Decision-Making and Group Dynamic in the Workplace - Qantas - Case Study Example

Decision Making and Group Dynamic in Workplace Name Professor Institution Course Date Decision Making and Group Dynamic in Workplace Executive summary As one of the employees, I prepared this report to analyze the theory of decision making and group dynamics in Qantas Airline Company. The report also analyzes how the organization conforms to the theory of decision making and group dynamics. Qantas is largest airline in Australia and second oldest airline in the globe. This company was established in 1920 and started its international flying services in 1935 (Qantas 2014). Qantas Airline Company has its headquarters in Mascot Sydney with its major center being in Sydney Airport. Qantas Website (2014) claims that the company holds a 65 percent Australian local market share and carries 18.7 percent of every passenger flying both in and out of a country. Qantas serves 20 local destinations and 21 global destinations in 14 nations across America, Asia, Africa, Oceania and Europe apart from the destinations in which its subsidiaries operate (Qantas 2014). Due this situation, the company employs several of up to 33,265 staffs to manage its operation. These employees are organized in groups to ensure work efficiency. Table of Contents Decision Making and Group Dynamic in Workplace 2 Executive summary 2 Table of Contents 3 1.0 Introduction 4 2.0 Decision making 4 3.0 Group dynamics in the workplace 9 4.0 Recommendations 11 5.0 Conclusion 12 6.0 References 12 1.0 Introduction With business activities increasing across the world, a lot of people are now travelling to different destinations (Whyte, Prideaux & Sakata 2012, p.216). However, with increasing number of airlines operating today, companies are forced to make various decisions reach customers in all social classes so as to maximize profit. For instance, some airlines companies including Qantas have been compelled to diverse into low-cost airlines to reach out to middle class customers (Whyte, Prideaux & Sakata 2012, p.217). With the rising competition, a company which takes a long time to make informed decisions and to implement it will find it difficult to sustain competition. Currently, in the general Qantas group, it flies within 65 domestic destinations and 27 international routes (Qantas 2014). This means the company must organize its employees to work as a team to deliver customer value fast and efficiently. In light of the information, this report seeks to analyze theory of decision making and decision making process at Qantas Airline Company. 2.0 Decision making Competition has made the Qantas management to be on toes and rethink their strategies quite often to remain market favorites. As such, they have to normally make informed decisions at the best interest of the organization. Krantz & Kunreuther (2007, p.138) claims that Managers in the current society are frequently called decision makers. The decisions concerning distributing resources, realizing its objective and recognizing how Qantas solves its issues are crucial to the success and effectiveness of the organization. Therefore, it is apparent that “decision-making is a process of recognizing challenges and opportunities, and solving them” (Krantz & Kunreuther 2007, p.142). During its operations, Qantas has made several decisions with regarded to business strategies. For example, in 2007, the company started customer loyalty rewarding programs called “frequent flyer program” aimed at increasing their customer’s base. The program portrayed them as a caring and value providing company (Qantas 2014). In 2008, another decision was made to make an overhaul of the program was arrived at (Qantas 2014). In the improved program customers were to redeem any or every seat in a plane as oppose to just few selected seats at a price. To some extent the program was not doing well and it had to be improved. However, decision-making usually entails making decisions under some uncertainties in which managers are conscious of which objectives to achieve, but information regarding other alternatives and future actions is imprecise (Jullisson, Karlsson & Garling 2005, p. 562). Thus, managerial decision-making is a complex task which requires careful valuation by means particular decision models like decision tree, and sensitivity assessment to make better decisions concerning the organization’s position. According to De Bruin, Parker & Fischhoff (2007, p.939), managerial decision-making entails making several decisions under some uncertainty and risk. For that matter, the managers must be competent to manage under uncertainty and hope that it will work. There are different steps organizations could undertake to makeup their decisions like recognizing the decision prerequisite, recognizing and analyzing problem causes, formulate alternative solutions, choose the preferred alternative and execute it, then seek out for feedback (Krantz & Kunreuther 2007, p.139). Just like the one mention above, the problem was attracting customers, motivating and appreciating them through rewards. However, that Qantas program did not effective as expected and they had to implement the alternative. The alternative here was redeeming points on any seat as opposed to selective seats as before. Based on such information it can be argued that organizational practice of decision making at Qantas conform to the theory of decision making, and there is no difference between theory and practice. It should also be noted that majority of decision making at Qantas Airlines company normally made by the incremental method (Whyte, Prideaux & Sakata 2012, p.222). Every year, Qantas Airlines analyzes its results and then create some changes in its operations to generate better results the following year. Incremental theory method suggests that the board of directors or manager do not wholly need to remake policies or decision each time, but instead can refashion existing decisions or policy (Whyte, Prideaux & Sakata 2012, p.219). This is what they did with their customer reward program. The airline does not rapidly decide to develop change operations or new product, but their decisions is informed by their results. Qantas website (2014) claimed the Company served as a domestic airline for 15 years before venturing into international operations. The decision was formed by the fact that it established itself as the largest company in Australia. The decision was also informed by increasing business and leisure travels outside the country. By utilizing these stages, decision making will be more effective and productive for board of directors. Therefore, decision-making under uncertainty is a normally a challenge for several managers since they have to make considerations, balance the success probabilities and formulate the final financial decision in regards to the situation of the organization (Gilbert & Ebert 2002, p.503). Several models have been made upon which board of directors, manager sand decision makers can use to make decisions. Some of these models are economic rationality model, adaptive, collective participation, social model and Simon’s bounded rationality model among others. Decision models offer a basis for policy makers to make informed decisions regarding a company’s status now and in future. Even though people make decisions, the success of their decisions is influenced by several factors. Some of these factors include past experience and organizational structure. Juliusson, Karlsson & Garling (2005, p.565) indicate that past experiences impacts the future decision making. It holds that when positive results came from that particular decision, managers will probably decide in the same way when the factors remain constant. Conversely, policy makers have the tendency of avoiding repeating of the past mistakes (Krantz & Kunreuther 2007, p.151). In the perspective of Qantas; when the CEOs Alan Joyce and Jayne Hrdlicka decide that the company will pursue a certain country in Europe and the results becomes successful, it likely that he would pursue market within Europe which has the same economic factors such as disposable income (Whyte, Prideaux & Sakata 2012, p.217). When the airlines fail in one market it will not report the same mistake in another market with the same factors. This is important to the level that decisions made in future based on the past experiences may not necessarily be the ideal ones. In the financial decision-making, successful individuals do not arrive at investment decisions founded on the past sunk results, but by evaluating choices without referring to past experiences (Juliusson, Karlsson & Garling, 2005, p.566). Organizational structure also affects the decision making. Traditional organizations used to be created revolving around the hierarchical organizational charts. This created authoritarian situation with less involvement of the employees in various decisions. The competition and dynamic in the business environment has prompted managers to create a flat and lean organization structure which can speed up the decision making process and implementation as well. As one of the employees (information system analyst) of Qantas, I can report that the company currently uses matrix form of organizational structure. Matrix structure categorizes staff by both role and product. This form of structure often employs teams of employees to complete work, so as to exploit their strengths. However, this structure is tall and causes delay of decision making. The company employs this form of structure because it is a large company with global presence (figure one). Figure 1: Qantas organizational chart Source: Qantas 2014, Qantas Official Website, viewed May 14th, 2014 From http://www.theofficialboard.com/org-chart/qantas-airways 3.0 Group dynamics in the workplace London & Sessa (2007, p.551) contend that in the 21st century group formation remains one of the best strategies in the organizations. In Qantas, groups offer better decision-making, greater motivation, and improved problem-solving and enhanced coordination. These results normally come at some price. Group decisions could be slow in the early stages of group formation, and maturation of groups into efficient social entities can even be slower (London& Sessa 2007, p.561). The situation is experienced because employees normally have unique personalities, come from different cultural background, subscribe to different religion and have different political affiliation. The difference is what forms group dynamics. In a nutshell, group dynamics are defined as a collection of psychological processes and behaviors taking place in the social group, i.e. intragroup dynamics (Backstrom, Huttenlocher, Kleinberg & Lan 2006, p.44). This is where most will always give their opinions with personal interest and want it to be the adopted as group decisions. It happens in every organization and Qantas is not exception in its early stages. The dynamics of the group relies on how members define the group boundaries. Frequently, there exist distinctive subgroups within the large and defined group. For example, within customer service (ticketing department) there are several employees serving customers, and within this group, they are a clique of employees who have created subgroups based on personality and maybe friendship. Such cliques can delay work because one subgroup may not cooperate with the other. Backstrom, Huttenlocher, Kleinberg & Lan (2006, p.44) argue that as the group bonds the antagonism reduces and member drop personal interest and focus on the goals of the organization. Such antagonism drags the decision-making and implement back. Pinto, Marques & Abrams (2010, p.110) holds that teams need training and time to bond and mature. When managers create teams, they normally have learnt something about individual and understand their potential and it just a matter of putting them in groups to harness that potential (London & Sessa 2007, p.115). The members of the group exhibit particular types of behavior which enable them to function efficiently toward particular goals. Enabling staff the opportunity to develop in their skills, competency and offer team training to improve is one of key agenda at Qantas (London & Sessa 2007, p.111). The company provides several development initiatives to support and motivate staff. Effective teams attain much of the power from the divergent attitudes, experience and thinking. Without this situation, conflict is reduced, but the resultant decisions become less effective. It can then be argued that conflict is normal, even advantageous. Individual capability can influence the group and even uplift the competence of other group members (Van Vugt & Schaller 2008, p.3). Optimal distinctiveness theory points out that individual capability make individuals have the desire to be the same as others, but also the need to surpass them. Over the years group settings has helped the company launch service in up to 65 destinations (Qantas 2014). Individual behavior of the group leaders has been able to influence the rest of the group members to work hard to the prosperity of the airline company. Just as research has found out that employees work faster and harder when the rest of the team members are present the company has embrace group setting in all its departments. Similarly, it can be claimed that group setting is bad for organizational setting because it slows down the decision process (Backstrom, Huttenlocher, Kleinberg & Lan 2006, p.44). For example, in 2013, the board of directors at Qantas Airlines Company had to halt the IT system upgrading with the reason that they were still consulting. The IT system hosts their frequent flyer program. Qantas faced numerous hitches in their technology. 4.0 Recommendations There are numerous factors which influence the decision making; one of such factor is the organizational structure, and as a company that still grows, Qantas must embrace flats organization structures which quicken its decision making process. In the 21 century the companies have become dynamic and flexible that employees tend to resist authoritarian decisions. As such Qantas must involve employees in decisions which affect their lives directly or indirectly. The increase in travelling activities has prompted managers to improve the speed at which they serve their customers to ensure that they increase the customer base. To speed up their operations and customer service group formation and setting must be one of the top agenda of Qantas organization. However, team formation is not just enough. As such group dynamics must be considered to create team cohesion. 5.0 Conclusion Qantas Airline Company enjoys the Australia airline industry dominance and even poses a great competition internationally. The company dominates in the product innovation platforms in three recognized classes including first, business, economy due to its strong brand. However, it faces constant complaints regarding its ethical issues in relation to accidents, extortion attempts and price fixing. Nevertheless, there are several opportunities which it can exploit so as to sustain this market dominance, most get it in its decisions more international and make use of teams to speed up its customer services. Coca-Cola must also get rid of competition posed by Virgin Australia Airline including other upcoming airline companies. 6.0 References Backstrom, L, Huttenlocher, D, Kleinberg, J & Lan, X 2006, Group formation in large social networks, Proceedings of the 12th ACM SIGKDD international conference on Knowledge discovery and data mining - KDD '06. p. 44. De Bruin, W.B, Parker, A & Fischhoff, B 2007, Individual differences in adult decision- making competence, Journal of Personality and Social Psychology, vol. 92, pp.938-956. Gilbert, D & Ebert, J 2002, Decisions and revisions: The affective forecasting of changeable outcomes, Journal of Personality and Social Psychology, vol. 82, pp.503-514. Jullisson, E.A., Karlsson & Garling, T 2005, Weighing the past and the future in decision making, European Journal of Cognitive Psychology, vol.17, pp.561-575. Krantz, D & Kunreuther, H 2007, Goals and plans in decision making, Judgment and Decision Making, vol. 2, pp.137-168. London, M & Sessa, V 2007, How groups learn continuously, Human Resource Management, Vol. 46, pp.651-69. Pinto, I. R, Marques, J & Abrams D 2010, Membership status and subjective group dynamics: Who triggers the black sheep effect? Journal of Personality and Social Psychology, vol. 99, pp.107-119. Qantas 2014, Qantas Official Website, viewed May 14th, 2014 From http://www.qantas.com.au/travel/airlines/home/au/en Van Vugt, M & Schaller, M 2008, Evolutionary approaches to group dynamics: An introduction". Group Dynamics: Theory, Research, and Practice vol. 12, pp. 1-9. Whyte, R., Prideaux, B & Sakata, H 2012, The Evolution of Virgin Australia from a Low-Cost Carrier to a Full-Service Airline – Implications for the Tourism Industry, in Joseph S. Chen (ed.) Advances in Hospitality and Leisure, Emerald Group Publishing Limited, pp.215-231. Read More