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Continental Airlines

Essay by   •  December 18, 2010  •  487 Words (2 Pages)  •  1,341 Views

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Among all the legacy airlines, Continental has not exactly been the leader in regards to achievement in both profits and human resources. Throughout the early nineties, Continental had filed for bankruptcy twice, lost six hundred thirteen million in profits, implemented a vast number of layoffs, was ranked dead last in industry indicators such as on-time service, made both employee wage cuts and delayed wage increases, and if that wasn't enough, Fortune Magazine ranked them near the top of "least admired" companies. As a result, travelers, employees, and shareholders despised Continental.

It was evident that Continental needed to make serious changes in their organization if they were going to survive in such a competitive market. In 1994, Continental made a decision that would forever change the airline by hiring Gordon Bethune as the new CEO. Once in charge, Bethune immediately eliminated more than 7,000 jobs. Out of that 7,000, fifty former managers were replaced with twenty new managers. In addition, Bethune decided to outsource much of the airline's maintenance opposed to doing it "in house." Maintenance is very costly for airlines, especially for Continental, since they operated a wide variety of aircraft. By implementing these changes, the company has become more efficient and had freed up funds that were not otherwise available.

One of many efforts that had a significant role in Continental's reengineering was the removal of surveillance cameras in executive offices. This small change had a huge impact on the executives. By removing the cameras, they now could feel as if they are each a trusted employee and could perform their job without feeling as if they are being watched at all times.

Arguably the most significant change, enforced by Bethune, was in the Human Resource management practices. Employees were given more insight in the company's decision making and were



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