The aim of this assignment is to evaluate the different types of pressures that the company i.e. AMR Corporation is currently facing. The pressures are divided into 2 broad categories i.e. external pressures and internal pressures. This assignment on pressure analysis would help to identify the pressures that are being forced onto the organization.
PRESSURE ANALYSIS OF AMR CORPORATION
In order to evaluate detailed pressure analysis of AMR Corporation, it is essential to assess both the internal and external pressures analysis. Each of the broad categories of pressure analysis is as follows;
AMR Corporation operates in airlines industry due to which the company faces low fashion pressures in the industry. Although the competition is quite severe and cut-throat in airline industry, the fashion pressures on the company are quite low and very little.
AMR pressure is also vulnerable to geopolitical pressures. The company operates in 5 major hubs of US along with other countries due to which the organization is under such pressures. In addition, it has been indicated that the organization faces global and domestic recessions which have led to the decline in air traffic. Due to such recessionary period, the organization is constantly under pressure to bring change in its operations and other critical factors to survive in the industry.
Market Decline Pressures
The company is invulnerable from the pressures arising from declining market. The AMR Corp. operates in 5 major hubs in US along with major countries. This has eventually reduced the market decline pressures.
The company is also highly vulnerable to hyper-competition pressures, although, the company has connections to American Airlines along with American Eagle. Due to rising competition in the market, the organization is under the pressure to enhance its market share along with its pace of business but due to the rising competition in the airline industry, this pressure has gradually increased to great extent.
Reputation and Credibility Pressures
The company is under the pressure of reputation and credibility as in the November 2011, the company i.e. AMR Corporation filed for Chapter 11 bankruptcy protection (BBC, 2011; Swelbar, 2012). Due to such filing of bankruptcy, the organization is facing pressures to maintain good reputation in the market. After such act, the organization’s credibility is also under pressure.
The internal pressures that are haunting the company are as follows;
Being the parent company of American Airlines and American Eagle Airlines, the company’s growth pressure is quite low which makes the organization free from such pressures. It has been observed that the processes as well as the systems have evolved with the increase in organization’s growth.
Integration and Collaboration Pressures
The company i.e. AMR corporation is under high pressures for changes in organization due to which AMR Corporation announced a merger after 14 months of filing for bankruptcy (Kim, 2013). In order to once again build its reputation and credibility, the organization has decided to give 72 percent of the ownership to its creditors (Arnold, n.d.). In addition, this merger would allow the organization to create economies of scale and would provide the organization with an opportunity to effectively compete in the global marketplace.
The company is under high identity pressure due to lack of motivation of cabin crew in AMR Corporation and its subsidiaries. For the AMR Corporation, motivation of the cabin crew staff is a long-term challenge which reduced to great extent year of uncertainty regarding their jobs and bankruptcy proceedings. This indicates that identity pressures are quite high in AMR Corporation which needs to be reduced to provide the customers with consistent services.
New Broom Pressures
In addition, it has also been noticed that the new broom pressures are too great in AMR Corporation. With the new CEO in place, changes in the organization are quite evident. According to the new CEO, the organization would witness 13,000 job cuts along with restructure of pension benefits due to the organization’s poor performance in 2011 (Koenig, 2012).
Power and Political Pressures
In order to conclude, it could be said that the organization is surrounded by external and internal pressures after the filing of bankruptcy due to which the organization’s decision making authority is constantly facing hurdles to bring the organization back on its feet again. To enhance its performance once again, the organization pursued a merger with US Airways which could help AMR Corporation to compete in the airline industry.
Arnold, K. (n.d.). American Airlines. Retrieved April 9, 2013, from http://www.tulsaworld.com/continuing/coverage.aspx/american_airlines/34
Aviatime. (2012). American airlines: AMR corporation reports third quarter 2012 results. Retrieved April 9, 2013, from http://www.aviatime.com/index.php/en/commercial-aviation/commercial-aviation-news/operators/4213-american-airlines-amr-corporation-reports-third-quarter-2012-results.html
BBC. (2011). American Airlines files for Chapter 11 protections. Retrieved April 9, 2013, from http://www.bbc.co.uk/news/business-15935206
Kim, S. (2013). US Air, AMR near $11 billion merger, deal seen within week: sources Reuters, http://www.reuters.com/article/2013/02/10/us-amr-usairways-merger-idUSBRE91900K20130210
Koenig, D. (2012). American airlines aims to cut 13,000 jobs. Retrieved April 9, 2013, from http://finance.yahoo.com/news/american-airlines-aims-cut-13-200857865.html
Swelbar, W. (2012). Hold off on US Airways / American airlines marriage. Retrieved April 9, 2013, from http://www.charlotteobserver.com/2012/06/28/3347039/hold-off-on-us-airways-american.html