Cebu Pacific A Time For Change Management Essay

Cebu peaceful A Time For Change sharpensing EssayThe skyway Cebu pacific n unmatch commensurate (CEB) has been flying since March 1996 (Cebu peace-loving ship 2010). It has experienced ups and downs when deuce of its fleets jampacked, killing hundreds of citizenry (Balatu cornerstone c. 2010). Yet disdain the tragic incidents, CEB was fit to ascent and salvage its re beatation, bringing it in as one of S placeheast Asias close dominant air delimitates (Krinks 2002). Its status grew, give it the license to start erupt international flights with in the world. Cebu peaceful nervous strain is especially well-known in Singapore, as one of the leading airlines who has flights nearly each twenty-four hour period in Singapore. Yet collectible to the stinting crisis that is felt globally, CEB is letting go a portion of its doglike employees. Though it is painful for the company to do so, such measures be issue of the prudences hands as the wave of financial turmoi l crash stronger and stronger daily. This is the better metre for the company to reorganize, so that Cebu peace equal Air could emerge as a stronger, better, and a safer airline which ordain be known by dint ofout the world in the years to come. If the company perish be able to rethink its solicitude appearance, in placeicularly, plurality worry, hence to a greater extent avail would be generated for the airline, and the company exit be able to afford its munificent number of employees as well.1 IntroductionAccording to Manila b be Publishing Corp. (2008), Cebu Pacific Air contri unless(prenominal)ed 45% of the total national summonr dealing by carrying 2.57 one thousand thousand passengers in a span of half-dozen months in 2008 (from January to June). This promoter that in 2008, the company was able to generate loads of income and was a big donor to the Philippines annual r even offue.Yet despite this, the economic crisis has not been kind to the company. Some employees had to be let go in localise to adapt and give way for a better regrouping that testament give Cebu Pacific Air a better leverage in the airline manufacturing.Main competitor Philippine Airlines already bowed out of the race by having to retrench a lot of it raft. Yet Air Philippines, a Philippine Airlines affiliate, was ru more(prenominal)d to be headhunting the market for a Quality impudence music director.Right now Cebu Pacific Air is in addition in pauperism of a Quality Assurance Director to oversea the whole end product and process of Cebu Pacific. What the company has now is Mr. Jose F. Buenaventura who directly reports to the Director, electric chair and CEO of Cebu Pacific, scape Gokongwei. Having a Quality Assurance Director go out surrender its umpteen advantages, therefore bringing the Cebu Pacific tax senior higher than it has ever been.With the February 2, 1998 crash of Flight 387 which took 104 lives, and the May 3, 2006, Flight 393 cra sh which delayed flights in a topical anaesthetic airport because of a failed aircraft part, Quality Assurance is not a question of want, unless a necessity. It is important that the company changes its precaution hyphen and employ a superbly qualified Quality Assurance theatre director to ensure that future flights of Cebu Pacific will not suffer the resembling fate as the two flights mentioned above.2010 has been a effective year so far, by enabling the company to find out its 40 million passengers in the 999 pesos Go Lite Seat. Having met this milestone, the company will be able to lapse with more important and semiprecious projects which will amplification the income of the airline. condescension the unmistakable growth of Cebu Pacific Air in the current years, expenses atomic number 18 mounting up, and these turbulent cartridge holders globally should be taken advantage of. Cebu Pacific should sit back and regroup, taking its biggest and best thinkers into a room to chequer the best course of action that will propel the company even higher than its standing today. The reservoir believes that once Cebu Pacific changed its management style and employed the slump Quality Assurance Director, more revenue will enter the companys portfolio. With proper planning, and correct execution of plans, Cebu Pacific could well be a household name in terms of flying, abolishing all traces of competitors vastness forever.2 Background of the CompanyCebu Pacific Air would cease to embody as it is known today without the efforts of John Gokongwei, who is the founder of this noble airline. He st ard selling textiles and corn, created textile miles and explored food manufacturing before directly competing with San Miguel, one of the necropsy brands in the Philippines. Gokongwei continued to amass wealth by building obtain malls, hotels, compounds, real estate, among some(prenominal) others. His major companies include Digitel Corpo proportionalityn, Apo C ement, and Cebu Pacific Air (Krinks 2002).Cebu Pacific Air first graced the skies on March 1996. The company calls its clients as Juans, which is a typical Filipino name with affiliations to the poor. Because the company aims to give low f be, great value (Cebu Pacific Air 2010), the word Juan is very(prenominal) symbolic in terms of giving the medium and average families the gamble to fly and bawl out places. This romance is made possible by Cebu Pacific as it offers the last(a) prices on the market.CEB started its operations by offering clients to fly domestically in cheap prices. After the initial mastery, the company was able to fly internationally on November 2001. Now, nine years subsequent, Cebu Pacific is apt(p) the license to put down in Bangkok, Kota Kinabalu, Kuala Lumpur, Jakarta, Macau, Seoul, Shanghai, Taipei, Singapore, Bangkok and other hot spots across Asia (ibid). It enables all(prenominal) Juan who boards its planes to explore the countries near the Phil ippines, and to enjoy their stay with the affordable prices.Cebu Pacific Air excessively boasts to be very safe and reliable, considering its recent re-fleeting program which brought more or less twenty-nine new planes. These 10 A319 and 11 A320 Airbus planes and 8 ATR 72-500 aircrafts (ibid) gives Cebu Pacific the right to say that it has the youngest fleet in southeastward Asia. Having younger planes gave the airline passengers a sense of security that since the planes are never overhauled, repaired, and manipulated in any way, and the fear of the fleet is routine, then their safety will not be compromised despite the low fare.Not unless(prenominal) is Cebu Pacific the leader when it comes to low fares, it is as well as the torchbearer of technology in terms of air power in the Philippines. It is the first local airline to use e-ticketing (made popular by the Ameri mickle Airlines), prepaid supernumerary baggage and seat selection in the Philippines (ibid). Unlike other domestic airlines, Cebu Pacific not only returns magazines in flight (the magazine is called Smile), but also provides board games and other forms of pastime, otherwise known as enjoyment Flights (ibid).Lastly, not only does Cebu Pacific provide low fares that will give peace of mind and assurance to consumers, but it also provides the travelers with a from plane-to retreat do after having tied up with destination hotels, travel insurance, entertainment ticketing, travel agencies, travel insurance, and other travel necessities. The Juans could simply board the plane, and upon arrival, ride the rental car arranged for them by the company. Last February 2010, the on-time performance of Cebu Pacific reached 92.5% (ibid), and the company is aiming to raise this to a hundred. With the smooth travels, reliability, and pleasurable flights, it is no wonder that Cebu Pacific is the best choice for air transport in Southeast Asia.3 Literature ReviewThough there are many an(prenominal ) management styles, Cebu Pacific employs people-friendly but firm in the discipline and order area (Manila publicize Publishing Corp. 2010). Before the author discusses this particular style, a literature review of workplace link up concept would be given to establish the importance of the authors proposed management method to be given later on.3.1 Air transport in the PhilippinesKrinks (2002) points out that the air transport was only accessible to citizens with a high social standing, the elites, the famous, tourists, and business concernpeople whose travel expenses are cosmos shouldered by their companies. Majority of Filipinos can only dream of flying and visiting foreign places, since to ride an airplane before is correspondent to having a lavish lifestyle. This was before Cebu Pacific came in.Philippine Airlines, the first airline in the Philippines, has dominated the air transport industry in the Philippines for more than v decades. It was first obtained by the Philipp ine government in 1948, was bought by a private institution in 1965, and was re-taken by the government in 1977. This was when the former President Ferdinand Marcos issued a decree saying that befriend should be the sole domestic carrier (Krinks 2002) in the Philippines. When former President Marcos was ousted, President Corazon Aquino then started turning Philippine Airlines as a private company. By 1993, Lucio Tan was the major stockholder, and from then on, Philippine Airlines enjoyed the privilege of dominating the Philippine skies without competitors.By 1995, former President Ramos re-build two airports in the Philippines and made their sizes to be globally belligerent. The Manila and Mactan (in Cebu) airports were the major airstrips in the country, and Ramos urged competitors to take advantage of the five new airports with international flights.By 1996, Cebu Pacific entered the picture by giving the lowest rates possible without incurring loses for the company. PALs maket s hare fell a whooping 65%, and it continued to decline by losing billions of pesos from that year onwards. By 2000, PAL was indebt to an amount totaling to $2.2 billion, and Cebu Pacific was universe embraced by the Filipinos.The air transport industry is currently being shared by Cebu Pacific Air, Grand Air, Air Philippines, Philippine Airlines, Asia Spirit, and Corporate Air (ibid).Along with the opening of NAIA 3 came the luck for Cebu Pacific to display to its counterparts that it is a force to be reckoned with. When the third Ninoy Aquino transnational Airport was opened in Villamor, Pasay City, Cebu Pacific was the one who first launched a flight in the airport (Manila Bulletin Publishing Corp. 2010). Airport worldwide Manager Alfonso Cusi for NAIA 3 said that the airport had an agreement with CEB that the airline will fully utilized the terminal for their regional flights (ibid).4 Proposed Workplace dealings ApproachCebu Pacifics laidback friendly admittance to its empl oyees are working and motivating people, but the lax in discipline and respect could be further im evidenced. A domineering or autocratic style of management could work as well, but according to Thomas (1997), this type of leadinghip could fail at one point or another(prenominal). But since Cebu Pacific motifs to regroup and to change its system in order to earn more revenue, it is time for the airline to think about its workplace relations entree.An institution requires the purpose of a complex array of resources to grow, survive and achieve the ultimate cathexis or accusives that informed its existence or creation. The mobilization and deployment of these resources human, financial and worldly in the right resource-mix, gives the boldness leverage toward the desired end. Of these resources, the human resource is the most potent and central, contributing significantly to corporate bottom line and competitiveness.The organization therefore gains sustained competitive adv antage through people, the organization workforce. Competitive advantage is simply defined as anything that gives an organization an surround over the competitors in its market.According to Porter (1985), the unique talents among employees, including flexibility, innovation, superior performance, high productivity and personal customer service are ways employees provide a critical ingredient in developing a firms competitive position. Similarly, Chiavenato (2001) notes that employees are purveyors of activities and knowledge whose most important contributions in the organization are their intelligence and individual talents. at that place is agrowing consensus that effective management of human gravid is critical to an organizations success (Barney Wright, 1998 Jackson, Hitt DeNisi, 2003 Akhtar, Ding Ge, 2008).Managing the human resources in the organization is the conventional responsibility of the personnel manager, a precursor to human resource management (HRM). Some schol ars however equate HRM with personnel management, concerned with providing staff fend in the organization (e.g. Guest, 1989).Other scholars consider HRM as a inbred development of personnel management practices in the face of changing economic and business environment (Armstrong, 1989 2004 and Fajana, 2002). The people-management discipline is undergoing continuous metamorphosis, with the recent emergence of strategic human resource management (SHRM) in organization and management literature.In a recent review covering 30 years, Lengnick-Hall, Lengnick-Hall, Andrade Drake (2009) present an evolutionary and chronological perspective on the development of SHRM. The authors identify the following seven themes which influenced the development of the field of SHRM (1) explaining contingency perspective and fit, (2) shifting from a decoct on managing people to creating strategic contributions, (3) elaborating HR system components and structure, (4) expanding the scope of SHRM, (5) a chieving HR downation and execution, (6) measuring outcomes of SHRM, and (7) evaluating methodological issues. SHRM is evolving as a new approach to the management of people, and unique(predicate)ally foc utilise on integrating the human crownwork to business strategy to enhance organizational competitiveness.According to Aswathappa (200439), the advent of SHRM has brought advancing the issues of linkages between the employer-employee relationships and wider organizational strategies and corporate objectives.4.1 OutsourcingHow would one be able to increase revenue except save money at the same time? Rival Philippine Airlines has already resorted to outsourcing. Yet Somani (2005) argues that there are many problems in outsourcing, in terms of miscommunication-misunderstandings that are the result of misinterpreted content, tone or word choice-as it relates to people management. This is a problem since by outsourcing, the company is have to employ people who speak various lang uages with no upbringing of the Cebu Pacific culture. They will not be the fun, committed individuals who have served the Juans of Cebu Pacific through the years.Somani (2005) gives a portrait of outsourcing which could easily happen should the company decide to outsource its services an outsourced project team member mistook a debt of 95 million as credit, and created a report saying as such. The company then included the 95 million to the already overextended credit line. Needless to say, kind of of saving money by outsourcing, it only made them lose 95 million more.Cebu Pacific aims to bring people together to have an enjoyable flight through affordable means and the staffs willingness and eagerness to serve with a true heart (Cebu Pacific 2010). If the backbone of the operation (i.e., the ground operation, the ticketing staff, the wear out in counter people) were being outsourced to other nations, then this soul for service that Cebu Pacific is known for would be changed. The airline would only be another airline who wishes to increase money.4.2 SolutionBerman, E.M, West, J.P., and Richter, M. Jr. (2002) says that the workplace friendships and relations advance by a company derives from mutual trust, commitment, reciprocal liking and shared interests or values. These behaviors are present in CEB employees as they mingle and explore new challenges as led to them by team leaders.QM has been adopted widely by most organizations. Previous research has suggested that successful timber management requires a series of people management practices such as training, development, and empowerment. Despite ample findings on the impact of QM on organizational and individual performance, less attention has been paid to employees actual behavior during the implementation of people management practices. The present study, therefore, contributes to the literature by going beyond the employees perception and reaction toward QM implementation and identifying employees emf behavior when implementing QM.Yet when it comes to disciplining, this friendly approach could prove to be fatal. Managers might make wrong decisions because their view is not objective and forming personal friendships with the people they are in charge of could cause complications and remainder of interests in the future.A way to avoid such is to get the attention of an outstanding Quality Assurance Director. There would be one-third organizational heads which will help the company a Quality Assurance Director, an operations Director, and a Management Director. The most promising would rise to the title of general Director, and would report directly to the current heads Mr. Jose Buenaventura, and CEO of Cebu Pacific Lance Gokongwei.Having this surplus structure in place would give the directors more focus on their tasks in their department for human resource management, operations, and quality assurance. Once these three aspects are strengthened and formed, then the rest of the organization would follow.This is the proposed structure for Cebu PacificDirector, CEO and PresidentBoard ofDirectorsOverallDirectorSeniorConsultants decision makerOfficersFigure 1.1 Proposed Structure for Cebu PacificThe current structure of Cebu Pacific is as followsFigure 1.2 Current structure of Cebu PacificAs one can see, having the Board of directors in the same level as the senior consultants, executive officers, and the overall director would prove to be beneficial since the companys top people are closely working together. There would be no distinction in positions, as there would be different functions for each person.4.3 Management ApproachAfter implementing the proposed structure for Cebu Pacific (Figure 1.1), then the companys management approach should be changed as well. The informal, friendly atmosphere essential be changed. The managers must be more diligent in imposing the rules, yet be flexible enough to the changes. The managers will cease to be lenient wi th their teams, and stir up each team member to establish more results and more revenue for the company. Watching movies while working in their desktop computing machines, having four break-times in an eight-hour work day, and games in desktop computers would all be removed. There would only be three break times in an eight-hour work day at 1000 to1015 in the morning, 1200 to 100 PM for the lunch break, and a 300 to 315 PM break. This will maximize the potential of employees and remove those who are skiving off work.While people management practices involve extensive communication, employee participation, and teamwork, it is expected those practices would facilitate individuals pro-social values motive. In addition, Nair (2006) suggests that QM is now most widely accepted organizational goal and is believed to be essential for effective management and competitive option of organizations. This organizational-wide consensus with respect to QM as organizational goal and QM as a mea ns of competitive survival may lead to the increasing in individuals desire to help the organization even when they need to do more than their job descriptions stated. In sum, if people management practices are heavily emphasized in QM implementation, it is expected to run some(prenominal) organizational concern and pro-social values motives of organizational citizenship behavior.There are employees who were caught watching movies while working, with their Windows Media Player minimized. There are also those who are spending the office hours by playing Solitaire and other games that were ab initio installed in all desktops. It would then be implemented that all computer programs and softwares that are not work related would be uninstalled, and employees will no longer have the access to install programs. Each program from an anti-virus to gondola CAD for the engineering department and Adobe softwares for the marketing team would need to be installed by the IT department. Instant messaging systems such as rube Messenger, Skype, and others would be removed as well. In its place would be the intranet which would have the same function, the only difference is that only colleagues and co-workers would be able to run out to the employees, and there would be no distraction and other impediments that are impeding the productivity of a team to flourish.5 Basis for critical success componentsThe author strongly believes that changing the organizational structure of Cebu Pacific and set up powerful and over-qualified people in the positions of Overall Director, Quality Assurance Director, Managing Director, and Managing Director could prove to be beneficial for the company. There would be a actualize distinction of tasks and responsibilities. Unlike to what the company has now wherein there are different vice presidents per sector under the Executive Officers, there are areas that are forgone and are ignored, such as Quality Assurance, which is a crucial part o f an airline.Having no Quality Assurance director in place means that Cebu Pacific is compromising the lives of its millions of passengers since there are no routinely aware processes that would indicate that a plane is safe for flying. Though Cebu Pacific airs fleet is young and robust, this will not be the same in five to ten years time. A fleet would have to be maintained rigorously and each decision should conform to the manuals of FAA and other aviation regulators.Changing the management habits of higher ups would also prove to be of valuable contribution to the company. The employees look up to their division managers, section managers, and team leaders to set an example. If the manager is always deviation his or her place to smoke, or is caught doing things that are not work related, then the morale of the team would course and all efforts would be ineffective. It is important that the management be able to cite respect and awe in the members to make the most out of their potential and to maximize their talents. If a leader is lenient with no concern for the company, then the team it is managing as well would feel the same way.Knowledge, competence, and related intangibles have emerged as the key drivers of competitive advantage in developed nations. This is not just because of the importance of knowledge itself, but because of the rapid expansion of goods and factor markets, leaving intangible assets as the main basis of competitive note in many sectors.There is implicit recognition of this in both management theory and practice with the growing emphasis being fit(p) on the importance of intangible assets, reputation, customer loyalty, and technological know-how. By using a good structure like learning organization we will have organizational structure that have the ability to support the adroit capital in todays market. So todays organizations should try to use this paradigm (learning organizations) to be competitive.Also because our contempora ry organizations may differ from the traditional organizations and so we should implement new skills to be learning organization so that our staff can adjust themselves with new technologies. Also can sense the weak signals in the environment and can reply the prosper answer to them. In this location our managers and executives and CEOs can effectively manage the Intellectual Capital in the organization. triple-crown managers as well as businesses have been overseeing clever capital one way or another right from the start, whether deliberately or intuitively. This though, does not denote that they have an Intellectual Capital Model (ICM) program or strategy. Overseeing intellectual capital as a topic of common business sense is not adequate for the expansion of intellectual capital mould like an organizational capability.It is simply when a management style shifts from being instinctively applied to a planned and systemized development that it can be completed. Only then can it b e significantly altered from being an art developing into a science. Once it evolves into a science, it turn out to be testable, measurable, more predictable, furthermore, most importantly, repeatable. Even if organizations that pertain intellectual capital model progress this goal, there is, nonetheless, a long road of experiment along with applied research ahead for the up-and-coming area of intellectual capital model to develop into more of a science. (ICM, 2009)6 expiryThe Cebu Pacific legacy as the countrys low-fare pioneer when it comes to air transport continues to this very day. Two years ago Cebu Pacific contributed 45% of the air traffic in the Philippines by carrying 2.57 million passengers in six months time (Manila Bulletin Corp. 2010). This legacy should be protected, so that it would continue to transcend for future generations to come. habituated that Cebu Pacifics management style is people-friendly, there are those employees who are taking advantage of the lenien t management of their team leaders, section managers, and division managers. It is time to put a stop to that. Personal relationships should between higher ups and employees should be avoided in order to ensure that the managers decisions for the teams welfare would not be compromised because of personal reasons. It is also important that the managers learn how to be firm and demanding, to push their team members to produce more output rather than letting them go at the stones throw that they want. A team without a clear direction is eating at the funds set by the company for development. It is important that managers be able to adapt and learn how to be rigorous in leading their people.The author proposed that at least initially, the following changes should be made in the staff-manager ratio lesser breaks, remotion of not work related computer programs, and removal of instant messaging systems which would be replaced by an intranet for the company. These changes are small and gra dual, yet they would have a positive effect on employees. If the staff members logs in to their computer and there is nothing there but work related stuff, then there would be less distraction and the employees would be able to function to the best of their abilities. Having lesser breaks removes the chances of employees asking for overtime pay for leaving their cubicles during working hours to do personal chores and to return after the 530 end of shift to file for overtime to compensate for the hours they lost.The author also suggested that the organizational structure of Cebu Pacific be changed in order to meet the demands of this technologically advancing world. Outsourcing is not an option since this could only mean more money spent because of miscommunication. The best way is to restructure the management in terms of putting emphasis in Quality. Having an emphasis on quality will ensure that future plane crashes would be avoided, equipment malfunction would be minimized, and th e Juans would have peace of mind when flying with Cebu Pacific.The goal of Cebu Pacific as Southeast Asias cheapest fare provider is to give every Juan a chance to fly and explore new worlds by traveling. Having directors in place with specific functions would be vital for the company since Cebu Pacific would be able to focus on having good quality without compromising safety.With proper management, a good structure, and more dedicated people, Cebu Pacific Air would go miles it has never been to before. There would be savings in terms of not having to pay more overtime fees for those who are not deserving, and savings for big replacements which would be avoided by routine checks. With all these changes, Cebu Pacific would be able to give every Juan the chance to relieve a dream to fly in the skies without lamentable for their safety, and the bills they are leaving behind. Now they can fly cheaply, safely, and with no worries since the management has dedicated its time to ensuring their safety in terms of Quality Assurance.