Management Analysis - Case Study Example

CASE STUDY REVIEW AND REPORT Introduction: The given case study explains how James Hoogan who was appointed Chief Executive Officer of Gulf Air in 2002, at a time when the airline was facing irreversible losses and was on the verge of ruin, turned the floundering airline around into one of the most competitive companies of the Middle East. The strategy employed by him to turn the company around was to change the corporate and work culture giving the workforce a completely new direction, a new set of operative values to work for. He completely discarded the old modes of operation as they had become redundant; he identified new values on which to base operations. These new values were identified by him as they were in keeping with the current competitive and changing environment to which airlines around the world were being forced to adapt if they wished to survive. This case clearly shows that even if you have the potential and capital, if work is not organized properly, the company cannot survive. This is what this company did. Motivation and redesigning work organization structure are keys to success here. Arguments: Using James Hoogan as an example of effective leadership, this essay will argue that effective leadership is a combination of strategic and operational leadership values rather than a one dimensional energizing or motivational leadership. Leadership that combines the strategic and the operational is the key requirement to turning around an organisation that is in danger of going under, because there is a lot more at stake in such a company than just a workforce that is not motivated or skilled enough. There are faulty strategies that need to be identified and isolated and changed operational values that need to be put in place to fit the strategy outlined. There is no room for experimentation as in many cases the situation is a do or die one. These situations require leaders who can do a lot more than just motivating and training the workforce with new skills. Very often motivation falls in place once the workforce sees new procedures in place and becomes convinced of the changed strategies. Research indicates that the leadership model suggested by Kenneth Blanchard is the best for effective leadership. With competition getting stronger, leadership is the key to the success or failure of any company as the many mergers, takeovers, chapter 11s, lay offs and the few hard won success stories of the corporate world will bear out. Those companies that have the right leader in the right place at the right time manage to scrape through after resorting to stringent measures and in almost all cases after bringing in a complete change in strategy and work culture, almost a revolution. Many companies even move on to be highly successful and competitive, because their changed business strategy makes them adaptable to a changed business environment. The right leadership is crucial to ensure that this transition from a floundering business to a successful one happens smoothly and successfully. The Gulf Air story is one of a successful transition which happened only because the management of the airline was pragmatic enough to appoint James Hoogan as CEO the right time; the right man at the right time. Three years after he took over the story was a completely different one, he gave Gulf Air a completely new face, quite literally because they even sported a new uniform. In considering the role of leadership in the management of a company, this paper will compare the much acclaimed Jack Welch model with the model given by the Kenneth Blanchard Company, a model that is more acceptable today. The most successful and known model of leadership n corporate literature was given by Jack Welch which he developed with the intention of revolutionizing GE and turning it into the most competitive company in America. He himself led GE for over 20 years and during that tenure he succeeded in transforming it completely. The model of leadership given by him defines a leader as one who possesses the 4 qualities or the 4 E's of leadership, which are defined as: 1. Energy: the leader being a person of boundless and non stop energy. 2. Energizers: Energizers spark others to perform and get them excited about a cause. Without this quality a leader cannot motivate staff to perform. 3. Edge: Leaders have a competitive edge and know how to face all difficult situations regardless of the degree of difficulty. 4. Execute: This is the key to the entire model without which the other E's are of little or no use. Leaders are capable of converting energy and edge into action and results. This model has been widely supported and has been written highly about by writers like Jeffrey Krames who is considered as the world's foremost expert on Jack Welch. As widely accepted as this model is, there are certain criticisms leveled against it, the main one being that it places too much of pressure on employees and causes them to cut corners. GE has actually had issues arising out of this problem as a result of which Jack Welch's model has been accused of lacking in compassion with the middle and lower level of employees. Braun, Latour, and Loftus believe in effective advertising if you want to save the situation. In case of Gulf air, the problem was not very much with the quality f work, but it was with the way the organization was working. Cutting expenses was no solution here. As discussed in this journal article, Gulf air needed strong advertising to fight the issues, to build image and to motivate the employees to perform better. With the leadership of James Hoogan, this was achieved. James Hoogan followed Stephen, Bailey and Malone's advice by discussing the problem directly with the stake holders. He discussed the issue with the governments involved that they must not pull out and that Gulf air still can survive. He backed his motivational spirit with evidences and 3 year plan for his employees as well as for the investors. He made every one believe that this thing can still work. This logic is seconded by Stephen, Bailey and Malone. Hale, Dulek and Hale are of the opinion that in case any management issue is to be sorted out, dependence ion qualitative data is always high. Hoogan incorporated this thinking by making an extra effort to improve quality of services offered by Gulf Air. Kimberley and Timothy most strongly believe in the proper advertising and communication as means of success for an organization in trouble. Almost all of the points of views, as given by these writers, were followed by James Hoogan. He was a business manager by nature and instinct and that's the reason he was successful in saving the company. If a leader is to be successful, if his leadership is to lead to profit for the company, his leadership must effectively combine both strategic and operational functions. Strategic leadership is required to define corporate vision, culture and strategic imperatives. (O'Connor, 2000) Operational leadership is that which defines management practices that drive company procedures, policies and behaviour which ensure employee passion, customer devotion and organizational vitality, the three vital factors which put together are the formula for a profitable organization. The role of the leader is to provide a leadership that effectively involves both these functions in such a way that it creates an urge for employees to be passionate about what they do, thereby leading to customer devotion which contributes to a robust organizational vitality which is the key indicator of a healthy organization. (Shaw, 2007) These factors put together take care of the final indicator which is the balance sheet. Going back to the case study, James Hoogan changed the strategic and operational factors of an ailing Gulf Air in order to change its corporate culture and changed it to one where the customer is taken very seriously. When this strategy and its allied procedures were made workable, the company's financial health turned round. The emphasis here was not directly on financial health but on the key underlying strategic and operational factors leading to financial health. They included procedural measures like making staff accountable, allowing them the freedom to make key decisions as and when required without having to refer the problem to higher authority so that better service was rendered to customers. These were combined with strategic financial measures like some amount of cost cutting, delaying loan payments and even increasing staff strength. Conclusion: In conclusion, to create an organization that is successful its work culture and management practices must be aligned with its clearly defined key strategies and this task rests squarely with the leadership of the company. A leader in addition to holding employees accountable and driving organizational results or profit, must also influence the mood and attitude of employees. Employees must be allowed to be passionate about what they do and leaders must allow employees to feel empowered and motivated to do so. When employees are thus taken care of they in turn take care of customers in such a way that they want to return to the company year after year. When leaders or managers focus their attention only on profit and quantitative results as in the first model of leadership, they have a one sided view of the whole operation. Profit is a by product of serving the customer, which can happen only when the company serves its employees. References: 1. K. A. Braun-Latour, M. S. Latour, and E. F. Loftus. Is That a Finger in My Chili: Using Affective Advertising for Postcrisis Brand Repair. Cornell Hospitality Quarterly, May1,2006; 47(2): 106 - 120. 2. K. K. Stephens, P. C. Malone, and C. M. Bailey. Communicating with stakeholders During a Crisis: Evaluating Message Strategies. Journal of Business Communication, October1,2005; 42(4): 390 - 419 3. J. E. Hale, R. E. Dulek, and D. P. Hale. Crisis Response Communication Challenges: Building Theory From Qualitative Data. Journal of Business Communication, April1,2005; 42(2): 112 - 134. 4. Cowden, K. and Sellnow, T.L.Issues Advertising as Crisis Communication: Northwest Airlines' Use of Image Restoration... Journal of Business Communication.2002; 39: 193-219 5. O'Connor, W.E., (2000). An Introduction to Airline Economics: Sixth Edition. Praeger Publishers. Pg. 48-50 6. Shaw, S., (2007) Airline Marketing and Management. Ashgate Pub Co. Pp 223 Read More