Etihad Airways and Its Business Excellence Model

Executive Summary

Etihad Airways is a United Arab Emirates national airways and it is one of the biggest airline companies around the world. The company has successfully applied the Business Performance Improvement Resource Model (BPIR) to emerge as the most successful airline in Abu Dhabi. The Company’s operations management systems incorporate planning, development, implementation, and discovery.

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The system has remained efficient due to consultative decision science which has ensured the company’s survival for more than three decades. For instance, there is a performance tracking system that monitors the costs of running the aircraft, the time it takes to maintain each aircraft, and the general flow of activities from one unit to another. However, there is a need to improve on the long-term strategies in managing capacity, revenues, and customer satisfaction since Etihad operates in a very sensitive industry.

Introduction

Etihad Airways is a national airline company in the United Arab Emirates that was established by a royal decree as the national carrier of the UAE and first started commercial operations in 2003. The business excellence model of Etihad Airways is reasonably good. This paper attempts to review the current business excellence strategy of the airline in terms of its effectiveness. Besides, the treatise presents recommendations to improve the bottleneck identified in the current business management model.

Background of the organization

Etihad Airways Company is considered as one of the most rapidly growing airlines around the world with a fleet of more than fifty aircraft, 900 weekly flights, and an interest in 50 destinations across the world. With less than 12 years in operations, Etihad has been awarded a series of global medals such as the world’s best in first-class flights in the year 2011. The services of the airline are classified as Business Class, First Class, Economy Class, high-end lounges, and limousine pick-up services in more than 20 destinations across the globe (Etihad Airways 2014). The company has an effective business excellence model as evident in its efficiency in services that have guaranteed continuous growth, in terms of market, profits, and physical expansion.

Literature review

Etihad’s Business Performance Improvement Resource Model

Etihad Airways functions on the pillar of the total quality management system. The airline is proactive in safeguarding assets and resources, sustaining efficiency in operations, and ensuring completeness in the management strategies. These strategies support communications culture, efficiency, and optimal resource use in its service delivery to customers (Etihad Airways 2014). The business has incorporated a corporate disclosure and system of litigation variables which are connected at the central point of strategic planning. Every operational decision revolves around quality assurance and creativity.

Besides, the risk proportions are thoroughly verified before informed decisions are made. This procedure is necessary for monitoring decision science, distribution of risk elements, and forecasting future swings in the airline industry market (Escrig-Tena, A, Bou-Llusar, Beltran, & Roca-Puig 2011). The decision-makers in Etihad Airways have rationalized the service delivery processes as a prerequisite for managing operational costs, rather than simply introducing cheap flight tickets and services.

How Etihad Airways Implements the BPIR

Skills required in supporting a business strategy plan are found in the Etihad Airways’ operation management model, which functions as an implementer and driver of business decisions. The variables are connected at the central point of strategic planning which encompasses cost, flexibility, and dependability to create a smooth continuous operation tracking model that operates like a computer from one segment to another (Slacks 2012).

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Through the setting of performance targets for the staff members, the employees always strive and work harder to satisfy the needs of the ever-growing demands of their customers. Besides, the topological structure of the airline consists of a communication and operations management system which helps in determining efficient performance and optimal resource use (Etihad Airways 2014). The continuum of increasing the value of quality in operations through the BPIR at Etihad Airways lies in constant training, strategic planning, and employee motivation.

Data collection

Data collection for this research was carried out through reviewing secondary data on the management and performance of Etihad Airways. Data was collected from past performance reports of the company, journal articles, and books on business excellence through performance efficiency. The findings in the secondary research are explored further in the subsequent segment of the research paper.

Discussion

The efficiency of the soft skills

The key part of the success puzzle for operations management strategy at Etihad Airways operates with an efficiency of the soft skills involving a timeless vision of organizational principles, defining the value of the business, determining requirements, clarifying the vision, building teams, mitigating task, resolving issues, and providing direction (slacks, 2012). Moreover, the company’s strategies for balancing act between optimal performance at minimal operation and overhead costs are a component in its system modeling (Jaisnkar & Mistra 2007).

Efficiency in the value maintenance

Reflectively, relaying information on the success of operations is dependent on operations strategy for value maintenance. In the process of balancing the act, a quality operations management system should be capable of applying the scientific skills in an artistic manner through informed and perfectly framed use of soft skills to address technical aspects of production management (Slack 2012). Generally, the quality operations management system at Etihad Airways is that which satisfies requirements within the budget and time schedule without disintegrating initial goal projections (Etihad Airways 2014). Since its inception, the company has maintained positive growth and expansion of profits as a result of the efficiency maintenance strategies.

The balance between the short-term and long-term goals

Generally, the corporate strategies of Etihad Airline are to ensure long-term and sustainable operations. For the implementation of the strategy, the management balances both the short-term and long-term considerations towards decision making. Management that ensures long-term obligations is fulfilled. They consider the role played by planning for resources in technology, continued innovation, and conducting researches in the market to identify market niches within the customer segments (Etihad Airways 2014). For instance, the long-term expansion and further market penetration have been integrated through a series of beneficial partnerships, performance evaluation, and proactive innovation in the services to meet the demands of its diverse customers.

Recommendations

Adopting the Flexible Monitoring System (FMS)

Business efficiency is critical in the product management line since it is characterized by optimal utilization of allocated factors of production within the least possible cost. From the above refection, it is apparent that the Etihad Airline will gain in the long run if it adopts the Flexible Monitoring System (FMS). Despite lower returns on investment below the projection, the overall effect of adopting this proposal will have benefits that will outweigh its limitations.

For instance, when the FMS is fully adopted as proposed, the reduction in the cost of factors of operations such as labor and reduced actual operation costs will result in accumulated gains as a result of controlled costs that are recurring. Due to increased output, the market will eventually expand and the company will get more revenues (Jaisnkar & Mistra 2007). At the UAE location, the quality system is certain. Thus, when the system is quality-oriented, the entire chain coordinating these segments would result in optimal operations at the airline (Harrison & John 2010).

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Adopting the Six-Sigma

The company should also adopt the six-sigma approach in quality control and assurance in the customer care and operations department. The proposed Six-Sigma is aimed to reduce wastage of resources that can be experienced in long queues and ineffective task outputs, such as the current slow customer order processing system. The Six-Sigma will also integrate employees to provide the highest quality services through self-assessment and a proactive approach to skills tests. Six-sigma is done to prepare, synchronize and manage the multifarious activities of the company through an efficiency module (Powell 2005).

Modification of the performance measurement variables

In order to achieve quality operations management, Etihad’s existing forms of system monitoring should be periodically upgraded to introduce multiple operating system models such as ratio analysis in operational management. Despite having this efficient operations management system, the company has not fully established a mechanism of monitoring progress at the micro level and depends on macro auditing in decision making and still has to deal with the risk of internal redundancy (Powell 2005).

Conclusion

Etihad Airways has a relatively stable business excellence management system. However, there is a need to make adjustments in the efficiency pillar through adopting the Flexible Monitoring System, Six-Sigma, and performance variable to ensure sustainability in its business operations in the dynamic airline industry.

Reference List

Escrig-Tena, A, Bou-Llusar, C, Beltran, M, & Roca-Puig, V 2011, “Modeling the implications of quality management elements on strategic flexibility.” Advances in Decision Sciences, vol. 1 no. 1, pp. 1-27.

Etihad Airways 2014, About us. Web.

Harrison, J & John, C 2010, Foundations in strategic management, South Western Cengage Learning, Ohio.

Jaisnkar, S & Mistra, N 2007, Quantitative techniques for management, Bharathiar University, India.

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Powell, T 2005, “Total quality management as competitive advantage: a review and empirical study.” Strategic Management Journal, vol. 16 no. 4, pp. 15–37.

Slack, N 2012, Operations and Process Management: Principles and Practice for Strategic Impact, Pearson Education Limited, Alabama.

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