Overview of the Organization
Emirates Airlines is one of the leading airlines in the global aviation sector today. Founded in 1985 by the government of Dubai, the airline was specifically meant to open up the city of Dubai to the international community (Kuratko, Hornsby, and Covin 38). Since its foundation, the firm has made tremendous steps towards becoming one of the most successful airline companies in modern society.
The firm is a wholly owned subsidiary of Emirates Group, which is a large conglomerate owned by the government of Dubai. The main hub for Emirates Airlines is Dubai International Airport from where the administrative duties are conducted. It flies to over 178 cities in over 78 countries across the six continents of North and South America, Europe, Asia, Africa, and the Oceanic. With a fleet size of 234 planes, the airline makes over 3,300 flights every week (Smith 78).
The aviation industry has been faced with numerous challenges, from the fluctuating prices of oil to terrorism and issues of global warming. To be successful in this industry, this company has been forced to employ some of the most experienced top executives who have a deep understanding of these forces and are capable of managing them in a very efficient manner. The current chief executive officer of this firm, Tim Clark, is a highly experienced manager who has worked with several airline companies both in Europe and North America. The chairman, Ahmed bin Saeed, is an entrepreneurial manager who has worked in various successful public firms within this country.
The firm also has a team of highly experienced executives who have experience in various fields. Emirates Airline currently employs 56,725 people, making it one of the leading employers in the United Arab Emirates. In this paper, the aim of the researcher is to conduct a critical review of the operations of this firm in order to identify its strengths and weaknesses and suggest ways through which it can improve its operations in order to become more successful in the market.
Description of Assessment Framework
In this assessment, the researcher will review the operations of Emirate Airline to determine how innovative they are, identify what the firm is doing right and what it is not doing right, and make suggestions on the best way it can make improvements to achieve greater success. The framework that will be used will involve the use of analysis models such as PESTEL, Porter Five Forces, among others, to identify areas of strength, weaknesses, opportunities, threats, and other environmental concerns that the firm faces.
Using this model will be helpful in understanding the firm’s strengths and how it uses it to overcome threats and weaknesses and take full advantage of the opportunities that come its way. Analyzing areas of strength makes it possible to explain how this firm can manage external environmental challenges that may affect its ability to operate in the market. Analyzing what the firm is not doing well helps in developing recommendations about how the firm can be reformed to make it more successful in the current competitive market.
In this assessment, the researcher will need data from the company in order to understand the systems and structures within the firm and how they are operated. The primary data will be collected from a sample of the participants who are currently working within the firm. According to Kuratko, Hornsby, and Covin, issues about innovation is not a preserve of the top managers within a company (41).
Inasmuch as the top managers are in a better position to come up with innovative ideas based on their level of knowledge and experience, the junior employees also stand a good chance of proposing innovative changes that may be needed in their specific areas of assignments. The junior employees also get affected by the new ideas which are implemented from time to time to help improve the performance of the firm. As such, data was collected from the top managers, the mid-managers, and junior employees, as shown in the questionnaire attached in the appendix. To collect data from the three identified strata, the researcher used a stratified sampling method.
The researcher obtained consent from the top management of this firm to conduct the study, sampled the participants, communicated with these participants to prepare them for the study, and then conducted a face-to-face interview after preparing them for the study and answering all the questions they had about the confidentiality of their identity. The researcher interviewed 20 participants for this study. The questions used to collect data were open-ended in order to collect data that can be analyzed qualitatively. In this qualitative study, the focus was to come up with descriptive answers that would explain why and how this firm has been keen to embrace the emerging technologies and what it can do to ensure that it always remains competitive in the market.
Secondary data was also very important in this study in informing some of the concepts that firms are using to make sure that they remain relevant in the market. The researcher used books, journal articles, and other reliable online sources to have a better understanding of what other authors have to say about Emirates Airline and about the emerging trends in the aviation sector that are defining how airlines are operating in today’s market.
The review also provided important background information for this study. After reviewing areas that this firm is doing well in and the areas that it is not doing well, the research culminated into a series of recommendations about what should be done and how it should be done to ensure that the firm remains successful in the market despite the challenges, it faces in its operations.
Assessment of the Organization
According to Betz, when conducting an assessment of an organization, the focus is always to determine what the firm is doing right and what it is not doing right in order to come up with a series of recommendations about what should be done (56). In order to conduct a comprehensive analysis of this firm, it is important to start by analyzing the external environment within which this firm operates because this may help in explaining why the firm sometimes opts to act in a given way. Using a PESTEL Model will be useful at this stage.
The external environmental forces have serious impacts on the ability of a firm to achieve success in the market. The first factor under this tool is the political environment. According to Kuratko, Hornsby, and Covin, political stability within a country defines the security status and the ability of firms to operate in such an environment (44). It is not easy for a firm to operate successfully in an environment that is politically unstable because of the lack of assurance of security.
The United Arab Emirates has experienced a long period of political stability over the past half a decade despite the political turmoil that has been witnessed in the Middle East. In fact, Betz says that the royal family has provided a stable political environment where a change of regime from one leader to another in all the emirates has minimal impacts on the country in terms of security issues related to political problems (88).
The stability has provided a perfect environment for this firm to flourish in the market. Its premises and properties do not face a threat of wanton destruction from unruly youths, as is always the case in war-torn countries. This is one of the reasons why this firm has been successful.
The economic environment plays a very important role in determining the ability of a firm to achieve success in the market. The economic environment directly affects the purchasing power of the consumers, and this, in turn, affects the amount of money they have at their disposal. The United Arab Emirates was affected by the 2008-2009 global economic recession that affected many other countries in Europe and North America.
Instead of having a negative impact on this firm, Smith says that the economic recession enabled Emirates Airline to expand its market share in the world (94). This is so because the airline priced its products lower than the market average, a move that attracted many customers who were facing tough financial times. At a time when other airline companies were shrinking their operations in response to the harsh economic conditions, this firm was able to increase its international routes and achieve greater success in its operations. Since then, this firm has become very successful, always appealing to a large market segment.
The social environment in the United Arab Emirates has also influenced the operations of this company. As Kuratko, Hornsby, and Covin say, it is true that the world is increasingly becoming a globalized village where geographical barriers that existed before will be completely meaningless because of improved communication and transport means (45). However, cultural practices have not been changing at the same pace as technology. The Emirati’s buying behavior is still largely influenced by the religious practices, while the American buying pattern is informed by the social forces in the environment (Kuratko, Hornsby, and Covin 38).
The social, environmental forces still remain issues that are affecting many firms operating in the global market. Emirates Airline has been keen to understand the social forces that define the purchasing pattern of its target market. The purchasing pattern in this context means the preferences of the travelers in terms of the comfort they need in the planes, whether or not they prefer traveling with family members, and issues that may make them choose one airline instead of the other. Given that Emirates Airline operates in the global market, it must have a global perspective of understanding the social environment that defines the travelers’ choices.
Technology is one of the most important forces that have influenced the operations of Emirates Airline in the international market. The aviation sector is one of the most sensitive industries to the emerging technologies. The industry’s major concern is often the security, safety, and comfort of the travellers at all times.
These are issues that keep changing due to the emerging technologies. It forces firms to embrace these emerging technologies and accept what is new and effective in addressing some of the challenges that are faced in this industry. Issues such as custom-made entertainment for the passengers are also becoming a major area of interest in the aviation sector. This is another area that is being improved due to the emerging technologies.
Environmental concerns have affected the way this firm operates in the market. The United Arab Emirates, just like many other countries in the world where this firm operates, has been keen on promoting sustainable business operations.
The aviation sector is one of the industries that have been blamed for pollution of the environment. The Emirates Airline, being one of the airline companies with the highest number of flights made per week, is considered one of the leading polluters of the air. It has been necessary for this firm to find ways of operating in the global market, but with reduced threat to the environment. Through innovative strategies, this firm, in partnership with the local and international experts, is in the process of developing environmentally-friendly fuel that can be used by its large fleet of planes.
The legal environment is the final factor that a firm cannot afford to ignore in its operations. According Smith, a firm cannot operate in a lawless environment (101). Laws define how a business operates and how it interacts with other entities. The legal environment in the United Arab Emirates, and in most of the countries where this firm operates in, is well structured. The country has laws that define how business entities such as Emirates Airline should operate and interact with other entities. This firm has not been involved in many legal battles, a sign that it has been keen on following the laws and regulations set by various governments in the global market.
Five Forces Analysis
The model above has made it possible to understand the general external environment within which Emirates Airline Operates. In this section, the analysis will move away from the broader factors to industry-specific factors that directly influence the way this firm operates in the local and global market. In order to further understand the industry-specific factors within the market, it will be necessary to use the Porter’s Five Forces to understand the aviation industry in the United Arab Emirates and the global market at large. The figure below shows the Five Forces Model.
The industry rivalry is one of the most important environmental factors that determine the ability of a firm to achieve success within a given market. According to Betz, stiff market competition may hurt the profitability of firms within a given industry, especially if the rivals employ strategies such as price wars (48).
In the global aviation market, Emirates Airline has been facing competition from firms such as Qatar Airways, Etihad Airways, British Airline, Air France, and American Airline among a series of other international airline companies. The competition in the market has been stiff and firms are forced to employ various strategies to gain a competitive edge. However, Smith notes that in the aviation sector, firms have avoided price wars because of the consequences that it may have on their operations (87). Instead, they use other strategies such as improved services to ensure that clients are more satisfied whenever they use the services of various airline companies.
Another market force is the threat of new entrants. The United Arab Emirates has an open market policy that does not restrict entry or exit of firms. This means that the threat of new entrants is always real. For Emirates Airline, this threat of new entrants is not just limited to the home country market but also the international market from which it gets most of its revenues. Currently, almost every country in the world is trying to have a national carrier, and this increases the number of airline companies in the market.
It forces firms in this industry to come up with effective ways of managing this threat. Emirates Airline has been able to manage this threat by continually offering high quality products to its clients at an average market price. The company has ensured that its planes are more comfortable and can be used by people of different social classes. This has enabled it to develop a pool of loyal customers who are not easily swayed by the entry of new firms into the market.
The threat of substitute products is another force that the company has to deal with in the market. For a long time, airline companies have not considered the cruise ship companies as being a threat to their businesses. However, it is becoming more apparent that the cruise ships offer substitute products that can be used by the current customers using planes. Tourists make the most attractive market segment in the aviation sector.
However, the cruise ships also rely on this market segments as their main target market. It means that the two industries have to compete with each other for the available market share. This threat can be managed by delivering high quality products that meet the needs of clients in a better way than the substitutes do. This way, tourists will be more attracted to the products offered in the aviation sector than what is offered by the cruise ships.
The bargaining power of the buyers is another issue that Emirates Airline has to deal with in this industry. The power of the buyers is increased when they have a wide choice to make whenever they want to purchase a given product. In United Arab Emirates, consumers have a wide variety of choices they can make whenever they are planning to make an air travel both within the country and to international destinations. This gives them some relatively high bargaining power.
They can decide to use the local airline or many other international airlines which are also operating within the country. Managing the bargaining power of the customers under such stiff market competition is not easy. Emirates Airline has been using various strategies such as improved entertainment systems in the planes, more comfort for the travellers, and provision of snacks as ways of making the clients more attracted to the products it offers.
The suppliers’ bargaining power is another issue that this firm has to deal with in order to remain successful in its operations. When there are a few suppliers who are expected to meet the needs of many retailers in the market, Adan says that they tend to use their bargaining power to their advantage (28). For instance, there are only four major airline manufacturers in the world which are the Boeing, Airbus, United Technologies, and Lockheed Martin.
In fact, it is only Boeing and Airbus which are trusted to build large commercial airlines used by firms such as Emirates Airline. This near duopoly gives them massive bargaining power as suppliers of aircrafts used by the airline companies. Emirates Airline has formed a strategic alliance with some of its main suppliers to ensure that they have a common goal (Adan 76). This eliminates the possibility of these suppliers to use their powers to their own advantage at the expense of this firm.
Areas in which the firm is doing well
In the above sections, the researcher has used PESTEL and Porter’s Five Forces to critically analyze the environmental forces that affect the operations of Emirates Airline based on the existing literatures. In this section, the researcher will now look at the specific issues areas that this firm has registered excellent performance in the market. This section will be primarily based on the information gathered from the interview with the employees of this firm.
Their arguments will also be supported by the existing pieces of literature. Competency framework will be specifically relevant for this analysis. According to Kuratko, Hornsby, and Covin, competency framework is very useful in distinguishing excellent performers from mediocre or average performers (46). The framework is shown in the figure below.
This framework points out at some of the areas that Emirates Airline has registered excellent performance, putting it a step ahead of some of its competitors in the market. It will be necessary to look at these specific areas individually.
Recruitment and selection
According to most of the respondents that were interviewed in this study, recruitment is one of the activities that Emirates Airline has been doing right in its quest to develop a pool of highly knowledgeable and talented employees who can manage the issues the firm face in the aviation sector. Recruitment is an important area in human resource management. According to Smith, it is always the expectation of the employer to recruit employees who have special skills in a specific area of business operations (56).
However, the recruiters face a number of challenges when it comes to selecting the most qualified candidates for a given task. One of the biggest challenges that affect the recruitment process is the inability to know those who are genuine in presenting their skills. During the interview process, every interviewee will try to showcase his best side possible. This may even involve faking their credentials. Some people even go as far as assuming identities of other people in order to be considered for an interview. Given that the interviewers do not know the real identity of the people they are interviewing, it is possible for such impersonators to pass an interview.
They may put a brave face and demonstrate that they have the capacity to deliver the services expected of them by the employer. Many have succeeded to get jobs using such unscrupulous approaches. At Emirates Airline, there are a series of steps that are used to determine the real identity of the interviewees and the authenticity of the credentials they present.
According to Wiliona, organizations must realize that the best time of getting highly talented employees is during the recruitment process (12). This process offers a firm an opportunity to identify the most qualified individuals to undertake various tasks within an organization. Price advises that recruitment should be a continuous process (76). In order to have time to verify the capacity of the prospective employees, a firm should encourage the applicants to send their resumes even when there are no vacancies.
When a position falls vacant, the firm will have time to conduct a background check for the applicants before calling them for an interview. This is one of the ways of validating the credentials of such an employee. This approach eliminates the rush of trying to get a lot of information from an employee within a very short period. This is what this company has always embraced. One of the top Human resource official interviewed stated that the firm has maintained a continuous recruitment process where job applicants are allowed to send their resumes to the firm. When there is a vacancy at the firm, the management goes through the resumes to select the most qualified candidates. This strategy has always helped the firm employ some of the best qualified candidates for various positions.
According to all the participants who were interviewed in this study, performance management is one of the areas that Emirates Airline has registered excellent performance over the years. As Adan says, a number of companies are now using performance management as a way of enhancing talents among their employees (86). In the past, companies used to review the performance of departments in order to determine their performance at that level.
It was the responsibility of the departmental heads to ensure that their departments delivered the results expected by the top management. However, it became apparent that this was not the best approach of reviewing the performance of an organization. Through research and practice, it became apparent that the overall performance of a firm largely depends on the performance of an individual employee. This has forced firms to come up with new performance measures that focus on the individual employee’s output.
Performance contract is one of the areas of management that has gained popularity at Emirates Airline. This firm is now using performance contracts to determine the compensation of its employees. The principle of this concept is simple and very clear. It holds that a firm should be fair in compensating its employees (Betz 52). Instead of using a general approach of compensation where salary was based on one’s job group, firms are now basing salaries on the value of an employee to a firm. An employee who contributes a lot to the success and profitability of a company gets a higher salary than those who contribute less.
Performance contract has been largely accepted as a fair way of compensating the employees at Emirates Airline. It is one of the best ways a firm can use to increase salaries of its talented employees without affecting its profitability.
This is so because the increases of salary which the employees are given will be proportionate to the increase in profitability they have facilitated. According to one of the participants, when it was first introduced in this company, many employees felt that this was a ploy by the employer to reduce their salaries. However, many employees at this firm have realized that this is the fairest way of determining their salaries.
They now know that every effort they put in every assignment will be directly reflected in their salaries. The interviewed participants strongly support this strategy as a way of rewarding their efforts in various departments where they work. This is different from what would happen in the past where it was almost impossible to equate employees’ effort to their compensation. Other than performance contract, the participants noted that a number of strategies have emerged that the firm is now using to enhance the performance.
Training and development
From the results obtained from the respondents, training and development is another key area that Emirates Airline has registered impressive performance over the past one decade. For a long time, many firms believed that training was a task meant for institutions of higher learning. Employees were expected to come from colleges with a proper knowledge on how to address various tasks in the workplace environment (Graham, Papatheodorou, and Forsyth 44).
However, it is apparent that most of the colleges today produce graduates who have theoretical knowledge but very limited practical aspects of what they are expected of in the workplace. Most of these colleges are focusing on how to increase their earnings, giving limited focus on the quality of graduates they produce. This means that many graduates that are coming from colleges have limited knowledge of the actual tasks they are expected to undertake in the workplace. That is why it has become necessary for firms to subject their employees to training processes in order to sharpen their skills and knowledge.
Training is one of the best ways of enhancing talents at Emirates Airline. In many cases, one may not know that he has a talent that may make him a special employee. Providing employees with a platform where they can identify these special skills in them is, therefore, of critical importance. As noted in this interview, it has helped this firm to develop a pool of highly talented workforce responsible for the success it is currently enjoying in the market.
The respondents also noted that this firm has been very instrumental in enhancing career development of the employees in their respective areas of expertise. It has a program designed to ensure that its employees go through continual education on and off work. At work, these employees are always assisted by industry experts to understand what is expected of them as pilots, cabin crew, and security officers, junior or senior managers at this firm.
The management of Emirates Airline also created a fund for its employees who wishes to go back to school for further education. This means that their employees can register for higher degrees at local and international universities and the company helps in paying their school fees. The firm has specifically recommended e-learning so that these employees can continue with their education even when they are at work.
It was also apparent that the employees were satisfied with the succession plan that has been used at this firm, whether at the top management unit or at junior levels. The succession plan that has been used at this firm over the last decade has made it possible for it to maintain its success despite the challenges that it has been facing. The respondents specifically stated that the current president of the firm, Tim Clark, came to this top position in a very systematic manner that did not disrupt the operations of the firm.
Although sometimes the firm often considers hiring top managers from other successful firms, most of the mid and junior managers are always taken from its employees through promotional programs. This strategy has helped in boosting the morale of the employees.
Areas in which the firm is not doing well
In the analysis above, it is apparent that the respondents felt that Emirates Airline is doing a lot to ensure that it remains successful in an industry that is increasingly becoming competitive. However, they also felt that there are some areas where this firm is not doing well in and may need to adjust as a way of becoming more competitive. Almost all the respondents, especially the junior employees, stated that the firm was exhausting them by making them work for very long hours.
The employees do not have a choice but to follow the set work schedule in order to avoid punishments. Some of the pilots stated that they spend a lot of time in air and have very limited time for their families or personal issues. One of the cabin crew stated that the firm has earned itself the name ‘Golden Cage’ among its employees because of the long hours of work and limited time for one’s personal issues.
The management was also accused of lack of proper ways of handling scandals that emerge out of its operations. In 2010, a scandal emerged where flight attendants were accused of engaging in indecent sexual acts while on duty. This scandal was brought to the attention of the top management of this firm well in advance and it was expected that something would be done to control the damage.
However, the respondents noted that the management did nothing, and this led to the unfortunate scenario where the scandal was published in the popular media. It was an indication that this firm is yet to develop effective damage control mechanism when faced with a crisis such as that brought up by the scandal. The scandal would have been addressed internally without reaching the media if the management acted in a timely manner and decisively.
Some of the participants in this study complained that the management is heavily relying on experts when coming up with innovative ideas, especially the emerging trends in the market. They stated that the junior employees are rarely engaged when coming up with new innovations. They are often directed to embrace the innovations which are already designed. Some of them stated that they have innovative ideas that can help improve the performance of the firm, but they are not given the platform to share them.
Emirates Airline is a very successful firm that has managed to overcome various environmental challenges to emerge as one of the leading firms in the global aviation industry. However, it is apparent that it has a number of weaknesses that will need to be addressed to ensure that it operates successfully in the market. The following are some of the recommendations that should be observed.
- The issue of employees’ exploitation should be effectively be addressed to avoid similar complains in future. Such complaints affect the employees’ morale and team spirit within the firm.
- The management should come up with damage control mechanism to address cases of scandal within the firm such as the one that was witnessed in 2010 that tarnished the image of the firm.
- The process of developing work schedule should be engaging where all the stakeholders, especially the employees, are actively involved to avoid situations where some of the employees feel that they are overworked.
- The management should realize that employees have an important role to play in promoting creativity and innovation within the firm. As such, they should be accorded platform to participate actively in promoting innovation within this firm.
It is apparent from the discussion above that Emirates Airline is a very successful firm that has been very successful in the aviation industry even at times when other firms were experiencing challenges in the market. The firm has developed effective structures and systems that enable it to recruit and maintain talent, improve their performance, and promote creativity in their operations. The firm also has very effective means of managing its finances, a fact that has enabled it achieve its current success. However, some of its employees feel that they are not actively involved when coming up with new innovations. This issue should be addressed and at all times all the stakeholders should be allowed to take part in promoting innovation within the firm.
- Nationality: Emirati_____________ Non-Emirati______________
- Gender: Male_____________ Female______________
- Education attainments:
- High School______Bachelor’s______Master’s_______Doctorate______Other_____
- Are you currently working for ABC Company?
- What is your current position within this firm?
- Top management position
- Mid-management position
- Non-management position
Innovation at ABC Company
- How innovative is ABC Company?
- Highly innovative
- Barely sure
- Not innovative
- Detest new ideas
- Do you believe that the management is doing enough to promote innovation at this firm?
- How flexible is the firm’s workforce in terms of embracing innovation?
- Very flexible
- Barely flexible
- Very inflexible
- Is the management doing enough to promote culture of innovation within this firm?
- How creative is the management of this in addressing emerging trends in the market?
- Very creative
- Barely creative
- Very uncreative
- Do you believe that there is room for change at ABC Company in terms of promoting innovation at this firm?
- What is the role of management in promoting creativity and innovation within this firm? Kindly explain.
- What is the role of the junior employees in promoting creativity and innovation within this firm? Kindly explain.
- What is the role of the board of directors in promoting creativity and innovation within this firm? Kindly explain.
- Do you believe that the government has any role to play in promoting creativity and innovation of firms in this country? Kindly explain.
- What are some of the environmental forces responsible for promotion of innovation within this industry? Name them.
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Graham, Anne, Andreas Papatheodorou, and Peter Forsyth. Aviation and Tourism: Implications for Leisure Travel. Farnham: Ashgate, 2010. Print.
Kuratko, Donald, Jeffrey Hornsby, Jeffrey Covin. “Diagnosing a firm’s internal environment for corporate entrepreneurship.” Business Horizons 57.1 (2014): 37-47. Print.
Smith, Joel. Airlines of the United Arab Emirates: Emirates, Etihad Airways, Emirates Skycargo, Air Arabia. London: University-Press Org, 2015. Print.
Wiliona, Jack. Airline, Hotel & Travel Industry Market Research, Statistics, Trends & Leading Companies. Plunkett Research Ltd, 2010. Print.