This week we peel away the outside layers and look inside the organization with an assessment of United Airline’s internal environment.
Remember, the goal is to:
• First – locate, convey, and explain the KEY information critical to understanding these elements of the organization
• Next – assess those findings and make a definitive and evaluative determination as to their strategic impact on UAL as an organization.
The applicable elements to consider in the preparation of the internal environmental evaluation include the following:
• organizational culture / human resource management processes
• financial management
• marketing efforts
• organizational structure
• Analyze the culture / human resource management processes at United Airlines
• Is it strong or weak?
• Does it help the company or is it a liability?
• What role does the culture play in creating (and/or sustaining) the competitive advantage(s)?
• Are they effective at acquiring, growing, and retaining talent?
• Are there practices in place (potentially connected to the culture) that help to build an effective organizational team – or is the organization nothing more than a collection of employees?
• Analyze the marketing practices and management of United Airlines
• Do they understand (well) their customers – worldwide?
• What trends do they need to be aware of – and do they market (well) to those trends?
• How effective has their ‘crisis communication’ been?
• Are their marketing practices in line with the rest of their approach to operational approach?
• Analyze the structure of United Airlines
• In its current form, understanding the need for strategy/structure connectivity
• Is it effective in supporting the strategic initiatives?
• Should any changes be made to the structure – given their current strategy – to create a better strategy/structure connection?
• Analyze the financial situation of United Airlines
• Compute the applicable key financial ratios for United Airlines and compare the results to either (both) industry standards and their competitors
• Liquidity and profitability • Quick ratio
• ROI • Gross profit
• Debt to equity • Operating expense ratio
• Inventory turnover ratio • Earnings per share (EPS)
• How effective is United Airlines comparatively?
• Are there any changes to United Airlines’ financial management practices that would help to better manage the financial position of United Airlines?
Perform a VRIN test on these internal elements of United Airlines’ operations
• In your opinion, and based on your analysis so far, what is/are UAL’s competitive advantage(s)?
• How/what would you describe United Airlines’ current business model to
Think through the answers to these questions – and then logically organize your researched findings, your support, your evaluations, and your conclusions.
Summarize and transmit your findings in a memo to the CEO
Business Evaluation Memo #4
This week we move away from the very narrow ‘deep dives’ we have taken in the weeks past, into the specific segments of the organization, and work to look across what we have found and look for recurring themes, key factors that can cause issues – good and bad – for United Airliines, and determine in a systemic context what all that means!
Remember that systems theory, and systems thinking, is at the heart of our whole view of organizations. We view organizations as socio-technical systems, and as such where the individual elements of the organization are important it is the interdependence between these elements – and their connections (or not) to each other – that really make up the organization.
To that end, what we’re doing now is working to look at the individual elements of UAL as that system – and then assess the system in its entirety.
Consider these questions – and prepare a memo to top management providing the answers – and your supporting analysis.
In MGT 670, we explored the elements necessary for an effective strategic plan … not just one that looked good on paper, but one that could be executed well. In that exploration process, there we re two key questions we worked to answer for the organizations we evaluated – because we knew that bounding the strategic decision environment (to avoid being ‘trapped in the middle’ as Porter noted) was critical – not just for creating an effective plan … but importantly to execute any plan created.
Based on your research to date – currently – Who IS United Airlines?
• Who are they NOT?
What have the attempted to do – strategically – to get themselves where we find them today?
• What has been successful in these attempts?
• What has not been successful in these attempts?
What do you think/believe that the UAL top management has intended to accomplish with the strategic decisions/actions they have made across the last decade?
• What might have been their motivation for taking the actions they have taken?
• What might have been the competitive advantage they were attempting to achieve?
Based on your research thus far, and using Teti, Yang Bloom, Rivkin &Sadun’s (2017) four approaches to decision making, which approach do you think UAL’s top management team has used thus far?
• Which might be a better/the best approach as they think to move the organization and its strategy forward into the future?
Martin (2017) noted that strategic choices often – or should – cascade from one another. Using his framework, and your research on UAL to date, identify:
• first how United has failed in the use/application of these stages
• and then how they might positively and proactively use these failures/lessons learned to make better decisions and provide some potential answers to these questions as possible strategic recommendations
• Use the table below to help structure your thoughts/answers to these questions.
Martin (2017)’s Framework Stage How United has Applied – or Failed to Apply – that Stage Possible Strategic Answers/Applications of the Stage
The questions posed by Trevor &Varcoe (2016) on the need for strategy/structure connections and Leinwand&Mainardi (2016) on the connections between strategy and execution may provide some guidance. (Note – you do not need to prepare answers to these questions specifically – they should help to provide some guidance in your thinking)
Trevor &Varcoe (2016) note the need to answer the following questions on the strategy/structure connections in an organization.
1. How well does your business strategy support the fulfillment of your company’s purpose?
2. How well does your organization support the achievement of your business strategy?
Leinwand&Mainardi (2016) identify four steps in the Strategy and Execution
1. Commit to a clear identity that is defined by how you create value for customers, by the differentiating capabilities that enable you to do so
2. Translate the strategic into the everyday by designing and building your own bespoke capabilities that set you apart from competitors.
3. Put your culture to work, instead of trying to change it or reorganizing it, in order to change employees’ behaviors.
4. Cut costs to reinvest in what makes you distinctive.
5. Instead of reacting to change, create the change you want to see by continuously advancing what you’re already great at and gaining privileged access to your customers.