Table of Contents

Introduction............................................................................................................... 2
Case Study Analysis.................................................................................................... 2
Conclusion.............................................................................................................. 12
Appendices............................................................................................................. 13
References.............................................................................................................. 16

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Human Resources and Organisation Development

(Assignment 2)

Introduction
Silvertail Airline used to be the only national competitor of Australia Air which is now
experiencing a drop in share prices due to introduction of low cost carriers in the domestic
and international market. The board of director are replaced with promising bright and zesty
marketers, advertisers, accountants, and smattering of experts from USA whom were under
the leadership of an innovative and open minded CEO. Top-heavy management structures
were dismantled, maintenance was outsourced and regional branches were closed.
To survive and sharpen their competitive edge, Silvertail emerged as an airline with new
image that promoted itself as new, young, and innovative. Silvertail wants to adopt workforce
reduction and organisation redesign to get rid of the old crews through unethical strategies.
There are few considerations that need to be look into such as the barriers by implementing
such plan, ethical issues, the implications and type of downsizing tactics are essentials for
decision making in this case.

Case Study Analysis

Q1: What barriers might there be to the implementation of such a plan?
The entire organization is replaced by new management and with plans to reposition their
image. At the same time, they also decided to lay off old cabin crews and ground crews to
reach their objective. However, there are few barriers that will hinder the implementation of
such plan.
1) Union
In order for Silvertail to be successful in the aviation industry, the Union plays a part. Union
is the guardian of the employees. Should Silvertail dismiss the old crews; there will be
disagreement from the Union. This act will be considered as discrimination against older
employees and there will be severe impact on the airline if the Union voice out and is made
known to the public. Non-profitable organizations which concern of human rights and
discrimination may also step in to intervene. At the end of the day, the image of Silvertail

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Airlines will be tarnished and label as discrimination against old crews. This issue is very
sensitive and can pose great challenges to Silvertail.
2) Pressure Group
Pressure group has influenctial impact on the public especially in this technology century. For
example, the social media group may spread the news and analyse their advantages and
disadvantages. Additional, for non profitable organisations on human right, they may take the

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necessary action and post their negative opinion against Silvertail on the internet or they
might even come together to write a petition to stop Silvertail from implementing such act.

Under Australia Workplace Relations Act 1996 (WRA), the unlawful termination of
employment is discrimination. WRA can assist employees who have been discriminated by
upholding the fundamental prin principles of the sex discrimination act 1984 (SDA) which
promote equality between men and women, eliminate discrimination based on sex, marital
status, pregnancy and family responsibilities, and abolish sexual harassment at work.
Q2: Is Silvertail entitled to embark on such a course of action? Is it ethical?
Silvertail is entitled to such course of action so long as it is legal. Whether it is ethical or not,
there are different ways to view ethics and approaches of ethics need to be first understood
before answering it.
What is Ethics
Ethics is about justice and about goodness. It concerned with what is right or wrong, good or
bad, fair or unfair, responsible or irresponsible, obligatory or permissible, praiseworthy or
blameworthy. It affects how people make decisions and it is difficult to judge what may be
right or wrong in a particular situation. Being ethical is not the same as following the law;
ethics is different in terms of doing things that the society deem acceptable.
Different views of ethics
There are three possible views in Silvertail case which are the management views,
employees views and union views.
In management point of view, they have duty to do what is best for the stakeholders. They
have to make decisions based on business ground instead of involving their personal beliefs.
The responsibility is to ensure the firms financial health. Thus, as long as the actions taken

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are legally right, the firm and decisions from those actions would not necessarily perceive as
unethical.
In employee point of view, they may find that their right has been abused or manipulated by

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the organisation. Timing of the downsizing communiqu, method of downsizing communiqu

Words)
and the content of downsizing communiqu plays important roles. If downsizing is
implemented near a major holiday and not without ample notice, employees are likely to
perceive that ethical violation. When employees first learn about downsizing from sources
outside the firm instead of via formal organisation channels, and without providing an
adequate, unambiguous explanation for downsizing, employees are likely to find it unfair and
unethical.
The union has the responsible for protecting the rights and benefits of employees. They want
to ensure fairness during downsizing. Thus, they might think that this is unfair and
discriminating against old cabin crews and ground crews without really assessing the
situation of Silvertail
Other Approach of Ethics
There are five sources of ethical standards which are based on the answers to the critical
question.
-

The Utilitarian Approach

Utilitarian approach is also known as consequentialist approach as it deals with

consequences. This approach was a basic consideration in a business decision that has a
dramatic impact on the lives of many people. The utilitarian principle holds that an action is
right from an ethical point of view only if the total sum of utilities produced by that act is
greater than the sum total of utilities produced by any other act the agent could have
performed in its place. It tries to increase the good done and to reduce the harm done to the
organisation. In short, an action is right if it creates the best overall outcome. However, the
weaknesses of this approach are considering it as the only outcome for the group or
individuals and the only direct consequences instead of including indirect and long term
consequence.

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The Rights Approach

In general, a right is an individuals entitlement to something. This entitlement may be

derived from a legal system or from a system of moral standards independently of any
particular legal system. Example, legal right citizen has the right to freedom of speech;
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moral right or human right the right to work, which based on moral norms and principlesWords)
that all human beings are permitted to do something or to have something done for them.
Also, it is often said that rights imply duties-in particular, the duty to respect others' rights.

The Fairness or Justice Approach

The fundamental principle of justice is that equal should be treated equally and unequal
treated unequally. We can use this idea to say that ethical actions treated all human beings
equally-or if unequally, then it has to be based on some standard that is defensible. We pay
people more based on their hard work or the greater amount that they contribute to an
organization, and say that it is fair. Standard of justice are generally taken to be more
important than utilitarian considerations. For example, if we think slavery is unjust, we
condemn a society that uses slavery even is slavery makes the society more productive. This
approach always remains disagreement to the ethical people.

The Common Good Approach

This approach suggested that interlocking relationships of society are the basis of ethical
reasoning and that respect and compassion for all others-especially the vulnerable-are
requirements of such reasoning. The common conditions that are important to the welfare of
everyone could be system of law, effective police and fire departments, health care, public
educational system, or even public recreational areas. This approach focuses on whether the
action or situation contributes or harms a particular aspect of the common good.

The Virtue Approach

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Honesty, courage, compassion, generosity, tolerance, love, fidelity, integrity, fairness, selfcontrol, and prudence are all examples of virtues. Virtue ethics asks of any action, "What kind
of person will I become if I do this?" or "Is this action consistent with my acting at my best?"
The key action-guiding implication of virtue theory can be summed up in the claim that: An
ethical company is not just a matter of following ethical rules but involves developing of
habits to act in the way that we, our company, and the society think that good people and
companies should act.

Silvertail approach - It is Unethical

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If Silvertail is to embark such course of actions, it is unethical because they seem to be

adopting utilitarian approach which only benefits stakeholders.

Silvertail should take into considerations of other ethical approaches instead of one. They
need to give opportunity to the employees to voice their opinions, convey the precise
information to them on what company is facing, reason for implementingworkforce reduction
and so on. It will be good if Silvertail can provide consultation service, job transfer training
and job hunting services for the laid off employees or provide a higher severance pay than the
statutory amount.

Silvertail should look into Human Dimension, use as a cushion rather than an axe in the
current business world. Silvertail should treat employees with respect and dignity when
letting them go because this will create greater loyalty from the ones left behind, and will be
easier for them to attract new cabin crews.

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Q3. If Silvertail gets rid of its older cabin crew, what are the implications for the new
cabin crew when they, too, age? Should the same standards apply to non-cabin crew? If
not, why not?
Currently, Silvertail is facing difficulties to reposition their image. The management feels that
the new airline image does not co-relate to the experienced but old cabin crews. This is
mainly because older cabin crews have lost their passion and initiatives as they are in their
jobs for long, the work they do are routine and stagnant. Hence, the drive and motivation
while working are not present in them.
Consumers
With new image and new young and vibrant crews, the consumers will prioritise Silvertail
when flying. Silvertail will emerge as a new airline despite of beening in the industry for
years.

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Community
Nowadays, social media plays a big part in influencing lifes. People that got to know about
the actions of the airline might boycott them. They will spread the word around fast and
create awareness regarding the way the airline dismisses older crews. Management should try
to view it from the public shoes and understanding what they would view Silvertail as.
Shareholders
If Silvertail are to lay off old cabin crews, their labour costs will decrease. They pay the older
and more experienced cabin crews more than the newly-joined. Hence in lieu with the
situation in the airline industry, this is one of the feasible solutions to cut costs. Though there
might be an increase in cost for training and hiring, the airline can recruit experienced cabin
crews from other reputable airlines, so as to minimize the cost in conducting intensive
trainings for them.
Employees
The current employees will find it stressful to continue working in Silvertail. Because morale
will be affected, knowing that once they reach certain age, they will be terminated by the
organisation.
Potential cabin crews that once considered joining Silvertail will now hesitate. This makes
the job less attractive compared to other airlines which do not have such strict age limitations.
Service standards
However, it is also because appearance is importance for a cabin crew. Besides being
presentable, they must also displays positive learning attitudes and cohesiveness. They must
be physically fit for the job.
By hiring new cabin crews and doing without older crews, the inflight service standards may
also drop drastically simply because younger crews does not have the experience and
knowledge that the old crews have. The service standards will be compromised if most of the
cabin crews are young and new to the job, even when if they are degree holders. Therefore,
the airline must hold intensive trainings to test them with necessary service and emergency
skills prior to them working hands-on on the flight.

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Non- Cabin crew

The same set of standards should not be applicable to non-cabin crews. Non-cabin crews
mainly focus on back end tasks and have lesser chances of meeting passengers face-to-face.
They do not require to be physically fit and to be as presentable as compared to cabin crews.
As long as they can work professionally and carry themselves in a presentable manner, they
should not be lay off.
Ethical Issues vs Business limitations
Though it may sound unethical to lay off old cabin crews when they reach a certain age,
Silvertail should not be hesitant in order to maintain the safety and service standards to be on
par with other airlines.
A Win-Win situation
In fact, another feasible plan for Silvertail Airlines is to offer an option of doing ground jobs
once they find it challenging to perform in-flight tasks.
In this case, the airline can reduce recruitment and training expenses as the older cabin crews
have experiences and thus require minimal training unlike new candidates who are new to the
job and environment. At the same time, the airline will not be considered unethical to get rid
of old cabin crews. The old cabin crews may not be suitable for the front line work, but they
are still able to perform tasks back-end. And they are given an option to leave the company or
to go for back-end jobs even when they can no longer perform cabin crew duties. This is
actually a win-win situation for both old cabin crews as well as Silvertail.
Q4. Analyse Silvertails situation in terms of the three types of downsizing tactics as
described in Table 8.6 in Waddell, Cummings and Worley (2007 p.223) and consider the
tactics in terms of short-term and long-term changes.
Downsizing refers to interventions that aimes to reduce headcount in an organisation. In
Silvertails situation, the organisation diagnosed a problem from low cost carriers which
created competition in the duopoly market. Thus, the application of downsizing tactics were
driven by the intensity of competition which immediately impacted Silvertail dramatically
and forced the organisation to restructure and create major changes in the organisation
strategy to regain its position in the Australia airline industry by repositioning itself.
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The downsizing method must be planned with a clear understanding of the organisations
strategy and evaluation of employees competency. It can be successful by following the steps
stated in Appendix 1.
According to the table (Appendix 2) by K. Cameron, S. Freeman and A.Mishra, it listed three
types of downsizing tactics namely:
1

Workforce reduction

This tactic is to reduce the number of employees in the organisation. Bobbi, Management
Consultant in the article suggested this tactic during a discussion with the director of
recruitment to come up with solutions to lay-off old cabin crews as they are not deemed to
match the organisations new image nor have much enthusiasm and initiative. This tactic
gives the fastest results as compared to the other 2 downsizing tactics (organisation redesign
and systemic) as the introduction of low cost carrier has caused detrimental effect to the
organisation and Silvertail was not prepared to face any competition initially, thus did not
make any downsizing plan. The positive outcome of this tactic is it l allow Silvertail to
quickly gain its initial share price and able to replace its staid image almost immediately.
The consequences are:
Short-term Consequences
1) Bad publicity
- The massive amount of lay off of the old cabin crews may be view unethical to the public and
especially when they have more choices (low cost carrier) now to choose from, they may thus
shun Silvertail.
2) Breach of psychological contract
- It can be painful to those that do not foresee this and if the organisation lacks of proper and
constant communication to the cabin crews, insecurity, anxiety and confusion will arise. For
those that are laid off, they might be resentful towards the organisation as they feel that they are
not appreciated and for not holding its end of the psychological contract.
Long-term Consequences
1) Lost of experienced cabin crews

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- In the process of reducing the number of old cabin crews; the organisation will lose their
experience crews as usually those with the most flying experience are those that are older. It
takes time to gain experience and to train new cabin crews.

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2) Difficulty in finding new cabin crews

- Silvertail has now set a maximum age limit for cabin crews, thus people will now hesitate to
join this industry because of the lack of job security.

The consequences of using this tactic can be mitigated by having constant and honest
communication with the employees, providing retirement incentives and job consultation
trainings to those that are laid off, giving employees opportunities to voice out their opinions.
2

Organisation redesign

This is a moderate-term implementation that fosters transition and potentially, transformation.

Relating it to the article, Silvertail has adopted it by eliminating some functions in the
organisation such as replacing the board of directors, removing of top-heavy management
structures, closing of regional branches and outsourcing some business functions.
The consequences are:
Short-term Consequence
1) Moderate implementation time
- An organisation has to conduct advanced analysis of the areas that required consideration and
thus, it will take some time to implement.
Long-term Consequences
1) Poor structural redesign
- It will have a direct impact to the business and affect the productivity and performance of its
people if the ways of redesigning the organisation is not adopted or planned well.
2) Increased workload
- Eliminating some business functions or layers will result in having the rest of the employees or
cabin crews having longer working hours or a heavier workload. This can be an obstacle to
achieving business efficiency.
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One way to prevent such consequences is to make sure that redesigning of the organisation
structure is an environment where people are clear of the need to restructure and people can
work effectively by communication, being productive and innovative. Another way is to
provide training to the crews so that they can deal with tasks that they are responsible for.
3

Systemic

Systemic is a long-term implementation that is aimed at changing the cultural atmosphere of

the organisation and foster transformation. This includes all parties in the organization and
thus it requires making everyone clear about the strategy and changes made or will be make
to the organisation. If Silvertail chose to adopt this tactic, they would have given the old
cabin crew time to react upon it and gain understanding that the decision made was all meant
for the interest of the business.
Silvertail has decided to transform the organisation by turning the airline into a culture of
new and young image.
The consequences are:
Short-term Consequence
1) Resistance to change
- Some of the old cabin crews chose not to adapt or may lack the understanding of the need to
change to a younger culture and the result of status quo.
Long-term Consequence
1) Long implementation time
- As this tactic involves major changes to the organisation such as fostering continuous
improvement and innovation, it takes a long time to implement and to see the result of such
downsizing method thus the organisation will lose a huge sum of money.

Involving the employees to contribute their downsizing ideas will help them to adapt to a new
set of culture easily rather than having the top management to decide and passing down the
information to the cabin crews only on the day of execution.
According to the amount of research done, it shows that workforce reduction alone is often
being proved not as successful. It is recommended to have a mixture of all 3 tactics with

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adequate amount of communication to the employees and cabin crews. Also, reducing the
workforce has more negative impacts to the organisation and thus, the adoption of
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appreciative inquiry approach and brainstorming approach will be more applicable
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Silvertail situation. The management should focus on what works well rather than problem
solving. Please refer to Appendix 3 for the continue conversation between Sam and Bobbi by
using appreciate inquiry approach.

Conclusion
When an organisation is going to make a decision, the decision maker has to think of all
aspects such as what are the barriers, what are the consequences, is it legal, is it ethical, what
are the available tactics, the pros and cons, long term and short term consequences in order
for the organization to meet its values and vision while others are not being offended by
whatever actions being implementing.

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Appendices
Appendix 1
For Silvertails intention of downsizing to be successful, it needs to follow the below steps:
1)
2)
3)
4)
5)

Clarify the organsations strategies

Access downsizing options and make relevant choices
Implement the changes
Address the needs of survivors and those who leave
Follow through with growth plans.

Appendix 2
Downsizing tactic
Workforce reduction

Characteristics
Aimed at headcount reduction

Examples
Attrition

Short-term implementation

Transfer and outplacement

Fosters a transition

Retirement incentives
Buyout packages
Lay-offs

Organisation redesign

Aimed at organisation change

Eliminate functions

Moderate-term implementation

Merge units

Fosters transition and, potentially, Eliminate layers

transformation

Eliminate products
Redesign tasks

Systemic

Aimed at culture change

Change responsibility

Long-term implementation

Involve all constituents

Fosters transformation

Fosters continuous
improvement and innovation
Simplification
Downsizing: a way of life

Appendix 3

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You are a member of the Silvertail board. Using the Appreciative Inquiry Approach,
continue the conversation between Bobbi and Sam.
Appreciate Inquiry Approach
Appreciative Inquiry attempts to use ways of asking questions and envisioning the future inorder to foster positive relationships and build on the present potential of a given person,
organisation or situation. Appreciative inquiry has low resistance as an approach to change
because it focuses on internal strengths
People feel that they are building on their own strengths and working towards the optimal
performance situation that they want; their strengths are celebrated and developed. AI
assumes that every individual has some untapped positive experiences that are useful in
motivating change and development; this immediately shows participants that the organizers
and managers have faith in their abilities.
Four phases:
1. DISCOVER: The identification of organizational processes that work well.
2. DREAM: The envisioning of processes that would work well in the future.
3. DESIGN: Planning and prioritizing processes that would work well.
4. DESTINY (or DELIVER): The implementation (execution) of the proposed design
Continuing from the Sam & Bobby conversation:
Bobbi: Wait a minute Sam, now Ive recalled that there is this appreciates inquiry approach
to foster changes and to view this as an opportunity to improve the airline because it focuses
on its internal strengths.
Sam: Well, are you saying that by using this approach, we do not need to crack our head and
think of how to get rid of the old cabin crew and just focus on the positive side?
Bobbi: Yes, the word appreciate means the act of recognizing the best in people and
affirming past and present strengths, successes, and potentials. All these factors are the base
point of change. Whereby the word inquiry means the act of exploration and discovery or
to ask questions; to be open to seeing new potentials and possibilities.

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Sam: So, how are we going to deal with the current situation by using this AI approach?
Bobbi: Well, firstly, we need to conduct a leadership workshop whereby involve all the
management team, and the leader or each department. All participants need to take part in the
structured interviews which aim to find out what the organisation and stakeholders really
want. The interviews are a positive inquiry and therefore focus on satisfied stakeholders or
positive experiences from all stakeholders. What I have mentioned just now is consider as the
discovery phase.
Sam: what is next then?
Bobbi: Second phase is the Dream phase. Participants will gather to discuss the dream and
are asked to describe it. Participants try to imagine a company where optimal performance is
normal and expected. They use the positive core that was discovered in the previous stage
and apply those themes to the present and future.
And then participants start to work out exactly what will be different in the future during the
design phase. Participants would need to describe exactly what must happen in order for the
optimal performance level to become the norm. And the last phase is delivery phase, the
organisation will adopt s the design which being developed from the previous phases. This
stage would require innovation and creativity groups take responsibility for action arising
from the discovery, dream, and design phases.
Sam: Well, seems like the basic idea of these four phases is to build the organisations around
what works, rather than trying to fix what doesn't. And instead of focussing on the never
ending problems, participants were asked to focus only on the factors that contributed to the
success.
Bobbi: Yes, thats right. Shall we move towards this direction and to rescue Silvertail?
Sam: YES! Lets make it work together!

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References
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Augustinas, Thomas and Manolopuolos, Dimitrios. 2003. Communication during
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Revolution in Change: Appreciative Inquiry, 01 May 2005,
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Robertson, Sarie, Richter, Linda. 2011. Effective Downsizing
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