American Airlines\' reorganization plan filed in 2012 involved the company reduc

Question

American Airlines' reorganization plan filed in 2012 involved the company reducing operating expenses by $2 billion, while increasing revenues by $1 billion. The company's strategy to increase revenues included expanding the number of international flights and destinations and increasing daily departures for its five largest markets by 20 percent. The company also intended to upgrade its fleet by spending $2 billion to purchase new aircraft and refurbish the first-class cabins for planes not replaced. A final component of the restructuring plan included a merger with US Airways to create a global airline with more than 56,700 daily flights to 336 destinations in 56 countries. The merger was expected to produce cost savings from synergies of more than $1 billion and result in a stronger airline capable of paying creditors and rewarding employees and shareholders. Explain why the strategic initiatives at various organizational levels and functions require tight coordination to achieve the results desired by American Airlines.

Explanation / Answer

All these strategic actions are very critical for the future of business. Each decision or initiative requires deep analysis and tight monitoring to ensure that the end results are achieved. In case, there is slip in any of the initiative, it can hamper the company as a whole like:

Thus involvement of all functions like Operations, Marketing, Commercial, Legal, Human Resource, Sales etc. is essential for successful implementation

Related Questions

Navigate

• Browse (All)
• Browse A
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.