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The chief objectives of this report include:Ø Settlement of the power conflict between top management of Cathay and pilots Ø Moderate the power of pilots in order to avoid or reduce industrial actions in future

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TABLE OF CONTENT 1. INTRODUCTION 3 1.1 BACKGROUND INFORMATION 3 2. OBJECTIVES 5 2.1 OBJECTIVES 5 2.2 ANALYSIS OF THE EXISTING POSITIONS OF BOTH PARTIES 5 3. SOURCE OF INFORMATION 8 3.1 SOURCE OF INFORMATION 8 4. FINDINGS 9 4.1 INTERVIEW FINDINGS 9 5. SWOT ANALYSIS OF CATHAY 12 5.1 SWOT ANALYSIS 12 5.1.1 STRENGTHS 12 5.1.2. WEAKNESSES 13 5.1.3. OPPORTUNITIES 14 5.1.4. THREATS 15 6. PROBLEM-SHOOTING AND RECOMMENTDATIONS 16 6.1 PROBLEMS & DIFFICULTIES 16 6.2 RECOMMENDATIONS AND STRATEGIES 16 6.2.1 STRENGTHEN THE POWER OF THE COMPANY 17 6.2.2. WEAKEN THE POWER OF THE PILOTS 19 6.2.3 DEVELOP RELATIONS WITH THE PILOTS 22 7. SUMMARY 27 7.1 SUMMARY 27 8. REFERENCE & BIBIOGRAPHY 29 8.1 REFERENCE 29 8.2 BIBIOGRAPHY 30 1. INTRODUCTION 1.1 Background Information Since 1993, Cathay Pacific Airways Limited ("Cathay") has experienced the threat of industrial actions initiated by unions. On 1 July 2001, another industrial action was commenced, resulted in a three-month chaos in Hong Kong's tourist industry. Being the representatives of the pilots of Cathay, Mr Nigel Demery, the President of Hong Kong Aircrew Officers' Association ("HKAOA"), informed Cathay's top management that the pilots refused to accept Cathay's new pay proposal. Members of the HKAOA have decided to commence industrial actions to force Cathay's top management to accept their demand. The event was followed by a sharp increase of pilots reporting sick leaves. Unlike previous industrial actions, Cathay's top management held firm to their original standpoint and dismissed 52 pilots and chartered additional aircraft to moderate the problem of pilots reporting sick and absence from work. However, the incident did not come to an end. On the contrary, the problem escalated when HKAOA reacted by announcing support of the sacked pilots by taking legal actions against Cathay for the unfair dismissal. The pilots' industrial action caused a financial loss of US$12.8 million to Cathay each day. In fact, this was not the first time for the pilots to use industrial actions as a mean to press the top management in accepting their demands. ...read more.


High level of dependency on foreign pilots to carry their passengers; ? The HKAOA vowed no resolution to the Cathay dispute unless all the pilots who have been unfairly dismissed were reinstated. 6.2 Recommendations and Strategies Our recommendations are made to achieve 3 chief objectives:- i) Strengthen the power of the company ii) Weaken the power of the pilots iii) Building-up relations with the pilots 6.2.1 Strengthen the power of the company In order to strengthen the power of Cathay, "playing games" will be a good tactic. Authority game can be used to resist the power of the pilot. History indicated that Cathay lost in 3 industrial actions (from 1993 to 2000), as the company did not resist the power of the other party. Hence, the company original policy should be strictly adhered in order to win the game. In July 2001, Cathay proved that the "Authority Game" tactic was feasible with its firm adherence to its proposed pay, benefits and roistering package with up to 9% increment (Table 2 showed the salary package as proposed by Cathay). On the other hand, Cathay has publicly refused to consider negotiating with the pilots again unless they withdrew their industrial action. Besides, Cathay may consider using the coalition-building game to form alliance with other airlines, preferably nearby airlines. Coalition game is another power-base game to increase power through forming of alliances or coalitions with groups within the subunits of the company or groups outside the organization.4 Cathay can then enjoy immediate assistance by chartering additional aircrafts and rebook passengers on other aligned airlines. This increases the flexibility for Cathay even if HKAOA imposes further destructive actions. Moreover, all airlines should agree not to hire bad-listed pilots. Furthermore, Cathay can inform outsiders about the injustice and irresponsible actions of pilots via a whistle-blowing tactic. Firstly, they should let the public know the prospect and earnings of a qualified pilot, i.e. ...read more.


Botton V., "Secret Cathay peace talks fail" South China Morning Post, 29 September 2001. Bowman J., "Cathay turns screw on pilots" South China Morning Post, 30th June 2001. Bowman J., "Union denied access to Cathay mail boxes" South China Morning Post, 3rd July 2001. Cheng A., "Narrow nationalistic views clouding the Cathay issue" South China Morning Post, 19th July 2001. Cheung C.F., "Thousand stranded at airport" South China Morning Post, 8th July 2001 Cheung J., "Dispute may open extra routes" South China Morning Post, 8th July 2001 Interim Report 2001, Cathay Pacific Airways Limited Ivancevich, J., Olekalns, M. & Matheson, M. 2000, Organizational Behavior and Management, 1st Aust. Ed, Irwin, Sydney Lai C.Y., "Cathay Strike", Next Magazine, 28th June, 2001. Lai C.Y., "Cathay vs HKAOA" Next Magazine, 12th July,2001. Lo J., "Rostering and overtime remain key issue in Cathay negotiation" South China Morning Post, 4th July 2001. Luthans, F., 1992, Organizational Behavior, McGraw-Hill, Singapore. Mintzberg H., 1983, Power in and around Organizations, Prentice-Hall, N.J., USA. Mullins, L., 1989, Management and Organizational Behavior, Pitman, Great Britain Pfeffer J., 1981, Power in Organizations, Pitman Publishing, M.A. USA. Porter L.W., Lawler E.E., and Hackman J.R. 1975, Behavior in Organizations, McGraw-Hill, N.Y., USA. Kotter P. 1987, The Empowered Manager, Jossey-Bass, San Francisco, USA. Reuters, "Airline job cuts hit Europe" South China Morning Post, 21 September 2001 Robbins S. P., 1994, Organizational behavior, 4th ed., Prentice Hall, N.J, USA. See http://www.cathaypacific.com Tichy N.M., 1986, The Transformational Leader, N.Y., USA. 1Ivancevich J, Olekalns M, Matteson M (2000), Organizational Behavior and Management, 1st Aust ed., McGraw-Hill, pg. 401. 2 Ibid. 3 Ibid, pg 393. 4.Ivancevich J, Olekalns M, Matteson M (2000), Organizational Behavior and Management , 1st Aust ed. McGraw Hill, pg.403. 5 Ivancevich J, Olekalns M, Matteson M (2000), Organizational Behavior and Management , 1st Aust ed. McGraw Hill, pg.395. 6 Ivancevich J, Olekalns M, Matteson M (2000), Organizational Behavior and Management , 1st Aust ed. McGraw Hill, pg.401. 7 Ivancevich J, Olekalns M, Matteson M (2000), Organizational Behavior and Management , 1st Aust ed. McGraw Hill, pg.397. 1 ...read more.

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