Case Study, Merging American Airlines and US Airways
Background
A merger of two organizations is one of the most challenging change leadership scenarios. Beyond the usual list of “functional” integrations of IT systems, finance protocols, and operational processes, mergers inevitably bring with them myriad cultural and leadership issues that must be resolved. The best HR professionals can serve as powerful change leaders by helping the executive team understand and leverage a “people first” agenda.
Welcome to the Team
Takeover or merger? The question and the impact of the answer on stakeholders is of critical importance to Doug Parker as he leads one of the largest and most complex airline mergers in history. The decisions he makes on both processes and people will have a significant impact on the future of the new combined airline.
As part of this merger, you have been hired as the new CHRO of the combined airline.
You are an outsider to both organizations, and it is hoped that you will bring fresh insights and will be free from biases that may impact veteran insiders. You will be working directly with CEO Doug Parker and the heads of the integration team, Bev Goulet and Scott Kirby. Your primary job is to support the CEO by providing a candid assessment of the direction the merger has taken to date, as well as the risks, needs, and opportunities in managing the change as the organization moves ahead.
One of the most important tasks change leaders have in complex M&A situations is understanding the interconnection among the many forces that impact the change, and being able to present these in a clear way so that senior executives and other stakeholders “get it.” You are about to participate in your first meeting with the executive team. You have been asked to present your analysis and recommendations. You have decided to organize your analysis into THREE topics:
1. Synopsis of key drivers (to demonstrate your understanding of the complexities of the merger).
2. Assessment of the merger efforts to date relative to objectives. Leverage Kotter, or another
recognized change management model, as a framework to organize and communicate your
findings.
3. Identification of ways HR can support the new organization during the merger process and
beyond through additional strategic “people first” management recommendations not already
discussed in the case
Remember, your analysis should raise issues and challenge assumptions – even those of the CEO.
Instructions:
1. Your submission will be in the form of a paper.
2. Read the case “Merging American Airlines and US Airways.”
3. Complete an analysis of the merger process and recommend a strategic “people” plan to the executive leadership team.
4. Your presentation should be organized as follows:
I. Begin with an Executive Summary presenting a synopsis of the key drivers in the merger.
Identify the most critical factors impacting the two businesses, along with the strategic
objectives for the integrated company. To accomplish this:
a. Summarize the outcomes the CEO is seeking from the merger.
b. Characterize the key differences between the two airlines. Create a chart or other display to provide a clear visual snapshot of each company, including:
Size, financial performance, market share, etc.
Culture, management structures, and working relationships
Knowledge and best practices
c. Explain why these differences matter and what impact the integration decisions
would have on the new company.
d. This summary should be presented using no more than 1 page.
II. Assess the Current Merger Efforts Relative to the Objectives.
a.Review the “Integration Principles” (Exhibit 6, p. 17) and compare these to the Key Merger Objectives.
b.Explain which of these have been accomplished so far.
c. Leveraging at least two of the models or principles covered in the course to provide a framework, present your analysis of whether the merger efforts demonstrate good change leadership practices. In your assessment,
Identify the different categories of change being undertaken and the challenges being addressed in each one.
Be sure to include specific references/examples from the case to support
your position.
III. As the new CHRO, you play a critical role not only in helping to lead the organization
through the merger, but also in building a stronger “people first” culture to create a
sustainable competitive advantage. Drawing on leadership principles and tools you have
explored in this and previous courses, identify two additional ways that HR can support
the new organization that are not discussed in the case. You can focus on any areas you
feel are most relevant, but you must:
a.Explain your rationale for these initiatives, including your assessment of the risks
and opportunities for each.
b.Present an overview of an implementation plan, including timelines, key success
metrics, and resources required.
c.Ground your recommendations. Consider the financial implications of
your proposed recommendations.
Review the tables in exhibits 2a and 2b. What insights do these provide
on the financial impact from the merger?
Locate and cite at least two additional sources, including the most recent
annual reports or investor updates for the new company (AMAR).
a. How has the company fared since the merger?
b. Can you find evidence of what has worked out well and what has
not?
d.What market conditions exist that could impact the airline and staffing needs in the next 3 to 5 years?
0 comments