American Airlines, Research Paper Example

Organizational effectiveness has been called several things, but it is one of the prime factors in measuring and defining how and organization competes against others, how they attract their target market, and how quickly they bring new products to the market. The idea of organizational effectiveness was an imperative advancement in business administration. As opposed to characterizing corporate accomplishment by a couple of transient measures, for example, deals or benefit, it cultivated an all-encompassing long haul viewpoint. Case in point, associations was urged to couple benefit with an understanding toward nature’s environment, to consolidate the transient profit of offers with the long haul requirement for client administration. The stretched point of view that came about because of a concentrate on the general effectiveness of an organization has get to be key to corporate survival and achievement in today’s economy.

Organizational effectiveness has an incredibly expansive and frequently dubious definition, to such an extent that most sources clarify the idea by case instead of a definition. Fundamentally, the effectiveness of a business constitutes its capacity to perform a capacity with ideal levels of info and yield. With organizational effectiveness, is largely measured by the productivity, according to experts, “Productivity is defined narrowly as the amount of physical output for each unit of productive input, which has been a human concern for centuries. “ (Ramanujam1) Organizations use organizational effectiveness to measure any number of things, from the relationship between worker execution and organization benefits to the association between assembling procedures and creation volume. According to, Gish (2013), “No set parameters exist for organizational effectiveness and it takes after no complete numerical equation – every association makes it strategy for measuring effectiveness.” (Gish 1) Measuring effectiveness can help a little business without the capability to ingest inadequate systems alter its approach to dodge misfortune.Just like in cases of Enron in which the external environment measured success with their current stock price, they only provided one concept of assessing the organizational effectiveness. How much goes into assessing the success of an organization. One of the companies that this paper will be examining is American Americans. One of the biggest airlines in the world.

American Airlines is the United States major airline and the second biggest airline in operating revenues, passenger fleet size, and the number of passenger miles transported. Although there are headquartered in Texas, there are a domestic and international network that schedules flights throughout the world. (American Airlines) In their business strategy they utilize a value-based pricing strategy, which services consumers in the Premium, Business, and Economic classes. American Airline contains the qualification of various firsts in the aviation history. In which they continually include new planes, it has consistently kept with the market in changing the industry, with the requirements and advancements in technology. (Smith, Leimkuhler, and Darrrow 10) American Airlines is credited with the presentation of the first valid in-flight dinner administrations. The airlines have developed with the creation of more current planes that are fit for conveying more travelers to meet the developing need of individuals to fly. Traffic control framework and ticket reservation framework are additionally the developments of American Airlines. The recent merger of American Airlines with US Airways, reports from USA Today (2014), state, “American Airlines, which was in bankruptcy court last year and merged with U.S. Airways in December, announced the company’s first dividend since 1980, based on record quarterly profits of $1.5 billion.” (Jensen 1) After the merger, the company beat expectations from media outlets such as Wall Street, in expected the company to post $ 1.9 billion, and had an combined revenue of over $40 million, with shares up 5%, and at $31.(Sharf, 2014)  Yet at the same time they reported a $ 2 billion loss, as well as several other financial losses. At the time many didn’t think the merger would work out, and shortly afterwards, American Airlines did file for bankruptcy.

In benefiting their employees and their stakeholders, American Airlines has it plans to accomplish more for its workers by making supplemental commitments of $600 million to its characterized profit arranges in 2014. These commitments would be well beyond the $120 million base obliged commitments for the year. The organization has reimbursed $420 million of flying machine obligation and bond commitments and will prepay $480 million of unique office income bond commitments. It is foreseen that these prepayments will speak to a diminishment in obligation going ahead to ensure organizational effectiveness for organizational performance. In measuring the performance of American Airlines, first we must look at the stakeholders, which includes, airport users, the administrative (management, owners, and regulators), and outside entities (people nearby). The key indicators of airport performance are measured by the percentage of flights delayed, connecting times, security and immigration that impacts wait times at check in, and baggage delivery. According to Flight Stats reports that the On-time performance of American Airlines is at 74%, while the late percentage is at 9%. (FlightStats, 1) The rate at which American Airlines cancelled or diverted their flights was less than 1%. (FlightStats 1) The completion factor for American Airlines was overall 99%, the mishandled baggage for 2014 has been less than 5 %, and the customer complaints has decreased to 2%. (Yahoo Finance) Based on these key performance indicators American Airlines has accomplished organizational effectiveness. They have had success since their merger in which they filed for bankruptcy, and in the process have helped their stakeholders, in which their customers and employees have benefited. They have improved their operational performance with the help of increasing their on-time performance and completion rate. With the increase in on-time performance they also provided incentive payments to their employees, and according to Yahoo! Finance, their employees have earned over $16 million in incentive payouts. (Yahoo! Finance) American Airlines has improved significantly in the past year alone, and have fared far better than other airlines such as Southwest with 4.51 percent, and United Airline at 3.87 percent. (Yahoo! Finance)

According to American Airlines, their corporate Responsibility Performance is measured by, “our short- and long-term financial viability; customer safety, service and satisfaction; employee and labor relations, including diversity; our climate impacts as related to energy use and greenhouse gas emissions; and our impact on the communities where we live, work and play.” (American Airlines) The organizational effectiveness of an organization isn’t just measured by financial indicators, but for Airline companies such as American Airlines it is measured by the success of their corporate responsibility goals, their on-time completion rate, customer complaints, customer satisfaction, baggage deliveries, as well as the stakeholders’ satisfaction. Using the information within the essay, American Airlines has proved to be a successful company in the internal and external market. Their employees are well compensated, and their airlines are constantly improving. The organizational effectiveness of this organization is a success.

Works Cited

“About American Airlines.” American Airlines. 2014. Web. 30 September 2014. http://www.aa.com/i18n/aboutUs/corporateResponsibility/company/perfomance-and-goals.jsp

American Airlines On-Time Performance Rating.” Flight Stats. 15 July 2014. Web. 30 September 2014. http://www.flightstats.com/go/FlightRating/flightRatingByCarrier.do?airline=AA

Chandrappa, Tejeshwari. “American Airlines Operational Performance In 2Q14.” Yahoo! Finance. 19 August 2014. Web. 30 September 2014. http://finance.yahoo.com/news/america-airlines-operational-performance-2q14-130019965.html

Gosh, Will. “Organizational Effectiveness Vs. Organizational Efficiency.” Small Business. 2014. Web. 30 September 2014. http://smallbusiness.chron.com/organizational-effectiveness-vs-organizational-efficiency-22413.html

Jensen, Bart. “Several airlines announce record profits.” USA Today. 24 July 2014. Web. 30 September 2014. http://www.usatoday.com/story/money/business/2014/07/24/us-airlines-earnings-jetblue-united-southwest-american/13060163/

Matthews, Joe. “Organizational Effectiveness.” Library Assessment Conference. 2010. Web. 30 September 2014. http://libraryassessment.org/bm~doc/matthews_joe.pdf

Ramanujam, Nanda. “Fostering Productivity, Organizational Effectiveness via Employee Engagement.” Innovation Insights. 14 April 2014. Web. 30 September 2014. http://insights.wired.com/profiles/blogs/fostering-productivity-organizational-effectiveness-via-employee#axzz3Ev0qb5d5

Sharf, Samantha. “Post-Merger, American Airlines Group Reports Stronger Than Expected Combined Earnings”.Forbes. 2014. Web. 30 September 2014. http://www.forbes.com/sites/samanthasharf/2014/01/28/post-merger-american-airlines-group-reports-stronger-than-expected-combined-earnings/

Smith, Barry C., Leimkuhler, John F., Darrow, Ross M. “Yield Management at American Airlines.” The Institute of Management Services. January-February 1992. Pg. 8-31. Web. 30 September 2014. http://classes.engineering.wustl.edu/2010/fall/ese403/software/Informs%20Articles/CH18%20Yield%20Management%20at%20American%20Airlines.pdf