Case 2: Delta Air Lines, Inc.
Due: September 23, 2012
Delta Air Lines
1. Delta has made great strides, but there is room for improvement. How should Delta continue to regain the commitment of its employee in order to attain #1 status? Discuss your strategic recommendation? How are your suggestion linked to improve customer satisfaction?
In business literature, Delta had a primary capability on human relations by paying competitive wages, treating personnel equitably as it grew, and adopting a “no-layoff policy”. Things changed in the 1990’s for Delta though. Key business trends altered the competitive advantage, and the human resource strategy had to change too. After two straight years of financial losses in 1994, CEO Ron Allen rolled out a new strategy called “Leadership 7.5.” Allen targeted to reduce Delta’s cost per each available seat mile from more than 10 cents to 7.5 cents, which would match that of major competitor Southwest Airlines (Bryant, 1997). Along with a new company strategy a change followed with Delta’s human resource strategy. This changing policy devastated employee morale and resulted in a decline of customer service, efforts to unionize, and dissatisfaction among personnel. Delta couldn’t keep the past primary policy about human resources so there were several significant changes in Delta’s organization and corporate culture. There are many programs that Delta has built after passing through the cost-cutting reformation in 1997 for getting back its capabilities on customer relationships like rewards and recognition program above and beyond and more. The reference is Delta must be persistence and consistence with their management’s offering based on two different overall human resource strategies, labeled “commitment” and “control,” have been identified. The commitment human resource strategy would include: Broadly defined tasks, high levels of employee participation, highly skilled workers, and extensive training, and high...