Continental Airlines: One Companys Flight to SuccessINTRODUCTION

HISTORY AND PRESENT POSITION

Continental Airlines was a major U.S. airline, founded in 1934 and headquartered in Houston, Texas. The company started its operation in the year 1934 as Varney Speed Lines with Lockheed Vega, a single engine four-seated plane. On July 8, 1937 Varney Speed Lines was renamed as Continental. Initially Continental Airlines was operating flights on EI Paso Denver route and later on added many destinations. Continental Airlines was the world's fifth largest airline. Continental, together with Continental Express and Continental Connection, had more than 2,600 daily departures throughout the Americas, Europe and Asia, serving 235 domestic and 138 international destinations. Continental was a member of Star Alliance, which overall offers more than 21,200 daily flights to 1,172 airports in 181 countries through its 28 member airlines. With more than 40,000 employees, Continental had hubs serving Los Angeles, Houston, Narita International Airport, and together with its regional partners, carries approximately 138 million passengers per year. Its primary hubs were at three airports, namely Cleveland Hopkins International Airport (Cleveland, Ohio), Newark Liberty International Airport (Newark, New Jersey) and George Bush International Airport (Houston, Texas). Continental had ownership interests and brand partnerships with several carriers. Continental was a minority owner of Express Jet Airlines, which operated under the 'Continental Express' trade name but was a separately managed and public company. Chautauqua Airlines also flew under the Continental Express identity, and Cape Air, Colgan Air, CommutAir, and Silver Airways fed Continental's flights under the Continental Connection identity. Continental did not have any ownership interests in these companies.

In May 2010, the airline announced that it would merge with UAL Corporation, the parent company of United Airlines, via a stock swap. Continental's shares were acquired by UAL Corporation. The acquisition was completed in October 2010, at which time the holding company was renamed United Continental Holdings. During the integration period, each airline ran a separate operation under the direction of a combined leadership team, based in Chicago, Illinois. The integration was completed on 3rd March 2012, thereby creating the worlds largest airline both in terms of flights offered and revenue generated. The announcement came on the heels of Deltas 2008 merger with Midwest-based carrier Northwest Airlines. In an industry with high volatility, heavy capital investments, and extremely price sensitive customers, mergers as a way to improve costs and maximize revenue is certainly not surprising.

PRODUCT& SERVICESUnited Continental Holdings unites cities around the globethrough subsidiariesUnited Air Linesand Continental,titans among passenger and cargo air carriers.While United Air Lines and Continental are its main lines, the company also has regional operations, which areoperated under contract by United Express, Continental Express, and Continental Connection. Combined, the companyhandles an average of 5,166 flights a day to more than 374 domestic and international destinations from hubs that include Chicago, Houston, Los Angeles,New York, San Francisco, and Washington, DC. The company also sells fuel, as well as offers catering, ground handling, and maintenance services for third parties. As of 2014, it operated through a fleet of approximately 700 mainline aircraft.

Worlds Most Comprehensive Route Network

373Destinations (airports served)235Domestic destinations (airports served)138International destinations (airports served)60Countries Served4,935 Daily Departures138Million Passengers in 2014

Member LoungesMore than45 United Clubs in 38 airports worldwide offer members complimentary bar service, light snacks and beverages; business amenities such as Wi-Fi, conference rooms and workstations; and personalized assistance with reservations, seat selection, upgrades and boarding passes.

MARKET SHAREAs of September 31, 2014, United Continental Holdings has a 15.40 % market share based on Revenue Passenger Miles.

COMPITITORS

United competes primarily with large carriers like American Airlines (AAL) and Delta Air Lines Inc. (DAL) but also competes with low-cost carriers like Southwest Airlines Company (LUV), both domestically and internationally. Because of high fuel and other operating expenses, United has the highest Cost per Available Seat Mile in the airline industry, 13.5 cents. To combat its increasing operating expenses, United has implemented several strategies prevalent throughout the airline industry including cutting food and beverage services and charging customers extra fees to check in baggage.

HUMAN RESOURCES As of December 31, 2013, UAL, including its subsidiaries, had approximately 87,000 employees. Approximately 80% of the Companys employees were represented by various U.S. labor organizations as of December 31, 2014.

Collective bargaining agreements between the Company and its represented employee groups are negotiated under the RLA. Such agreements typically do not contain an expiration date and instead specify an amendable date, upon which the contract is considered open for amendment. The Company continues to integrate its remaining employee groups in connection with the Merger, such process being governed by a combination of the RLA, the McCaskill-Bond Amendment, and where applicable, the existing provisions of Uniteds collective bargaining agreements and union policies.

OBJECTIVE OF THE REPORT

1. If you are placed to manage in anorganization facing stress, what steps can you take in order to bring the company back on track?

2. Specify the reasons behind the changes of morale among the employees of continental airlines.

THEORITICAL AND PRACTICLE ISSUES OF THE CASEQuestion no:1If you were the manager of a distressed organization, what specific steps would you take to turn the organization around?If we were the manager then we will take some steps to improve the present situation. Those steps are given below to turn around my organization. Reduce Employee Dismissal:Our first step is to reduce employee dismissal by providing motivation, such as on time wages and salary pay, We will train unskilled people but we will not layoff them. Before dismissal employment we will give them time to prove their skill. In this case we found that on the crisis moment of the Continental Airlines they had undergone several series of layoff but on that moment they should to move them to other airline companies or by reducing their payment and kept them. Otherwise they could help them to take different types of professional training for building career to other sector or another airline company. On the case we found that the new CEO and the old CEO had dismissed the employees without any notice and any benefits which is inhumanity. In the long run the continental airline will be suffering lots because the talented employees dont like this type of organization and continental cant hire the talented people in future. When need to fire the employees we will try to keep in mind above things. Employees Benefits:We will try to give the incentives to the worker in two ways, thats psychologically and physically, it can be given the recognition of the best performer in front of whole employees. Its not true that only money can motivate the employees. We will give the best performer award in quarterly basis. We will try to give the benefits to employees.Training and Development:We will provide various types of professional training to the employee. Every training program will have a targeted point which will help to my employees to solving the various types of problem. We will take skill oriented employee development process which will help to succession planning. Performance Appraisal and Rewards:We will review and monitor their performance regularly. After assessing the performance we will provide rewards to the performer. We will give them recognition within the organization so they will be motivated physiologically. On the case the new CEO also changed the performance appraisal system but we will flow the above things about performance appraisal and it will be help full more.Participative Management:When we will take any major decision within the organization then we will take opinion from different respective level of mangers an employee. When we will take strategic decision then we will take top-level and mid-level employees. When we will make operation level decisions then we give priority to operation level employees. People get engaged fleeing within the organization. They will start to thinking as an undividable part of organization. The new CEO comes out to solve the problem and he made success because he ensured that all people can give their valuable advice to make any big decision.

Working authority:When we will give the working authority to the employees then their productivity will be increased. They will perform their job with own authority. In the case we found that the new CEO had given the employees autonomy.

Question no: 2What are the primary causes for the sudden change in employee morale at Continental Airlines? ConnectionEmployees need to feel there is a connection between themselves and management. That they share a common purpose and common goals. They need to know that management knows worthy are, what is going on with their job and that management is there to help them when needed. One-way to connect with employees is to spend time with them. We should regularly work along with them if possible. If not then take some time and find a reason to sit with them at their desk. Perhaps to check something they are working on or just to stop in and see how they are doing. RecognitionEmployees want recognition and acknowledgment that their work has purpose and that it is appreciated. Never miss an opportunity torecognize when someone has done good work. Even a simple Thank You when an employee completes a task for you will help them see their work is appreciated. If employees have worked hard on something and done a good job, they almost expect to berecognized for it. It affirms that their work is appreciated and that you respect the work that they do. Awards and public recognition of work above and beyond are excellent ways torecognize the hard work of your employees. All employees want recognition from management and their peers. A manager may also benefit from the increased performance of others so they also can get an award.Effective TeamsTeam building is a more complex challenge than fostering high morale in individual employees. Here are five problems that many teams develop that keep them from being as effective as they want to be in accomplishing company goals: Absence of Trustdue to invulnerabilityFear of Conflictartificial harmonyLack of CommitmentambiguityAvoidance of Accountabilitylow standardsInattention to Resultscaused by individual status and ego issuesIn the absence of trust, morale is at its lowest and self-protectionism becomes the rule. It doesnt take a PhD in psychology to realize that this will limit productivity and make work a lot less rewarding for both employees and their managers. This every man for themselves attitude destroys teams and makes it impossible to optimize goal setting and achieve corporate objectives in a timely manner, if at all. By learning to communicate more effectively based on honesty, consistency, vulnerability, and respect, your teams will be able to focus unselfishly on common results. This in turn keeps individual egos and agendas in check.Sharing New Ideas:Once youve built trusting relationships and developed a foundation of respect, employees will automatically respond with more new ideas. The best way to nurture and benefit from their new-found ideas is to go by the philosophy that there are no bad ideas, only undeveloped ones. Trusted and respected employees with managers who reinforce the fact that they have some flexibility to try new things will surprise you with the new ideas ingenuity that they bring to their work. The best part is that you get this for the same price youre paying unhappy employees who are doing just enough to get by.Based on case: One of the first things that Bethune recognized needed change at Continental was employee morale. This would be no easy task as many workers at the airline felt completely detached from the organization, which was due in large part to the previous management team. Lorenzo, the former chief executive, was cut off from employees and did not communicate. Bethune immediately created change by establishing an open door policy and encouraging employees to participation with management. One mechanism employed to build participation is a toll-free hotline to handle employees suggestions, which is managed by a cross-section of the employee-base. He wanted to establish a new corporate culture where employers and employees will work together. As a result he involved his workers in the decision making processes at Continental. Bethune was ready to listen actively to worker concerns. Therefore, he invited workers to call his voice mail, and when they called, he called them back. When he personally returned calls and employees started to realize that the management team was really listening to their suggestions. These important steps helped Bethune to gain the trust of employees and by extension, care about their work.To boost up employee morale, Gordon changed performance appraisal practices. The focus of the performance appraisals shifted toward achievement and facilitation of on-time flights. To emphasize the importance of this goal, management devised an incentive system that promised to reward each employee $100 if they achieved the number 1 ranking in the Department of transportations. Moreover, to acknowledge perfect attendance by employees, seven workers were rewarded new sport utility vehicles at the companys expense.To sum up it can be said that, by focusing on the workers and rewarding them for displaying the behaviors and actions necessary to the companys success, Gordan Bethune was able to change in morale at Continental Airlines.CONCLUSION

Only ten years ago, Continental was in trouble. There were ten major US airlines, and Continental ranked tenth in on-time performance, mishandled baggage, customer complaints, and denied boardings because of overbooking. Not surprisingly, with this kind of service, Continental was in financial trouble. It had filed for Chapter 11 bankruptcy protection twice in the previous ten years and was heading for a third, and likely final, bankruptcy. It had also gone through ten CEOs in ten years. People joked that Continental was a Per- fect 10.The rebirth of Continental began in 1994 when Gordon Bethune took the controls as CEO. He and Greg Brenneman, who was a Continental consultant at the time, conceived and sold to the Board of Directors the Go Forward Plan. It had four interrelated parts that had to be executed simultaneously. United Continental Holdings, Inc. The Company became the parent company of Continental Airlines, Inc. ("Continental") upon the closing of a merger transaction (the "Merger") on October 1, 2010. As part of the Merger integration, on March 31, 2013, the Company merged its two operating subsidiaries, Continental and United Air Lines, Inc. ("United Air Lines"), with Continental continuing as the surviving corporation and as a wholly owned subsidiary of the Company. Upon the closing of this transaction on March 31, 2013, Continental's name was changed to "United Airlines, Inc.

RECOMMENDATION

The greatest challenge United is facing is a lack of leadership and credibility both internally and externally. The company needs new leadership and a new strategy.

Some of the integration process work still remains unfinished. So they should finish remaining works.

United's mechanics still are working under separate contracts and IT systems. The company should migrate to a single IT system on a fleet-by-fleet basis.

United still flies many smaller regional jets, which guzzle fuel and whose close quarters and slower speeds annoy passengers. They should replace these jets.

The carrier also operates too many hubs, which adds expense. In order to minimize costs its hubs should be reduced. Their customer service is not good so their customer service should be developed.

The company should provide adequate training to the employees.

Enhance/Expand transcontinental routes.

Strengthen alliances for customer convenience.

REFERANCES

Analoui, F. (2000). What motivates senior managers?: The case of Romania, Journal of Managerial Psychology, 15(4), 324-340.Carey, Susan, (2014). United Continental: One Sick BirdRetrieved fromhttp://loyaltylobby.com/2014/06/09/wsj-united-continental-one-sick-bird/Chambers, R. (1996). GPs low morale is contributing factor. British Medical Journal, 313, 302.Cox, K. B. (2001). The effects of unit morale and interpersonal relations on conflict in the nursing unit. Journal of Advanced Nursing, 35(1), 17-25.Dye, F, C. & Garman, N. A. (2006). Exceptional Leadership: 16 Critical Competencies For Healthcare Executives. Chicago: Health Administration Press.Greenleaf, R.K. (1996). On becoming a servant-leader. San Francisco, CA: Josey-Bass Publishers.McKnight, D. H., Ahmad, S. and Schroeder, R. G. (2001). When do feedback, incentive control and autonomy improve morale? The importance of employee-management relationship closeness. Journal of managerial Issues, 13(4), 466-482. Psychometrics Canada (2010). Feuding and failure vs. Performance and innovation. Retrieved from http://www.psychometrics.com/docs/leadership.pdfRauktis, M. E. &Koeske, G. F. (1994). Maintaining social worker morale: When supportive supervision is not enough. Administration in Social Work, 18(1), 39- 60.Straka, J. W. (1993). Is poor worker morale costly to firms? Industrial and Labor Relations Review, 46(2), 381-394.(2014, 11). Major Competitors. Retrieved from http://finance.yahoo.com/q?s=UAL

3