Management and Leadership Airlines

Question: Discuss about the Management and Leadership Airlines. Answer: Introduction: In the assessment, the researcher has chosen Singapore Airlines to conduct the study. This assessment consists of critically analyzing and evaluation of Singapore Airlines Management and Leadership qualities. The topic further illustrates the outcome of Singapore Airlines in the work group and political factors of Singapore Airlines. The aviation industry consist of several crucial factors which consists of overloading, rivalry among low cost carriers, rising oil prices and threat of terrorism impact the airlines industry harmfully. Despite of all this critical factors Singapore Airlines has been able to perform to its potential. The company has a reputation of acquiring huge revenue on annual basis and achieving greater returns as compared to its competitors. Singapore Airlines also achieved several rewards and recognition from the society for its supreme service traits. The efficiency of Singapore Airlines is strictly depended on their management strategy, which consist of differen tiating themselves through service quality and innovation. The leadership style opted by Singapore Airlines is Cost Leadership Strategy (Singaporeair.com. 2016). Singapore Airlines is the flagship carrier of Singapore; it commenced its business operation from October 1, 1972. It has achieved revenue of more than $12 billion in the financial year 2010. It has the capacity to reach 63 destinations and 34 countries globally. With the innovation of modern technology and superior flights, they are outperforming in the market place with flights like Airbus A320s and Singapore Airlines Cargo. Singapore Airlines generally targets customers of high-income potential and business people by providing them with unpredictable flying experience, they has set new and modern standard of aviation industry and continuously innovating their service facilities by launching and promoting efficient aircraft to their product line (Singaporeair.com. 2016). The company came into limelight when they first introduce the worlds longest nonstop flight from Singapore to Los Angeles in 2004 and in 2007 launched the largest commercial aircraft Airbus A380. Motivational Theory: The motivational theory was developed by Abraham Maslow identifying the hierarchical needs, which leads to employee motivation. The Maslow Hierarchy Need is divided in five stages such as Physiological Needs, Safety Needs, Love Needs, Esteem Needs and Self Actualization Needs (Maslow 2013). To motivate an employee all the above-mentioned needs are important. The motivational practices addressed by Singapore Airlines are as follows: Direction: Singapore Airlines provides rewards and recognition to their employees to encourage motivation. They often initiate employee excellence and provide rewards and recognition according to their performance and appraisal. Excellence in staff performance is solicited with increased salaries and promotion to job (Zook and Allen 2013). Their main objective is to increase efficiency through rewarding employee on their performance. Rewarding and recognizing an employee leads to the effective way of retaining an employee in the organization. Singapore Airlines follow both extrinsic and intrinsic rewarding system and not always, the reward is monetary. Persistence: Singapore Airlines provides employee loyalty such as implementing the best cabin crew and becoming the best class airlines that will attract more employees to work with the company and provide efficiency in their growth. Singapore Airlines also initiate non-monetary rewarding system in their organization such as giving newsletter to motivate their employees. A reward like The Deputy Chairman Award is given annually to teams or individual those who provide unique customer satisfaction with exceptional services. These rewards have no financial implications but they increase the morale of the employee that leads to motivation (Zetner 2016). Initiation: Singapore Airlines also provide better employee communication strategy to support efficiency in excellence by motivating employees as soon as they join the company. Their primary objective is to make sound relation between manager and employees and sustaining their relationship by defining the company mission and goals. These goals are defined with the help of online communication channel, print materials and arranging meetings. Therefore, employees can address their problems to their managers immediately without wasting their valuable time and manager provide adequate measures to solve their queries. Moreover, this creates a healthy environment in the organization and productivity of the employees increases (Zook and Allen 2013). Management of Singapore Airlines: External Factors: Political: In Singapore, the political environment is generally stable in nature. The dominance of Peoples Action Party (PAP) existing in Singapore since independence. The Singapore government has very low restrictions for industries and given complete freedom to the commercial supremacy in Singapore. Most of the companies take 90% of their decisions on their possession and the government does not interfere much (Heracleous and Wirtz 2012). The government has put lot of pressure in Singapore Airlines to increase their profit and supported the organization for reduction of expenditure during economic catastrophe. Singapore Airlines foreign policy is to maintain sound relationship with various countries. Singapore Airlines has also entered free trade agreement between India, Australia, Japan, Korea, New Zealand and United States of America (Heracleous and Wirtz 2012). Economic: The Financial calamity of 2007 has relentlessly affected countries globally and brought recession to most of the countries. The crisis of this financial situation lasted through 2008 and made it very difficult for the companies to run smoothly. This depression also affected Singapore Airlines as Oil prices were increased to $140.00 per barrel on June 2008. The Singapore tourism board is providing tremendous effort in promoting Singapore Airlines. The Singapore Government has also initiated to host the Formula One Race Contests, which will help in gathering business travelers and enhance the tourism sector (Homsombat et al. 2014). Social and Cultural Factors: Singapore is known as an immigrant country and the culture is diversified intensely. The percentages of non-residing citizens in Singapore are such as 25% of foreigners and 10% permanent resident. Due to globalization and high demand of travel, people nowadays travel more often for work than leisure purposes (Homsombat et al. 2014). Singapore Airlines are committed in providing great service to their customers and a safe flight experience. For example, different cultures of people require diverse range of services that includes types of food served and welcoming language is considered to satisfy different customers accordingly. Singapore Airlines provides most of its knowledge in solving the fears of customers related to terrorism and accidents. After the incident of 2002, when 82 people died in crash at Taipei International Airport, Singapore Airlines altered all engine motor of the Aircraft A380 to retain and gain new and potential customers (Pearson an d Merkert 2014). Technological Factors: The growth of Singapore Airlines is huge and to retain that position changes in technology and modernization is their key to success. Singapore Airlines was the first airlines company to introduce micro system power in the air, which benefited the customer to keep to their working condition in the flight without turning on their laptops. Singapore Airlines also provided their customer the widest seating capacity in economic classes as compared to their competitors that help them in gaining competitive advantage (Ford, Ford and Polin 2014). Beside, in terms of Safety and Security, Singapore Airlines was ranked number one in 2008 and received number of rewards from Singapore Government (Zentner 2016). Environmental Factors: Aviation industries are always under immense pressure of sustaining the environment by reducing the rate of air pollution and noise pollution, which lead to global warming (Smit and Dula 2014). In respect to this Singapore Airlines has planned to spend more than $1.5 trillion on new modern aircraft that will be much greener and cleaner. This new aircrafts will decrease the rate of CO2 emission by approximately 21%. Moreover, they are using fuel-efficient system, training new staffs and sustaining the use of energy. They are not only performing exceptionally in their business but also adding benefits to the communities (Park et al. 2015). Internal Factors: Financial Factors: The Singapore Airlines has a flexible profitability ratio over the years and it has survived the financial catastrophe of 2008. Aviation market dimension is measured with the help of Revenue Passenger Kilometer (RPK) (Smit and Dula 2014). Having it base in Asia pacific region, Singapore Airlines consists of developed aircrafts and low cost operations. Singapore Airlines and its competitors like Cathay Pacific and Qantas has similar market share mentioned in the table below: Carrier RPK ( Revenue Passenger Kilometer) (Million) Singapore Airlines 90,130 Cathay Pacific 90,976 Qantas 99,180 Figure 1: Comparison of RPK Made by Author Marketing Factors: Due to the growth of globalization and implementation of advanced technology, the aviation industry has changed drastically over a decade. Travel agents do the main distribution networks of Singapore Airlines with the help of online booking. With the help of e- ticketing systems passengers are now able to board flights ticketless. Singapore Airlines also established a sound search engine online, such as when consumers search for Singapore Air ticket the name of Singapore Airlines pops up instantly (Smit and Dula 2014). However, the effect of marketing in social media is poor the presence of Singapore Airlines in twitter and facebook is very low despite the company promoting its business over the internet (Thomas et al. 2013). Research and Development: Singapore Airlines has one of the strongest financial backbones in the aviation industry and it is still innovating its flight leisure services and comfort for customer satisfaction. Singapore Airlines also developed and introduce the lie-flat bed in its business class in 2002. The company have also estimated to spend 12,000 million on purchasing new aircrafts over the span of five years and reorganized their cabin crew according to market segmentation and customer preference (Thomas et al. 2013). Organizational Structure: The organizational structure of Singapore Airlines is segregated by functions and it consists of drawbacks in the lower level of staffs. To handle this situation Singapore Airlines has level its organization structure with very few hierarchical levels inside the organization (Williams et al. 2016). This helps in creating autonomous and vibrant business that provides job improvement. The company encourages senior staffs to train the new employees and allow junior employees in decision-making process. The primary objective of Singapore Airlines is to maintain good and healthy working environment within the organization (Sengupta and Sengupta 2014). Elements of Organizational Structure: Complication of the Organization: Singapore Airlines consists of more than 2000 pilots, 170 ground staffs and more than 7000 employees in their cabin crews. The core activities of Singapore Airlines are to create various initiatives towards social welfare and sustainability in environmental protection. The goal of the company is to indulge researching skills in its operations to provide better qualities of services (Sengupta and Sengupta 2014). Centralization of Structure: The main framework of Singapore Airlines is handled by the Singapore Government with the help of Ministry of Finance. However, the government does not involve themselves in the management of the organization. Singapore Airlines has recruited successful presidents that increase the efficiency of the organization (Zook and Allen 2013). Formation of Structure: Formalization is the process through which an organization formalizes in setting up various rules, regulations and limitations on its members. Singapore Airlines does not implements autocratic leadership style but rather focuses on providing low level of regulation that creates a comfortable environment to work for the employees (Zetner 2016). Leadership of Change: Change leadership is a phenomenon by which organizational process move towards change. Change management is undertaken due to both internal and external forces affecting the business operations. The external forces consist of economic, political and technological changes whereas the internal forces include new strategies, low consumer satisfaction and conflict between workers (Goetsch and Davis 2014). Leadership Strategies of Singapore Airlines: The main effectiveness of Singapore Airlines lies in its dual strategy that consists of product differentiation and cost leadership. The differentiation strategy includes high quality of contributions to their customers and important investments in innovation, employee development and branding. The company has successful in implementing dual strategy better than their competitors do. Singapore Airlines has been able to delivered vigorous financial returns over the years and never acquired a loss in its long run. The company also has very less mount of debt in the market and the growth rate is higher than its competitors (Baker 2013). The main strategies of Singapore Airlines consists the following: Providing Service Superiority: The two main property of the company are people and planes. Singapore Airlines always ensures that there flights are always young and fresh. Therefore, they change their fleets on an average of 74 months old, and introduce new planes with more fuel-efficient capacity and less maintenance cost. The service facilities consist of treating employees respectively. In Singapore Airlines, they put a lot of effort in training their employees (Baker 2013). The company generally trains their employees for four long months. Their training procedure consists of several courses such as courses on manner, etiquettes, wine approval and cultural sensitivity. The cabin crews of Singapore Airlines are trained to communicate with different passengers in different ways. It also trained the employees to interact at eye level to its passengers to entertain greater service to the customers and reducing cost by minimizing customer loss. Singapore Airlines provides training kee ping in mind the cost factor and increasing deliverance of huge service to the customers (Ford, Ford and Polin 2014). A Singapore Airlines trainer consists of senior crew members or exterior experts. Singapore Airlines always try to minimize their costs and every decision they take are based on cost consideration. Their primary aim is to decrease waste with no compromising in customer service. Moreover, Singapore Airlines cost related to fuel, labor and fleet depreciation is approximately 29% that is much lower than other airlines companies (Suhartanto and Noor 2012). Innovation: Singapore Airlines is one of the reputable innovator in the aviation industries, they bought huge transformation in the industry. Such as customer entertainment system in all the classes, modern sound system, food menus for business class passengers and one of the widest seating capacities. Singapore Airlines spends 40% on training the employees, 30% on business operations and the rest 30% on innovating new aircrafts and services (Baker 2013). Singapore Airlines Product Innovation Department (PID) provides an extremely structured process that consists of identification of opportunity, evaluation of concepts and development a superior product design. Singapore Airlines also initiated forefront employees, passengers, competitors and the media to create various criticism channels. The company implements the idea that those employees provide direct services to the passengers like ground staffs and cabin crew must encourage in innovating Singapore Airlines (Narasimhalu and Mathur 2015). Technological Leadership: Each year Singapore Airlines carry out high-risk innovation projects. They were the first to launch Airbus A380 that differentiate themselves from their competitors and provided them with a competitive management (Borenstein and Rose 2014). Due to their huge financial support, Singapore Airlines are able to take calculated risks. In the year 1991, it was the first aviation company to introduce services like telephone and fax in the aircrafts. In addition, in 1988, Singapore Airlines designed a website from which passengers can book flights, choose appropriate seats and order meals (Leifer 2013). Standardization: Singapore Airlines services are mostly standardized. Their primary objective is to provide high dimensions of service operations that lead to lowering of cost and safety of the customer. Singapore Airlines focuses on personalizing customer service by gaining information from it CRM system, often address the passengers by their name, know how about their food, and drink (Narasimhalu and Mathur 2015). There are various types of customer needs while travelling such as some may look unwell, others may want to read a book and other must want to charge his/her laptop. Most of the aviation industries do not look seriously on these needs but Singapore Airlines provide get attention to these small services to fulfill customer needs (Leifer 2013). Power Politics: Singapore Airlines has received innumerous support from the Government of Singapore in terms of liaison on Tax, Low Cost Fuel and strong government support. The tax structure of Singapore Airlines is very flexible which provides Singapore Airlines to attain a competitive advantage over its competitors. For example, Delta Airlines is subject to pay 36% corporation Tax, British Airways subject to pay 30% whereas Singapore Airlines in comparison to them only pays 20% corporation Tax. In the aviation industry, government rules and regulations are necessary to be taken into consideration that enables Singapore Airlines to expand their business operations overseas (Narasimhalu and Mathur 2015). Singapore Airlines has withdrawn all its business investment from India due to political unrest. In the aviation industries, it is very important to address the need of airlines freedom. This term can be defined as the rules and regulation that follows while entering into the airspace of other count ries weather to land or not. The agreement is generally discussed at the international level between government and trade meetings (Baker 2013). The power of Singapore Airlines deal with all the core competencies of them that create a competitive advantage. The core competencies of Singapore Airlines consist of providing service excellence with decreasing the amount of cost. These core competencies are generally made by the combination of business strategies with management goals. Singapore Airlines is a exclusive brand as they provide new services to their customers like introducing hot meals, non alcoholic beverages, improved entertainment systems in their flights that enables them to distinguish themselves from other airlines companies and initiate complete customer satisfaction (Leifer 2013). Conclusion: Singapore Airlines is one of the most reputable companies in terms of customer appeal, customer satisfaction and loyalty. The organization has received numbers of rewards and recognition in the society. The main offerings of the organization are customer comforts, facilities to be attentive towards their passengers and individual services within flights. Moreover, it is also a low-priced aviation company than its competitors. For more than two decades, Singapore Airlines has managed to accomplish cost-efficient service superiority in their organization. Singapore Airlines has positioned them as a finest carrier with maximum level of of innovation in their expertise and excellence in providing passengers service. The company has adopted the use of information skills as one of their primary strategies. Singapore Airlines web site is maintained with modern technical facilities and it is user friendly. With the implementation of dual strategy in their leadership it is been observed that Singapore Airlines have gain a competitive advantage over it competitors and the organization is growing significantly with efficiency and innovation. References: Baker, D.M.A., 2013. Service quality and customer satisfaction in the airline industry: A comparison between legacy airlines and low-cost airlines.American Journal of Tourism Research,2(1), pp.67-77. Borenstein, S. and Rose, N.L., 2014. How airline markets work or do they? Regulatory reform in the airline industry. InEconomic Regulation and Its Reform: What Have We Learned?(pp. 63-135). 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