Structure and performance organization of a company has a great impact on its culture and profitability. Effective structure is a core of work and performance management bonding together all the elements of organizational success into a single, aligned process that channels employee performance toward the same organizational goals and reinforces and maintains that alignment through reward and recognition programs. If the power of this tool can be harnessed and used to the fullest, then organizations can better their chances of success in a highly competitive business world. The company selected for analysis is Emirates Airways. This company is the largest carrier in the Middle East founded in 1985.
The Organization Environment
Regional airline business succeeds because of unique strategies and market niche occupied by airline carriers. Regional airline industry consists of independent carriers specialized in short haul flights. The success is that regional airline industry services small communities in partnership with large carriers. There is no fierce competition between large airline carriers and regional carriers because of unique environment and lack of capabilities of large airlines. Technology and partnership with large carriers is another success factor. The success of the regional airline carriers is explained by attention is directed to the selection of the logical or best strategy under conditions of risk (Belobaba et al, 2009). Of course, expenditures for certain types of service are declining while others are gaining.. It is also important to recognize technology, particularly as it interacts with the strategy and organizational structure of the regional airlines. These expansions reflect desires to meet consumer needs and capture a larger part of the discretionary dollar. Services are not accorded concrete treatment in marketing, since they are intangible and difficult to deal with. Life styles are leading passengers to larger expenditures on services, which are important not only in the aggregate but also in their influence (Emirates Airways. Home Page, 2010).
Following Mullins theory of OB, the strategy of Emirates Airways is based on unique brand image and partnership (Mullins, 1993). The key is to have a strategy for investigating and integrating the various technologies over time (Belobaba et al, 2009). This is a challenging endeavor, to say the least. The importance of Emirates Airways strategy is that its operational strategy and organizational structure are developed simultaneously with the implementation of new information systems (Emirates Airways Home Page, 2010). At some point, new strategies and structures are required on the basis of what the information technology can deliver. It is all too easy to improve the information technology of the firm in increments only to find that it does not mesh well with the existing strategy and structure. As a result, these separate components become impediments to successful implementation. Strategy, structure, and systems must be melded together as an integrated whole (Bolman and Deal, 2003).
Emirates Airways followed differentiation strategy and tries to achieve sustainable competitive advantage. Service differentiation results from different service processes, research and know-how, design and adjustment of products, and the variety of wants and needs represented by price, quality, style, and other product attributes. Service differentiation, which tries to bend demand to meet supply, has considerable effect on a firm’s market position and margins. Or it may be achieved through a totally redesigned product or a technological breakthrough, as in the use of transistors in electronic products (Belobaba et al, 2009). Emirates Airways is faced with the need to instill an image in the minds of customers that distinguishes their products from others and causes the customer to react more favorably toward them. This might be the result of the image of the company itself, its distributors, or the product per se (Hersey et al 2001).
Emirates Airways has unique resources and capabilities to compete with large airlines and its direct competitors. Unique capabilities involve human resources and loyal customers. The implication of the realization that organizational boundaries are arbitrary is important: control is not, cannot, and should not end with organizational employees and resources (Emirates Airways Home Page, 2010). The key to controlling the firm’s environment is to build and manage networks of personal relationships–a living bridge between people in the organization and key people in the organizational environment: customers, resource and technology suppliers, liaisons, including the media, regulators, even competitors (Cole, 2005).
The main weaknesses are safety concerns and fuel prices, old fleet and dependence of large carriers. These factors decisions influence prices, middlemen activities, and margins. They strongly affect inventory situations and production fluctuations, as well as marketing policies in such areas as advertising, branding, product lines, personnel selling, and physical distribution. Yet channel selection often receives less attention than such areas as the allocation of advertising budgets or the motivating of salesmen. Although a continuing task, resources are often treated as a decision to be made once for a relatively long period of time. Whereas stratgic decisions usually involve long-run commitments, strategic policy is not irrevocable. It must be reviewed and changed to improve efficiency. The wrong strategic choice can severely handicap a program, especially for a new product, and yet switching channels is not likely to be a frequent occurrence because it is a disruptive and costly undertaking (Emirates Airways, Home Page, 2010).
Following Mullins theory, growth is accompanied by larger organizational complexes, both internal and external, that place pressures on coordination and integration (Mullins, 1993). As the growth process continues, we see shifts to product, divisional, or functional areas to ease pressures on coordination. Emirates Airways’ financial data reveals growth and profitability caused by effective use of resources and investments. Even where standards are set, however, it is not expected that performance will correspond exactly. Rather, tolerances are established and corrective action is taken when performance falls outside the range of tolerance. Financial data shows that the company integrates and coordinates marketing activity and marshal marketing resources to realize desired outputs. A most significant item in a budget is estimated sales, which are based on the sales forecast. Given estimated sales, the anticipated expenditures necessary to generate and support the sales volume are presented. However, since sales and expenses are interrelated, forecasts in turn depend on supporting marketing programs. Production, personnel, and inventory budgets should be derivatives of the sales budget. Budgeting sales, however, is no easy task, and it is not enough merely to budget total sales (Cole, 2005).
Functional Relationships and Lines of Communication
At Emirates Airways, functional relations are based on strict rules and delegation of authority, span of control and stipulated duties (see Appendix 1 and 2). Organization is important for every department because it allows it to delegate and separate functions and maintain strict control over all activities. For Emirates Airways, the establishment, evaluation, and systematic review of organizational priorities become acute needs (Cole, 2005).
The organization function stipulates rank structure, personal relations and compensation system. The purpose of organization is to ensure approaches to establishing priorities: the nominal group technique. Like other organizations, Emirates Airways operates in turbulent environments that imposes numerous, rapidly changing demands and require substantial capacity. In order to manage the future direction of the organization and to establish the most effective direction for achieving organizational goals, Emirates Airways should understand the dynamics of strategy in organizations (Foster-Fishman et al, 1997).
Organization by area stipulates posts and sectors, zones of control and precincts. Thus, an organizational structure is important in achieving performance. The organization function can be described as a process perspective, focusing on systematic analysis and effective planning. It enables us to become aware of the demands of particular events and the conceptual schemes or mental models operating in specific contexts. Organization by area accounts for ability to reframe our experiences in different terms, so that Emirates Airways officers and administrators can evaluate our operative models and critique role demands. As free reflection, Organization by area helps in developing fresh interpretations of particular scenarios and creating new perspectives. Organization by area enables us to integrate theory into decision (Hersey et al, 2001).
In Emirates Airways, communication is a core and framework of effective performance and strict delegation of authority and functions within the company. Organization allows Emirates Airways top ensure effective management and organization of human resources. Organization function ensures division of labor, chain of command, span of control, delegation of authority, unity of command, stroct rules, regulations and discipline. These situations are typical of much of the program and policy planning that takes place in government today. Unfortunately, many decisions must be made in an environment where the goals, constraints, and consequences of possible actions are not precisely known (Foster-Fishman et al, 1997).
Mechanistic and Organic Structures
Emirates Airways is based on organic structure. This structure permits joint specialization and integration of all operations and mechanisms. While rapidly growing from the small company into a large multinational at its current level, when each employee is able to make his/Emirates Airways own contribution toward the internal and external corporate processes and development. The overall structure of Emirates Airways look like the following: hundreds of individual contributors report to middle managers who report to division managers who in their turn report to the management team. The main question about Emirates Airways today is whether the company’s approach to management and innovation, thus, organizational culture, is a cause of its success or a product of its success. In close examination the business model of Emirates Airways is rather simple for using its network to get their messages (Mullins, 1993).
Mechanistic structure, characterized by individual specialization and hierarchy of authority is found in horizontal structure and relations between top managers and employees. Organization by purpose demands that administrators examine carefully not just the case but also perspectives and biases. One needs to develop more critically evaluative perspectives even in engineering and scientific analyses and most surely in the use of statistics. Given that all are activities are embedded in a conceptual scheme and framed by organization, are such critically evaluative perspectives possible (Hersey et al, 2001).
Given the total range of services supplied by a channel (the wholesaler, for example), Emirates Airways should be able to distribute to broader market areas and to expand their production capabilities. As distribution channels change, so do corporate financial requirements and resource positions. Emirates Airways managers designing distribution channels should adopt the perspective of the total channel rather than of the immediate link alone, as many are prone to do. Among the market factors that should be analyzed are customer habits and wants, purchasing requirements, degree of geographic dispersion, depth and breadth of market, trade practices, and control of channel desired. The product features include perishability -both style and physical; type of product — convenience, shopping, specialty, consumer, or industrial; large versus small purchases; and price value relationships. From the airline industry standpoint, the things to consider are the length of the line, the geographical distribution of markets. Improve service quality and safety will be the main advantages and benefits of Emirates Airways which attract new customers and create a core of loyal travelers. Emirates Airways should create a unique brand image recognizable by the regional customer group (Mullins, 1993).
The Organization Structure
Organization by time helps Emirates Airways to maintain four tour conditions and systems. Organization by time allows Emirates Airways anticipate untoward consequences, and project new practical solutions that take into account a variety of points of view and respond to or even create demands. Organization by purpose ensures line and staff relations and establishes the Emirates Airways units (Mullins, 1993). The case of Emirates Airways demonstrates that the main barriers to effective communication between employees are perceptual barriers, emotional barriers and interpersonal barriers (such as withdrawal). These barriers prevent effective communication and interaction between employees. Cross channel communication” is neglected so this creates additional problems for Emirates Airways. If a work group sees its overall task as a collective activity with mutual responsibilities, the group, within the constraints of agreed upon quality and health and safety standards, takes on the responsibility for internal task allocation and with it the self-regulation of individual activities. Internal coordination and control by a supervisor are replaced by outcome-oriented process supervision on the part of the group as a whole. The decision latitude for internal task distribution depends on the skill and competence level of the work group members. The barriers prevent team members and employees to communicate effectively and cooperate. The range of competences has to be seen in the context of group size and the complexity of the overall task. In larger groups with more complex tasks, overlapping competences might be sufficient; in other words, not every person has to be able to do everything Competence increases as time goes on, as individuals acquire new skills and problem-solving capabilities. Multi-skilling and task rotation can vary according to individual preferences and their current level of competence, allowing group members to find suitable niches (Emirates Airways, Home Page, 2010).
The organization culture of Emirates Airways is based on direct approach. This approach will help Emirates Airways to improve comprehension, coordinate communication and save time. Sensitive messages will aim to create trust and credibility among employees and motivate them. In this case, individualists view their team as an entity in and of itself rather than one that is connected to the external context and are therefore even less apt to use external sources of information to make corrections in their behavior and improve their performance. Particularly in individualistic cultures, team-based organizations need to have systems that help teams set realistic expectations. This allows them to stay motivated while at the same time remaining open to learning from feedback and mistakes. Doing so often requires extending team members’ task skills. Task skills and effective performance is impossible without effective communication and positive climate. Emirates Airways should discuss the benefits and threats of the proposed actions with employees and motivate them to express their opinion and views (Robbins, 2004).
To address these potential impediments, HR practitioners can encourage sharing practices within and between organizations, observe and adapt to organizational environmental trends, and maintain awareness of cultural convergence. HR professionals who can change their assumptions and are adept at modifying basic HR practices will be better poised to face future trends in the use of teams that are just on the horizon. The effective communication is a critical tool for increasing employees’ awareness of the value of their contribution to the organization’s success and for creating a dialogue with their managers that can enhance the contributions that employees can make. Indeed, change and organizational transformation are unlikely to occur without new values being introduced into the performance management system (Robbins, 2004).
Emirates Airways develops an effective communication strategy in order to improve interpersonal communication and morale at Emirates Airways. Emirates Airways should choose the best communication style to change current culture and communication. The best style is consult/join style. The advantage of this style is that it will help Emirates Airways to communicate with employees and meet their expectations and needs (Hersey et al, 2001). The strategy will be based on audience strategy approach which allows the manager to meet diverse interests and needs of employees. This will prevent the emergence of narrow group self-interest and will help preserve equities among the entire workforce. Thus a balance must be maintained between decentralization of rules and unit functional autonomy and consistency of certain principles and practices across units. Otherwise, autonomous units will tend to develop animosity and competitive relations with other units. A coordinator might be elected by the group to handle external communication. To avoid the development of hierarchies or unintended supervisory roles and conflicts of interest, the role of the coordinator should be rotated. People respond differently to certain working conditions or task demands. What is seen as a challenge by one individual may be experienced as stressful by another person. Negative effects on psychological and social well-being occur if a person feels qualitatively or quantitatively overloaded or underutilized. The persistence of such factors over time can result in symptoms of stress-related illnesses and long-term negative health effects. In general, the potential a job offers for personal development increases with more individual and collective discretion in decision-making and organization of work activities (Robbins, 2004).
Perceptual barriers mean that all people see the world differently. In order to understand each other, employees at Emirates Airways should pay a special attention to individual differences and different communication strategies. Perceptual barriers at Emirates Airways lead to poor performance and lack of cooperation between employees and departments. In order to rely on internal flexibility to deal with personnel fluctuations due to absences or changing output requirements, adequate personnel resources and sufficient time for planning are needed in addition to a certain degree of multi-skilling of group members. Then the group will be able to balance the variances on its own (Tannenbaum, 2003).
Emotional barriers involve fear, mistrust and suspicion. At Emirates Airways, the appointment of managers and their “open door policies” lead to emotional barriers between some employees and management. This prevents the group to plan its work activities over a longer time period. Based on the principle of self-regulation, the work group has to be able to set its own norms and rules for internal cooperation and the resolution of problems and conflicts. These norms and rules are likely to reflect the characteristics of the group’s composition (Hersey et al, 2001). The group, therefore, should have input in the selection of its members. Interpersonal barriers (such as withdrawal) are a result of past experience and individual relations between employees. Absence of interpersonal communication and contact leads to poor performance and lack of trust, poor communication and coordination of work. Group norms and values should have to be consistent with overarching values, principles, and guidelines of the total organization or, in the case of unionized firms, with both the employer’s and the union’s beliefs and values (Woodall et al, 2004).
The Organizational Life Cycle
Emirates Airways is at collaboration stage. The addition of marketing specialists, such as researchers or planners, induces the division of labor, more organization levels, and greater coordination. This requires the establishment of more formalized procedures and special staffs and departments (see Appendix 3). Both rate and kind of growth affect an organization’s form and efficiency. Although growth is partially an internal process, market conditions establish external constraints and influence both the current use of resources and the direction of expansion. Despite the difficulty of controlling marketing factors precisely, standards must be established to assure intelligence about marketing inputs and outputs, costs and results. Marketing management must evaluate the productivity of an operation and realign and adjust various elements of the mix in order to gain more effective performance (Woodall et al, 2004).
The Appropriateness and Efficiency of Technology
Technology is becoming a primary tool for serving the customer, improving decision making, and streamlining the management of the airline enterprise like Emirates Airways. Towards this end, it is important to keep systems “in sync” with how the business is run today and will be run in the future. The key will be to apply technology in order to gain a sustainable competitive advantage. Only by applying technology in this manner can exceptional profit performance be achieved. What follows will reveal the threats to airline industry from each of these potential competitors due to developing technologies that can be applied by others as well as by current airline carriers. The real challenge for airline carriers is, because the technologies are available to everyone, the mixing and blending of different technologies together into an applications system that constitutes the competitive (Woodall et al, 2004).
The main goal of Emirates Airways is to retain the company’s unique culture and keep the Emirates Airways happy by figuring out ways to maintain, enhance and develop Emirates Airways culture and keeping such core values as lack of hierarchy, flat organization and a collaborative environment. With the overall mission of making information accessible to the world, Sullivan identifies the general characteristics of Emirates Airways’s culture as team-oriented, very collaborative and encouraging people to think nontraditionally The internal communication within Emirates Airways is diversified starting from personal face-to-face communication at the working places or in special communication cabins and ending with conference calls between departments and international offices. Communication process is open and friendly so that any concern or idea has become known to colleagues and managers to be solved or applied. In such a way, the more businesses and initiatives companies and individuals are doing online, the more ads they produce and more money they create for Emirates Airways. That is why, to make such business processes easy, affordable and effective for its customers, Emirates Airways makes its employees teams diversified in terms of education, nationality, experience, innovative ideas and projects. There are no standards or limitations in hiring people since every skill and knowledge they have might be useful for Emirates Airways’ new services and products to be offered for its customers around the world (Willmott and Knights, 1999).
One of the main work-related advantages of Emirates Airways is that it creates small entrepreneurial teams that work on specific projects that look like start-ups businesses, where each participant is able to make his/Emirates Airways own contribution toward the development and success of that project. Everyone’s opinion is important and taken into consideration, which inspires high commitment and is rewarded by appropriate compensation. Another advantage is that company’s engineers are given 20 percent of their working time to devote to their own ideas and projects, which should be approved by the manager to proceed and might become small independent businesses inside Emirates Airways if they prove to be effective. Those employees whose projects and innovations add value to the Emirates Airways franchise can be granted Founders’ Awards of millions of dollars. Moreover, in order to encourage the sense of ownership, Emirates Airways provides its employees with stock grants or options, which increase as the corporate revenue grows (Willmott and Knights, 1999). Another advantage of the company within the working environment is Emirates Airways’ technical assistance on each floor of each building. They include all the necessary technical staff to fix any problem employees might have. Instead of spending several hours to identify the problem and try to fit by himself, the employee can just go to technical assistance and get the solution right away. While having additional storage of keyboards, cables, mice and so on, Tech Stops are able to provide employees with anything they need since it is broken, old or does not work. This saves a lot of time and increases employees’ productivity since their technical problems are solved within the minimum possible time. Moreover, such open communication with technical staff establishes a strong relationship with IT people, increase technical knowledge of employees themselves and encourages a more flexible model for employees to define their own equipment needs (Meyerson and Martin, 2001).
Issues and Recommendations
The selected communication channel is appropriate because it allows fast response and better coordination of all efforts. Thus, if an organization’s goal is to increase worker participation, it must not overlook its computer applications. They can facilitate or inhibit information sharing and interaction within an organization, and thereby facilitate or inhibit the maintenance and growth of worker participation in the organization as well. The main variable that shapes organizational culture is new rituals and principles introduced by Emirates Airways. When a major reorganization occurs within a company, the benefits of the reorganization are not always immediately apparent. Employees are shuffled around, out of one department and into another, taking on new or additional tasks. Management roles might change. Work locations might change. However, out of this apparent chaos might emerge a stronger, more viable corporate structure. But one factor that undermines this type of activity is that people are basically resistant to change. People become comfortable with the status quo and organize their lives around perceived constants. When these constants that stabilize one’s life are disrupted, one tends to resist them, even if the future benefits will outweigh the current inconvenience. The strategies of the company are to reduce resistance to change and prepare employees for future merger. Some employees, for whatever reason, will always view this type of change as a threat, and information will not be volunteered. Their strategy is one of turf protection and not one that furthers the overall corporate objectives. If left unchecked, their sentiments might spread like a virus to others within the organization and could completely shut down communication within the organization (Hersey et al, 2001).
The analysis shows that the organizational design is appropriate as it allows Emirates Airways to improve communication and create positive culture in all departments at Emirates Airways If the merging firms are separated by great distances, communication becomes all the more essential. When opening up a new office or division in a new city, state, or country, plans are made well in advance to maintain communication. Periodic meetings, reports, or visits by management are all traditional methods of keeping in touch with the field office and keeping it in check. Likewise, steps must be taken in advance to ensure that the communication between the merged organizations is maximized. Temporary relocations may be necessary to ensure that information is transferred to the appropriate personnel.
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Line of Communication
Organization Life Cycle