Introduction
“Culture” can be defined as stable set of values, beliefs, and behaviours held by a society.
Nowadays, a lot of discussion is taking place about the culture in an organization
(Organizational Culture). In fact, when many people wants to explain the economic success
of Japanese firm over American firms they believe strong organizational culture is the reason
behind that, Japanese firms had a committed workforce which had a common set of beliefs,
core values & assumptions. Hofstede (1980) even suggested that economic performance of
various countries can be accounted to their culture (Lim, 1995). The differences between a
successful and non-successful company can be explained if we can analyse the organizational
culture of two companies.
Hofstede provided one of the best approaches to culture by collecting the data of IBM
employees in more than 40 countries. He came up with four dimensions: Power distance,
Individualism/Collectivism, Uncertainty Avoidance and Masculinity/Femininity. These four
dimensions could be used to differentiate between nationalities and finally applied to study of
organizations (Lim, 1995).
This report studies the organizational culture of Singapore Airline and tries to examine some
of the unique traits of their organizational culture which makes Singapore Airline one of the
most successful airlines in the world.
Important link
http://www.ukessays.com/essays/aviation/singapore-airlines.php
http://www.singaporeair.com/jsp/cms/en_UK/global_footer/career-development.jsp
A. Company Background & overview
Company Background
Singapore Airline has its roots from Malayan Airways Limited, when MAL was started on 1
May, 1947. First plane flew to Kuala Lumpur from the British Straits Settlement of
Singapore. In 1963, MAL became “Malaysian Airways” when the Federation of Malaysia
was formed in 1963. In 1966, Singapore separated from Malaysia and airline’s name was
again changed, Malaysia-Singapore Airlines (MSA). But new name also could not last long
when the political differences in 1972 between two sides resulted in the division of MSA into
two separate entities: Singapore Airlines and Malaysian Airline System. That is how
Singapore Airline came into existence.
Since then SIA has become a global name in the airline industry. Flight between Singapore
and Newark (USA) is the longest scheduled commercial flight at present with nonstop flying
time of 18 hours each way. Singapore Airline’s icon Singapore Girl is one of the main
attractions for the airline and also found a place as a commercial figure in Madame Tussaud’s
museum.
Singapore Airline is subsidiary of Temasek Holdings, which is owned by government. The
voting rights of up to 55% are reserved by Temasek Holdings. Currently it flies in 35
countries with more than 60 destinations across six continents.
Industry Overview
The role of Asia Pacific Region is very important when it comes to commercial air travel as it
connects different part of the world. The airline industry has faced many difficult challenges
in last decade such as commoditization of offerings, entry of low cost carrier, cutthroat
rivalry, overcapacity, etc. Apart from that, macro and socio-economic factors like rising fuel
prices, SARS, bird-flu, rising terrorism, Asian Tsunami, have also affected the industry.
According to an estimate, global airline industry bore a loss of $500 million in 2006, and a
total loss of $42 billion in between 2001-2006 periods. 2007 was slightly a better year when
the airline industry made a profit of about 5.5 billion dollars( (Wirtz, 2009).
However, Singapore Airline was an exception which never posted a loss. In fact, it recorded
superior returns and also received several awards for its excellent quality.
Mission & Vision statement
“Singapore Airlines has a responsibility not only to be an excellent company, but also to be
an excellent citizen of the world by enhancing the lives of the people we touch. With that aim
in mind, we have made many commitments to the arts and education, to our communities, and
the health and welfare of our country's citizens, and those in countries we fly to. With this
goal in mind, we've also made a strong commitment to preserving the environment - and our
world for future generations.” (Singapore Airlines, 2012)
The vision and mission statement mentioned above is very dissimilar to the vision and
mission statements of other companies. For most of the companies, the vision and mission
statements speak about their goal and direction in terms of economic objectives. However,
Singapore Airlines understands that being one of the top airline companies in the world, it has
a duty to perform for the society. It understands its impact on the environment therefore
sustainability is the key driver for Singapore Airlines.
Leadership
Any person can be a great leader if he or she has an ability to grow followers. A great leader
organizes his followers, stands by them, and gives them direction towards a common goal.
There have been many examples of great leaders in the history who have changed the course
of the history. No one can forget the role of ‘Hitler’ in World War II, role of Mahatma
Gandhi for Indian freedom, or role of Martin Luther King Jr. in the American Civil Rights
Movement, etc. These people not only changed the course of history but also changed the life
of people.
Leaders are equally important in the business world. They can make or break a company.
Arguably, the greatest example of a great business leader of our time who transformed his
company from the brink of bankruptcy to become one of the most prestigious brand was
‘Steve Jobs.’ He was the founder of Apple Company, but was forced to quit after few years.
When he rejoined Apple in 1997, the company was doing so well but his uncanny knack of
leadership transformed Apple, iPod, iPhone, iPad, iMac, all have been launched during his
tenure and have been hugely popular worldwide.
Let us analyse the leadership style of Steve Jobs. His leadership style was very
straightforward - he was a task-oriented leader. Some of Apple employee considered him as
an Autocrat. But everyone accepts that he was a visionary leader.
Bill Gates of Microsoft is another example who made Microsoft world’s largest software
company during his tenure.
Competitive Strategy and Advantage
The excellent performance of SIA can be attributed to its dual strategy which Michael Porter
(1985) deemed was unachievable. It offers services which are differentiated and known for
excellence and innovation. At the same time, it can be termed a cost-leader in its peer class.
Michael Porter wrote that cost leadership and differentiation are mutually exclusive but SIA
manages both.
SIA wishes to play at all levels and therefore it uses diversification as a part of its corporate
level strategy. There are more than 35 subsidiaries and associated company. Singapore
Engineering Company, Singapore Airline Cargo, and Singapore Airport Terminal services
are part of its subsidiaries; while, its airline subsidiary include Tiger Airways, Silk Air, and
Virgin Atlantic. Tiger Airways is a budget airline, Silk Air competes on middle level while
SIA itself caters to high end (Wirtz, 2009).
As a part of business-level strategy, it has used differentiation techniques but at
comparatively low cost than its competitors. SIA could manage to use both the strategy
through continuous innovation, excellent technology, and cost-effective service excellence.
Table 1: Elements of cost leadership and differentiation at Singapore Airlines (Wirtz, 2009)
Favourable Location
Singapore Airline is based in Singapore which is a very small country with very small
population. Country is so small that there is no role or place for any domestic airline service.
However, country’s location is a competitive advantage not only for the country but also for
the businesses operating in Singapore. Singapore Airline benefits as Changi Airport operates
as a hub within South East Asia. Secondly, Singapore attracts lot of foreigners who come to
work or study in Singapore. Many foreigners also come to visit Singapore or neighbouring
countries. Being, the most preferred airline of Singapore and this region acts as a competitive
advantage for Singapore Airline (Tornquist, 2004).
Government Interest in Singapore Airline
The interest of Singapore Government in Singapore Airline is another competitive advantage
for the airline. A favourable tax treatment works in the favour of SIA. Government also
wants to position country as a major transport centre and therefore spends a lot on
infrastructure facilities and provides several benefits to Singapore Airline. This allows them
to have the latest fleet of aircraft than other airlines, due to newer airlines and infrastructure
facilities they have to spend lesser in terms of maintenance and repair bills (Tornquist, 2004).
Service Excellence Cost-Effectively
SIA considers two main assets for its business – People and Planes. It manages both so
effectively that rivals cannot match. People come first, SIA trains its employees for four
months before they actually serve the customer. Training period is twice the industry average.
Not only it invests on new employees but it also invests around 70 million US dollar to
retrain its existing employees. Training teaches different ways to communicate with Chinese,
American, and Japanese people. They are taught to communicate at eye level rather than
talking down to customers. The excellent service by SIA people delights the customers and
gives them advantage by reduced customer turnover. Thus, they manage cross cultural issues.
Other important asset is plane; SIA always keeps its fleet new and in good condition. For
example, the SIA aircraft were less than 75 months old against the industry average of 160
months. Repair cost only accounted for 4% of total cost which is also less than other airlines.
New planes provide the benefit of being fuel efficient, less maintenance & repair, and also
liked by customers (Wirtz, 2010).
People Development
Singapore Airline focuses a lot on people development, the people development programmes
are aligned with the Company’s competency framework. This helps them to improve
productivity. Recently, Company launched a revamped SIA Executive programme for newly
joined people. The newly developed programme helps executives to gain customer-service
experience and greater knowledge about the complex operations of Singapore Airline. SIA
also introduced Station Leadership courses which will help them to enhance leadership and
decision-making skills at stations.
In order to promote healthy lifestyle and well-being in organization, SIA initiated a Health
and Wellness programme. Regular Health Screening sessions and lunch-time health talk
further encourages the health environment.
All these efforts help the airline to maintain its appeal in the job market.
Recommendations:
Keeping the superiority intact
Singapore airline is known for its superior quality and service excellence. It will be important
for them to maintain the level of superiority while dealing with the competition.
For this, they should thoroughly understand the strength and weaknesses of competitors like
British Airways, Cathay Pacific, etc. Explore their weaknesses and benchmark with their
strength.
Installation of space beds
British Airways started a new era of comfort in airline travel when the introduced space bed.
Since Singapore airline have a great reputation, they should either come up with better ways
or at least match their competitors. The installation of space beds will help them to bring
higher income group to Singapore Airline (123helpme, 2012).
Straighten the decision making model
The operational structure of Singapore Airline is very efficient which clearly identifies, who
makes the decision, where decisions are made with regards to a particular section of the
business. However, higher management still controls most of the decision making. However,
with increasing number of global passengers, they may have unique situations; in order to
allow a bit of divergence, lower level managers and staff should be trained properly and
informed about their decision making capabilities so that they are quickly able to respond to
new challenges and explore new areas of opportunity.
Works Cited
123helpme, 2012. Singapore Airlines Recommendations to Management. [Online]
Available at: http://www.123helpme.com/singapore-airlines-recommendations-to-managementview.asp?id=159474
[Accessed 07 Oct 2012].
Lim, B., 1995. Leadership & Organizational Development. Examining the organizational culture and
organizational performance link, 16(5), pp. 16-21.
Singapore Airlines, 2012. Mission & Vision Statement. [Online]
Available at: http://sias.org.sg/index9.php?handler=ir&action=ir_content&ir_content_title_id=36
[Accessed 09 Oct 2012].
Tornquist, A. C. K. a. J., 2004. Strategic Issues in the Airline Industry and the role of Singapore
International alirlines. [Online]
Available at: http://www.delhibusinessreview.org/v_5n1/v5n1a.pdf
[Accessed 08 Oct 2012].
Wirtz, L. H. a. J., 2009. Strategy and organization at Singapore Airlines: Achieving sustainable. Journal
of Air Transport Management, Volume 2008, p. 274.
Wirtz, L. H. a. J., 2010. The Globe: Singapore Airlines’ Balancing Act. [Online]
Available at: http://hbr.org/2010/07/the-globe-singapore-airlines-balancing-act/ar/1
[Accessed 09 Oct 2012].