Reference no: EM132241423

In the case, “Case Singapore Airlines Changing to Stay Ahead”. The most important thing that you can do for: customers is to make them feel cared for as individuals. That means doing the little things, looking for opportunities to provide extra customer care. It means making passengers feel as if everything you do were especially for them—how you serve a cup of tea, with just the right amount of sugar, or the way you empathize with a particular passenger's plight.

Yap Kim Wah, Senior Vice President of Marketing Services, Singapore Airlines (March 2000 as quoted in Fast Company magazine, p. 108)

INTERNAL PRESSURES

The Labor Shortage in Singapore The economic success of Singapore had at least one unwanted consequence for SIA. Until the mid-1990s, almost all its stewardesses had been Singaporeans and Malaysians, the only exceptions a few nationals of Japan, Taiwan, or Korea recruited for linguistic reasons. But an emerging labor shortage was making it increasingly difficult for the airline to recruit the home-grown hostesses who had been its main marketing tool for two entire decades: In its advertising it exclusively used its own stewardesses The number of cabin crew was expected to grow going forward with estimates as high as double the number of cabin crew. In 1996, for the 3Financial Times, May 27. 1999.

the first time, SIA rehired two dozen flight attendants who had quit to have children. SIA clearly saw that it would have to recruit beyond the borders of the tiny is-land-state and neighboring Malaysia. But could the "Singapore Girl" be Thai or Indian or even Caucasian? This move would erode a key difference with Cathay Pacific, which cultivated a cosmopolitan image with multi-ethnic cabin crew fluent in a variety of languages besides English. While SIA's leadership saw some advantages in heterogeneity, they thought it made it harder to have shared values and dedication to service. "Cathay has problems with the assimilation of different nationalities: they have a hard time getting them to work as teams," said one senior manager.

The "Young Turks" Traditionally MA staff had felt a strong attachment to the company. "We're almost like communists, we believe in a cause," joked one senior manager. "I want the company to do well. I don't see it as an employer." But the new generation, whom one executive described as "the Young Turks," had somewhat different expectations. As the republic became more affluent, individual values tended to a replace-the-Confucian tradition of respect for authority, and some managers felt the young generation lacked dedication and a service spirit. Young Singaporeans were better educated, more mobile, and readier for the challenge. While they were proud of working for Singapore's most prestigious employer, they also expected higher standards of living. As a result, unions were becoming more militant. "In the early years, we were like a small family," said Managing Director Cheong. "As we grow bigger, the relationship between management and unions is becoming more formalized and there's a greater degree of tension."

STRATEGIES FOR SATISFYING THE DEMANDING CUSTOMER

Michael "Ilm's analysis of the competitive situation ran as follows:

A number of governments have been divesting their shares in airlines in an effort to encourage competition. They are giving a wider choice to consumers, creating competition and therefore improvements in quality. As a result, more and more airlines are trying to duplicate the causes of SIA's success. Even if the world economy picks up, the good old days are over. The industry will be finer. Competitors are doing away with excess manpower and looking at their route structure. The bottom line is becoming more important, the aircraft more reliable, the staff more motivated. There is structural change, as well as mental change, among airline executives. This is how he saw the challenge for

SIA:

SIA is changing all the time. We start - off telling ourselves we must continually improve. There is no such thing as, "We have nothing more to learn." But we're not talking about changing people. we're talking about strengthening what we have. We encourage our people to look for new ways of doing things. SIA's image is strong: That is not easy to keep up unless you continue to strengthen your operations, you come up with new ways of doing things. We never sacrificed quality, even in the last two years. If you try to save by cutting down on what you give the customer, people feel it straight away. We won't allow cost-cutting to affect what we've built over the years. For instance, we're looking for ways to prepare the food ahead of time, but that is to give cabin crew more time to look after our passenger, not to reduce the number of crew.

The challenge for SIA was to train front-line staff to anticipate customers' needs in order to satisfy them before the passengers even realized they had those needs. One answer was to be flexible, explained Inflight Services Senior Manager George Lee: Demand is evolving, and one of our strategies is to provide flexibility, especially in first class and business class. For instance, on long trips, you can have your meals at any time you like. We encourage our people to be flexible. They have to be on the watch-out to do more things that will remain ingrained in passengers' minds, and turn any negative impression into a positive one. As long as the company continues to see itself as its main competitor, it will continue to improve and innovate.

RESPONDING TO THE CUSTOMER: TWO APPROACHES

In practice, customers' demands were analyzed at weekly meetings of SIA's Complaints and Compliments Review Committee. Paul Denver's letter provided an interesting test of the airline's approach to continuous service improvement: one of its demanding customers was challenging it to go further. Two major views emerged at the meeting. The first, underlining the importance of safety, standards, and consistency, could be summarized as follows: First and foremost we have considerations of security, cost, and efficiency: there are lots of security regulations on the handling of luggage. Second, the Manila supervisor incurred a lot of expense for the company: If we were to have this as a standard procedure, it would mean tremendous costs. Third, the risk of mishandling would be a lot higher. We are proud of our low rate of mishandled luggage, by far the lowest among major airlines. Passengers far prefer to have their bags with them in a normal situation. But of course, we tell our staff that OSG means going beyond, finding a way to satisfy the passenger. This is a classic dilemma. I'm not saying it would be impossible to satisfy Mr. Denver, but it is a choice we'd have to make. I certainly wouldn't tell off our people in Malmsey for refusing the passenger's request. In this industry, in the final analysis of the safety and security of the passenger are more important, and this means procedures. I don't want to compromise on that. A second view stressed the need for staff to use their judgment and make considered decisions, rather than follow established guidelines: We need a balance between the soft part, people's judgment, and the system of rules. We need the system of course— but only as a guide. More emphasis but only as a guide. More emphasis must now be placed on judgment, responsibility, and entrepreneurship. At first glance, the Manila agent should be congratulated for his decision. We encourage staff, even junior staff, to take considered decisions. The Manila agent took a decision and he took responsibility for it. He went out of his way to help a passenger. The Bali agent didn't show any courage, he just played by the rules. We've been telling our people, "Go beyond the rules. We dare you to innovate." We've asked them to use their judgment. He was probably worried about giving away the "company store." We must show him what was missing in his thought process: if he tries to accommodate a pathogen, we will support him. I want all our people to show that they can think through a situation and make judgments on behalf of customers, whether they're traveling economy, business, or fast class. The pressure is on the front line. The pressure is also on us to coach and counsel. If we determine that the Bali agent did make a mistake, he should discuss the issue with his staff. In that case, we would congratulate the Manila agent and also recommend discussion there. The issue would be mentioned in the Manila agent's annual performance review, but the Bali agent would not be penalized. In fact, the issue is more complex. What we really need to understand is the thinking behind both decisions. What led each of them to his decision? Saying no to a passenger is more difficult than saying yes. But did the Bali agent just falls back on regulations? or was there a basis for his judgment? What about the Manila agent? Did he say Yes to make it easy? How did he active to his judgment? Front-line staff must put themselves in the customer's shoes and determine whether a request is reasonable and genuine, or whether someone is trying to take advantage of the airline. The Bali agent did not have to copy the Manila agent's decision if his conclusions were different Consistency is to do well all the time, not consistently to say no, or yes: This is what SIA is trying to inculcate.

QUESTION:

With reference to the case “Singapore Airlines – Changing to Stay Ahead”, please answer the question below:

1. How shall SIA respond to Paul Denver’s letter? Please kindly elaborate the key points or measures that SIA should take.