EasyJet Strategy in Change Management

Introduction

Organisations that endeavour to acquire long-term success keep on changing the ways of executing their deals. The most appropriate organisational adjustment has to ensure that the business becomes more lucrative in the changing business environment. Geopolitical, population, hi-tech adjustments, and even intense pressure on the physical environment pose the call for organisational changes. Such changes attract various security issues and governance approaches that help to create a force that is necessary to set organisational change in motion as Bruch and Gerber confirm¹. Development of awareness concerning technological needs, political, sociological, and economic characteristics of the external operational environment of an organisation is crucial in the effort to drive strategic initiatives for its success. Change may involve proactive and reactive approaches. Irrespective of the adopted approach, a theoretical model for the analysis and implementation of any appropriate change coupled is of paramount importance in an organisation. This paper deploys the Nadler and Tushman’s congruence model to analyse change implementation at easyJet Airline Company.

Before the analysis of easyJet plc change implementation through the Nadler and Tushman’s theoretical model, the paper lays the background to both the organisation and the model. It then progresses to categorise key aspects of change, namely components, strategy, tasks, formal systems of change, and key individuals. This goal is accomplished to determine the necessary outputs for an organisation that is going through change. The paper seeks to determine whether easyJet plc achieves such necessities. The paper also makes an effort to determine whether the organisation’s strategies are aligned with key environmental inputs to drive change and/or whether the transformation process (the key tasks, the formal organisation, the informal organisation, and the key individuals) all align well with easyJet’s strategies. The main purpose for this analysis is to determine the manner in which the inputs interact to produce outputs. The project report responds to the query of whether there is anything that might help in identifying issues that the organisation should address after evaluating its outputs at the organisational, group, and individual levels. The last section of the paper addresses whether some easyJet’s aspects introduce any difficulties in understanding how the organisation does its work. In case this interrogation realises positive responses, the paper then progresses to identify the necessary resources for the analysis.

Background to easyJet

EasyJet’s main offices are based in London-Luton airport. The organisation was launched in 1995. As Millward reveals, its mission entails supplying “customers with safe, excellent, value, point- to-point air services in the effort to effect and to provide consistent and reliable merchandise and fares that appeal to leisure and corporation markets on a variety of European routes”². In an effort to ensure that it achieves its mission, easyJet plc mainly focuses on establishing and maintaining its long-term relationship with key individuals who make its operations possible. Such individuals include suppliers, customers, employees, and even communities within which the organisation is established.

From the perspectives of passenger carriage capacity in both international and domestic fronts, easyJet plc emerges the largest airline organisation in the United Kingdom. Millward states, “it serves 500 routes between 118 European, North Africa and west Asian airports.”³ By the end of 2012, Sumberg reveals how the company had a workforce that amounted to 8000 people, although this number has since increased. The organisation mainly expands through acquisitions⁴. Its strategy of success entails focusing on the economical strategy. EasyJet confirms, “The airline, along with subsidiary airline easyJet Switzerland, now operates over 200 aircrafts, mostly Airbus A319⁵”. In terms of cost leadership, easyJet takes the second position after Ryan. Indeed, in 2011, the company offered airline travel services to more than 55 million people.

Similar to all other organisations that operate in the airline industry across the globe, easyJet experiences the challenges of fluctuations in fuel prices. To minimise fuel cost, the company resorted to a project that involved building its own airliner, namely Ecojet. Ecojet has a prop fan engine that is designed ensure increased efficiency in fuel consumption. In the effort to guarantee that the organisation increases its competitive advantage when compared to other businesses that operate in the industry, in 2011, it “painted eight of its aircrafts with a lightweight, thin revolutionary nano technology coating polymer”⁶. The coating helps in reducing frictional drag from debris on the surface of the plane so that the amount of power that is required to overcome frictional resistances to propulsion reduces. In turn, the cover reduces the amount of power that is required to induce a forward thrust. Through this strategy, the company saved between 1 and 2 percent of its total expenditure on fuels. EasyJet estimates this revenue as about 14 million Euros⁷.

Background to Nadler and Tushman’s Model

Organisations are established to achieve particular goals, missions, aims, and objectives. This devotion requires the conversion of input to outputs via organisational processes. Outputs may involve services, products, or even their combination. One of the factors that influence the ability of an organisation to deliver its objectives is the capacity to establish coherency, congruence, and integration of various inputs that act as the independent variables to influence the independent variables (outputs). When organisations experience problems in meeting their projected outputs, it becomes inevitable to incorporate change in their operational strategies⁸. Changing the outputs requires altering the inputs. This situation implies that change is implemented on the input. Nadler and Tushman’s congruence model exemplifies the interdependence between the inputs and outputs in the operations of an organisation as shown in figure 1.

Nadler and Tushman’s model for organisational analysis portrays an organisation as encompassing a system that draws different inputs from internal and external sources. It then transforms them through various processes into outputs via four essential components (subsystems). According to Burke, these components entail the labour, persons, informal administration, and the official organisation⁹. The model considers an organisation an open system whose operations are determined by internal and external environments to the extent that inputs from them are changed into outputs. These outputs comprise organisational manners and presentation.

The model holds that an organisation converts efforts into yield via the connections of organisational subsystems. The subsystems of labour imply that all people in an organisation are responsible for every day performance¹⁰. People refer to all skills and abilities that are possessed by the organisational staff, which is necessary in ensuring that an organisation executes its purpose on a daily basis. These organisational subsystems also focus on emotive backgrounds coupled with expectations of any organisation¹¹. Prescribed organisation’s subsystems refer to the guiding principles, arrangement, and values that are utilised by any organisation in conducting its business. The informal aspect takes into consideration the moral, ethical, norms, power, and political behaviours that are utilised by organisations in running their businesses, particularly when addressing subjective issues, which potentially alter operations as time changes as Nadler and Tushman observe¹². Under Nadler and Tushman’s congruence model, a change occurs in an organisation upon integration of the four subsystems.

Analysis of easyJet using Nadler and Tushman’s Congruence Model

Nadler and Tushman’s congruence model takes into consideration various organisational inputs, including the environment. The model holds that the environment entails any factor that acts outside an organisation. It incorporates markets, regulatory bodies, financial organisations, suppliers, competitors, and people who have shares in the conduct and the operations of an organisation¹³. This observation suggests that organisations do business by interacting with various elements that form part of the larger environment, namely individuals, groups of people, and other businesses. The chief aim of organisational change entails deploying the appropriate strategies for ensuring that environmental forces become sources of competitive advantage as opposed to inducing troubles in the immediate and long-term operation.

Key Components

Environment

EasyJet’s environment measures up to the business setting characteristics as revealed in the Nadler and Tushman’s congruence model. The company’s environment comprises employees, customers, suppliers, and people who own shares in the company’s operations. People who have stakes encompass the stakeholders and community within which the organisation does its business. EasyJet has an obligation to ensure that it only engages in activities that ensure continuous increment of returns on shareholders’ investments. It also has an added responsibility of engaging in socially responsible conducts to foster harmonious interaction with the communities in which it does business. This goal requires the business to allocate its resources in CSR. Unfortunately, easyJet faces the challenge of setting a specific amount to commit to CSR due to fluctuation in prices of inputs such as fuel among other elements, which eat into its profit margins. The organisation also encounters other challenges such as declining to offer food services free of charge in case of flights that take more than two hours. A certain level of competition from other service providers such as BMI Baby, Jet2, and Ryan is evident. Competitive forces influence the pricing policies that are adopted by easyJet so that operation routes that have the highest levels of competition yield minimal profit margins.

Strategies

Operating in any environment requires the adoption of effective strategies. EasyJet pursues low-cost strategies coupled with acquisitions to increase its economies of scale. For these strategies to help in yielding success, the company also invests heavily in building a positive public image through the development of different mechanisms of communicating with clients. One of such strategies encompasses advertising easyJet’s product. People need to discover that taking the easyJet flight is pocket-friendly, just like purchasing a cup of tea. The company also needs to request its customers to make regular trips with the airline since they will be on the saving side in relation to other airline companies. Indeed, this plan constitutes an effective change promotion strategy of the organisation. In a decade ago, it mainly promoted itself via painting a booking telephone number on the body of its planes.

EasyJet plc ensures that it scans its environment to ensure that the process of making decisions and their implementation replicates the dynamics of the environment. For example, between 2008 and 2009, easyJet experienced high problems in its operation akin to the effects of the global financial crisis. However, its low-cost strategy made it possible to survive through the trying recession time. The strategy ensured that the organisation retained its customers who were also not spared by the crisis. Their household incomes were constrained so that the only option was easyJet plc whenever they needed a low-cost air travel partner.

Tasks

According to the Nadler and Tushman’s congruence model, organisational strategies are engineered to ensure increased organisational performance of various key tasks¹⁴. EasyJet’s main task entails moving people in superbly convenient and cheap manner. In the performance of this task, the company pays critical attention on any underlying challenges in operation. This performance requires the input of people (groups and individuals).

Individuals and Groups

Individuals comprise one of the most crucial facets of any organisation¹⁵. The traits of people and their nature affect organisational performance. While selecting cabin crew, easyJet plc considers the traits of people in terms of their knowledge coupled with skill in handling them (people) from diverse cultural, ethnic, age, gender, racial, and social class backgrounds. This claim implies that workers in all organisational departments must possess amicable skills in dealing with people from all diversities.

Formal and Informal Organisation

With reference to Nadler and Tushman’s congruence model, the third and the fourth components of an organisation are the formal and informal organisation. The formal organisation implies the “range of structures, processes, methods, and procedures that are explicitly and formally developed to get individuals to perform tasks that are consistent with the organisational strategy”¹⁶. EasyJet’s formal structure set out the roles and functions of the staff people. This plan eliminates the probability of conflicts of mandates. New recruits undergo training and development programmes to become oriented with the work environment and the easyJet’s way of doing work. A major issue of concern involves training and developing people from mixed cultures. The formal structure is also bureaucratic in nature to enhance conformity to new strategic directions.

Apart from the prescribed arrangement, organisations also have informal structures. In the context of Nadler and Tushman’s congruence model, an informal structure entails the “different systems, processes, and arrangements that emerge while an organisation is operating”¹⁷. While doing business in a changing operational environment, easyJet is forced to adopt new regulations and the best practices of operation such as CSR. For instance, through taxation policies, the political environment has control over the company’s operation. Indeed, easyJet plc pays charges that are levied when planes land in different nations. The nations also possess different taxation guidelines. In some situations, they also keep on reviewing them. Consequently, easyJet must keep on changing its taxation management structures to align them with the environmental changes. It must comply with various tariffs, employment laws, and environmental regulations, which require changes in the management operational structures.

Outputs

Organisations do their work with an objective of delivering particular outputs. Nadler and Tushman’s congruence model views productivity as any successful organisational deals or merchandise. Although easyJet mainly offers services, it also engages in selling various products via its onboard programmes. These commodities include intoxicating goods, squash-in items, warm snacks, sweets, and soft munchies, which provide ancillary income. It sells electronics, fragrances, and cosmetics to its customers. Many of these products carry easyJet’s brand name on them. For people who wish to make transfers to other airlines upon reaching their destinations, easyJet offers airline ticket sales services.

EasyJet has the capacity of realising its productivity. The continued dominance of the organisation in terms of carriage capacity evidences this assertion. In fact, the company still ranks the second position in the UK with regard to carriage capacity. While easyJet stands as the biggest intra-UK airline, it is also the fifth biggest airline operating within Europe. This observation implies that the organisation remains highly competitive in comparison with rival organisations that operate in the UK airline industry. Additionally, traditional low-cost organisations in the industry do not target the same clientele as the easyJet. This situation reduces the competitive force that is experienced by the company. From the context of the low-cost strategy, Ryan is the only organisation that offers a significant threat to easyJet. Based on comfort, easyJet provides a high-class entertainment. Some of its aircraft have a drop down screen. For some specific planes, in 2009 and 2010, Millward adds that easyJet offered customers who had the capability to pay for manageable Sony DVD machines with videos and sports competition.¹⁸ In Manchester and Gatwick, the company availed Mezzo devices, which the customers could rent between 2011 and 2012.

Alignment of the Organisation’s Strategies

Alignment of low-cost Strategy

In the context of Nadler and Tushman congruence model, low-cost strategy and growth via acquisitions are well aligned. For success of the low-cost strategy in driving easyJet’s competitive advantage, it is important to reduce the cost of operation. In its foundational years, easyJet promoted itself via painting of its telephone booking number on the plane body. This strategy played an effective role in the reduction of promotional costs. The company does not also offer incentives to air tickets sales personnel. Indeed, this situation comprises the standard practice in all organisations that pursue the low-cost strategies. Unfortunately, the strategy misaligns with the plan of investing in customer convenience to enhance success. Failing to factor in ticket vendors raises congestion of various customers who seek to make booking and/or buy air tickets within the premises of the easyJet. Without incentives, vendors cannot consider working for the organisations since they cannot engage in non-profit generating activities simply to ease the congestion of service demand. This finding implies that it is necessary to develop strategies for enhancing better customer convenience, amid the exploration of the low-cost strategy.

EasyJet deploys the power of technology to reduce expenditure on human resources. Booking and check-in services are technology enhanced. In 2011, the company also deployed the nano technology to cut down fuel consumption by reducing frictional drag on the surface of its planes. Through low fares, it prevents its royal clients from seeking services from alternative organisations. From an economic perspective, low fares mean high demand. This economic relationship between price and demand is highly effective since the company has the capacity to mass-promote its products via the internet.

Acquisitions Strategy

Acquisitions enable easyJet to add couriers into its fleets. For instance, following the acquirement of GB Company, easyJet got several A321 and close to ten A320 aircrafts. For an organisation that seeks to exploit the low-cost operational strategy, it must align its strategic objectives with mechanisms of enhancing its economies of scale¹⁹. The company utilises planes that have a high carriage capacity such as A319, A320, and A321. The company also reduces the degree of competition in some of the competitive routes. In 1998, easyJet bought 40% of the total stake at Swiss Charter airlines (TEA Basle). This airline was subsequently called easyJet Switzerland. Its main offices were moved to Geneva IA. The acquisitions ensured that easyJet gained an operational ground in regions outside the UK. In 2002, it purchased the Go airline. Apart from raising the number of aircrafts, the acquisitions were critical in increasing the number of operations routes, which helped to increase the presence of easyJet in the global airline industry. Driven by this concern, in 2007, easyJet secured the GB Company. Acquisitions were crucial in increasing economies of scale for easyJet to continue offering even lower fares.

Operational Model

EasyJet still uses its past operation model, which benchmarks the southwest airlines operation model, namely the low-cost operation model. The model has also proved highly effective in the context of the US airlines industry. In the case of European markets, the southwestern airline model is also deployed by key organisations such as Ryan. It helps in cutting the cost of operations. Indeed, in their low-cost operation model, both Ryan and easyJet do not charge when a passenger requests to be linked to another flight. Besides, they do not offer food to the on-board passengers. However, they provide a room for high utilisation of the aircraft space. It also provides quick spinning instances whilst getting money for any extras, for instance precedence entry, holding of personal belongings and foodstuffs, and maintaining low working charges. EasyJet has not been operating without challenges. It has encountered issues of labour conflicts akin to claims of denying employee a freedom to join unions.

Labour conflicts have posed high challenges in the capacity of easyJet to deliver its outputs. However, the adoption of the southwest airlines model of operation has been critical in ensuring that easyJet aligns its mission with objectives and goals. The model ensures that easyJet alters its operation model by hindering the participation of employees in labour union. This change aligns well with Nadler and Tushman’s congruence model aspects of using individuals to gain a competitive advantage. Unions are critical in managing conflicts between an organisation and employees. Consequently, it becomes possible to prevent any repeated strikes. Permission of unionisation has also been instrumental in the management of issues that may lower the products of the company’s staff in good time.

Issues that easyJet plc should Address

Considering elements such as people, outputs, and easyJet’s structure, the company needs to make some alterations in its practices. The organisation has a bureaucratic organisational structure. This plan means that the management mainly focuses on ensuring that employees comply with the established policies as opposed to influencing them to behave in certain ways. EasyJet’s employees know what they must do and/or what they should not do. Hierarchical structure of power and command reflects differences in remunerations. People who are paid the highest amount of money also have the highest say.

People who make decisions constitute mainly of directors. They then communicate the decisions to managers who then deliver the messages to supervisors. The subordinates implement the decisions. This chain of command is crucial in providing a mechanism of swift and efficient information flow while making critical decisions. However, such an internal structure poses the danger of failing to recognise the need for rewarding outstanding employee efforts to drive organisational success. Having the highest amount of power does not necessarily directly translate into possession of the capacity to deliver better outputs in terms of productivity. Failing to incorporate subordinates in decision-making processes hinders easyJet from using talent potential of all its individuals and groups to deliver highly competitive strategies. This situation has the ramifications of making easyJet turn away innovative and creative strategies of success such as the development of new ways of improving service delivery for both onboard and off board passengers. Consequently, although it is crucial for easyJet to consider employees the most essential sources of success in its mission statement, it is also important for it to value and incorporate their talent potential, innovation, and creativity in top decision-making processes. When well harnessed, creativity and innovation of the subordinates can be critical in facilitating the attainment of long-term competitive advantage.

EasyJet organises its customer service in a manner that ensures that all administrative personnel aid in enhancing compliance with its strategic plans. Efficiency in delivering services suggests that bureaucracy facilitates in ensuring the administration of customer service structures. Through the human resource, which is the employee compliance-enforcing arm of easyJet, every person who is charged with addressing human relations issues must ensure that both employees and customers are satisfied. In this context, a desired change at easyJet involves the alteration of the perception that employees need to deliver quality and prompt services to comply with the commands that are issued by high-ranking decision makers. Instead, employees need to deliver services to satisfy customers who make easyJet continue with its operations.

Difficulties in Understanding the Aspects of Organisational Operations

In some organisations, it is difficult to understand the aspects their operations. These difficulties arise because of failure of the respective companies to adopt the appropriate operations mechanisms. However, easyJet possesses a well-developed and laid out strategies and structures. Consequently, difficulties are not experienced in understanding the manner in which it operates. As stated before, easyJet’s internal structure is bureaucratic. Thus, the hierarchical portfolio has a clear definition so that in every managerial level, clear rules are set to define the function of every hierarchical job position. This observation is sufficient for the reader to conclude that the company has limited issues of work conflicts because each employee understands what the company expects of him or her, just as he or she knows what to expect from the organisation.

Conclusion

Nadler and Tushman offer a comprehensive theoretical model for analysing both internal and external environment of an organisation. In the context of the discussions of the project paper, the model finds application at easyJet. The key elements of the organisation, which can be understood through the model include people, groups, individual, input, and outputs. The formal and informal structures are also developed in the Nadler and Tushman’s model since they constitute important subsystems. When they interact with inputs, they help in enhancing the quality of outputs. For easyJet, these outputs include services and products. From the context of easyJet, Nadler and Tushman’s congruence model for organisational analysis offers a relatively detailed approach while at the same time ensuring that an organisation retains and manages its action plans of success.

Bibliography

Bruch, H & P Gerber, ‘Strategic change decisions: Doing the right change right’, Journal of Change Management, vol.11, no.5, 2005, pp.1-99.

Burke, W, Organisation change: Theory and practice, Thousand Oaks, CA. Sage, 2002.

EasyJet, Annual Report and Accounts 2011, Web.

Millward, D, EasyJet To Open New Base At Southend, The Daily Telegraph, 2011, pp. 16-17.

Nadler, D & M Tushman, Managing Organisations: Reading and Cases, Boston, Brown and Company, 1995.

Sumberg, J. EasyJet Paint Job Makes Fuel Bills Less of a Drag. 2011. Web.

Footnotes

1. H Bruch, & P Gerber, ‘Strategic change decisions: Doing the right change right’, Journal of Change Management, vol.11, no.5, 2005, p.11.
2. D Millward, EasyJet to Open New Base at Southend, the Daily Telegraph, 2011, p. 16.
3. Millward, p. 16.
4. J Sumberg, EasyJet Paint Job Makes Fuel Bills Less of a Drag, 2011, Web.
5. EasyJet, Annual Report and Accounts 2011, Web.
6. Sumberg, Para. 4.
7. EasyJet, Para. 4.
8. Bruch, & Gerber, p.21.
9. W Burke, Organisation change: Theory and practice, Thousand Oaks, CA. Sage, 2002, p. 40.
10. Bruch, & Gerber, p.21.
11. Burke, p. 22.
12. D Nadler & M Tushman, Managing Organisations: Reading and Cases, Boston, Brown and Company, 1995, p. 35.
13. Nadler & Tushman, p. 38.
14. Nadler & Tushman, p. 43.
15. Nadler & Tushman, p. 48.
16. Nadler & Tushman, p. 42.
17. Nadler & Tushman, p. 42.
18. Millward, p. 17.
19. Bruch, & Gerber, p. 62.