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Performance target

Core competence refers to the enabling culture existing in an organisation. It should be unique to the organisation, invisible to competitors and difficult, if not impossible to imitate. (Veronique Ambrosini, 1998 p. 4) The core competence of Continental Airlines lies in its Management/Leadership capabilities, loyal, committed and motivated employees, teamwork, and employee friendly culture. These are developed over a long period of time and are the sources of competitive advantage for Continental Airlines.

This has enabled the company to achieve organic growth by building on its core strengths and unique capabilities. The real essence of core competence approach lies in the fact that company strategies should be built upon its competences ones it has developed or identified them. Continental Airlines was able to strengthen its position in the industry after it has developed core competences relevant to its strategies. 3. 1 VALUE CHAIN Identifying the value chain activities and understanding where value is added can help Continental Airlines in revamping its value chain.

Value chain analysis can help continental to eliminate nonessential and low-value-added activities in its attempt to cut costs so as to help it revive. As a result of the 9/11 attack the company is in a big crisis and

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need to cut low-value added activities as much as possible so as to be able to reduce costs and survive. The value chain of Continental Airlines can be depicted as follows: Supplies/Suppliers Check 4. Key success factors of Continental Airline The KSF are the values that shape whether the company will be financially and competitively successfully.

Continental KFS are based on the: Leadership or management style: The kind of leadership Bethune used was democratic style of leadership describes a leader who involves employee in decision making, delegates authority, encourages participants in deciding work methods and goals, and uses feedback to coach employees. Every company has a unique organisational culture each has its own business philosophy and principle, its own way of approaching problems and making decisions, it’s own work climate, its own taboos and political don’ts.

The culture dimension in Hofstede-Bond studies. This describes a unique method of culture as it allows a person to isolate the culture effects in the company. There are four cultural dimensions in Hofstede model. Power distance How much do people expect inequality in social institutions (e. g. family, work organisation and government)? Before Bethune employees and management were demarcated as unequal in the organisation, and employees views and ideas were not recognised.

Bethune introduced teamwork and as well as independence of workers in decision-making, this enhanced their sense of belonging and erased the perceived inequality of management and employees as they felt they too were recognised as important stakeholders in the organisation. Individualism-Collectivism This is how loose or tight is the bond between individuals and societal groups. In this dimension Continental staff can be viewed as people who were working together either individually or working collectively to assignments given to them.

This made the company to have a tight bond between employees and management and also its customers. Masculinity-femininity To what extent do people embrace competitive masculine traits (e. g. success, assertiveness and performance) or nurturing feminine traits (e. g. solidarity, personal relationship, service, quality of life)? In this dimension Continental can suit with regard to the leadership it had in the company. Bethune was striving hard for the success of the company, because of outspoken character making things to happen, he builds teamwork and opens communication within the company.

The kinds of incentives given to employees and the quality service that was offered to customers build a good relationship between the company and its clients and all these leads to the good performance of the company. Uncertainty avoidance This explains to what extend do people prefer structured versus unstructured situations. In normal situations people prefer structured situations because they want to know where they fit and what they are supposed to do. Bethune introduced the Go-forward -Plan during the time that the company was in crises and people were loosing hope that the company will succeed.

Meaning that there were people at that time that did not know what to do, where they fit in the organisation as a whole in order to make things happen. The restructuring of the company and the introduction of the “Go Forward Plan” helped the company and the employees alike. Latitude with regard to decision making in doing their work and not constraining themselves to the rigid policies also made the employees feel that their capable of performing and that the belong.

Thus the structures introduced by Bethune removed the uncertainty of both employees and management with reference to where the organization is going and how they are going to get there. Long -term versus Short-term orientation (Confucian Values) It refers to what extent are the people orientated towards the future by saving and being persistent versus being orientated towards the present and the past by respecting tradition and meeting social obligations. Bethune wanted people to believe in him, that what he is going to do will work.

He also wanted people look towards the future of the company as opposed to concentrating on the past, thus he needed for the employees to stop remarking that; many people have tried this and failed. He encouraged people not to waste their energies by concentrating on the past failures of the company and believing that nothing positive and worthwhile can be done. To combat this negative attitude, Bethune orientated all employees as to the plans he has for the company end the cooperation that is expected from all employees for that plan to work.

By so doing he got the employees to think and focus on the long-term success and prosperity of the company, through attitude change, teamwork and hard work. Bethune moved to install much stronger financial systems. Continental developed systems that allowed management to have dependable and regularly update estimates of revenues, cost, profits and cash flows. Every morning executives had a report of the previous day’s credit and receipts with the system. Costs: Continental made inroads on reducing training and maintenance costs by reducing the number of different types of aircraft making up its fleet.

Continental launched a three-year program to bring employees wages and salaries up to industry standards. Open communication and teamwork: There was a hot line employees could call for information about pay benefits and their 401(K) programme to keep employees up-to-date on company developments, corporate headquarters distributed a daily update via the company internet and e-mail. Bethune preached a teamwork among senior executives warning them that he look every dim view of people who engaged in power players, backstabbing or jockeying for position, and of department that failed to work cooperatively with other departments.

Performance target: Executives got bonuses based partly on Continental’s performance and partly on the achievement of individual’s goals. Row five tests: Bethune wanted Continental to add costs only when the expenditure added customer value. He defined success and good performance in customers’ terms as meaning safe clean, reliable service from well-managed hubs, convenient flight to places customers where they wanted to go: amenities that made the travel experience more pleasant and desirable frequent flyer benefits.

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