Airline industry and leadership - Essay Example

Airline industry and leadership Table of Contents Introduction 3 Section 3 Section 2 6 Section 3 8 Conclusion 10 Reference 11 IntroductionThe airlines industry is one which constantly faced with considerable global challenges and competition. Constantly turbulence in their business conditions leaves the fortunes of these companies in the hands of global conditions and conditions of the economy. The co-evolutionary process of industry development and leadership is evident in many of the airlines companies across the world. Leaders have played the dynamic role of developing new business models with the aim to revitalize and rebuild the industry. Some of the greatest airlines in the world, such as the South West Airlines and British Airways have been successful in overcoming hard times and driven towards success by the initiative, zeal and enthusiasm of their leadership teams. It would explain the general theories of leadership providing evidence from another industry (Gilbert, 2009). This project aims to bring forth the role of leadership in the airlines industry in India with particular focus on Jet Airways. It begins with elaborating on the concepts and theories of leadership applied in organizational contexts. This is followed by presenting the conditions in the automobile industry and the way I which it has been led through effective leadership. Finally the leadership role played in Jet Airways is discussed which particular emphasis on the change management strategies. Section 1 Effective leadership has been particularly responsible for bringing about dramatic organizational transformations. However, the leadership styles and types have differed between organizations. The most important ones which are worth mentioning in the context of bringing out organizational changes or transformation of organizations are situational leadership and contingency theory. According to Bass (1990), situational leadership takes into consideration the leaders and the followers as well as the situation. This is complemented with the elaboration of the circumstances, time and place as well (Martin, 2006, p.45). The fundamental underpinning of situational leadership theory is that it does not consider any single or best style of leadership. It is rather relevant to the task to be performed and the most success successful of all leaders is those who can adapt their leadership styles to the needs of the situation. Effectiveness of his leadership style not only varies according to the group of individuals that he leads but also the nature of the task to be performed or the job function which needs to be accomplished (Martin, 2006, p.45). The most important model which needs elaboration in this context is the Hersey-Blanchard Model of situational leadership. This is elaborated using the following figure. Figure 1: Hersey-Blanchard Model of situational leadership (Source: Martin, 2006, p.45) One of the greatest demonstrations of situational leadership was shown by Barbara Cassani in British Airways. Under her initiative as a situational leader with a selling style of leadership she was successful in her ventures to cut down on ticket prices for air travel in British Airways. Her selling leadership style with high concern for both the people as well as the task was able to make the business grow and create different product offerings in the market (Baxter & MacLeod, 2008, p.19). The contingency theory of leadership as presented by Fiedler assumes that leaders are either task oriented or relationship oriented. The former are the ones who are mostly directive in attitude, they structure situations properly, set deadlines and make assignments according to deadlines. On the other hand relationship oriented leaders are the ones who have greater focus on its people, considerate and not much directive in nature (Leitner, 2007, p.7). The following diagram can elaborate on the theory of contingency leadership style. Figure 2: Fielders Contingency model of leadership style (Source: Hitt, Chet Miller & Colella, 2006, p.291) Section 2 The Indian automobile industry is one which has shown immense growth and expansion under the helm of effective leadership and control. Major acquisition in the industry like Tata and JLR and the Suzuki and VW demonstrates that through the right kind of leadership initiatives and roles, the sector can be taken to great heights and be compared to some of the largest competitors in the world (KPMG, 2010, p.13). The increase in car sales in the Indian market is evident from the following figure. Figure 3: Luxury car sales in the Indian market (Source: KPMG-a, 2010, p.14) The automobile industry in India has seen interesting dynamics recently. After the recovery from the global downturn, the industry has flourished dramatically. The demand in the industry is also quite high which is demonstrated in the following figure. Figure 4: Domestic vehicle volumes (annual) vs. Year-on-year growth rates (Source: KPMG-a, 2010, p.8) The creation of Tata Nano is considered to be one of the greatest innovation and creation under the leadership role of Ratan Tata who is the present chairman of the Tata Group. The idea was to create something which would be more than just a care. It was a dream project to invent the most affordable transportation solution to reach the masses. It is a car priced at 1 lakh which has never been possible for any automobile country in the world. The low price of the car serves as its most important competitive advantage in the market. Being the cheapest of all cars, it has a competitive edge over them all as being the most affordable car for the masses. Customer satisfaction with the use of the car is also immensely high and 80% of the customers using the car are said to be highly satisfied. This is because of its size, space, durability, manoeuvrability, mileage and safety. The success of the company was especially possible because of the vision and leadership of Ratan Tata to create the most affordable car in the world which could reach the masses in the country (Tata Motors, 2011). Section 3 Leadership has played an important role in the airlines industry in India. This is particularly in the case of Jet Airways which is one of the premier airlines in the country. In the domestic market company showed an increase in revenue of about a solid 11% carrying 8.70 lakh in 2010 as against 7.85 lakh in 2009. The role of leadership is especially worth mentioning in this regard because the company was hit greatly by the recession of 2008/2009 which resulted in immense loss of revenue and decreasing profit margins. The company demanded complete restructuring and remodelling in order to recover from the effects of the recession. Initially the company has to close down a number of offices located throughout the country which was a big blow to its entire management and workforce. Leadership innovation and initiative has played the most prominent role in changing the condition of the company and improving its viability (Jet Airways, n.d.). Under this strategic change management initiative, Jet Airways started an ‘information and technology’ led strategic change management. The technology based innovation and change acted served as its competitive edge over rivals. However, the change was subjected to certain restrictions. It was not able to undertake any job cuts even though application of technology required reduction in the workforce employed in the organization. It was subjected to strict industrial relations and labour regulations in the country which could result into strikes or other non-cooperative activities from the employees in case of job cuts. The restructuring of Jet Airways was possible through the entrepreneurship and leadership of the icon Naresh Goyal who has the reputation of winning the most prestigious leadership awards in the nation. The fact that his restructuring policies did not involve any job cuts or loss of jobs across the industry shows that he has got the highest concern for his people. However, the restructuring policy involved greatest participation from the employees and the board which he has claimed to be the most important factor for realising his initiatives. This shows that he incorporates the selling style of leadership in managing the company. He was especially careful about ensuring the welfare of employees and maintaining favourable employee relations during the process of restructuring. The leadership style in Jet Airways can also be compared with the transformational leadership style which brought about changes in the individuals and the social system at large in the company. He was able to create positive and valuable changes in the minds of the followers and led them towards attaining the goals successfully. He was able to enhance motivation, performance and morale of employees in the process too which truly characterizes the transformational style of leadership. The company successfully faced the challenge of merging with Kingfisher with the aim of making optimum utilization of each others’ resources. Along with this it was also meant to bring down costs substantially in order to avoid duplication of resources. The strategic move of leadership here was entering into an agreement with Kingfisher to rationalize operation of routes, sharing codes, prices and availability, ground handling and fuel management, thus making the merger not only the biggest player in the market but also enabling the organization to survive and recover which was on the verge of collapse (Indian Television, 2011). Conclusion The research reveals that leadership plays a prominent role for the success of any organization. This is especially true for the airlines industry which remains vulnerable to the turbulent business conditions and environment. It is through the leader’s vision, initiative and enthusiasm that followers are able to see the road ahead and the sure path to success. In this context situation leadership and contingency leadership are especially mentionable as they are applicable for varying situations and conditions through which organizations can be led. However, the degree of leadership style can vary according to the persons concern for his employees or his concern for the tasks. The situation on Jet Airways is a demonstration of situational style of leadership where Naresh Goyal represents highest concern for his employees as well as the restructuring task he wanted to realize. The transformational leadership is also evident through his attempt to ingrain the new business aims and objectives in the system and bringing about a complete transformation in the process and structure of the organization. Reference Alasdair B. & MacLeod, M. (2009). Managing performance improvement. Routledge. Gilbert, S. J. (2009). Come Fly with Me: A History of Airline Leadership. [Online]. Available at: http://hbswk.hbs.edu/item/6275.html. [Accessed on November 19, 2011]. Hitt, M. A., Chet Miller, H. C. & Colella, A. (2006). Organizational behavior a strategic approach. John Wiley & Sons. Indian Television. (2011). India’s Airlines tycoon Naresh Goyal talks to CNN. [Online]. Available at: http://www.indiantelevision.com/release/y2k5/oct/octrel28.htm. [Accessed on November 22, 2011]. Jet Airways. (No Date). Press Releases. [Online]. Available at: http://www.jetairways.com/EN/IN/PressReleases/RobustInternational.aspx. [Accessed on November 22, 2011]. KPMG. (2010). The Indian Automotive Industry. [Pdf]. Available at: http://www.kpmg.com/IN/en/IssuesAndInsights/ThoughtLeadership/Auto_survey.pdf. [Accessed on November 22, 2011]. KPMG-a. (2010). The Indian Automotive Industry. [Pdf]. Available at: http://kpmg.de/docs/Auto_survey.pdf. [Accessed on November 22, 2011]. Leitner. A. (2007). Concept of Leadership and Management Within the Manufacturing Industry. GRIN Verlag. Martin, B. (2006). Outdoor leadership: theory and practice. Human Kinetics. Tata Motors. (2011). Open sales of Tata Nano extended across India. [Online]. Available at: http://www.tatamotors.com/media/press-releases.php?id=633. 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