Understanding Business and Management Methods - Research Paper Example

Understanding business and management research methods Executive Summary The case study involved an in-depth analysis of three major engine failures that happened in Emirates Airline’s passenger aircraft, Airbus A380. The case study highlighted the operational consequences of such technical failures. In addition to that, the researcher was also able to identify the implications that these incidents had on the organizational policies and performances of Emirates Airline. The report revealed that the incidents of engine failure deteriorated financial performance of the company significantly in 2012 and 2013. This was majorly because of increasing operational costs. Also, the company was not able to generate enough revenues when compared to the operational cost that was incurred. In addition, the company was not able to maintain a high customer satisfaction level due to incontinences that the passengers had to face. The customer base of Emirates Airline had also shrunk remarkably, which in turn affected profitability of the company. This led the company to modify its organizational policies frequently. However, that had certain repercussions. The frequent modifications of policies reduced commitment level of the employees towards their work as well as the company as a whole. Overall, reputation of the airline was tarnished by a certain level. Table of Contents Introduction 4 Literature Review 4 Operational consequences of aircraft failure 5 Impact of such failures on organizational polices and performance 5 Methodology 6 Findings and Discussion 6 Conclusion 9 Limitations 9 Self-reflection 10 10 Reference List 11 Bibliography 13 Introduction The case study involves an in-depth analysis of the repeated engine failures of Emirates Airline’s passenger jet, Airbus A380. Emirates Airline, headquartered in Garhoud, Dubai, United Arab Emirates, is a subsidiary of the Emirates Group, which is owned wholly by Investment Corporation of Dubai. The company started its operations back in 1985 with just two leased aircrafts. Since then, the company has emerged as one of the most famous and successful passenger airline in the history of aviation industry. The company has always preferred quality over quantity. This ideology has enabled the company to evolve as an internationally influential travel and tourism conglomerate. The airline has grown in stature and scale through competition and not protectionism. Emirates Airline has proven to be hugely profitable for the parent company, recording significant profits every year, since third year of operation. This attribute of maintaining quality in accordance with profitability on a consistent basis has fetched the company many rewards and recognitions (Emirates, 2014a; 2014b). However, over last few years, Emirates Airline have been associated with certain major issues, which escalated because of repeated failures of the most prestigious aircraft ever built, Airbus A380 (the largest passenger carrier). Engine failures were reported frequently for causing disruptions mid-flight, putting lives of hundreds of passengers in danger. These failures can be due to a weak organizational management or lower levels of commitment to the company. This forms the context of this case study that will discussed in details in the following sections. The immediate section after this will involve a thorough review of relevant literatures and theories. Thereafter, the methodology that is to be adopted to complete this case study will be stated. Following that, outcomes of the case study will be discussed and appropriate conclusion will be provided. Literature Review The primary responsibility of an airline is to ensure safety and optimal service reliability of its carriers. They can achieve this by reducing interference of unexpected technical failures and unanticipated downtime, which may lead to operational abnormalities and disruptions in daily operation of an airline. Operational consequences of aircraft failure Failure modes that interfere with completion of an aircraft mission are generally termed as failures with operational consequences. Operational consequence may also be described as a counteractive action to a failure that disrupts flight operations. These failures lead to operational interruptions, which are categorized as air interruption and ground interruption. Air interruptions involves diversion, in-flight turn back, touch and go, go around, re-routing and other operational barriers such as, altitude restrictions. On the other hand, ground interruptions involve aborted takeoff, postponement in flight dispatch, aircraft substitution, ground turn back and flight cancellation. Such has been the consequences in case of engine failure issues that were witnessed in few passenger aircrafts (Airbus A380) managed by Emirates Airline (Ahmadi, Gupta and Kumar, 2008). Impact of such failures on organizational polices and performance New products play a vital role for any company. It helps the company to maintain their growth as well as enable them to safeguard interest of employees, investors and suppliers of the organization. Products of a particular company that are relatively new also help the company to sustain competiveness in the ever changing market (Patrick, 1997). The way a product is developed directly affects competitiveness of the product as well as the company that had developed the same (Wheelwright and Clark, 1995). New products are developed with the underlying objective of maximizing revenue and profit as well as enhancing reputation of the organization. In order to be able to achieve the objectives, companies have to implement effective and efficient strategies. However, failing to do so creates a huge barrier for the company, preventing it from fulfilling the objectives (Lord, 2000). The end result is reduction in revenue and profit. These losses are measureable or rather tangible; but, loss that has a significant impact on the company is its tarnished reputation as a result of new product failures. Various reasons can be attributed to the failure of a particular product. Weak organizational management, inadequate developmental strategies, improper quality management plan, lower level of engagement or commitment to work are some of the reasons that can be associated with failure of a product or a particular project related to development of a particular product. A product that is not developed appropriately and is not checked for quality can have negative impacts on performance of a company. Taking the aviation industry into account, a faulty product or part of an aircraft can lead to severe consequences. Failure of such products can reduce profitability of the company considerably. Moreover, failures that occur in-flight may terrorize passengers to such an extent that they may refrain from travelling in the same airline ever again. This greatly reduces the customer satisfaction level and hampers reputation of the airline (Hess, Ganesan and Klein, 2003). This also reduces chances of recovering trust of the customers (Dietz and Gillespie, 2012). As a result of that, companies have to modify their policies in order to have a control over the situation. Now, if such failures occur repeatedly, then that leads to frequent modifications of organizational policies. The new policies may enforce strict rules that might be hard to follow for the employees (Baumruk, 2006; Madell, 2014; Papalexandris and Galanaki, 2009). If such is the case, then the level of employee engagement or commitment to work might get lowered (Coetzee, 2005; Shuck, et al., 2012; Macey, et al., 2009; Mone and London, 2010; Macey and Schneider, 2008). In addition, frequent modification of policies portrays a poor image of the company to the market. This has a direct impact on the company’s reputation, which may deplete the overall base of customers. Thus, in a way it can be stated that the chain of events that occur following a project or product failure reflects a cyclic process, where each and every event is associated with each other. Methodology In order to prepare a thorough case study report, secondary sources such as, journals, books and newspaper articles, were reviewed. An in-depth analysis of these sources helped the researcher to lay a solid foundation that served as a ground work to conduct the analysis. The literature enabled the researcher to gather valuable insight about certain theories and ideas set forth by research scholars that were relevant to the case study. With those theories, the researcher was able to interpret the case study and provide a self-reflection regarding the issue under discussion. The following sections include the researcher’s self-reflection about the case of repeated failures of Airbus A380 engines managed by Emirates Airline. Findings and Discussion Over the recent years, Emirates Airline has been associated with frequent engine failures, which have disrupted their flight operations, both en-route and on the ground. One such failure was noticed on November 7th, 2012, when an Emirates Airbus A380-800 was en-route at about 30nm northeast of Kosice. At that instant, the crew had to shut down engine number 4. The aircraft was then diverted to Paris and landed safely on Paris Airport (Charles de Gaulle Airport). The aircraft flew for more than 2 hours with one of its engines completely offline. The aircraft was able to resume its operations 35 hours after landing in Paris. In the mean time, a replacement Airbus A380-800 was dispatched to Dubai in order to continue with the flight operations. In the end, passengers reached New York after a delay of 12 hours (AeroInside, 2012). Just four days after that, another similar incident happened in Sydney, which also involved an Emirates Airbus A380. This time, engine number of 3 of the passenger aircraft malfunctioned. It was reported that crew members had heard a loud sound followed by an over limit warning of exhaust gas temperature. The cabin crew dumped fuel and returned back to Sydney. The investigation report highlighted many technical failures, leading to such a disruption (AeroInside, 2013a). A third incident took place just two months after the previous incident on Jan 18th 2013, involving Emirates Airbus A380 passenger aircraft. This happened when the flight was en-route near Singapore and the crew had to shut down engine number 1 because of low oil pressure. The crew members decided to divert the flight back to Singapore in order to ensure safety of the 506 people on the flight. The aircraft was able to resume its operations after 25 hours and reached Dubai after a delay of 25.5 hours (AeroInsde, 2013b). Having done a thorough analysis of all the three cases, it can be said that the engine failures that occurred in the Emirates Airbus A380 had many consequences. Both the company as well as passengers had to face the consequences. Nonetheless, the former was impacted severely compared to the latter. The operational consequences of those engine failures involved both air interruption as well as ground interruption. The air interruptions involved diversions, in-flight turn back, re-routing and altitude restrictions; whereas, flight dispatch postponement and aircraft substitutions were the major ground interruptions faced by the passengers. Even so, these were just surface level consequences. The incidents of repeated failures had other major effects. First of all, Airbus A380 is a relatively newer product whose development has proven to be a huge success to both the creators as well as buyers. Attributes of the aircraft combined with an unmatched quality of service provided by Emirates Airline offered customers a world class flying experience. However, the experience now seems to be a temporary one owing to the frequent engine failures. Emirates Airline’s main objective is to provide its passengers with a convenient as well as superior quality transit service. The organization faced severe criticism following the cases of repeated flight disruptions as a result of frequent engine failures. One of the major consequences that the company had to face following this incidents was a substantial fall in profitability from 2011 to 2012. In 2011, the company’s net profit was AED 5,467 million. The profit reduced by a huge margin to AED 1,620 million in the year 2012. Nevertheless, the company managed to implement efficient strategies, which enabled them to recover from a bad situation. This was characterised by a rise in the net profit for the year 2013 (AED 2,408 million). Even after this hike, the values are still lower compared to that in 2011. A vital part that was noticed in the financial statements of 2011, 2012 and 2013 was that although revenues increased from AED 52,945 million in 2011 to AED 61,508 million 2012 and then to AED 71,159 million in 2013; this was not equally matched by the profit that was generated. This is precisely because of the fact that operating costs increased significantly from AED 48,788 million in 2011 to AED 60,474 million in 2012 and then to AED 70,274 million in 2013 (Emirates, 2011; Emirates, 2012, Emirates, 2013). The drastic increments in the operating costs can be associated with the cost that was borne by the company due to repeated aircraft engine failures. The alternative measures taken by the company in order to tackle these incidents also had certain costs, which were borne by the company. This depleted the profit margin by a huge extent and henceforth, deteriorated overall financial performance of the company. The customer satisfaction level for Emirates Airline also declined significantly following the disruptions that occurred due to repeated engine failures. This may be because passengers were terrorized by the mid-flight incidents, prompting them to refrain from availing services offered by Emirates. Moreover, delays that happened had led to numerous inconveniences for the passengers, which in turn gave them negative vibes about travelling with Emirates henceforth. As a consequence, the wide customer base of Emirates Airline depleted substantially. This fact can also be attributed to a reduced profitability over the past two years as the company was not able to generate enough revenues relative to the operating costs that had to be borne during those periods of crisis. In general, whenever a company suffers consequences as a result of any disruptive event, it tends to change or modify the organizational policies. Keeping this in mind and taking into account the incidents that happened with Emirates Airline, it can be said that the management had to often modify organizational policies in order to counter the frequently occurring aircraft failures. These policies had to be adopted in order to assure that such incidents do not occur in future as well as to maintain their existing customer base. Nevertheless, strict rules were enforced owing to those frequent policy modifications. The employees found it quite difficult to adapt to the new policies, which in turn reduced the level of commitment towards their work and the company as a whole. Furthermore, policy changes indicated an instability factor existing within the company. This relayed a negative signal to investors as well as the market. Consequently, reputation of the airline came under a certain level of speculation. Thus, it can be said that events that transpired following the incidents that happened with Emirates Aircraft A380s were quite closely associated in terms of having a direct impact on outcomes of one another. Conclusion The in-depth analysis of the case study enabled the researcher to gain valuable insights regarding implications of various disruptive events on the organizational policies as well as performance. However, the case study could have been given a better shape, had there not been the following limitations. Limitations Inadequate availability of funds restricted the researcher from carrying out primary research. Primary research would have enabled the researcher to examine the case study even more critically. The limitation of time also restricted the researcher from conducting an in-depth research about the cases. Limited access to various journal databases prevented the researcher from obtaining a detailed perception about the topic of discussion. Recommendation Emirates Airline should formulate an efficient total quality management plan in order to ensure safety and quality of the services that are provided. The company should recruit a highly experienced and skilled team of technical officers, whose major responsibility will be to conduct a thorough quality check of every aircraft, before departure and after arrival. Another team should be appointed in order to ensure authenticity and accuracy of the quality checking done by the technical officers. The company should formulate effective organizational policies, which are self-adaptive to any disruptive events. This will prevent the organization from modifying the organizational policies frequently, allowing them to maintain their employee engagement level. Self-reflection This case study has helped me to identify a key strategy that can be implemented by my previous organization to significantly improve their profitability. My previous company indulged in a lot of overtrading by investing aggressively so as to boost production. Nevertheless, aggressive investments sometimes lead to a fall in working capital. This forced my company to frequently change the organizational strategies in order to tackle the situation of overtrading. The frequent changes in the organizational policy were not approved by many employees, leading to a higher employee turnover over three consecutive years. Hence, the company can formulate effective organizational policies, which are self-adaptive to situations of overtrading, thereby preventing organizations from making aggressive investments. This in turn will reduce the need for them to frequently modify the organizational policies. Reference List AeroInsde, 2013b. Emirates A388 near Singapore on Jan 18th 2013, engine shut down in flight. [online] Available at: [Accessed 12 March 2014]. AeroInside, 2012. Emirates A388 near Kosice on Nov 7th 2012, engine shut down in flight. [online] Available at: [Accessed 12 March 2014]. AeroInside, 2013a. 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