United Airlines Outsourcing Case Study

1188 Words 5 Pages
Major airline companies such as United Airlines are constantly looking for new ways in which they can reach organizational goals and still maintain cost reduction. The notion of outsourcing allows companies to more effectively achieve these goals by shifting some of the day to day activities to a third party vendor. There are various reasons why an airline might result to outsourcing but regardless of the reason this can cost workers their lively hood as well as possibly compromise the safety of the consumer. This paper will examine why United Airlines should not result to outsourcing as a cost cutting method within the company. It will also further examine the idea of “insourcing” as a proposed solution to United Airlines work force issues. …show more content…
6). It is therefore imperative that through consideration goes into a proposed outsourcing of any kind especially if it involves client contact like in the airline industry. If a customer experiences sub-par service, there is the potential to lose that customer to a competitor which takes revenue away defeating the purpose of the outsourcing. In addition to the customer related jobs United Airlines plans to outsource engineering jobs from its maintenance hub in San Francisco to other parts of the world. However, United employees along with others, question how the move will impact the quality of repair work and aircraft safety. Workers at the base said they were told most of the work would be outsourced to India, with little oversight from an Atlanta firm called TeamSAI Inc. The engineers and specially trained personnel that would be losing their jobs are part of a team along with 3,000 mechanics at the base to ensure that proper designs and repairs of aircraft there. The engineers, mechanics and Speier sited that duties being done by non-airline workers off site could result in mistakes due to communication issues or mediocre quality …show more content…
The benefits of outsourcing in certain instances are not convincing. The success or otherwise of both outsourcing and insourcing are still being measured. An airline needs to not only address financial concerns, but carefully evaluate whether there is a strong business case to outsource. The airline needs to keep in mind whether the outsourcing will negatively impact both at the operational and organizational level, therefore financial considerations should not take precedent over others such as safety and job security. Overby (2007) states that ‘Outsourcing is increasingly pursued by organizations as a “quick fix” cost-cutting maneuver rather than an investment designed to enhance capabilities, expand globally, increase agility and profitability, or bolter competitive advantage (p. 6). The airline must maintain a superior level of service or product or that it exceeds the current service level when it is outsourced. From a consumer point of view, they should not be able to notice any inconsistencies that arise as a result of the

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