Answer to Question #225989 in Management for Priyanka

Question

What are the primary sources of competative advantages SIA has leveraged over time

Answer 1

SIA has been single-mindedly focused on becoming the airline that overseas travelers prefer while still being cost effective. SIA had no domestic market when it split from Malaysian Airlines in 1972. Singapore's population was small, at 3 million people, and the government budget was small, with many other pressing needs, so the country couldn't afford to maintain a loss-making airline. This was a stretching goal, which combined with the social support provided through a common organizational identity supported contextual ambidexterity.

Singapore Airlines is able to absorb, adapt, and occasionally improve high-level technology from the west at a cheaper cost than western airlines, while still providing the polished and courteous service for which the East is known. Individuals at SIA feel a part of a community where failing to provide excellent service would disappoint not only a customer but also their coworkers, who act as a safety buffer and support network for their emotionally hard job when needed. Along with service quality, SIA personnel understand the importance of cost effectiveness and continuous productivity improvements, as well as the necessity to be adaptable and maintain the cost structure competitive. For example, unions and management decided to make a portion of everyone's salary variable, allowing them to earn less during times of crisis while benefiting greatly during times of prosperity.

Because of the simultaneous quality and cost constraints in most businesses, as well as the advancement of technology that challenges or reshapes traditional business models, the ability to master paradox and balance seemingly contradictory competencies and viewpoints is becoming increasingly vital. SIA has demonstrated that mastering contradictions is feasible with the basic building components that every organization possesses. Organizational culture, strategic HRM, strategic technology investments that can support dual strategies, optimal organization design that leads not only to efficiency but also to adaptability and learning, skillful use of market power, and sound strategic choices of where to commit scarce capital and where to focus innovation resources are just a few examples.