In reviewing information pertaining to labor unions, there is a plethora of information about unions in the transportation industry. One of the most widely known unions is the teamster unions, which deals with truckers. Labor unions and issues with automotive industry are often seen in the media. The newest transportation industry in American history is the airline industry. As the newest transportation industry that is still vital to American comfort, convenience, and commercial, the airline industry is ripe for workers to organize and demand a greater piece of the profits from operations.
In this essay, an effort will be made to review this company in regards to labor relations. Company’s stance toward Labor Delta Airlines was founded by C. E. Woolman, an agriculture extension agent (Anthony, Kacmar, & Perrewe, 2010). C. E Woolman was not a banker, venture capitalist or war pilot, as many of the competing airlines were. He didn’t have the aggressive military style that many of the other airline founders had. What C. E. Woolman instilled within the employees at all levels of the organization is that people matter and should be treated fairly and equitably.
This philosophy led Delta Airlines to be the leader in customer service from the company’s inception through the many mergers over the years. Through the difficult financial times when other airlines were laying off employees and filing for bankruptcy, Delta continued to pay their people well and keep them employed. There was an exception during the Ronald Allen CEO era of 1987 thru 1997. Human relations took a significant down turn during his tenure as CEO, especially during 1993 and 1994, but Delta decided to part ways with Allen and began repairing those fragile relationships with its employees.
Delta Airlines still focuses on the human relations factor and has been able to repair the relationship with its employees; they believe it is their key to success. Despite the corporate culture to take care of its employees, a number of Delta employee departments are unionizing. They feel as though that piece is not being distributed justly. Formulate a strategy for negotiating a labor agreement Human behavior dictates that there will be problems. As a company starts making money, there is always a desire by the employees to acquire more of the profit.
On the other hand, management has a desire to retain as much of the profit to be provided to investors and to receive bonuses for their “supposedly” wise business practices. When one group wants more and another wants to retain, there will be conflict. And this is precisely what is happening at Delta Airline, as well as among many industries in the transportation arena. Employees, seeking to gain an upper hand threaten to strike; however, management must be willing to address the matter through negotiation. The Negotiation Process
Fisher and Ury recommend conducting negotiations according to the process of “principled negotiation. ” Their method has four main tenets: 1. Separate the people from the problem. The idea should be for both sides to work together to attack a problem, rather than attacking each other. To achieve this goal, it is necessary to overcome emotional responses and set aside egos. 2. Focus on interests rather than positions. The natural tendency in many negotiations—for example, dickering over the price to be paid for an antique—is for both sides to state a position and then move toward middle ground.
Fisher and Ury warn against confusing people’s stated positions with their underlying interests, and claim that positions often tend to obscure what people truly hope to gain through negotiation. 3. Generate a variety of options before deciding what to do. The pressure involved in any type of negotiation tends to narrow people’s vision and inhibit their creativity, making it difficult to find optimal solutions to problems. Instead, Fisher and Ury suggest developing a wide range of possible solutions as part of the negotiating process.
These possible solutions should attempt to advance shared interests and reconcile differences. 4. Base the result on objective criteria. No one will be happy with the result of a negotiation if they feel that they have been taken advantage of. The solution is to find and apply some fair standard to the problem in order to guarantee a mutually beneficial result. Fisher and Ury’s principles provide a good overall guide for the actual negotiation process. In his book, Nierenberg offered a number of other tips and strategies that may be effective in promoting successful negotiations.
For example, it may be helpful to ask questions in order to form a better understanding of the needs and interests of the other side. The questions must be phrased diplomatically and timed correctly in order to avoid an antagonistic response. The idea is to gain information and uncover basic assumptions without immediately taking positions. Nierenberg stressed the importance of listening carefully to the other side’s responses, as well as studying their facial expressions and body language, in order to gain quality information.
Nierenberg noted that good negotiators will employ a variety of means to accomplish their objectives. Small business owners should be aware of some of the more common strategies and techniques that they may see others apply or may wish to apply themselves. One common strategy is forbearance, or “patience pays,” which covers any sort of wait or delay in negotiations. If one side wishes to confer in private, or adjourn briefly, they are employing a strategy of forbearance. Another common strategy is to present a fait accompli, or come to a final offer and leave it up to the other side to decide whether to accept it.
In a simple example, a small business owner may scratch out one provision in a contract that he or she finds unacceptable, then sign it and send it back. The other party to the contract then must decide whether to accept the revised agreement. Nierenberg warns that this strategy can be risky, and encourages those who employ it to carefully appraise the consequences first. Another possible negotiating strategy is reversal, which involves taking a position that seems opposed to the original one. Similarly, feinting involves apparently moving in one direction in order to ivert attention from the true goal.
For example, a negotiator may give in on a point that is not very important in order to make the real objective more attainable. Another strategy involves setting limits on the negotiation, whether with regards to time, the people involved, or other factors. It is also possible to change the participation in the negotiation if it seems to be at an impasse. For example, a neutral third party may be enlisted to help, or one or two people from each side may be sent off to continue the negotiation separately.
It may also be helpful to break down the problem into small pieces and tackle them one by one. Another strategy might be to trade sides for a short time and try to view the situation from each other’s perspective. All of these techniques may be applied either to gain advantage or to push forward a negotiation that has apparently reached an impasse. Analyze the principle economic and administrative issues The airline industry is a fast growing sector demonstrating a very strong growth rate. It is associated with a number of social and economic benefits and is a growing contributor to the global inventory (Whitelegg, 2000).
Business cycles have a wide reaching impact on the airline industry; during recession, air travel was considered a luxury and therefore spending is cut which leads to reduced prices. The industry creates its impact not just by providing direct employment, but also through the creation of opportunities throughout the travel and hospitality sector of the economy. Jobs in hotels, resorts, restaurants and car rental agencies are all impacted by the airline industry (Global Airline Industry Program, 2011).
The airline industry itself is a major economic force, both in terms of its own operations and its impacts on related industries such as aircraft manufacturing and tourism. There are few industries that create the amount and intensity of attention that airlines receive, not only among its participants but from government policy makers and the media as well. The crucial issues on the table vary depending on whether the person is in management or is a worker. For management, the key to retain as much money as possible, while for the workers the goal is to obtain more of the profit.
Thus, in management, the argument would be made to show how much money is used to provide employee insurances and benefits, reinvest in equipment and aircraft, general property and liability. On top of that, investors must be repaid. For the employee or worker, this is a stressful environment where the employee needs to be compensated for his work-related stress. Employee paid benefits continues to decrease, and the employee is forced to pay a disproportionate share. Thus, the employee needs more money just to live at a sustainable level.
Recommend policies and procedures to administer a labor contract and resolve disputes. It is of utmost importance to resolve conflict expeditiously and justly for all parties involved. Thus, I would recommend the following policies as a means to resolve disputes: When a team oversteps the mark of healthy difference of opinion, resolving conflict requires respect and patience. The human experience of conflict involves our emotions, perceptions, and actions; we experience it on all three levels, and we need to address all three levels to resolve it. We must replace the negative experiences with positive ones.
Acknowledge the conflict – The conflict has to be acknowledged before it can be managed and resolved. The tendency is for people to ignore the first signs of conflict, perhaps as it seems trivial, or is difficult to differentiate from the normal, healthy debate that teams can thrive on. If you are concerned about the conflict in your team, discuss it with other members. Once the team recognizes the issue, it can start the process of resolution.
• Discuss the impact – As a team, discuss the impact the conflict is having on team dynamics and performance. Agree to a cooperative process – Everyone involved must agree to cooperate in to resolve the conflict. This means putting the team first, and may involve setting aside your opinion or ideas for the time being. If someone wants to win more than he or she wants to resolve the conflict, you may find yourself at a stalemate.
• Agree to communicate – The most important thing throughout the resolution process is for everyone to keep communications open. The people involved need to talk about the issue and discuss their strong feelings. Active listening is essential here because to move on you eed to really understand where the other person is coming from. Determine the most likely interest dispute and determine how you could leverage economic pressure to help resolve that dispute. “There is no way to overstate the role “leverage” plays when it comes to achieving favorable settlements. Leverage is defined as: “positional advantage; the power to act effectively; strategic advantage”. Stated more simply, your leverage is whatever power you have” (Cory, 2011). Leverage is usually more about situational advantage than objective strength or power.
For example, a single individual or small business may have few resources relative to a large corporation but still have situational advantage by virtue of being able to compel the larger corporation to appear and answer in a favorable venue. Likewise even when there is a legitimate claim which could result in a significant loss to the defendant, if the plaintiff does not have the resources or the fortitude to stay the course, then the defendant has the situational advantage by virtue of being able to delay and wait the plaintiff out.
Leverage can be real or imagined. Your actual leverage at any point in time is based only on the other side’s perception of your leverage (which can obviously differ significantly from the actual facts). There are obviously situations where you have an information advantage, such as when you know about a weakness in your case that is not yet known by the other side. In such a situation you will, perhaps only briefly, appear to have more leverage than you actually do.
Likewise, you can be at an information disadvantage such as when you mistakenly think that the other side has a stronger case than they actually do. There are also situations where you mistakenly think that your case is stronger than it actually is which occurs when for one reason or another you don’t have all the facts, or when the facts have not been accurately relayed to you. But regardless of your actual leverage, if there is no fear on the other side, you have little if any effective leverage (Cory, 2011).
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