This case examines the Human Resource Management system at American Airlines and its role in the airline's past and continued success. The case takes us through a time line from 1980 to 1992 of the company; of how the growth of the company was followed by changes in the strategy, changes in the HR policies at different time and finally their effect and impact on the employees and the company as whole.
1. 1978: Deregulations of the airline industry.
2. 1980: AA's growth plans called for ore planes, new routes, increased membership in its AAdvantage frequent flier program, and an enlarged installed base of its SABRE reservation system.
3. 1981:The Presidents Conferences began.
4. 1983: Two Tier compensation system concepts was adopted. Head count restrictions was applied to the managerial posts
5. 1985: Decline in fuel prices. AA began building up it U.S route network
6. 1986: Developed presences in 15 different European countries
7. 1987: AA began a Peak Performance Through Commitment program
8. 1988: AA decided to broaden employee involvement to improve customer relations. A program named Committing to Leadership was started
9. 1990: Industry conditions started to Detroit.
10. 1991: Due to the Persian Gulf War there was a recession in the economy and slow moving profits. And finally new contracts with the employees were finalized.
CASE FACTS according to the time eras
Target market: Price-insensitive and business class people, who emphasized high levels of service.
Structure: Seemingly functional (centrally controlled).
Corporate level strategy:
Business level strategy:
Market penetration, (Surpass United)
Market development (new routes, Europe)
Functional level strategy:
Differentiation in IS and marketing dept (SABRE reservation system, frequent flier program, lost baggage system, sheep-skin seats). Low cost in HRM department.
o Base salary lowered...