Designing Leading and Managing a Sustainable Competitive Strategy - Research Paper Example

Sustainable competitive strategy Globalised world As said by many philosophers “Change is the only constant in the universe” (Malloch & O'Grady, 2008, p.67). The world around is rapidly changing which can easily be perceived from our immediate environment. Contemporary world has made it possible to communicate face to face with a person some thousands of miles away. Improved communication and transport has indeed made the world a smaller place. Such stupendous improvements have made a vacation in moon seem a near possibility. It is the advancement in technology which has provided the wings to such high degree of imagination. As said by the father of modern management, Peter Drucker “We are in one of those great historical periods that occurs every 200 or 300 years when people don’t understand the world anymore and the past is not sufficient to explain the future (Cameron & Quinn, 2005, p.1). The fast changing world has resulted in globalisation of the world. The term ‘globalisation’ has been defined in different terms by the scholars; one of the commonly used definitions of globalisation is given by Harvard professors Robert Keohane and Joseph Nye. They opined that “globalisation results in deeper and/or geographically more complete globalism” (Westerfield & Abbink, 2004, p.181). Therefore before understanding the term globalisation one needs to understand what the term ‘globalism’ stands for. These scholars explained that “globalism is a state of the world involving network of interdependence at multi-continental distance. These networks can be linked through flows and influence of capital and goods, information and idea, people and force as well as environmentally and biologically relevant substances (such as acid rain or pathogens)” (Westerfield & Abbink, 2004, p.181). Various incidents have related globalisation with post-modernity. To understand post-modernity one needs to understand the concept of postmodernism. According to John McGowan “Postmodernism highlights the multiplication of voice, question, and conflicts that has shattered what once seemed to be (although it never really was) the placid unanimity of the great tradition and of the West that glorified in it’’ (Davis, 2006, p.14). The concept of postmodernism has influenced the mode of thinking of general public which accelerated the rate of globalisation. Through the process of globalisation one tries to achieve the iconic economy. With increasing degree of globalisation the concept of rationalisation is also getting popular. It can be defined as “using plausible sound but usually fake reason to justify a particular position that is held by others, less respectable ground” (Damer, 2008, p.95). Rationalisation motivated the common people to raise their voice which accelerated the change that took place. The present rate of change prevailing around the world seems an enchantment for many. Initially the term Nihilist was used to describe “a man who bows to no authority, who accepts no principle without examination, however high this principle may stand in the opinion of Man” (William, 2009, p.217). This definition was provided by Turghenef, but in the present day the internal meaning of this term has changed to a great extent. In history the nihilists played an important role in bringing revolution in the society and fought against the unjust practices prevailing in the society. Even today the mantra of change is inspired by the though process of the nihilists. All the above given arguments support that the world has changed at a very fast rate in the last few decades and the process of change is still going on. As a result it is quite uncertain to predict what might occur in near future. Therefore to remain competent in the present world, everyone should accept the change palpable at every aspect of our life. Introduction First and foremost, I will thank the Easy Jet Company for providing me the opportunity to express my ideas regarding the management of the present day’s organisation. Easy Jet, a British airline has its headquarters in London. Among other UK based airlines it is the one that carries the highest number of local as well as domestic customers. It offers more than 500 routes that connect 118 European countries, different parts of North Africa and many West Asian locations. After Ryan air, Easy Jet is the second largest low cost airline in UK (Great Britain: Parliament: House of Commons: Transport Committee, 2007, p.153). The recession phase of 2008-2009 was highly challenging not only for the aviation industry in UK but also for the entire world and this is the prime time when the industry needs to revive its strategy (Great Britain: Parliament: House of Commons: Transport Committee, 2009, p.10). As the market conditions have improved in different parts of the world (especially in developing countries) it is expected that the business of aviation industry will improve soon. This report will explain the ways the world has changed in the last few years and the manner in which this pace of change (globalisation) has affected the needs of customers. This information is of vital importance for the company because this can be used to develop a more effective customer management system and to further enhance the market share in the international market. This report will explain the manner in which a company can alter its organisational structure to make itself more flexible so that it can easily adapt the changing environment. An organisational culture is highly influenced by the type of management practices prevailing in the organisation. The management should have the acumen to understand at which point what change is required in the management style. Hence this report will try to explain all the information pertaining to contemporary management practices. This report will be designed keeping a broader view point but it will mainly deal with all those issues that are relevant to the aviation industry and mainly to Easy Jet. In this section an in-depth analysis will be conducted to find out the root cause behind the problem and the challenges faced by Easy Jet. This section will also describe the ways in which the management can deal the issues though modified organisational structure, better customer care policies and appropriate management style. This report can be used by the management to understand the ways the company can gain and retain a competitive position in aviation industry of UK. This report contains vital information which will assist the higher management to develop strategies in future. Managing changing need of customers The aviation industry is a highly competitive industry where the prevailing companies try hard to enhance their market share and they go on changing their strategy on time to time basis. As the aviation industry is a part of service sector hence the quality of the service offered to the customer make a great difference. Before developing an appropriate customer management strategy it is important to understand who are the customers of Easy Jet. Being a low cost airline company their main customers are the one who often have to travel because of their business nature, the students how travels on regular basis and prefer to cost as far s possible. The families also travel with their children while going for holidays who don’t mind paying a little more for value added services. The customer base also comprises of the high class persons for them comfort comes first. Therefore it can be concluded that the customer base of the company is heterogeneous in nature so the management need to develop such policies that satisfies diversified need to almost all the customers. Easy Jet’s corporate strategy is based on six main pillars, among them commitment to customer service is one of the most profound one. The company try hard to collect information regarding the customers’ need and their degree of satisfaction with the service offered by the company (easyJet-a, 2009). For that there are many specific websites where he customers can provide their feedback, but ultimately it is the front line staff of Easy Jet that represents the company to the customers. Therefore to enhance the satisfaction level the customers, management should train its front level customers. The present customer base of any company can be segregated into three distinct groups; these are Nihilists, Constructivists and Hedonists. Each of these groups has their own specific requirements. As for example the Nihilists can be satisfied by providing a feel of togetherness and by caring them. For these types o customers the factor of security and safety comes first. On the other hand constructivist’s customers search for reliance and personal meaning. They try to apply the logic behind each and every matter and tolerate no nonsense. These types of customers are quite serious and practical in nature. Hedonists’ customers are completely different from both of these types; they are more attracted toward fun and adventures. While satisfying these customers there must be an element of surprise and excitement. This analysis will be of great use while training the front line staff of the company. For satisfying the customer who belongs to the group of Nihilists, front line employees should be very polite with them. The staff should take care of their small little needs and should assist them as and when they need the help. These customers are quite emotional so the service provided by the front office employees should have personal touch. Old age customers, children and sick passengers mainly belong to this class of customers. While handling the constructivist customers, the front line employees should gather in-depth information regarding all the facts and figures. These employees are more interested in knowing the scientific reasons behind different matters so they would not tolerate any kind of abstract information. The front line employees should keep themselves updated with all types of information which can be asked by the constructivist customers. They are mostly utilitarian in nature and prefer to have standardised services. The business class travellers are the one who mainly belongs to this category or those who often have to travel from one destination to another. As they are less concern regarding the comfort level, they pay more attention toward the cost or the basis services. Before availing any paid services they analyse what they are paying and the utility of the services. These are the regular customers so the front line employees should provide them the all those information which they ask for. It is difficult to satisfy the hedonists’ customer because they prefer some fun element in the service provided to them. They need something new and exciting at each and every time, hence they are generally not loyal to any specific brand for longer phase of time. These are the one who prefer to have a more customised service and are eager to pay high cost for availing value added services. Although these are not the regular customer of the company but on the other hand this group of the customer is more profitable and so the company try hard to attract them. For gaining loyalty of these customers the front line employs need to introduce some surprise element in their services. Basically the family who is on the holidays or the youngsters going for any trip or even the high profile customs belong to this group. They prefer to make their trip a memorable one thus it is the responsibility of the front line employee how they add adventure to the whole journey. Many a time the front line employees offer a surprise gift or a specific service (like free passes to a theme park or free lunch in the airline) to these customers. Such surprises and gifts help the customers to make the journey a memorable one and inspire them to avail the service of the airline again and again. Service offered by the front line employees can make a great difference hence these employees should be provided a proper training or adopting required hard (technical) skill and soft (behavioural) skill. Due to fast changing world needs of the customers are changing at fast rates hence the front line employees should be trained on time to time basis so that they can satisfy diversified of the large customer base and can assist the company to retain their competitive position in the industry. Organisational structure and control The organisational culture assists a company to achieve its strategic goals hence the management of the company pays great importance to cultivate a desired organisational culture. Organisational culture can be defined as “the set of shared, taken-for-granted implicit assumptions that a group holds and that determines how it perceive, thinks about, and reacts to its environments” (Kreitner, n.d., p.61). Hence an organisational culture of a company is influenced by many factors such as the value system shared among the employees, and the attitude belief prevailing among the human working in the organisation. Depending on the nature of the business and the industry in which the company is operating the organisational culture is selected. It has been commonly seen that those companies which are more into creative works, they prefer to have a discretionary culture where as the company that maintains a routine task prefer to have a conformity culture. At different point of time several studies have been conducted to understand how in practical world the organisational culture influences performance of the employees. The results indicate that employees prefer to work in the organisation where they get the opportunity to interact and work with other employees so that their personal needs to grow and develop can be satisfied. It was determined that congruence between employee’s value and organisational value highly influences factors like job satisfaction, commitment, performance and turnover rate (Kinicki, n.d., p.48). Organisational culture is highly influenced by organisational structure and design of a company; generally it is defined as “organisational structure specifies the firm’s formal reporting relationship, procedures, controls and authority and decision making procedure (Hitt, et al., 2008, p.309). Organisational design refers to “the formal system of accountability that defines key position in an organisation and legitimates rights to set goals, receive information, and influence the work of other” (Simons, 2005, p.29). Goold & Campbell (2002) said “For most organisations, organisational design in neither a science nor an art, it is an oxymoron. Organisational structure rarely results from systematic methodological planning. Rather they are evolved over time, in fits and starts, shaped more by politics than policies” (Myran, 2003, p.25). However in general the organisational structure of a company can be segregated in two distinct categories: controlled and flexible. When the company prefer its employees to be creative and imaginative it maintains a more flexible and flat organisational structure. On the other hand when company is under pressure and it is more important to retain prevailing quality and work standard, management introduces mechanistic structure and tighten the degree of control. Both of the organisational structures suffer with certain degree of disadvantages; as for example too much of the flexibility many deteriorate the work quality and productivity of the staff may decline. In the same way if the degree of control is too high it may result in a bureaucratic structure and with change in the external environment the company may fail to respond and to adjust. According to the present market condition those companies that deals with fast moving consumers goods or which provide customised service to the clients prefer to have an organic structure and discretionary culture. On the contrary the companies who are into the business of slow moving consumer goods and offered more structured services to the clients prefer to retain mechanistic structure & conformity culture. However the best solution is to have an ambidextrous organisation. Such organisation maintains certain degree of control in those tasks which needs to be operated as per the standards (back office jobs) and flexibility is introduced in those tasks where the employees can take certain decision of their own. As a result the employees can develop competency through more creative mode of working (front office employees). Such an ambidextrous organisation can be called an ideal organisation in real sense as it can succeed in satisfying nihilist customers as well as hedonist customers. In practice life both the management and the work force should work hand in hand to make ambidextrous organisation function smoothly. Management & leading style In the post modern era customers prefer to have a memorable experience and demand for transformational value along with utility value of the products and services. It is getting highly complicated and challenging to attract and retain customers in present market condition. Therefore it is the responsibility of top level management to develop such policies that assist the company to enhance its market share and to become the market leader. The management of a company can be differentiated into three groups: operational level management group, middle level management group and top level management group. The operational management group take care of all day to day activities and assist the grass root level employees to perform their task. Their main task is to provide support and supervise the task performed by the workers. If the productivity of the workers declines, then the operational managers are solely responsively for that. They pay more importance toward the task done by the workers and give more importance toward the task as compared to building personal relations. They are the true manager in real sense and have the ability to manage. As defined by Mayer Parker Follett “management is the art of getting things done through people” (P & Tripathi, 2005, p.2). So the manager is the one who indirectly contribute toward the organisational goal by directing the work done by others. The middle level management group is responsible for developing a link between top management and operational management. This group receives the strategic policies from the top level managers and they propagate that to the operational level mangers so that it can be implemented. They are always under pressure, as for example the top management ask for reduction of operational cost where as the operational manger demands for more input material or replacement of an old machine with the new one. As a result such managers should be capable enough to analyse the situation and to take required action. These managers often bear the responsibility of specific strategic business units (SUB) hence it is their duty to reduce the operational cost and to enhance profitability of that SUB. The manager of the SUB should possess creative skill and should be a moderate risk taker, so the manager of the SUB requires entrepreneurial skills. Wilson (1994) gave a good definition of an entrepreneur “An entrepreneur is a person who organises and manages an enterprise, especially a business, usually with considerable initiative and risk” (Iyer, et al., 2005, p.4). The top level managers are responsible for making all the strategic decision in the company and develop the organisational goal to provide vision to the whole organisation. They are like a leader who led whole of the organisation to achieve the organisational goal. In the earlier days a top level manager used to act as an autocrat who dictates what to be done and what not. With passage of time the organisational structure modified from bureaucratic to a flat organisation and degree of flexibility enhanced a lot. In such organisation the autocratic mode of leadership lost its existence and the managers realised that they need to modify their leadership style. In today’s business environment the three contemporary mode of leadership style are charismatic, transitional and transformational. If one considers the service sector, especially the aviation industry, one can understand that it’s the front line work force that comes in direct contact with the customers and delivers the service. Therefore the front line employees should be well trained to understand specific requirement of each and every customer and to deliver the service according to the specification. To deliver high quality service it is important to have efficient and motivated work force so the employees should be transformed to achieve higher disagree of excellence. In the aviation industry the top level manager should adopt transformational leadership style so that along with leading the workforce, the leader can transform its followers (employees) to be self dependent. These followers (employees) develop the capability to take the responsibility and later on they can assist the leader (top level manager) in making strategic decisions. For effective management the employee and the managers should work hand in hand. As the grass root employees are the one who actually involved in providing services to the customers hence these employees can provide vital information regarding the changing taste and preference of different groups of customers. This information should be used for developing strategic decision so the employees can act as a strategic partner in a company. This strengthens the bonding between employees and management therefore the level of coordination between different department increases and policies can be executed smoothly and effectively. The prevailing issues in Easy Jet Easy Jet is UK’s second largest low cost aviation company where the first position is occupied by Ryainair. Both the company maintains a cut throat competition to enhance the market share and to improve profitability. As per the aviation watchdogs both the low cost aviation registered maximum numbers of customer complaints regarding cancellation, denied boarding and missing bags. The number of customer complaint is highest for Easy Jet (719) followed by Ryanair (673). Such high numbers of customer complains raise question about the efficiency level of customer care department and the excellence maintained in operational level maintained in these low budget airlines (Guardian, 2010). These high number of complains can hinder the market image of budgeted airline and can create major problem in days to come. Therefore it is a high time that Easy Jet should take some strategic action to minimise customer grievances and to attract more and more customers. If Easy Jet wants to retain its competency level and to gain the position of a market leader in low cost aviation industry then it should introduce required changes in its customer management policies and efficiency of front level employees needs to be improved. The company should train its front level employees and provide them with required level of authority so that they can offer different services to different class of customers. This flexibility can only be achieved if Easy Jet can incorporate an ambidextrous organisation management. Change should also be introduced in the prevailing organisational design. As for example if a customer finds his or her bag missing then there should be a separate customer service department to take care of such problem. If required specific insurance policies can be introduced so that if the customers lost his/her bad, such loss can be compensated by the insurance company. Hence to handle such problems the management should introduce required change in the organisation by introducing ambidextrous organisation design, ambidextrous organisation management and higher degree of flexibility in the front line employees. Conclusion The concept of budgeted airlines is getting popular among passengers because they feel they can control the cost of fare according to their requirement. Therefore the employees of the company need to provide customised services to each and every customer. As different customers have different requirement so the front line workforce should be well trained to fulfil specific requirement of different customers. The front line staff should by flexible, they should understand specific requirement of nihilist, hedonic and constructivist customers. Such flexibility can be attained by introducing ambidextrous organisational structure and culture. The managers should modify their management and leadership style to suite the organisational culture and structure. After incorporating all the above mentioned changes in the organisation, Easy Jet will be able to handle the issue related to high number of customer complains more effectively and hence the market image of the company will improve. Reference Cameron, K. S. & Quinn, R. E. 2005. Diagnosing and changing organizational culture: based on the competing values framework. John Wiley and Sons. Damer, T. E. 2008. Attacking Faulty Reasoning: A Practical Guide to Fallacy-free Arguments. 6th ed. Cengage Learning. Davis, T. F. 2006. Kurt Vonnegut's crusade, or, How a postmodern harlequin preached a new kind of humanism. SUNY Press. Guardian. 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