Analysis of Singapore National Airlines - Case Study Example

Singapore Airlines (Name) (University) Case Study of Singapore National Airlines Introduction Singapore Airlines have been successful in South Asia and across the world, becoming one of the most awarded companies of the world. Singapore Airlines rose and stayed at the top mainly as a result of its ability to transcend traditional organizational paradoxes, employing a dual strategy on its way to success. It has combined traditional business success elements with new innovative approaches to stay at the top and remain an excellent, well-managed company. Heracleous and Wirtz (2004) approach the success story of Singapore Airlines from a ‘paradox’ perspective. There seems to be an unwritten rule in the business world regarding the general direction a business should take towards success. However, looking at the story of Singapore Airlines, it has constantly outperformed competitors in the industry, never registering losses since the founding in 1972 and becoming one of the world’s most awarded companies (Fortune, 2013). To remain at the top, Singapore Airlines has employed dual strategy, combining the unconventional elements of the past with futuristic strategy. The article addresses four paradoxes associated with the success story of Singapore Airlines; being an industry follower and leader, simultaneous centralized and decentralized innovation, combining standardization and personalization as well as cost-effective service excellence. This article explains the ambidexterity of Singapore Airlines in adopting strategies that are naturally considered contradictory and incompatible (p 152). Singapore Airlines have achieved a high level of performance through simultaneous differentiation and excellence and cost leadership in its peer group of companies Like in Heracleous and Wirtz (2014), Smith and Lewis (2011) explore the paradox theory more closely. Organizational environments are getting increasingly global, competitive and dynamic. The Airline industry is especially competitive and volatile, with small events having ripple effects all over the world. Across the business world, contradictory demands continue to abound, and businesses must adapt to meet these demands adequately. One of the ways through which companies such as Singapore Airlines meet such demands and stay at the top is by adopting the paradox approach. Smith and Lewis (2011) explore the paradox approach explained in Heracleous and Wirtz (2004). This paper explains the cyclical nature of paradoxes that Heracleous and Wirtz (2014) speak about when they explain the self-reinforcing loops that support dual strategy. Chan (2000) and Chen and Wong (2003) deal with the history and the success story of the Singapore Airlines. Chan looks at the success story from a marketing and image perspective, looking at the history of the organization from 1947 during its 50th anniversary and the impact of the Singapore Girl association in the success of the airline. Unlike Chan, who concentrate on non-financial aspects of the business, Chen, and Wong (2003) look to gain a better understanding of both the business and financial performance metrics of Singapore Airlines. The research done by Chen and Wong is more comprehensive, using several tools to evaluate the performance of the organization. They use PESTEL, Porter’s five forces analysis, and the SWOT analysis to put the operations of the airline into a clearer perspective. The approach by Chen and Wong (2003) is interesting as it compares uses another airline’s records as a benchmark. This is similar to several aspects of Heracleous and Wirtz (2014) in that it compares the Singapore Airlines with peer companies. The researchers chose Cathay Pacific Airways as a benchmark because of its historical accounting records. The paper used five key accounting parameters to compare the performance of the two in an global organic environment; liquidity, profitability, leverage, activity, and investment. Sengupta and Sengupta (2014), puts Singapore Airlines and its strategies in the context of the industry at large. This article explains the history of the airline and the aviation industry. The introduction insinuates the strength of the strategies of the Singapore Airlines. According to this article, the airline maintained profitability throughout one of the toughest periods in the industry, with a major damaging incident occurring every few years starting from the September eleventh attacks.Airlines suffered losses in the years between 2001 and 2006. Events such as the 911 attacks, the outbreaks of bird flu and SARS, the Asian Tsunami and frequent terrorism threats and concerns lost airlines billions of dollars.It highlights how Singapore Airlines’ people management strategies have helped it reach the top of the industry. The article gives a detailed explanation of how the airline’s human resource strategies have helped it achieve excellence in service provision. Excellence in such aspects of people management as recruitment and selection, training, empowerment of frontline staff, employee motivation and the formation of service delivery teams (p 120) have helped the company stay at the top. However, despite the mention of the general poor performance of the Airline industry and the challenges faced by the Singapore Airlines, there is no mention of any specific steps that the airline has taken to overcome its challenges or those posed by the industry. Sengupta and Sengupta (2014), Chan (2000) and Chen and Wong (2003) have all looked at the success story of Singapore Airlines from an outside perspective, banking on yearly case studies and business analysis models to extract information about the company.Wirtz and Johnston (2001) look at the story of Singapore Airlines from a senior management perspective. The paper does this by organizing the service delivery of the Airline into four section; the airline’s perspective of service excellence, understanding and anticipating the needs of customers, training and motivating the airline’s front line staff and management with an eye to detail and profits. Interviews with high-level managers at the airline were then tailored to these aspects of service delivery. The managers whose interview excerpts were published were from the cabin crew training, performance, training and products and service. While this change of approach is certainly helpful, the choice of executives seems one sided, many of them only coming from human resource related departments. The categories mentioned in the Wirtz and Johnston (2001) article about staying at the top seem to align with the opinions of Riwo-Abudho, Njanja & Ochieng (2013) who highlight the major success factors of airlines. In this paper, the researchers look at the major players in the industry, their success factors, and challenges and how they cope with them.The increased interconnectivity of the world is placing more pressure on the global airline industry, both internally and externally. This creates challenges that airlines have to deal with in the course of their operations. According to the paper, the biggest problems facing airlines are increased costs, competition, increasing the power of customers, maintaining reputation and product innovation from manufacturers and suppliers. In addition, the paper also mentions the key success factors (KSF) or airlines. The success factors include structure, organizational culture, planning and forecasting, marketing and branding, technology and strategic alliances. Articles describing the success story of Singapore Airlines describe the company as having been at the top of the industry since the beginning in 1972. The company has also been a leader in terms of coming up with trends never seen before in the industry, with the introduction of in-flight satellite based phones. Innovation, especially in terms of service provision, is one of the biggest strengths of the company. Dodgson, Gann and Philipps (2014) look at innovation as a necessity for organizations to survive in their respective industries. Innovation must be managed to maintain the kind of sustained advantage that Singapore Airlines has. To manage it, innovation must be understood. This book helps the reader understand various aspects of innovation, which might help readers understand the innovative practices of Singapore Airlines. The airline industry is highly competitive and dynamic. Despite the turbulence over the years, Singapore Airlines have maintained an excellent trend of profitability and management. This is down to the manner in which it collects and uses its information. In an organization as large as Singapore Airlines, to remain a market leader through innovation in service requires the collection and use of information. Over the years, Singapore Airlines has remained committed to the use of technology to improve its position. In fact, according to Teo, Lee-Partridge and Lim (1998), the excellence of Singapore Airlines can be attributed to its management of information systems and investment in information technology. Their article looks at Singapore Airlines’ management service division, which is tasked with both development and production. According to the researchers, there are six critical success factors for the management service division; 1. Strategic IT planning is driven by business strategies, which makes sure that the information systems solve business problems and support business strategy. 2. Continuous upgrade of information technology infrastructure to remain relevant and responsive to changes in the business environment 3. Continual IT staff development and training to enhance their skill-set 4. Strategic alliances to enhance the communication potential 5. Managing in-house development of software 6. Continuous change management to facilitate continuous improvement Information management is especially important considering nature and recent history of the aviation industry. The case of the Germanwings flight crash comes to mind here. With smarter information systems regarding both the activities of staff and customers, the airline could perhaps have been able to prevent the disaster from happening. The aviation industry, and airlines especially, can be considered high-reliability organizations. The world is growing increasingly smaller and dependent on globalization. The ease of air travel is one of the reasons for this. On the other hand, failures or errors result in destruction and catastrophic consequences, perhaps even loss of life. Milosevic, Bass and Combs (2015) look into knowledge creation processes in high-reliability organizations. It mentions three levels of paradox, the paradox of organizing, of practice and of knowing. The nature of organizations such as Singapore Airlines is such that individuals must work through various paradoxes to generate and formalize knowledge especially noting the general lack of opportunity for misfortune and the dynamic nature of the industry and organization. This article is different from the other research papers highlighted in that it is a research study that focuses on a hydroelectric power plant, which is similar in terms of the high reliability but fundamentally different. That Singapore Airlines has maintained a streak of profitability since its inception is no mean feat in an industry as dynamic, competitive and unpredictable as the airline industry. Singapore Airlines have managed this by combining traditional aspects of success such as people management, with new and perhaps contradictory aspects such as innovation and diversification. This has been facilitated by a strong information management system and a management that understands what it takes to get to and stay at the top. Singapore Airlines remains one of the most awarded organizations and an excellent, well-managed company. References Chan, D. (2000). The story of Singapore Airlines and the Singapore Girl. Journal of Management Development, 456-472. Chen, Z. H., HE, M., & Wong, K. C. (2013). A Case-based Analytical Study on the Strategic Evaluation of Common Equity Performance of SIA in a Global Organic Environment. Journal of Contemporary Management, 51- 62. Dodgson, M., Gann, D., & Philipps, N. (2014). The Oxford handbook of Innovation Management. Oxford: Oxford University Press. Fortune. (2013). Fortune. Retrieved from World’s most admired companies: http://money.cnn.com/magazines/fortune/most-admired/2013/list/?iid=wma_sp_full Heracleous, L., & Wirtz, J. (2014). Singapore Airlines: Achieving Sustainable Advantage through Mastering Paradox. The Journal of Applied Behavioral Science, 150–170. Milosevic, I., Bass, E. A., & Combs, G. (2015). The Paradox of Knowledge Creation in a High- Reliability Organization. Journal of Management. Riwo-Abudho, M., Njanja, L. W., & Ochieng, I. (2013). Key Success Factors in Airlines: Overcoming the Challenges. European Journal of Business and Managemen, 84- 88. Sengupta, N., & Sengupta, M. (2014). Singapore Airlines: Gliding with People Excellence. Cases in management, 115- 126. Smith, W. K., & Lewis, M. W. (2011). Toward a Theory of Paradox: A Dynamic equilibrium Model of Organizing. Academy of Management Review, 381-403 Teo, T., Lee-Patridge, J. E., & Lim, V. K. (1998). Managing Information Systems at Singapore Airlines. International Journal of Information Management, 195- 203. Wirtz, J., & Johnston, R. (2001). Singapore Airlines: What it Takes to Sustain Service Excellence- A senior Management Perspective. NUS Business School. Read More