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Essay Available:
Pages:
5 pages/≈1375 words
Sources:
6 Sources
Level:
APA
Topic:
Management
Type:
Essay
Language:
English (U.S.)
Document:
MS Word
Total cost:
$ 23.4
Topic:

Human Resource Ramifications Of Merging And Acquisition On Southwest Airlines

Instructions:

The essay focuses on the role of human resource in merges and acquisition in south west Airlines. It highlights the human resource swot analysis, the challenges it faces on merging of companies, evaluation metrics and recommendations.

Content:

Human Resource Ramifications of Mergers in Southwest Airlines
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Human Resource Ramifications of Mergers in Southwest Airlines
Mergers and acquisitions (M&A) involve a major company acquiring a smaller company in terms of resources either in its industry or one that is in line with its mission. Southwest Airlines has been known to do a lot of acquisitions as it is normal in the airline industry. In the past, Southwest Airlines have had experience doing acquisitions for smaller companies such Muse Air in 1985, Morris Air in 1993 and ATA Airlines in 2008 (University of Pennsylvania, 2010). The current acquisition is the AirTran Airlines in 2010 and has acquired its current employees now with a combined figure of 43,000 employees.
From a human resource perspective, most mergers and acquisitions of companies have an uphill task of integrating the different cultures and strategies of both companies. Employees are at the center stage of the fiasco because of the different work processes and organizational culture encountered during the merger. An estimated 70 to 90 percent of all M&A fail to achieve their strategic and financial objectives and the failure is largely attributed to human resource related factors (Wickford, n.d). Companies face a myriad of ramifications in the merging of their businesses and the core issues to be addressed in the human resource challenges.
From a business perspective, the Southwest Airlines acquisition gives them to shop in larger airports and gives them access to over 83 airports where AirTran has a presence. The airline folding operations with AirTran cost an estimated $300 to $500 million as per the leadership of Southwest. They believe the merger will strengthen their competitive advantage in the industry to compete with world class players. However the merger is a big bet and tricky move for the airline, the post -merger challenge is bringing two different cultures into line (Silva, n.d). The Southwest Airlines has a particular approach to managing their employees. They put enormous effort into the selection and training of new employees and taking thousands of AirTran's workers into the system and hoping to work is quite a risky move. During the merging process, normal complex operations need to continue posing a challenge as not all people can be orientated.
Pay and Seniority Challenge
The major issue that sabotages mergers in the airline industry is the seniority scale; people who were captains will no longer be captains in the merged company. The vice is attributed to the seniority scale between airlines and unclear labor relations agreements. In the case of Southwest Airlines, their pilots earn 30% more pay than their counterparts in AirTran. The company may look to improve their pay, however, the challenge is the seniority issue because Southwest pilots outnumber the AirTran in a ratio of five to one, therefore, will look to push the AirTran pilots dow...
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