Travel industry in Europe - Essay Example

?Introduction: Travel industry has grown rapidly over the years with the advent of globalization. People flock in from different parts of the world for various purposes. The industry has been one of the important revenue earners for many developed countries. Various parts of Europe have been the preferred choice of destinations for business as well as travel destinations. The travel industry in Europe has thrived due to many reasons over a long period of time. Airlines has played role in the travel industry of Europe. It has been a key driving factor of the overall business reaped from the industry. In the paper we analyze the two organizations of the travel industry in Europe and analyze the factors contributing to their growth and success. Various factors to sustain in the market conditions have been analyzed and the policies adopted by the organization in dealing with the issues have been carefully studied. One of the organizations chosen for the study is the British Airways which is one of the biggest international airlines in the world. The operational efficiency highlighted in case of British airways owes to a lot of factors which includes its overall target setting, its innovation in the service and delivery and the brand image which works in its favor. On the contrary a weaker airline has been studied for the purpose to identify its deficiency and focus on the factors needed for the overall improvement in the position and to increase the operational efficiency. Study of Mat Macedonia has been considered and a special emphasis is given in studying the reasons for closing of the business and the faults in management related policies. Report A British airways: The popularity of British Airways was since the year 1974 after the combination of British overseas airways corporation and the British European Airways Corporation. Since its formation it has been one of the primary airlines in UK and Europe. Since its inception it has been the largest airline based on the fleet size and in respect of the number of passengers in UK as well. It serves a massive number of 150 destinations. The organization has been able to perform consistently over the years and has been one of the major profit making organizations in the airline industry. The operational excellence of the British airways can be linked to the fact that it has successfully implemented the 24 hour IT system. Besides this it has gained significant achievement within its community, market place and workplace. Other than being the largest airline in Britain it has contributed significantly in donations and has devised proper training strategies for noise reductions in the flights. British airways have also developed a lot with respect to the infrastructure. The new terminal 5 has been delivering fantastic service for the airlines and has benefitted the passengers as well. (Overview – achievements, n. d) The overall organizational efficiency gained by the organization can be contributed to variety of factors. The general study in management reflects that there are various factors which lead to the operational efficiency of an organization. Research studies reflect that the prime factors leading to operational effectiveness are organization culture, organization operation, and organizational leadership. The paper analyzes each of the above mentioned factors with respect to the British airways. Leadership: The theory of leadership deals with managing a team of people for attaining a common set of goals. In British airways the organization opts for various leadership development programs. The leadership development program focuses on various issues like leaders will skill and commitment. The leaders will helps to identify the willingness of the leader to deliver according to reach the business benefits. The skill assessment measures the current level of skill the leader’s posses and the styles adopted by them to make it an effective learning process. Management ways of the organization emphasizes upon the manager’s response to obeying of directions and abidance by the norms. ‘Autocratic style of leadership’ marks the conduct of British Airways. Emphasis of the management lies mostly on the passengers and the managers do not show respect or close interaction with employees. The managerial society of British Airways is supposed to be demanding, biased and the associations between different levels are official. However the management does hold the services of the employees as precious. They think that instructions delivered and pursued in the proper way have to be the final word of successful managerial doings. Willie Walsh and his group were successfully dealing with the leadership tasks of a reputed organization such as the British Airways. (BA backs the Bus and the Dreamliner, 2007) Organization culture of British airways British Airways has a huge manpower and the employees do belong from varied culture. Much emphasis is being given in creation of inclusive culture in the organization which maintains harmony and respect for the individual difference. The recruitment of people from diverse background gives rise to new ideas and innovation which benefits the organization. The employees are educated regarding the diversity issues through the corporate sites, and forums. Various diversity strategies which are in use by the organization are in maintaining racial equality and gender equality. British Airways organization gives no preference towards making the employee base powerful in terms of decision making. Hence it supports the workers and inspires them to be original but the verdicts are given within the board room with the 75 percent majority agreement. Its management thinks that the more consistent the methods are, the better is the outcome. the workforce is discouraged to make sudden or impulsive decisions concerning any issue. British Airways have also implemented the change in its culture by changing its physical structure. The organization changed it’s headquarter with a centralized system with the spreading of work units. In order to convey cultural meaning in the workplace a lot of physical artifacts have been introduced (Grugulis & Wilkinson, 2002). Strategic Management of British Airways: British Airways have been able to resist the competition from other airlines in UK due to rapid innovation and its change management aimed at producing the best service on offer to the customers. British Airways have been following a dynamic and complex strategic management s a part of the process. The strategic management team aims to improve the amenities of the airlines and develops new information system as part of the extra facilities provided to the customers. The strategic management team constantly looks for area of improvement and British Airways was the world’s first global airlines to render jet passenger service, supersonic passenger service and also became the first to offer fully flat beds for the passengers. All this factors have rose to the successful expansion of the airlines and made it one of the favorite airlines among the passengers. (Strategic Management of British Airways Company, n. d) Employee motivation: British Airways’ administration supposes that the workforce is inspired when their work is appropriately acknowledged through prizes and rewards. The tools to create employee motivation comprise of distinction honor rendered to the suitable employees. Incentives for enhanced enactment and endorsement oriented talent and presentation essentially directed the employees to stay inspired to be a part of the British Airways. The management adopted these measures with the mental note that the Maslow’s hierarchy of inspiration that allows people to shift from the bottom most level of physiological requirements to the maximum point of fulfilling one’s potential. Hence the leaders of subordinate status are stimulated to act effectively to enable them to rise in their profession. For the upper stratum, it is the acknowledgment that prompts them to conduct properly. (THE BA WAY IN THE WORKPLACE, 2005) Organization structure in British Airways: The organization plan is moderately simple with one stage of grading which divides the upper level management from the subordinate employees. The institution is categorized as follows: ‘Planning, Investment & Alliances, Commerce, Ground Operation, Engineering, Flight Operation, IT, Finance, Law, and Human Resource’. The categorization ascertains calibration and effortless checking of enactment. Therefore it is obvious that the administration emphasizes on specialty of work and stern regulation on supervision and response. (“British Airways”, 2011) Conflict management in British Airways: British Airways makes use of denials to be gears in solving clashes amongst its different serviceable divisions as well as components within the organization. The company’s application of the kind of conciliation differs from one situation to another. Majorly, the management prefers ‘integrative bargaining’ that deals with a win-win condition (Robbins, 1999). However it is not always achievable. Thus depending on information acquired regarding the subject in disagreement, a win-lose choice also gets carried out. The operational efficiency of British Airways can be accredited to the management team in whole which regulates and controls all the above factors mentioned. Proper skills are exhibited by the persons in charge to devise strategies in order to provide the utmost satisfaction to the customers and in maintaining a diverse workforce in the British Airways. The choice of various management tools for optimizing the productivity has been done effectively over the years which have contributed to the success of British Airways. Marketing efforts of British Airways: British airways have a high level of marketing procedure to adopt to spread its popularity among the fliers round the world. It takes the optimum benefit of its brand value to fetch customers from all over. Other than the brand image of the airline they use seasonal promotions and offers. It uses extensive marketing tactics to retain their customers and values on the preference of them. The loyal customers of the British Airways are held in high esteem by the organizations and they take additional steps in delighting them. The offer for being the official airline for the 2012 Olympic Games to be staged in London will add to the reputation of the company. The mass popularity of the airlines will raise immense popularity and will provide extra value to its brand name. Such venture will bring worldwide exposure to the organization. (Marketing Strategy, n. d) Conclusion: The study regarding the operational effectiveness of the organizations in the travel industry of Europe highlighted many significant points. The study of the factors relating to operational efficiency suggests that organizational policies and proper handling of the management team are the significant factors in the success of the organization. The organizations studied over here had varied managerial policies and nature of operation British airways had the perfect example of managerial policies in action. Report B MAT Macedonian Airlines: Mat Macedonian Airlines was situated in Skopje. It used to operate in various locations of Europe. The airlines however discontinued its operation in the year 2008-2009 due to numerous problems faced by the airlines. The airlines were in operation for a small period of time starting in the year 1994 and terminated in 2008-2009. The problem with the airlines soon came in to picture when it started barring its service to destinations like Berlin, Hamburg and Rome. Causes for failing business and termination of service: The termination in the service of MAT airlines was due to air traffic control fees which were not met for the period of 1995 to 2005. In 2009 the company faced further crisis when the company had to dismiss a major part of their employee strength with an aim to reduce the operational cost. A clear shortage in revenue was present in the operation of the airlines. Mat Macedonia faced severe problems with their service in Greece due to the naming problems. In order to restore the business, MAT airlines went in to an agreement with Jat airlines and were hopeful for receiving technical and commercial cooperation. The agreement was however cancelled due to MAT’s reluctance in processing with the required documents. Another main reason for the failure of the agreement was MATS airlines high debt in the market. (Jat Airways and MAT Take Partnership to Higher Level, 2009) This factor forced Jet airways in preventing the takeover MAT Macedonia. The failure of the agreement also hampered the prospect of the passengers who were hopeful for an improved service from the Serbian national air company. The operation of the organization was finally disrupted in the year 2009 when the airlines lost its air operators certificate. (MAT Macedonian Airlines, n. d) The Air operator certificate is mandatory for Airlines Company to carry out business in a region, and the deactivation resulted in the ceasing of operation of the airlines. The study regarding the airlines company suggests absence of proper managerial efficiency of MAT Macedonia. There was proper absence of aims and objectives from the companies’ point of view. Operational excellence was totally absent. The leadership quality of the top level managers was in question. The communication amongst the various decision makers was absent. Prioritizations of matters were never done as reflected through the nonpayment of the fees of traffic control for a significant time frame. The company was weak in making financing decision as well. The marketing policy of the company was also weak as it failed to handle the controversy in Greece regarding the naming issue. The business idea of the airline lacked innovation to sustain in the competitive market. The manpower in the organization was treated indifferently and no means were taken to motivate or inspire them to gain absolute productivity for them. Corporate restructuring measures adopted by the airline were weak as it resulted in the failure of the takeover process. The corporate structure in use by the airlines can be questioned and the prevalence of organizational culture in the airlines also accumulated to the rise of mismanagement in the organization. Effort was lacking from Mat Macedonia’s point of view in order to bring back glory in their service. What can be done? The study of the MAT Macedonian airlines reflects that the organization faced lack of managerial efficiency in its overall operation. In order to revive the smooth running of the business few areas for development of the business are suggested. If the business wants to start operating in the present scenario, firstly it will need a person with strong managerial capability. Strong leadership quality is desired from the person who will play a significant role in guiding the other employees of the organization towards predefined organizational goals and achievements. A good set of values needs to be inculcated among the employees to prevent organizational conflicts and the employees held each other in respect and a work friendly environment persists. A presence of efficient strategy management team is suggested who will frame policies for the ease of running the organization and highlight areas for future improvement. In framing policies for the organization, careful consideration of the current economic conditions prevalent should be considered. As an airline is a service industry, Mat Macedonian should carry out extensive research in providing their passengers with utmost facilities. Providing more facilities will make the organization more popular among the passengers and will result in the increase of the overall business. Mat Macedonian should be careful in handling with its employee. Other than reducing the number of workforce to reduce the cost the organization should look after the employees and motivate them. Effective training and nurturing of the employees needs to be done and proper facilities need to be provided to boost their morale and guide them towards organizational efficiency. Promotion of employee harmony and cooperation among them will enlighten the possibility of achieving targets. The organization should remember that efficiency can be achieved by the collective effort of the employees. The organization needs to introduce extensive marketing so that the information relating to their service reaches more and more customers. Mat Macedonia needs to create brand value of their organization in order to stands its position in the airlines market. The management should be flexible in order to cope with any required change which will enhance the value of the organization. The decisions taken regarding the operation of the business should be communicated between the different levels in the organization. Presence of effective communication is one of the primary criteria for gaining operational effectiveness. The airline needs to be quick enough in spotting the changes made by other organization in retaining the customers and should be proactive in making change also in their own behalf. In order to overcome the challenge of shortage of Capital, the organization should look for merger with other big brand names and sell a part of their share. In maintaining smooth workings it should also have a clear stand on the regulatory issues and licensing agreements. Mat Macedonia should also prioritize the demands of the customers. They should tale opinion from them and deliver their best to achieve the demands set by them. Regular updates regarding the needs and demands of them should be taken and it should channelize in their decisions. Market survey should be considered in order to find the pressure of the other airlines and Mat Macedonia should make efforts to arrange for flights in the most demanded destinations. A considerable amount of customer service also needs to be provided. Conclusion: The case of Mat Macedonia followed with faulty policies in implementation. British airways used a strong blend of policies for their employees and customers in order to have a firm stand among the innumerous airline companies. The result of management ineffectiveness led to the winding up of Mat Macedonia. The study can lead us to the conclusion that organizational policies and the effectiveness of the management team will enable us to draw a fine line of demarcation between operational excellence and failure. In the present economic environment of super competition between organizations from same industry it is difficult to sustain with only better kind of products or service. The other numerous factors determine the rise and fall of industries. Proper management of the organization is required for the overall prospect of the business. REFERENCES Jat Airways and MAT Take Partnership to Higher Level. 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