Easy Jet And The Recession - Essay Example

? Easy jet and the recession Contents 0 Introduction 3 2.0 The Organisation 5 3.0 The Challenge 7 4.0 Recommendation 9 5.0 Conclusion 10 Reference 11 Bibliography 12 1.0 Introduction One of the most important human activities is managing. Management is defined as the art, science of achieving the goals through people. Mangers supervises management and thus it can be interpreted that management means “looking over” which means to make sure that people do what they are supposed to do (Manjunath, 2011, p.2). Therefore mangers in organisation are expected to ensure productivity. Theories are termed as perspectives through which people can make sense of global experiences (Stoner, et al. 1995, p. 31). Thus theory is a systematic grouping of concepts which are interdependent and principles which provides a framework to tie together a significant area of knowledge. Data which are scattered are not information until and unless the observers have the accurate knowledge of the theories that needs to explain the relationships. Therefore according to Homans (1958) theory can be defined as “in its lowest form a classification, a set of pigeon holes, a filing cabinet in which fact can accumulate. Nothing is more lost than a loose fact” (Homans 1958, p. 5). The principles of management are the fundamental truth which explains the relationships between the different set of variables which usually constitute of dependent variable and independent variable. Mangers often apply the theories with the practical life and help to solve problems in the future and present which might occur in the organisation. Thus it can be said that there are mainly three major reasons as to why managers needs to know about the management theories are firstly the theories provides focus for understanding the experiences and relevance. Secondly, with the help of theories mangers are able to communicate and has the capacity to move into a more complex relationships. Thirdly, with the help of theories mangers can learn about the ongoing into the world (Olum, 2004, p. 1-11). Management theories accounts for and helps to interpret the rapidly changing environment in the organisations. This paper aims to deals with different types of management theories such as scientific theory, behavioural school, management science, system approach, contingent approach, and dynamic engagement approach (Thenmozhi, n.d). Another important aspect in an organisation is the culture and this can be well explained with the help of competing value approach. According to Quinn and Rohrbaugh (1983) it is the most conceptual model of culture. This model of competing value approach can be one of the four types that has been categorised, which constitute of clan, market, hierarchy and adhocracy. The clan culture based on the framework emphasise goal, participation and shared values and also a sense of family. Market culture tends to emphasis environmental interaction, competition, as well as customer orientation. Adhocracy usually emphasis creativity, entrepreneurships and also adaptability and hierarchy constitute of rules and regulations, lines of concerned authority and efficiency (Smart, 2010, p.389). Figure 1: Competing Value Framework (Source: Rainey, 2009, p.164) The competing value framework tends to work closely with the management theories. Most of the organisation tends to apply all the factors included in the competing framework. The four factors are equally important for the effective working of the organisation. The model helps a manger to understand the working conditions of the environment and finally match the culture with respect to the operational climate. 2.0 The Organisation Easy jet is one of the successful low cost airlines in Europe, established in the year 1995. It is based in London Luton airport and operates domestic and international services to about 400 routes in Europe and carries about 40 million passengers in a year. The airline industry and the travel agencies are competing with each other in order to build up a strong online strategy to attract the customers and in return generate sales. Easy jet has also developed online strategy by offering online holiday packages. It deals in mainly two types of holiday packages. The first is termed as ‘dynamic packaging’ which includes selling the customers tour package which involves separate charges for flight and hotels. The next type is ‘Opaque Packaging’ where the customers pay a single price for both the flight and hotels. Easy jet provided multi language option for flights but not for the holiday packages though it wanted to make the concept of holiday packages internationalise and increase the market share. To enable this service IVIS group provided the airline with a team of technology consultant to assist the team of easy jet and work tighter to understand the online processes (IVIS group, n.d). Easy jet strategy is based on the six strengths that support the competitive, sustainable growth and scalability. Easy jet strategy, which it had been following from the past are the airlines commitment to safety and service to its customers, low fare structure, strong branding, low cost of unit, a strong corporate culture and its multi based network (Williamson,2002).the company mission states to provide its customers with safe, point to point service and good value. Thus it has maintained its mission. Easy jet concentrates more on the pricing strategy and has become one of the most successful low cost carriers. It has use the internet to reduce its distribution cost, no distribution of free lunch on board, etc. Its operational policies were to keep the cost minimum so that it can allow the airlines to offer the lowest fare. This operational model also concentrated on moving people from one point to another (ICMR, 2003). The management theory plays an integral part in the working of the organisation. Easy jet is one of the low cost airline operating in Europe and it seems that there exists no correlation between the low cost strategy airline, the Easy jet and the used of theories which were developed by Taylor but when analysed it can be said that the strategy adopted by Easy jet is an innovative application made through scientific management. But at the same time it can be said that today’s organisation needs to be efficient in all aspects. The system theory, which most of the organisation did not follow in the past seems to face problems. Similar is the case with Easy jet, with drastic and frequent changes in the organisation, due to recession, financial crises and other undue changes, the airline did not plan for the future as to how to handle the issue with utmost concern. Easy Jet is the most successful low cost airlines operating in Europe but it should be kept in mind that the airline industry is facing a tremendous pressure from factors such as increase in oil price, shift in consumers demand, new technology and infrastructure and also with recession hitting the consumers’ pockets. Thus it is important for managers to know more about the organisation at a broader perspective and interpret the patters of various uncertain events taking place in the organisation and workplace. When it comes to contingent or situational theory it is necessary for mangers to make plans for any future uncertainty and act accordingly. Recession is the main issue with the airlines industry, and this has lead to flight delays, thus Easy jet should have looked into the matter before hand and plan accordingly so that the punctuality of the airline do not get affected (Osborne, 2010). Similar to the theory of contingent, the Chaos Theory takes care of the global events that are mostly common in the global organisation. An event occurring in one part of the world seems to affect the entire world due to globalisation and expansion strategy that most of the organisation has adopted. The chaos theory states that with more complexity the system tends to fall apart and an effective manger is required so that the worst scenario does not take place. Easy jet does not apply the Chaos theory and thus it faces conditions from across the world. Therefore it can be said that Easy jet has well adopted the scientific theory but other theories are not well accepted by the airline which are of immense importance for the organisation to survive in the worst conditions. 3.0 The Challenge Easy jet low cost airlines in order to survive in the tough world with so much of pressure from the entire globe needs to follow the management theories. The management theories would help it to fight against the adverse situation that it might get affected in the upcoming years. Globalisation has not only opened up several doors for organisation and provides advantage but at the same time many disadvantage also follows with the globalisation. An incident occurring in one part of the world tends to affect the entire globe and everybody gets affected, from individuals to organisations. With a rise in the recession, no doubt easy jet a low cost airline has managed to make profits which rose to 70% (Peninsula News Paper, 2010) but the hike in the fuel cost has hampered the low cost airline and has reported to be more than doubled. But despite the financial success which easy jet has experienced, but with a data realized by the Gatwick airport indicated that less than 50% of easy jet flights took off on time (Airport Watch, 2012). It did not consider the contingent approach which has lead to the fault. But at the same time the airline is fully aware of the fact it has been facing major problems with respect to managing time and it is important for the airline to handle the issue. But this is a big challenge for the airline and this is because, with recession hitting the airline industry Easy jet has detained many of its employees and this has ultimately lead to the issue with the punctuality of its flight timings and employing new staff would cost much to the company. Another reason with respect to uncertain conditions is that due to strikes which have taken place in Europe has affected the total working of Easy jet. Another major challenge with easy jet is the global financial crises. When the world is affected the airline industry is the worst affected industry (Harvey & Turnbull, n.d). Companies or organisations cannot prepare for such contingents but it is necessary for organisations to make plans for contingencies. In an uncertain world, an event that takes place tends to affect the entire globe and that too immensely. The main challenge for easy jet lies on the fact that is the preparation of contingencies but the question is what types of events might affect the airline; it might be recession, global financial crises, and also climatic changes affecting the industry. Thus the main challenge is the survival in the worst conditions. In addition to recession and global financial crises, an increase in the fuel price has an adverse affect in the airlines industry and Easy jet a low cost airlines would immensely suffer from such an increase in the price (Milmo, 2011). Other airline could easily hike the price but Easy jet categorized as a low cost airline cannot hike the price with such as ease giving an edge to its competitor Ryanair. The continuation of Euro crises also has the possibility of posing a serious challenge for the airlines (The guardian, 2012). 4.0 Recommendation Easy jet has been operating as a low cost airline and in spite of the challenges the airline has managed to put up the profits thus it could be said that Easy jet has been economical and operationally strong due to the adaptation of scientific approach of management theory. But despite profit and revenue generations the airline is facing serious problems and challenges with time management. More than 50% of the Easy jet flight has been running late which has been hampering the customers travelling into different stated due to work or other valid reasons. In the light of management theory, it can be recommended to easy jet that the airlines in addition to the scientific theory need to consider other theories such as the contingent theories and the chaos theory, This is because these are the modern management theories and most of the organisation has adopted this theories and has sustained in the worst economic and general crises. With the adoption of contingent theory, Easy jet can plan and focus more towards the aspect of the current situations and act on the concerned aspects which are important to the demanding situations in a particular organisations. Easy jet needs to adopt a leadership style that will affect the working conditions of the organisation in a positive manner and also plan for the future. It is the required situation when the mangers need to take decision based on a particular situation. Thus with the adoption of the contingent or situational approach, easy jet would be able to manage the uneven and unseen contingencies that night affect the organisation in the future. Secondly it is recommended to easy jet to adopt the Chaos management theory which was coined by Tom Peters. It is important for airline to take into consideration the new management theory because of the fact that this theory has emerged to recognise the events which are not controlled. Easy jet, with an effective manger can control the situation. And finally it would be said that easy jet should put into practise the team building approach which would bring into the organisations, best management practise, improvement and quality circles. With team work, Easy jet can well flatten on the concept of management theory and also at the same time reduce the level of hierarchy. Therefore involving more people into the process of decision making process would open up new ideas and would help the organisation to solve problems and challenges. 5.0 Conclusion Thus it can be concluded that with the help of the management theories discussed in the previous section, Easy jet can solve its major challenges concerning the current situation of the airline and also the upcoming events that might affect the working of the airline. It has been seen that the airline industry has been the most affected industry with a rise in recession and also due to global economic crises. Thus with the adoption of the management theories which has been recommended in the previous section, easy jet can solve the issues and incur an effective working conditions. It can be concluded that the major issue or the challenge faced by the airline was issues regarding the punctuality of the flights. Therefore it is important for the organisation to take into concern the current problem of Easy jet and work on it. Easy jet has experienced a high rate of return and profits and thus it has been the most profitable low cost airline operating in Europe. Reference Airport Watch, 2012. Gatwick News Stories. [Online]. Available at: < http://www.airportwatch.org.uk/?page_id=2084> [Accessed 17 May 2012]. Harvey, G. & Turnbull, P., No Date. The impact of the financial crisis on labour in the civil aviation industry. [Pdf]. Available at: < http://www.ilo.org/wcmsp5/groups/public/---ed_dialogue/---sector/documents/publication/wcms_161566.pdf> [Accessed 16 may 2012]. Homans, G. C., 1958. The Human Group. New York: Harcout, Brace and World. ICMR, 2003. EasyJet: The 'Easy' Way to Succeed. [Online]. Available at: http://www.icmrindia.org/casestudies/catalogue/Business%20Strategy1/EasyJet%20The%20Easy%20Way%20to%20Succeed.htm. [Accessed on 16 May 2012]. 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