Organizational Development and Management - Etihad Airways - Case Study Example

Etihad Airways Name Course Institution Date Etihad Airways 1.0 Introduction Etihad Airways has been in the aviation industry for the last 10 years having been started back in the year 2003 and is operated as a national airline for the United Arab Emirates. As can be accessed from the company’s website referenced as Etihad Airways (2014), the airline has experienced tremendous growth and is recognized as being the leading airline in the world as is substantiated by awards given to the airline during the World Travel Awards since the year 2009 to 2013. The Airline has modern aircrafts totaling to 88 in number and plying various routes that account to more than 1400 flights at the end of every week and represents the hallmark of hospitality in the Arabian destinations. The vision of the airline is to become the symbol of hospitality in the Arabian and to become enviably the best airline with respect to serving all the clients in a friendly, kind, stylish in the context of cultural aspects and paying attention to the needs and preferences of all the airline clients. Moreover, the airline has as its vision the enhancement of the prestigious legacy of the United Arab Emirates’ capital, Abu Dhabi into a status of recognition as the epitome of hospitable treatment of clients embarking on air travels between East and West. The goal of the company is to attain the highest standards of hospitable client treatment across the globe and be recognized in the entire globe as a modern airline that applies modern principles of customer care with the aim of introducing new aspects and principles of customer care. The commitment to achieving the company goals is illustrated through the objectives of treating every client of the company as important visitor with unique needs and given individualized attention making the client feel as free as possible in the course of the flight with the company. This approach to client treatment is aimed at making the company a global airline handling passengers, leisure travelers and cargo with air and ground operations. The report discusses the role of leadership and followers in organizational development and management within the context of Etihad Airways. 2.0 Organizational structure As Kortmann (2012) explains, the concept of organizational structure relates to the hierarchical alignment of various functions, resources and personnel requirements within an entity with the aim of efficiently achieving the entity’s goals and sustainable growth. The aspect of hierarchical alignment of various functional aspects of an organization implies that there must be some form of control for an organizational structure to be effective. The structure could be centralized or decentralized. Centralized organisational structure delegates authority to a limited extent while decentralized structure employs authority delegation to a large extent to lower hierarchies within the organization. As Stair and Reynolds (2010) further explain, organizational structures fall into different types including functional, divisional, matrix and network types of structures. Size of the organization is a distinguishing factor among the various types of structures. Functional structure is aligned around departmental or job responsibilities within an organisation while a divisional structure primarily applies to organisations with various identifiable operational units. While matrix form of organisational structure applies to very large organizations and majorly involves combination of functional and divisional structures into a single organizational structure that has operations in various locations, network structure involves outsourcing of costly functions and internally coordinating the less costly ones hence improving on efficiency. Networking is the most recent form of organizational structure. Etihad Airways operates under network form of organisational structure. This is evidenced in the company website where it is indicated that the company has partnership with other airlines and rail operators where they outsource the flight services to destinations that they do not operate directly. The concept of hierarchy implies the flow of authority and coordination mechanisms within the organization. As to whether or not an organizational structure is rigid or flexible determines the nature of the hierarchy in the organization. Hierarchy could either be mechanistic or organic. Mechanistic hierarchy is bureaucratic and subjects have to rigidly follow rules and instructions while organic is decentralized and gives more room for prudence in decision making. Communication is official and in written form in mechanistic hierarchy while in organic it is majorly verbal and informal. In Etihad Airways, span of control starts with the board of directors and is mechanistic in nature. The company is headed by a president who is also the Chief Executive of the airline, while the board of directors is headed by a chairman. There are well coordinated structures of authority and the company has particular rules to be followed as can be gathered from the information provided in the website and this renders the hierarchical structure mechanistic given that there is element of bureaucracy in the context of decision making and company strict procedures and policies. Decision making in Etihad Airways is centralized. In a centralized structure of decision making, control and authority in making vital decisions is delegated to high authority and decisions follow a particular hierarchy from higher authority to a lower authority in a orderly manner as Saaty and Vargas (2012) explain. In Etihad Airways, the top most ranking authority is a President who also doubles as the Chief Executive Officer and from whom leadership decisions originate. This is a centralized structure of decision making since delegation is limited to the Board of Directors after initial decisions by the Chief Executive Officer. 3.0 The role of leadership According to Burns (2012), the essence of leadership in an organisation is to provide positive influence, motivation and collaboration towards achieving a common interest represented through the organizational goals and objectives. The Pyramid process of leadership implementation encompasses the principles of leading, managing and doing within the context of providing support and accelerating the rate of team progress towards common goals in a sustainable manner. As pertains to the implementation process in the context of leading, Etihad Airways has a long term goal that is guided by a clear vision and this provides the long term direction of the company and lays foundation for sustainable business practices coordination. With a president in consultation with a board of directors, decisions are reached about various tasks to be done in different situations so as to continuously progress with the journey of reaching the company goals in a transformational, participative, consultative, autocratic or in a peripheral manner depending on the requirements of the circumstances. In Etihad Airways, leadership provides coordination of sales, marketing and operational functions through provision of tasks to be performed, seeking deliberations on how best to carry out the tasks, inspiring employees to act, challenging the employees and providing continuous feedback on the status of the progress towards the company goals. The company leadership team reinforces positive actions in the company such as excellent customer relationship management practices through recognition using pay increment, bonus pay, job promotions and verbal recognition. By employing authority in contingent situations, the company provides leadership through demonstration of confidence thereby instilling confidence in employees as well. As regards managing in the Pyramid process, Etihad Airways top management disintegrates the vision of the company into various distinct functions such as staffing, marketing, research and development and operational functions. The management then coordinates the functioning of the various departments within the airline into properly coordinated system where all the efforts are united towards achieving the goal of the airline. The management is responsible for creation of long-term company strategies, company policies to guide the daily actions of the company employees and in generation of ideas about how to best direct and control the various tasks by different departments in achieving the goal of being the most hospitable airline in the world. In order to function effectively, the top management of the company has a formal structure of authority with the subordinates being obliged to observe and obey the management directions by rules of conduct enforceable through disciplinary measures if not followed. The top management of the airline is always concerned about things being done the right way and that the company achieves the profitability targets set for the short term financial periods and that efficiency is highly maintained in the process of achieving such short term goal of increased profitability. The management does also measure the performance of the airline by checking the actual profitability against the targeted at the end of a functional financial and performance period. Concerning the achievement of the leadership and the management goals, the company in line with the aspect of doing in the implementation pyramid process has commissioned the followers who are represented by the company employees. The airline has customer service representatives, flight attendants, pilots, aircraft engineers, chauffeurs, flight coordinators and call center executives to attend to the needs of the customers on an individualized manner and in a continuous basis to keep the company on the path to achieving the short and the long term goals. The employees are rewarded by the management for excellent work performance and this function to keep the motivation levels high. The employees are involved in the actual implementation of tasks that are focused towards achieving the goals of the airline by attending to the needs of customers, carrying out marketing research to establish needs of clients, receiving calls from clients and provision of feedback to the top management for decision making. 4.0 The role of employees Tripathi and Reddy (2008) explain that company employees are an important asset of the company since they are involved in the actual implementation of the company tasks that are focused towards achieving the long term goal of the company and in increasing the market share of the company in a sustainable manner. In Etihad Airways, the company employees are in important in the execution of tasks since they provide the link between the company and the clients in providing information to the company management about the needs of the clients and providing the needed services by the clients from the company. The employees also represent the face of the company and are the means through which services of the company become identified by the clients. The employees are guided about the execution of the various tasks through role profiles and job descriptions given as the employees join the company and updated on a regular basis as new responsibilities come up. The management of the company also provides guidance through official communication means such as emails, letters, notices and the employment policies that provide instructions as to what the employee is supposed to do. The company also assigns supervisors to every group of employees who provide direction to the employees as to the task they are supposed to do and explain in case of difficulties. As can be gathered from the company website, Etihad employees are well equipped with skills and knowledge relevant to meeting the company goals and objectives. The company has well trained customer service personnel and the entire employee team is well experienced to meet the requirements of the company clients. However, the company has a policy of training the employees on a regular basis as an improvement on the skills set but not as a demonstration of lack of requisite skills and knowledge. The skills are monitored through constant appraisals by the employee immediate supervisors and observation while on the process of carrying out the tasks of under their role specifications. The results are compared against the skills requirements of the job as outlined in the role profiles to establish the extent of qualification and training requirements. The employees are trained, developed and motivated through a combination of various measures. The company has a training unit dedicated to special training through coaching by experienced personnel. Moreover, the employees are trained on the job by being attached to experienced staffs and observing as tasks are being implemented. The company develops its employees through mentorship programs internally coordinated or outsourced from companies specializing in staff training. Motivation is achieved through better pay, rewards, promotions, good working conditions and positive praise. The company employees are also asked to contribute ideas on how to better manage the operations of the company thereby feeling important and valued and this increases their motivation and willingness to share their ideas. 5.0 Conclusion As has been evidenced in the report, the implementation pyramid process has an important contribution towards the success or failure of an organization. The leadership strategy and function with regard to provision of inspiration and challenging the company employees towards being innovative about ways through which the company goals and objectives can be realized plays a great role in the final achievement of the company’s vision and goal. For sustainable development of an organization, the leadership must provide high levels of motivation to keep the employees highly energized in making actions that will have a positive impact to the company. A high level of motivation is transferred to the company customers in form of good service. The leadership must employ strategies that make the employees feel valued such as seeking their opinions and participating in decision making that ahs direct consequence on them. Through this participatory approach to leadership, employees contribute greatly in terms of innovation, ideas and performance while the leader maintains a facilitative position. Etihad Airways has experienced huge success in the last ten years due to effective application of the implementation Pyramid process. The company leadership has been effective in the application of transformative, participatory, collaborative and consultative approaches in guiding the company employees and coordinating the resources of the airlines towards the most profitable ventures. The top management has also encouraged innovation through allowing the company employees to make their contributions in a deliberative manner facilitated through company meetings and suggestion forums. The management has equipped the employees with appropriate skills and reward schemes that do not facilitate discrimination thereby promoting feelings of fair treatment and promoting spirit of team work. The employees have taken their doing part of the Pyramid process with enthusiasm and positive mental attitude due to effective leadership and management practices. The employees have continued to serve the company employees with excellent customer care practices providing unique solutions to unique customer needs on an individual basis. This has improved on the customer relationship management practices in the airline making it the most hospitable airline in the world and in the United Arab Emirates. 5.1 Recommendations Leadership and management are important function in the prosperity of an organization and make a lasting contribution to the sustainability of an organization. Etihad Airways should have a forum for establishing the employees view about the leadership of the airline given that the employees are the functional units of the airline through which the leadership and the management achieves the objectives of the company. The company should also put in place the policy of having the company leaders promoted from within based on experiences and skills rather than getting them externally since they will be better placed to understand the dynamics of the organization. The employees will also be ready to provide opinions on how to better manage the airline towards achieving its goals since they will be familiar with the management and leadership team. References Burns, J. (2012). Leadership. New York, NY: Open Road Integrated Media. Etihad Airways, (2014). Home: About us. Retrieved on 25th April 2014 from http://www.etihad.com/en-ke/about-us/ Kortmann, S. (2012). The relationship between organizational structure and organizational ambidexterity a comparison between manufacturing and service firms. Wiesbaden: Springer Gabler. Stair, R. & Reynolds, G. (2010). Principles of information systems : a managerial approach. Boston, Mass: Course Technology, Cengage Learning. Saaty, T. & Vargas, L. (2012). Models, methods, concepts & applications of the analytic hierarchy process. New York: Springer. Tripathi, P. & Reddy, P. (2008). Principles of management. New Delhi: Tata McGraw-Hill Pub. Read More