Understanding Technology Management Fundamentals

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Table of Contents

Introduction
Problem Analysis
Resources
Life Cycle of Implementation
Expected Outcomes
Conclusions and recommendations
Reference List

Introduction

Acquisitions, mergers, and or strategic alliances make it possible to create values that are attributed to some forms of synergies. Although such an advantage is beneficial for the American Airlines and the US Airways, statistical findings show that the benefits that look so good on paper often do not materialize (Stahl, 2004, p.3).

Mergers may at times produce value destruction. Literature on acquisitions and mergers record failure rates in the range of 50 to 70 percent with exceptions where the failure rate may even be higher (Stahl, 2004). This paper argues that, in the proposed merger of American Airlines and the US Airways, companies should put in place strategic measures to resolve internal challenges for the merger to be successful.

Problem Analysis

Fare regulation and Labor integration challenge

One of the substantive impacts of the merger between the US Airways and the American Airlines is that competition in the industry would be reduced. Portillo (2013) supports this challenge by reckoning, the combination will reduce the number of competitors, which would otherwise suggest that higher fares are in the offing (Para.11).

Even if this challenge is crucial, the American Airlines and the US Airways have had little overlaps since the two companies have established strong brand names. Merging the two companies would mean putting efforts to establish a new brand. Portillo (2013) exemplifies the overall internal impact of this case by arguing, the merger will result in the loss of one airline brand name though the net to the consumer will not be some octopus-like monopoly that chokes fares upward (Para.13).

In the airline industry, competition is one of the magnificent factors that make companies build their brands based on low fares. Merging the companies translates into a reduction of the industrys competition. Hence, it is more likely that fares would go up across the entire firms operating in the industry. More effects are perhaps expected in the routes where the American Airlines and the US Airways have been dominating together.

Leadership Challenge

Past research indicated that mergers fail because of poor strategic fits. Research that is more recent disapproves this position by holding that mergers and acquisitions find themselves in trouble due to poor execution processes related to instances of insensitive management, lack of trust building, communication, slow execution, power struggles, or a leadership vacuum following the deal (Stahl, 2004, pp. 3-4).

As an internal challenge facing mergers, leadership manifests itself for reasons stemming from the fact that the merger firms had some existing hierarchical leadership structures, which cannot be filled with dual person in the new firm. For the merger between the American Airlines and the US Airways, the above issue surfaced even before the execution of the merger deal took place.

For instance, it has already been agreed upon, Tom Horton, chief executive of American Airlines parent company AMR Corp., will serve as the companys chairman for about a year, and Parker will become the chairman upon his resignation (Portillo, 2004, Para. 2).

While the deal for the leadership top positions seems to have already been arrived at, the criteria for allocation of leadership positions in the lower hierarchical structures of management in the merger may create challenges thus often truncating into internal organizational conflicts.

Still in the domain of mergers leadership, different organizations establish different organizational cultures. Therefore, a challenge arises in the integration of different corporate cultures into one culture (Klein & Olivares, 2012) thus leading to complication of leadership matters in the extent that merger organizations need to capitalize on various cultural differences that exist between people to ensure that psychological distances among employees of different firms are diminished.

Internal Technical and Business Challenge

In the event of a merger, different states of technical structures are brought together. In the words of Cognizant White Paper (2009), the exercise of planning a revamp or transfer of technologies, process, and systems needed to establish a common regime upon which the new organization will operate begins at the point of confrontation (p.2).

Consequently, mergers create a necessity of creation of a consolidated information system that draws from the information management approaches previously deployed by both organizations. In the adaptation process, information structures need to be created to enhance cute communication to employees about the anticipated change in both organizational culture and work environments.

In the case of IT section of a merger, the absence of this aspect may truncate to internal competitions between the employees. This case leads to loss of IT human capability capital. Consequently, an organization becomes susceptible to IT risks. The problem is significant in case of mergers since, at the early stages of the merger formation, confusion exists on the information architectures that constitute the new firm.

For the US Airways and the American Airlines, it is crucial that corporate managers for both firms invest in helping the IT specialists for both firms to understand the value of IT and the different components that make up the companys architecture (Klein & Olivares, 2012, p.275). This strategy would go far in the transformation of the IT architectures of both the American Airlines and the US Airways so that an integrated IT architecture that facilitates ardent information flow is acquired.

Project Development Plan

Among the identified internal problems likely to face the merger between the American Airline and the US Airways, internal technical and business challenge is considered the most significant because the success of an organization operating in the technological age is highly dependent on information flow process for which leadership plays a central role.

Therefore, a project plan for its resolution is vital. Such a plan needs the commitment of organizational resources. It goes through various implementation life cycles to achieve some anticipated outcomes.

Resources

Any project plans requires the commitment of organizational resources in terms of time and money. Consolidation of policies of both organizations influences the manner in which a merged organization executes its business. It is impossible to spontaneously introduce change in an organization since any management change needs to be executed in phases upon which evaluation is done for each phase to determine the degree to which the outcomes of each phase have been realized.

Therefore, time as a resource available to an organization is utilized in the process of adopting new requirements since it will offer the opportunity to review compliance progress to ensure that the integration process remains on track (Cognizant White Paper, 2009, p.3). For example, in case of management of new information systems, an organization encounters activities that are more malicious in its information systems in the merger state relative to when it is operating as a single small business entity.

To respond to the increasing new challenges, retraining of the employees who provide security to organizations information systems is pivotal. This activity consumes time and money resources that could have otherwise been deployed to effect other business operations of the American Airlines and or the US Airways while operating as single entities.

In the reduction of the complexity costs of IT architectures, substantive financial resources need to be committed to eliminate various software and hardware that are redundant in the fort to ensure that compliance to corporate IT standards coupled with consolidation of the airlines services is realized. Money and time are also spent in the documentation of various network architectures that facilitate information flows to the customers so that they can link connections to the merged firm.

Life Cycle of Implementation

The project plan aims at integrating the IT activities of the American Airlines and the US Airways. The plan will encompass four main phases. The first phase is the planning phase followed by the framework for design integration, communication, and lastly the evaluation phase. These phases comprise the life cycle of the project implementation plan.

Under the planning phase, identification of information flows core competencies that are required for the merged airlines is conducted. An analysis is done for the competences possessed by each of the airlines. The best competencies are selected from both organizations based on the merged organizations corporate visions.

A plan is then developed for the integration of the competencies. The plan is executable within the first three months. In this time, it is expected that all people will be acquitted with the new ways of work to enhance the overall functions of information management in the new merger.

In the design phase of integration framework, prioritization of various integration issues is done followed by determination of the benefits of the integration. The task of design on the new IT architecture is accomplished at this phase. The groups charged with this task are selected such that people from different IT groups from different companies facilitate both small group and individual work to ensure that a common task is achieved in a manner that fosters development of a new organizations work culture.

In the third phase, communication, infrastructure, and strategies are developed to ensure workers motivation and management of rumor mill coupled with dealing with survivor syndrome. Evaluation is conducted in the last phase to determine whether the project plan realizes its anticipated outcomes as discussed below.

Expected Outcomes

A successful merger requires having integrated and efficient single business units. Such a unit needs to have the capacity to carry out a vision management plan to produce utmost good for two or more organizations that are coming up to from the merger.

Therefore, a project plan needs to produce an overall outcome of integrating people, processes, policies, technology and product, customers, and solutions towards a central solution (Klein & Olivares, 2012, p. 283). For an IT leadership plan, various outcomes are anticipated from the proposed project plan. They include:

Support integration of systems coupled with implementation of policies such that the merging organization is integrated into a common business entity that operates from a single organization culture. This strategy is critical to ensure leveraging of the best practices in the individual business entities forming the merger.
Ensure that the processes of change management are implemented coupled with employees communication processes. As pointed out before, a merger exposes employees to different organizational climates. Consequently, it is important for a plan to be adopted to resolve leadership challenges besides incorporating a means of enhancing both vertical and horizontal flow of information in organizations.
Upon formation of mergers, customers often get confused about the new forms of organization of the activities of a firm. To resolve this challenge, the project plan needs to provide ample information to the customers for both entities about the needs of formation of the merger besides also providing clear guidelines on how the activities of the new firm will be structured.

Conclusions and recommendations

The paper identified three main internal problems that are likely to face the merger between the American Airlines and the US Airways. They include fare regulation and labor integration challenge, leadership challenges, and internal technical and business challenge. Although, the latter problem was treated further to include the development of a plan for its resolutions, the paper recognizes the significance of other two challenges in affecting the merger internally.

The paper holds that a merger is a labor cost-cutting strategy that is achieved at the expense of increased employees anxieties about their job securities. In the short-run, this case is likely to affect the morale and performance of the employees. Thus, it is recommended that, in the merger process, the companies need to look for a mechanism of resolution of such internal challenges.

Leadership structures are yet other internal organizational aspects that are complicated by merger in terms of reorganization of hierarchical structures and development of information flow processes. In recognition of this challenge, it is recommended that the American Airlines and the US Airways need to look for mechanisms of resolving the challenges if the merger has to provide the benefit of a competitive advantage both in the short-run and long run.

Reference List

Cognizant White Paper. (2009). Overcoming IT challenges in mergers and acquisitions. Web.

Klein, A., & Olivares J. (2012). Business and technical challenges after company mergers. Journal of International Business Management, 3(1), 272-301.

Portillo, E. (2013). US Airways and American airlines announce a merger. Web.

Stahl, G. (2004). Getting It Together: The Leadership Challenge of Mergers and Acquisitions. INSEAD Quarterly, 24(5), 3-6.

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