Managing Change at Singapore Airline (Essay Sample)

Managing Change
Singapore Airline
Introduction
In the industry, Singapore Airline has been acknowledged around the world as a leading aviation brand name ever since its inception in the year 1947. This has been due to its up to its real time innovative and quality services, and world class safety standards. It has been able to spread its coverage to over 93 locations in 38 different cities in the world (Singaporeair.com). After separating from Malayan Airway Limited in the year 1972, Singapore Airline has grown to and developed to become a major market leader in the industry due to its specific culture that it has been able to dedicate to its customers. More so, the company has been bold enough to come up with very innovative services that are diverse and are improved continuously; which has been able to give them a competitive advantage over the rest of the airline operators. On the flip side, SIA has had its share of challenges and problems in the market coming from the effects of its external environment such as crisis in the economy or inflation among others. A good example is the year 2003, when there was an outbreak of Sars followed closely by the infamous economic crises in the Middle East. During this time, the company did not manage to keep a very healthy relationship with the trade unions, therefore, leading to drastic reduction n wages and subsequent loss of over 400 jobs in the organization. This was recorded as the biggest layoff ever experienced in the organization’s history.
Systematic diagnosis
Analysis of External and temporal environment of Singapore Airline
In the present day, there is need for a close collaboration of the environment and the organization itself. This will ensure that there is development since these external factors do have a big impact on the not only its development, but also its existence (Kottler, 2010). This then, means that the macroeconomic environment need to be analyzed together with the opportunities and threats that the organization faced in order to come up with the real picture. In the aviation industry, the external factors play an integral role in ensuring growth and sustainability of the organization.
In the airlines industry, one of the major problems faced will be excess competition among the airlines, passengers in an attempt to minimize their expenses; they will search for cheaper alternatives when they choose to travel without compromising the quality of services that are offered. With the emergence of low cost carrier, Singapore Airlines will lose some of its customers due to a better price that is offered in the market and it will affect the business of SIA.
The political factors, economic factors, social factors, environmental factors, legal factors, and technological factors are the main external factors that do affect Singapore Airlines.
Political factors
Globally, there are the policies that are put in place by the government in every country, region, or continent. In Singapore, the business policies that have been put in place are not only very favorable to local investors but also the international investors. The major shareholder of Singapore airlines is the government, something that has given them massive advantage since it receives adequate support from the same government in terms of tax and policies on fuel. However, some policies that were introduced were disadvantageous to the organization like the deregulation of the airline industry something that encouraged many entrants into the industry.
One of the major negative impact of political factors on Singapore Airlines is its exclusion from the Australia-US route in 2008 due to open skies policy and it has been proven to be of no benefit to the consumers and the organization’s spokesman, Stephen Forshaw, has been quoted saying "There is a lot of demand that can’t be met ad as a result, airfares are far higher than it should be." Also, with higher terrorism attacks, it could also influence the organization indirectly. It greatly shows that with new policies or disharmony among countries, it can greatly affect the business by influencing the air tickets, with higher risk of terrorism, leads to people travel lesser and causing loss of business (abc.net).
Economic factors
As Kottler (2010) argues, the economic might of the country in which an organization is has a big hand in determining how viable the organization will be. The factors in the economy that are most significant are the rates of foreign exchange, tariffs, laws on taxes, and crisis in the economy. These factors do have not only a significant impact on the need of the customers, but also influence how the organization does relate with its customers and suppliers across the globe. A good example is the previous increase in the prices of fuel prices in the global market. Singapore Airline had to either compromise provision of quality services or continue providing these services at their usually very competitive rate as this proved almost impossible (Lacar, F. 2004).
The continued increase in oil prices could potentially result to increased fuel surcharges and customers may shun away from choosing the airline due to increased prices. Singapore Airlines increased their fuel surcharges for tickets that were issued on or after 27th day of January 2011 as a result of recent sharp and substantial escalation in the price of jet fuel. Consequently, this potentially discouraged people from travelling by air and opting for cheaper alternatives, or reduce the number of trips. Another point to note is that with increased entry of lower fare airlines and better alternatives in terms of prices, customers who liked the airline due to its commonly know high standards and levels of services will shift to other airlines; after all, it is not possible for the company to maintain the high class-level services at their usual competitive prices after the increase in the cost of running due to the increase in fuel prices. In the times of recession in February 2009, International Air Transport Association (2010) had recorded that "marked the bottom of the cycle for passenger traffic during the recession, and passenger demand would need to recover by a further 1.4 percent to return to pre-crisis levels." The result of recession has a great impact on all airlines.
Social factors
The trends in cultures and in the society have the ability of either being a threat or an opportunity for the organization. When an organization is able to take into considerations the beliefs, ways of life, attitudes, and the values of the people, they can easily establish a strong believe from the customer and subsequently, establish a very strong brand name for themselves. In Singapore, there is a mixture of several cultures, including the Indians, Malaysian, together with Chinese. These have influenced how SIA operates so as to provide qualities to the expectations of all these groups of people.
Technological factors
Technology does affect the strategies that the organization will apply in their aim to achieve their goals (Travel Impact Newswire 2012). In the airlines industry, technological changes have led to creation and improvements of the services that are offered thus impacting the preference of customers. This has made it necessary for Singapore Airline to move in accordance to the trend at all times. Actually, Singapore Airlines has been able to set the pace for the other Airlines companies. They were able to foster the usage systems for in-flight entertainment.
Environmental factors
With regard to the environment, everyone in the world; persons and industries inclusive, are subjected to the great problem of global warming. To curb this problem firms need to embrace green industries as a consideration for their business. Singapore is amongst clear nations and thus these environmental factors are of vital impact on the field of development in the industries.
Singapore Airline has dealt with such negative factors on the environment by making use of the said green industries in the aim towards achieving sustainable development. For instance, A380 aircraft has been used by Singapore Airline over time for purposes of a cleaner as well as greener aircraft. This is in comparison with the Boeing 747 with the basis of seat capacity.
Legal Factors
Singapore was established in the year 1965, but despite this, the legal system has been among the contributing factors to foreign investment for purposes of perfecting the economic sector and its development. Through its laws and regulations, Singapore has both passed legislations to govern the trade practices, consumers and natural environment and secondly, has advantaged the development of the same. On the aviation sector, Singapore has a legal system in place that aims at protecting, benefiting both customers and firms and sets out their responsibilities. There is a great recommendation that Singapore should keep abreast of the amendments made to their laws and also to any newly enacted ones. This in turn will help to manage the compliance of marketing strategies and bring emphasis on the safety of passengers and the reliability of the aircrafts when used as carriers.
Set of interventions that are appropriate in tackling the above named problems as identified
Tuning is to make incremental changes that are made according to external environment. It is to make small alteration to the organization in hope of better prospects for the organization to suit the ever-changing environment (Nadler, & Tushman, 1995).
SIA has undergone the tuning process the past few years, with addition of low cost carrier airlines, Silk Air and the newly introduced airline, Scoots. Introducing budget airlines helped the organization to generate another source of revenue from a different group of customers. This way, they had appealed to a new ...