Organizational behaviour of Oman Air - Essay Example

?Organizational behavior analysis of Oman Air 1 Introduction Organizational behavior can be defined to be the study of the human behavior in an organizational setting, the manner in which the human behavior affects interaction within the organization and it is a study of the organization itself. It can be used to define the actions and attitudes of people in an organization (George & Jones, 2008, pp.3). In this paper the organizational behavior of Oman Air will be analyzed by making use of McKinsey 7-S framework and SWOT analysis of the company will also be carried out to understand clearly the operations of the company. Upon analyzing the company the organizational structure of the company will be analyzed and recommendations will be made for changes that must be made effective within the organization. The international carrier of the Sultanate of Oman is Oman Air and the company is based in Muscat. 33.8% stake of the company is held by the government and the key operation of the company is in providing international and domestic passenger services. It also offers charter work and local air taxi. Oman Air was founded during 1993 and it has a strong business presence in the Sultanate of Oman. Airlines industry is highly susceptible to political changes as the political environment plays a major role in determining the travelling frequency of travelers especially international. Unstable political environment markedly reduced the international traffic inflow. Since Oman Air is the national carrier for the Sultanate of Oman the business is largely monopolistic in nature. According to the official report of Oman Air during the year 2008 the company faced net loss of 42.775 million RO due to economic downturn. Though in Oman the economic downturn did not have a huge impact and the passenger traffic rose by 19% the company faced losses due to economic slowdown in the international market (Oman Air, 2009). 1.2 Analysis using Mckinsey 7-S framework The internal environment of a company can be assessed using McKinsey’s 7-S framework. The seven variables of the McKinsey framework offer the needed structure to analyze the operations of an organization and the interdependency of the variables is useful while analyzing complex organizations (Waterman et al, 1980). Strategy – Oman Air is the leading carried in Oman and their strategy is to maintain a positive work culture and thus promote customer friendly operations. Providing a reliable, safe and seamless flying experience which is further enhanced by friendly and warm customer services. Support in bound local tourism and become the first choice airline. Structure – The organizational structure of Oman Air is large and handling such a large structure is difficult. In order to become more efficient in its operations the communications from the corporate to the employees has to be made clearer by making changes in their organizational structure. Systems – The cargo operations management system is completely automated thus enabling automated end to end cargo operations, processing efficiency, accurate tracking, flight capacity that is optimized and e-freight capabilities (press release, 2011). Skills – The prominent skill of the employees at Oman Air rests in offering customer friendly services. Managers are responsible for monitoring and assessing the skill of each crew member. This gives the needed framework to enable inclusion of its corporate strategy into the employees work practices. Staff – Recruitment and selection of new staff is based on their field experience and educational qualification. To maintain high levels of performance the staff are trained on a continuous basis. Style – The staff are lead in an effective manner by the managers. The managers are kept updated by higher level of the board of directors. Shared values – The main value of Oman Air lies in its staff members. A value of importance is instilled in all staff members. The well being of the company directs all individuals and the culture of the company is imbibed in its work practices yielding shared values. 1.3 SWOT analysis SWOT (Strength, Weakness, Opportunities, Threats) analysis is a useful framework for analyzing the micro – environmental factors affecting an organization. It is an external analysis tool essential for strategic analysis of the internal business organization, potential of work force and it can be used to understand the organizational structure (Bensoussan & Fleisher, 2008, pp. 230). The strategic position of the Oman airlines will be analyzed by making a strategic SWOT analysis. Strength The main strength of Oman Air lies in the fact that it is the national carrier of Oman. The carrier is a monopoly and there is no competition within the country. There is government support for the company on a large scale and investments made by the government on the airline for promoting tourism in the country serves to increase the profits for the company. The inclusion of hospitality and customer service in its corporate culture serves as the key factor to their success. The ability of the airlines to renew continuously and improve the services offered in line with the needs of the customers serves to help maintain their business position in a strategic manner. The airlines incorporates technological software to automate its operations and thus increased speed, efficiency are achieved. This serves to be the main factor which attracts international customers. Their modern fleet A330 – 300 & A330 – 200 in which internet and satellite phone have been made available which is the first of its kind on a global scale shows their technological advancement in the airlines industry. Weakness The organizational structure is a huge one and the roles of the managers, high level officials are not clearly defined. These result in confusions related to the hierarchy of the structure adopted and the communication transfer is slow. During the recruitment phase the human resources department is not used to the maximum extent and this results in increasing training costs for the company. The management culture is not changed according to recent trends. This acts as a hindrance for globalization. The communication between departments and between the top levels of management with the employees is not clear due to the huge organizational structure of Oman Air. Opportunities The infrastructure at Oman Air can be leveraged to get a stronger hold in the local market. The company can tap into new markets by expanding its operations on a global scale by making use of its technologically advanced products in the airline industry. Monopoly in the aviation industry at Oman gives the company ample opportunities to expand its airline catering, ground servicing, maintenance and other airport related activities. Increased market size can lead to potential increase in profits and for Oman Air international operations can create new opportunities for further expansion of its operations. Threats The introduction of foreign carriers and their entry into the local market will create huge competition for the airlines and this will also increase the competition for the company. At present Oman Air is a monopoly in the country and there is not much concentration on ground handling operations. The survival of Oman Air is less if airlines like Qatar, Etihad who have good ground handling capabilities enter the local market. Increasing fuel costs will lead to increased operational costs and thus increased fares. This poses to be the main threat as increased fares can lead to decreased customer inflow. 1.4 Balanced score card An organization can be viewed in the following perspectives in order to collect data, analyze them and develop metrics as required using the balanced score card. By implementing the balanced score card the focus can be increased on the strategies to be formulated to attain improved results, vision of the organization can be communicated in an effective manner, initiatives can be prioritized and future performance drivers can be concentrated upon. The learning & growth perspective At Oman air the emphasis on continuous learning is present which is evident from the management seminars, employee training programs and the technological training imparted by the company for its employees. The main resource of any organization is the knowledge of the working staff and by focusing on improvement of the knowledge of the task force the company can attain growth. The business process perspective The internal business process can be measured and this metric can be used to know how the business is running. The managers at Oman Air keep constant watch on the employee’s activities and constant attention is given to individual performance. This ensures the business processes are carried out in an efficient manner. The management has to be better defined as the roles of managers are unclear owing to the large organizational structure adopted. The customer perspective The focus of Oman Air has always been on customer satisfaction and the main reason for their success is due to concentration on such practices. This is evident from the fact that their organizational culture is customer centric. The financial perspective Funding data that are timely and relevant will form the main strategy with which the performance of a company can be calculated. According to recent financial data the company has achieved good profits and thus has been able to increase its manpower count by 19% (Oman air, 2009). Also the company is largely supported by the Oman government and thus it is financially in a secure position. 1.5 Recommendations for change in the organizational chart The structure of the organization influences the motivation and performance of employees only in relation to a professional context. The personal profile of its members must be first analyzed as strategies cannot be formulated on the whole. Also when it comes to supervisors having more than one higher authority can lead to confusions and low morale amongst the employees. The teams must be run by efficient managers. The business related operations are affected by the time taken by the organizational messages to travel from the top levels of the hierarchy to the employees (Bedein, 1986). Figure 1.1 Organization structure of Oman Air (Oman air, 2010) The key to all organizations rests on the legal and financial staff also as work standardization is required for better work coordination in large corporate structures as in the case of Oman Air. As can be seen in the organization structure chart above though the structure is clear the manner in which the activities are separated is still unclear. Also the structure does not offer promotional methods for interdepartmental communication. The managers concentrate on their division of operations alone and absence of a higher level of authority other than the CEO to coordinate the operations can result in delay and confusions. Figure 4.2 Proposed organizational structure In order to better coordinate the activities within the organization an executive committee comprising of individuals who have expertise on marketing, operations management, finance, human relationships and legal issues can be formed. Also for each departmental division existing within the organization vice presidents can be allocated who preside over the affairs of each department separately and also coordinate its activities. The committee which is formed can concentrate on the regulating policies like corporate governance, auditing, compensation, finance and such. A change in the operations management, finance related operations in the Oman Air management style can bring about improvised changes in the operations of its system. Also such changes as described in figure 4.2 will ensure all departments are operated in an interrelated fashion. To ensure internal relationships are sustained the role played by the individuals in the success of the organization must be recognized. Information flow must be made more simple and free between the leaders and the employees. Job satisfaction and job enrichment can be promoted by making the information flow process a smooth one. Also the organizational culture must show how much the employees are valued in order to ensure trained employees remain loyal to the airways. The employees must be placed at the core of the culture in the organization and the structural changes that are made must ensure the commitment from the board room is taken to the frontline employees. My recommendation to the CEO would be to better the organizational structure within the organization will be to ensure interdepartmental communication is enabled through open communication channels. The structure must be made flexible to ensure a frontline employee contacting senior officers is possible. Also the existing customer centric approach must be further improvised. References Bennsoussan, B., Fleisher, C. (2008). Analysis without paralysis: Tools to make better decisions. FT press. Bedeian, A. (1986). Contemporary challenges in the study of organizations. yearly review management journal of management. vol.12. n0.2, 185-201. Jones,G., George,J. (2008). Understanding and managing organizational behavior. 6th ed. Pearson Education Oman Air. (2009). Clear skies: Annual report 2009. Available at http://www.omanair.com/wy/sites/all/files/about-us/pdf/annual_reports/2009annualreport_eng.pdf Oman Air. (2010). Organizational structure. Available at http://www.omanair.com/wy/about-us/corporate-information/organisation-structure Waterman, R. Jr., Peters, T. and Phillips, J.R. (1980). Structure Is Not Organisation. Business Horizons, Vol. 23(3), pp.14–26. Press release. (2011). Mercator helps automate Oman Air’s cargo operations. Available at http://www.omanair.com/wy/node/1939. Read More