Delta is maybe one of my favorite airlines. Part of what has attracted me to this carrier has been its history of success over the decades. Curious about how Delta has been in a position to survive when other carriers have failed, including TWA, Eastern and Pan Am, I thought it might be worthwhile to look at Delta Airlines through the eyes of Henry Mintzberg, a business theorist who envisioned some companies as 'machine bureaucracies'.
Founded in 1928, Delta Airlines is based in Atlanta, Georgia. One of the most important American airlines, Delta is likewise the second largest airline of the world in the area of passenger carried, third largest in the area of revenue passenger and sixth in terms of operating revenues. It maintains alliance with SkyMiles. It operates both international and domestic flights. Delta airlines flight status is available at all the major hubs of this airline. 1, 632 flights are operated by this airline on a daily basis. The subsidiaries of Delta Airline are Comair, Delta Shuttle and Delta AirElite. More delta airlines info: click for the full story.
Delta operates both international and domestic flights that cover South America, North America, Asia, Europe, Africa, Australia, the Middle East, and the Caribbean islands. The subsidiary of the airline is Delta Connection and they jointly run more than 4, 000 flights on a daily basis. Flights are available to 356 places in 65 nations. The fleet has more than 700 aircrafts and the airlines hires over 80, 000 employees around the world to look after its customers. Travel classes include Business Elite, Domestic First Class, Domestic Economy Class, International Economy Class, and Economy Comfort Class.
And Now For More Delta Airlines
These types of organizations usually have very formal operating rules with a centralized power structure - meaning power arises from the top. ' Machine Bureaucracy ' type companies also have elaborate administrative structures that flow between management and front line staff. Go look at : http://unicron.blog.com/?p=72.
I figured this would be a good company to use as an illustration of the ultimate machine bureaucracy given the size and reach of Delta Airlines.
I've also included some proposals for the future that Delta might want to consider, contextualized using Mintzberg's structural model.
Delta Airlines Inc., operating as Delta Airlines is one of the great passenger airline in the United States according to the majority of the current data.
Delta is a publicly traded company that has been on the New York Stock Exchange under the symbol DAL.
The airline operates an extensive domestic and international network, serving nearly all continents with the exception of Antarctica.
Starting off as an aerial crop dusting business that was jointly owned by B.R Coad and Collet Woolman, the company began operations May 30, 1924 as Huff Deland Dusters in Macon, Georgia. In 1928, Woolman purchased all of the actions of the company and renamed the organization Delta Air Service.
The company renaming was in large part inspired by the geologic flood plain known as the Mississippi Delta, a distinctive northwest part of the state of Mississippi that lies between the Mississippi and Yazoo rivers.
In 1929, Woolman bought three small aircraft and began scheduled passenger service from cities in Louisiana and Mississippi to Dallas, Texas.
During this short period of time, Delta technically could be classified as a simple structure, using Mintzberg's Organizational Structure Model. This was because Delta had only a small number of employees, in which Woolman himself supervised while also operating the tiny company.
Here, we see Woolman acting as the strategic apex and the small group of employees as the organization's operating core. This time period for Delta as a 'simple structure ' would be short lived because over the next few decades, Delta would grow to be one of the largest passenger airlines on the planet.
The merger of the Northwest Airlines and Delta Airlines was completed on October 2008. The Delta became the largest airline in the entire world after the said transaction. Northwest Airlines operated as subsidiary of the Delta Airlines for a few months since the operating certificates weren't yet finished. The ticket counters and gates were consolidated by February 2009. All the Northwest Airlines signs were replaced by the Delta. This integration continued until the year 2010. By then, the operation center of the Northwest Airlines was transferred to the Delta headquarters in Atlanta GA.
The Federal Aviation Administration issued the new operating certificate. Complete integration was finished in January 2010. Even the website of the Northwest Airlines is now merged with Delta Airlines. When you access the airline's old URL, you'll be automatically redirected to the official website of Delta. Last January 2011, the last planes of the Northwest livery, the five McDonnell Douglas DC-9-40s, were retired.
It was Colonel Lewis Brittin that founded the Northwest Airlines in September 1926. Back then, it was called Northwest Airways. The main purpose of the airlines is to fly mails to the US Post Office, and not for taking passengers. The mail route of the fledgling airline was in Chicago and Minneapolis. Northwest Airlines used the Waco JYM and the Curtiss Oriole during the early years. This is a 6-passenger plane. The Northwest Airlines only started to take passengers in 1927. The Hamilton H-45 and the H-47 was used since 1928.
A lot changes were introduced in the next years. Indeed, the airline's one of the best and most popular airlines in the US. There are scores of locations where the airlines have served the Americans. Even if it ceased operations, the Northwest Airlines is going to be part of the US history.
As a result of the Air Mail Act of 1934, Woolman secured government mail contracts for Delta, transforming the company from tiny tri-state carrier to a larger, southern based airline.
It was during this period that Delta began to characteristically transform from a simple structure to an expanding machine bureaucracy, using Mintzberg's structural configuration model.
Essentially, Delta was forced to take a new model as the company was growing too large for one or two people to operate. This transformation was in large part fueled by lucrative government mail contracts.
During the 1940 's, Delta was an early beneficiary of the Civil Aeronautics act of 1938. These in turn created the Civil Aeronautics Board (CAB), a governmental agency that granted approval to air carriers to fly to and from A given destination The CAB favored Delta due to its safety record, which was starkly different from other airlines of the time such as United Airlines and TWA.
The award of these lucrative mail contracts to Delta during these yearly years was an important growth factor for the company.
Due to rapid expansion as well as the need for centralized control over the company by management, Delta moved its corporate headquarters to Atlanta, Georgia in 1941. The company also began to upgrade its fleet to larger planes and added flight attendants during this decade.
This international airline fits the mold of a machine bureaucracy in that important decisions regarding operations, staffing and funds are made entirely at the strategic apex while day to day operations are controlled by managers.
The management structure at Delta is vertical in nature as is true in most all machine bureaucracies. Communication channels are also vertical in nature, meaning information stems from the top of the strategic apex down to its operating core.
A size advantage, dominating the marketplace, especially in the southern part of the United States, the Midwestern region and along the entire east coast corridor.
There are other strengths connected to Delta's machine bureaucracy, including its very strong domestic and international network, with major hubs in New York, Cincinnati, Salt Lake City, Minneapolis, Detroit and of course Atlanta, its worldwide headquarters. International hubs include Amsterdam and Tokyo, giving the company a European and Asian base of operations.
Delta's sheer size, with a fleet of nearly 700 aircraft flying to 318 destinations in 59 countries across six continents certainly gives this organization advantages over its competitors, such as American Airlines, United Airlines and to a limited degree, Southwest Airlines.
Important decisions being made at its strategic apex and communicated downward can in some ways be an advantage, as Delta has a structured process for imparting information to employees vertically. The top down structure at Delta also helps the company maintain clear lines of coverage, with information flowing vertically.
The machine bureaucracy at Delta doesn't come without some negative consequences. Paradoxically, just as the structured environment at the company that has helped Delta also causes harm.
Ongoing problems with workgroups who've reported feeling financially exploited by management in search of profit.
Delta's sheer size presents problems for the carrier as it is especially difficult to manage such a large organization with such a large employee base, scattered across six continents.
The airline industry is highly competitive and highly volatile. Attempting to work for a long term growth model for the future, Delta merged with Northwest Airlines in 2008. While the end result was one less airline to contend with [ Northwest folded into Delta ] it has also set up a much larger 'mega-carrier '. This hardens the bureaucratic model. It is important to note that Delta is a profitable company in its current form, posting a quarterly profit of eighty-million for the first quarter of 2013.
At this moment, things appear to be 'working ' at Delta. However, because of the instability of the airline industry, mainly attributable to a fluctuating fuel prices, coupled with recent mergers of carriers such as American Airlines and U.S. Air, the current operating model and structure isn't a guarantee of future success. What follows are two practical suggestions for Delta in order for the airline to stay on a glide scope of profitability, stability and growth.
Grow the future. Delta should continue to search for opportunities to grow, primarily through acquisitions and mergers. The number of available airlines to acquire however is relatively small as there are only a few of carriers left in the United States. One company to consider is Alaska Airlines, a regional airline that operates primarily along the western coast of the United States and Alaska. Delta has a relatively small presence on the west coast when compared to United Airlines and American Airlines.
Re-think communications. Delta has serious problems with its employee groups, particularly the flight attendants and ground support workers who may want to unionize. Many of the Delta employees in cities such as Minneapolis and Detroit are former Northwest Airlines employees, who were represented by collective bargaining units pre-merger. One of the main complaints against Delta by workers, which also happens to be fueling unionization efforts, is a 'top down ' communication style used by the company. One option for Delta to consider is a relatively open communication style, allowing the free movement of information up and down the company's current vertical structure.
There is some evidence this method is effective, as evidenced by the turn around at Continental Airlines [now merged with United Airlines ]. At Continental, the company chief executive at the time, Gordon Bethune, made drastic changes to how employees communicated with one another and helped to play an airline that was failing to success.
Delta Airlines has grown from a tiny crop dusting carrier in the southern United States to a globally competitive, profitable airline. Starting off as a simple structure, the company quickly turned into a machine bureaucracy. The company has much strength, fueled by its competitive route structure, both domestically and internationally. Delta's sheer size and dominance in the southern and eastern of the United States alone makes it hard for smaller carriers and start-ups to gain entry.
Delta's positives can also act as negatives. The company's largeness makes communications with employee groups challenging. Additionally, front line employees have reported a 'disconnect' between how workers are understood and dealt with by the management team.
Delta's machine bureaucracy appears to have served it well since the 1940's. The company however, needs to remain vigilant against problems with labor while also assessing its response to ongoing consolidation in the airline industry. Delta must continue to seek ways to grow.