyone is on the same page and informed Seniority, job roles, pensions, etc. are no longer a question Combining of NW and Delta employees ◦ Merger of two staffs brings two sets of procedures and practices ◦ Leaves employees to question new company’s operating practices and procedures ◦ When two different procedures/practices are operating tension arises between employees • Survey both Delta and NW employees – What is similar – What is different • Review both Delta and NW practices – Which procedures are most effective – What procedures can be used from both airlines – Outline a new procedure process • Train staff – Re-train all staff regarding new procedures Give both Delta and NW staff a chance to express concerns Allows for a feeling of appreciation and helps create buy-in for employees Pin points practices from both airlines that were not successful Through new company training: ◦ Helps to unify both employee bases ◦ New practice information is delivered properly ◦ All individuals have same practice information Employees feeling devalued through noninvolvement in merger process Employees not always receiving all information Employees not able to give feedback on their needs and suggestions through transition process “AI seeks, fundamentally, to build a constructive union between a whole people and the massive entirety of what people talk about as past and present capacities: achievements, assets, unexplored potentials, innovations, strengths, elevated thoughts, opportunities, benchmarks, high point moments, lived values, traditions, strategic competencies, stories, expressions of wisdom, insights into the deeper corporate spirit or soul-- and visions of valued and possible futures” (Cooperrider and Whitney, 2008) Appreciative Inquiry Four Phases (Cooperrider) -Discovery- strengths of organization (small ->large groups) -Dream- envision potential in the future10-20 years -Design- create initiatives to bring dreams to reality -Destiny- drafting action plan, mission, vision, etc.- focus on strengths of ideas •Provide happier, more committed and valued employees •Provide opportunities for employees to voice feedback and a place to have their ideas heard •Gain great insight and new ideas from people on the frontlines Questions from the group? Adesola, Sola, & Baines, Tim. (2005). Developing and evaluating a methodology for business process improvement.. Business Process Management Journal. 11(1). Retrieved from http://ezproxy.lib.uwstout.edu:2082/Insight/ViewContentServlet?contentType=Ar ticle&Filename=Published/EmeraldFullTextArticle/Articles/1570110103.html Alexander, Jackie. (2002). Organizational Diagnostics: Integrating Qualitative and Quantitative Methodology. Journal of Organizational Change Management. 15(2). 156-168. Chang, Yang-Ming, & Sanders, Shane. (2009). Raising the cost of rebellion: the role of third party intervention in intrastate conflict. Defense and Peace Economics. 20(3). Retrieved from http://www.informaworld.com/smpp/section~db=all~content=a913046811~fullte xt=713240928~dontcount=true#s913046862 Cooperrider, D, & Whitney, D (Draft). A Positive Revolution in Change: Appreciative Inquiry. Retrieved from http://appreciativeinquiry.case.edu/uploads/whatisai.pdf. Delta and Northwest Merger. (2010). Retrieved from Delta, northwest approve merger deal. (2008, April 14). Retrieved from Delta Airlines Inc. (2010, April 25). Retrieved from http://www.delta.com/help/faqs/merger/index.jsp http://www.cbsnews.com/stories/2008/04/14/business/main4014360.shtml http://topics.nytimes.com/topics/news/business/companies/delta_air_lines_inc/index.html Foust, D. (2008). Delta-Northwest Deal Grounded. Bloomberg Businessweek. Retrieved from http://www.businessweek.com/bwdaily/dnflash/content/mar2008/db20080318_527222.htm French, Wendell, & Bell, Jr., Cecil. (1999). Organization development. Upper Saddle River, New Jersey: Prentice Hall. Http://www.delta.com/about_delta/index.jsp. (n.d.). Retrieved from www.delta.com Johnson, Dana. (2004). Adaptation of Organizational Change Models to the implementation of Quality Standard Requirements. International Journal of Quality and Reliability Management. 21(2). 154-174 Martins, Nico & Coetzee, Melinde. (2009). Applying the Burke-Litwin Model as a Diagnostic Framework For Assessing Organizational Effectiveness. South African Journal of Human Resource Management. 7.(1). 144-156. Moylin, Martin. (2009, October 29). One year later, delta-nwa merger sees few kinks. Retrieved from http://minnesota.publicradio.org/display/web/2009/10/28/northwest-delta-merger Moylan, Martin. (2010, February 10). Delta-northwest merger nearly complete. Retrieved from http://minnesota.publicradio.org/display/web/2010/02/08/delta-nwa-merger-nearly-done Unger, C. (2010, January 6). Delta-Northwest Merger Nearing Completion. Retrieved from http://www.smartertravel.com