Delta Airlines

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Human Resource Management

Delta Case Study: Improving Delta’s Profit Margin

Written by Filiz McNamara, Ogochukwu Udekwe and Vicki Troftgruben

February 21, 2011

Table of ContentsPage

Introduction3

External Environment3

Internal Environment18

Systems and Stakeholder Analysis32

Conclusion34

Problem Identification36

Generation and Evaluation of Alternatives37

Recommendation38

Decision Implementation39

References40

Introduction

Delta Airlines was founded by C.E. Woolman, an agriculture extension agent (Anthony, Kacmar, & Perrewe, 2010).  C.E Woolman was not a banker, venture capitalist or war pilot, as many of the competing airlines were.  He didn’t have the aggressive military style that many of the other airline founders had.  What C.E. Woolman instilled within the employees at all levels of the organization is that people matter and should be treated fairly and equitably.  This philosophy led Delta Airlines to be the leader in customer service from the company’s inception through the many mergers over the years.  Through the difficult financial times when other airlines were laying off employees and filing for bankruptcy, Delta continued to pay their people well and keep them employed. There was an exception during the Ronald Allen CEO era of 1987 thru 1997.  Human relations took a significant down turn during his tenure as CEO, especially during 1993 and 1994, but Delta decided to part ways with Allen and began repairing those fragile relationships with its employees.  Delta Airlines still focuses on the human relations factor and has been able to repair the relationship with its employees, they believe it is their key to success. External Environment

General

The airline industry is a fast growing sector demonstrating a very strong growth rate. It is associated with a number of social and economic benefits and is a growing contributor to the global inventory (Whitelegg, 2000). Industry

Business cycles.  Business cycles have a wide reaching impact on the airline industry; during recession, air travel was considered a luxury and therefore spending is cut which leads to reduced prices.  The industry creates its impact not just by providing direct employment, but also through the creation of opportunities throughout the travel and hospitality sector of the economy. Jobs in hotels, resorts, restaurants and car rental agencies are all impacted by the airline industry (Global Airline Industry Program, 2011). Airline industry.  The airline industry itself is a major economic force, both in terms of its own operations and its impacts on related industries such as aircraft manufacturing and tourism.  There are few industries that create the amount and intensity of attention that airlines receive, not only among its participants but from government policy makers and the media as well (Jacobson, 2004). Environmental impacts.  On the other hand, the airline industry has a number of environmental impacts that are experienced by local residents in the vicinity of airports and under flight paths.  Noise has become a concern over the last 20 years as well as air pollution and the health effects associated with them (Whitelegg, 2000).  The most significant impact in recent history was the 9/11 incident. After 9/11 the world economy plunged into to global recession due to the depressed sentiment of consumers.  Immediate results were a huge drop in air traffic due to safety and security concerns.  With the new focus on homeland security in the United States, the terrorist attacks of 2001, a global recession, and anomalies such as the SARS virus; the airline industry had found itself in a state of...
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