United Airlines and Management Issues

Paper Summary:

This paper explains that United's primary issue in human resource management is the conflict created by the fact that its employees are also the majority owners and, to date, have been unable to reconcile their interests as workers and owners. The paper points out that purchasing is currently being handled appropriately, given efforts to outsource certain areas as well as to achieve economies of scale where applicable. This paper concludes that United has many factors in its favor; but, until and unless it is able to resolve its corporate structure and labor issues, which are leading to an non-viable cost structure, it will be unable to compete effectively in a changing, more competitive market.

Table of Contents
Operations & Logistics
Human Resources Management
Information Systems
Conclusion

From the Paper:

"In addition, United has harnessed information technology capability in order to provide enhanced flight notification, and superior sales support through its North America Sales Support Operations Center in Chicago (Business Travel News). Advanced technology and increased automation has helped United reduce disruptions caused by weather but extreme weather conditions and labor strikes are still vulnerability factors for United, as all other airlines. United is also vulnerable to sudden substantial cost increases in fuel and insurance premiums, which is compensated to a certain extent through hedging and insurance coverage by the FAA (United 2002 Annual Report, 8). As seen earlier, United is just about competitive now in terms of cost structures but is still at a disadvantage when compared with the cost efficient operations of low cost carriers. The significant trends that can be discerned here are the cost efficiencies generated by automation and technology, efficient planning via R&D and information systems, as well as cost cutting opportunities through outsourcing, negotiation and procurement efficiencies."

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