Collage of Business
BUSI 2311: Principles of Management
Project
Samar Al-Zayer
201000247
Hawraa Ghallab
200901705
Hanadi Al-Habboubi
200901730
Shima Al-Mubarak
201002182
Naseem Al-Ghanim
201002169
Fatimah Al-Ibrahim
200001073
Instructor: Kumarashvari Subramanian
Fall 2012
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Table of Contents
EXECUTIVE SUMMARY ......................................................................................... I
INTRODUCTION .......................................................................................................... II
Preliminary research: .......................................................................................... III
Political and Legal Factors ................................................................................. III
Economic Factors ................................................................................................ IV
Socio Cultural Factors ......................................................................................... IV
Technological Factors .......................................................................................... V
Advantages and disadvantages for operating globally ......................................... V
Workforce Diversity ............................................................................................. VI
Innovation ......................................................................................................... VIII
Conclusion ........................................................................................................... IX
APPENDIX ................................................................................................................ XI
BIBLIOGRAPHY .................................................................................................... XII
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Executive Summary
In this project we will be talking about the Emirates airline, we will
study the challenges of the business organization related to Emirates
airline faces in today’s world, and based on that we will discuss the
factors that play a very important role on an organization which are
political and legal factors, economic factors, socio cultural factors and
technological factors. We will also study the advantages and
disadvantages for why an organization would want to activate globally.
Finally, we will discuss how work diversity and innovation affect an
organization business and its manger.
I
Introduction
Emirates airline is a part of the Emirates Group; an organization that has a vast
business interests in the aviation, travel, tourism and leisure industries. The group has
more than 50 specializes business combined to make the most comprehensive travel
and tourism operation in the middle east region, the heart of the group consists of
Emirates airline and dnata the two driving forces behind the Emirates Group.
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Preliminary research:
Emirates airline played a big rule in establishing as Dubai its Middle East
commercial center and aviation hub stop with planes that files to more than 120
destinations in over 70 countries. The growth that Emirate airlines had was
remarkable moving from two leased aircraft into an entire fleet of airbuses and
Boeing aircrafts. The fleet is one of the youngest fleets to operate in the skies, with
the average age under 80 months, and this figure will drop further as Emirates airline
takes delivery of 200-plus aircraft that it has on order, it worth almost $84 billion at
list price. Although the government of Dubai owns Emirates airline operates on
commercial basis and does not receive any financial support or protection from the
government, and from the beginning it competed with aviation giants that are allowed
under Dubai’s open sky policy, and maybe having no support whatsoever from the
government is what allowed Emirates airline to become more innovative and success
driven to become a worthy competitor to the aviation giants and that was proven
because the only great losses it had was in its second year in the aviation industry.
Even though it is very successful every organization Emirates Airline would be highly
concerned about the environment where it operates. Every company has limited
resources and they have to utilize their available resources to maximize their utility to
face many challenges concerning politics, economics, social, and technology.
Political and Legal Factors
The political and legal factors play a very important role in a organization’s
operations as the organization has to answer to the rules and regulations posed by the
local government and different governments if the organization is operating in other
counters related to the industry the organization operates in. An organization like
Emirates Airline an international player and extends its services to many countries
would be affected by many regulations for airline industry that may be different in the
countries the airline operates in. There are many political factors Emirates airline
should address like permission to fly in the skies of other countries to reach its
destination, landing permission, tax issues, etc. The aviation regulations that were
adopted by many countries also played a very important role in the expansion
strategies of the organization by setting shared regulations for the aviation industry
accepted by many countries (Truxal, 2012).
III
Economic Factors
Economics plays a big part in any organization even if the organization is
successful if any changes to happen in the economy it will affect the organization, for
the aviation industry organizations like Emirates airline will be affected with the price
of fuel if it was increasing or decreasing, it will also be affected by the customers if
economic factors such as inflation a lot of people will not be able to afford an airplane
ticket which will affect the airline companies. Emirates airline had succeed in fighting
economics factor so far if there was a decrease in the booking they offer discounts for
their clients not only that but they will also offer discounts for their employees and
their families to increase the number of bookings. The graph below shows the
fluctuation between the economy and the airline industry.
Figure 1.1
Socio Cultural Factors
For any multinational player like Emirates Airline, cultural diversity is very
important role specially because it operate in different countries who have different
believes and traditions therefore Emirates must be careful with dealing with
employees and customer so that it does not offend their believe for example in Saudi
women are not allowed to wear revealing clothes, Emirates airline respects that and
makes a conservative uniform that respect the Saudi culture for the female flight
attendants that will be working on the flights from to Saudi. Another example is the
flight from to India do not serve cow or pig beef because big majority of Indians are
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Hindus who are forbidden eat cow beef or Muslim who are forbidden to eat pigs
because of their religion. Emirates airline respects that not all countries have the same
tradition and to guarantee the employees and customers are happy they try to make
efforts to respect their culture.
Technological Factors
Technology in these days is everything and it changes so fast that it is hard for
organizations to keep up with the changes but to survive organizations must use
technology to gain competitive advantage and also survive in the industry; the
companies have to update themselves regularly in terms of technology. Emirates
airline has been making continuous investments in the technology to provide top class
services to their flyers. As they are catering to the premium segment and are known
for their five star services they have been providing some extra ordinary services
Emirates Airlines have a website that includes information about all their flights, their
offers and promotions, and booking online services. It’s also easy on customers to
check the prices for different flights in the website. Furthermore, in the airplane itself,
for every seat there is an entertainment screen. This feature is suitable for every age
group. They have different programs such sports, news, movies, cartoons, and games.
The customers can also check the status of their flight from this screen. There is a
map that illustrates the plane location, the altitude, the speed, and the time remaining
to destination. In addition, in short flights Internet access is provided. All in all, these
features
help
customers
to
enjoy
their
time
during
the
flight.
(Hennig-Thurau & Hansen, 2000)
Advantages and disadvantages for operating globally
There are many advantages for why an organization would want to operate
globally, and for an organization such as Emirate airline whose main purpose was to
attract tourist to Dubai, these advantages such as faster growth since Emirates airline
decided to go internationally it had a remarkable growth rate because it had the
constant pressure to move forward and to compete with major airlines which made it
more innovate and success driven to stay at top with its outstanding services. Another
advantage is diversity by going internationally Emirates airline employee its staff
from all around the world giving it the opportunity to have more innovation and have
a staff that can speak several languages to communicate with customers from different
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nationalities and languages. By operating globally it will allow the organization to
have more market opportunities this new market it provided Emirates airline with the
chance expand, generate more revenues and profits by having more customers
allowing the organization to rise to its full potential. Even though operating globally
has its many advantages it also have disadvantages such as foreign regulation and
standards since Emirates airlines operate in more than 70 countries it must operate
within those countries regulation and make sure that all of their staff knows those
rules which differ from country to another. Another disadvantage is the increased
costs in operating globally the cost will increase because their will be more employees
to pay salaries for, more plane flying which means more fuel to consume and
purchase, more landing space to pay the rents for and another expenses that will
increase as Emirates airlines grows larger.
Workforce Diversity
Workforce diversity refers to programs or practices by companies or
institutions to employ individuals that are not part or different from the dominant
population. Diversity includes race, ethnicity, religion and also gender. A workforce
is said to be diverse if there is a mix of the before mentioned groups. Diversity in an
institution may be influenced by different factors such as legal requirement, marketing
strategy, a social responsibility (McInnes, 1999) and others. Workforce diversity also
refers to cultural diversity, which was used by some when referring to the mixture of
their workforce.
Emirates Airline of the Emirates Group has a diverse workforce consisting of
over 160 nationalities, which they consider as their unique strength as a global
organization (Emirates Group, 2012). In a multi-awarded organization like Emirates
Airlines, workforce diversity is said to be the driving force of its success. Aside from
an able leadership, being 100% owned by the government became a plus.
In an organization such as the Emirates Airlines, whose business is serving a
diverse set of people from different walks of life and nationalities, a diverse set of
workforce is ideal. Having a workforce of different nationalities or race, gender,
ethnicity and religion, the company can better understand and decide on policies and
strategies on how the business would go about. As they say, talent is not race or
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culture specific, so having a diverse workforce can further enhance and strengthen the
talent pool of the company. Meaning, you have more option and wider range of
selections if the company is considering of getting its workforce from different parts
of the world.
A good effect of diversity in a company is that because of different
backgrounds, cultures and others, the synergy among them can facilitate creativity;
creativity in the sense that the group come up with great ideas, solutions or
innovations that can benefit the company. In the case of Emirates Airlines, the diverse
workforce can come up for example with a more generalized service strategy to cater
its diverse costumers rather than concentrating on a specific group of customers. If the
group were successful with its strategy, it would then benefit the company because it
would attract more customers or passengers. In a country such as the UAE, which its
population is composed of 83% expatriates (Wikipedia, 2012), meaning most of its
population is coming in and out of the country often, and a diverse workforce is a
very good idea. Emirates Airline has a huge base of prospective customers at its home
base, so workforce diversity is very important. But because also of the differences
among the employees can mean a negative effect in the company. The synergy among
the workforce can possibly tear the company apart because of the differences in views
and opinions. So workforce diversity can either uplift or pull the company apart, and
here comes into play a good management.
Global market managers are now focusing on a culturally diverse workforce;
this is because it is believed to increase organizational effectiveness. Managers should
focus on aspects that would further enhance the effectiveness of their management of
diverse workforce such as the Emirates Airlines. One aspect that needed to keep focus
on when managing a diverse workforce is equality. Because of different backgrounds
of the workforce, management of companies such as the Emirates Airlines should
avoid discrimination and promote fairness among its employees. Communication is
also an aspect to focus on. Language barrier among employees can be a hindrance for
an efficient workforce and a nightmare to managers. English is an international
language that can be used and be understood by different nationalities in the
workforce and it is important to manage them. The emirates website and also its
recruitment are written in English, a clear indication that the management is targeting
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a diverse set of individuals and audience or customers. The management should give
equal opportunity to the employees. Without good opportunity of improvement,
development and progression in a company, it will be hard for them to keep their
employees.
Managers should not only manage its people, they should also motivate them
in order for the workforce to be more efficient and productive. The company should
provide the right equipment; if it is necessary; provide them with the right knowledge,
skills and abilities. This is one way of motivating the workforce.
Innovation
Innovation of the organization refers to new ways work can be organized, and
accomplished within an organization to encourage and promote competitive
advantage. It encompasses how organizations, and individuals specifically, manage
work processes in such areas as customer relationships, employee performance and
retention, and knowledge management. At the core of organizational innovation is the
need to improve or change a product, process or service. All innovation revolves
around change – but not all change is innovative. Organizational innovation
encourages individuals to think independently and creatively in applying personal
knowledge to organizational challenges. Therefore, organizational innovation requires
a culture of innovation that supports new ideas, processes and generally new ways of
“doing business”(Kustoff, 2010).
Emirates has been conferred the prestigious ‘Airline of the Year’ award for 2011
by the leading industry title Air Transport World, in recognition of the Dubai-based
carrier’s “strong commitment to safety and operational excellence, trendsetting
customer service and superb financial performance”. “This recognition is testament to
our commitment to innovation and service excellence as we continue to grow our
global network and offer customers more opportunities to discover the world from
Dubai.”(Emirates Group, 2012).
The lists below are examples that reflect Emirates’ spirit for innovation and for
being the first.
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- First to introduce AVOD (Audio Video On Demand) in all seats in all classes
- First to introduce in flight calling on a commercial aircraft
- First to introduce on Board spa concept
- First airline to express interest in and order for the Airbus A380
- First to have over 1,000 channels of entertainment on demand
- First to install on-board showers
- First to install first class private suites
- First to fly ultra long haul Airbus A340-500
Some of the Emirates’ pioneering innovations include becoming the first airline to
introduce individual seat back videos and to enable passengers to make authorized
onboard mobile phone calls. Emirates’ flagship A380s are the only commercial
aircraft to feature onboard Shower Spas for First Class passengers. The airline has
experienced rapid and consistent growth, above 20 per cent a year on average.
Financially self-sustained and unprotected, Emirates carried 27.5 million passengers
in the 2009-10 financial year – almost 4.7 million more than the previous 12 months.
“Customers have a choice to fly Emirates, given that more than 125 airlines serve
Dubai. The route network appeals to travelers not only in the UAE, but to those in
Europe, Asia, Africa and North America who value the efficiency and connectivity of
the Dubai hub,” said Perry Flint, Editorial Director for ATW (Flint, 2011).
Conclusion
By analyzing Emirates airline we saw how this airline started from nothing
but clear goals, which are to make Dubai its aviation, stop thus, attracting people
to Dubai and to make Emirates airline the customers number one choice for
traveling by providing services that cannot be found in other airlines. The
growth that Emirates airline had moving from two airplanes to a fleet of airbuses
and Boeings shows how determined the organization to achieve its goals and to
become a leading airline, Emirates airlines did not achieve all of its success with
out some challenges such as politics, economics, social culture, and technology
but Emirates airline did not let those challenges stop them in contrary it let them
fight to become a stronger organization. In operating globally Emirates airline
had advantages that helped it become more successful but in the same time it
had disadvantages that if it were not dealt with appropriately may lead to
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problems that can ruin the organization in the future. To stay a leading airline in
the aviation industry Emirates airline makes sure to improve its strength point
such as work diversity bay having employees from different nationalities and
their high innovation standard to come with new ideas to make the customers
have an exciting experience in traveling with Emirates airline.
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Appendix
Figure 1.1
Sigma Swan. (2011, November 17). Recession Proof: What does it Look Like? Sigma
Swan. Retrieved November 12, 2012 from:
http://www.sigmaswan.com/2011/01/recession-proof-what-does-it-look-like.html
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