Sia Structure And Its Nature Of Business Kfd 1 A Assignment

2231 words - 9 pages

1. Organization Purpose
Singapore Airlines is the world’s most awarded airline, it is also a top-class airline throughout the world. Since 2000 SIA has been named the best airline by numerous magazine and agencies. In Business Traveller USA 2017, it is named the Best Overall Airline in the World for the 27th time, it shows the commitment that SIA commits itself to its service and quality.
SIA visions itself to be an excellent company and an excellent citizen of the world by enhancing the lives of the people they touch (Singapore Ailines, 2006). It commits to arts and education to the communities, the health and welfare of Singapore’s citizens and to the people who fly using SIA (Singapore Ailines, 2006). SIA also made a strong commitment to preserving the environment and the world for future generations
SIA principle activities consist of air transportation, aero-engine overhauling services, simulator training, airport terminal services, marketing of aircraft cabin equipment, properties, aviation and general insurance and related activities. (Singapore Airlines, 2006)
2. Organizational Structure
a. Form of organization structure SIA adopted.
Based on the appendix given, it can be said that SIA adopted a functional and divisional organization structure. Its top tier management is structured based on its functional group for example, Technical, Admin and Commercial groups each headed by a Senior Executive Vice President or Executive Vice President. Its commercial group also follows a functional group structure, however the Marketing and Regions group from the Commercial group uses a divisional structure where its groups are structured based on geographical areas of responsibility for example America region, Europe region etc. each headed by a Senior Vice President.
b. 2 advantages and 2 disadvantages of this structure
The advantages of this structure for SIA can be described as below:
Functional Structure (SIA top tier management)
1. There will be accountability as each functional group is headed by an Executive Vice President or Executive President, which holds the responsibility for the functional group.
2. There will is clarity of individuals’ role and group, hence reduces the risk of coordination problems or communication issues.
Divisional Structure (SIA’s Marketing & Regions Group)
1. Assessment of each regions performance would be easier as each region is a distinct profit center.
2. Performance will be improved as there will be healthy competition of performance and results between regions.
The disadvantages of this structure for SIA can be described as below:
Functional Structure (SIA top tier management)
1. As the groups are limited to their own functional group, the managers in the functional accumulates experiences limited to their own functional groups hence may not understand or experience issues from other functional groups.
2. Staff will be protective of their own function and may end up laying the blaming game when issues arises, often forgetting that they are part of the larger organization.
Divisional Structure (Marketing & Region Group)
1. Duplication of functions between regions increases the costing overheads for SIA.
2. The difficulty for coordination between regions increases and the divisions are based in different regions hence communication and time zone is a factor that will affect the coordination.
3. Based on Article
a.2 reasons of why “transformation” of SIA is long overdue.
One of the reasons is that the aviation landscape in the world has changed dramatically over the years. As SIA cannot continue doing the same things as it did during the past as the ever changing landscape in the aviation industry which will affect its revenues. An example cited by Mr. Goh Choon Phone, is that competition is getting fiercer as competitor airlines has caught up with SIA offering comparable products and services, especially competitor airlines which started out emulating SIA.
The other reason is that the relevancy of some jobs may no longer be relevant, hence requiring redesign of the jobs to provide relevancy. Also as part of the effort to ensure sustainability of profits.
b. Specific lesson in organizational structure can be learnt from Qantas’ transformation and way it can help SIA.
Lesson learnt from Qantas’ transformation program is that major changes were made to the corporate structure and processes which includes consolidation of support services for cost efficiency and improved productivity, cost cutting measures and also the separation between international and domestic operations to provide more accountability and autonomy. As a result, turns Qantas’ losses into profits, as currently the model of flying on budget where customers pay for only what he or she needs is gaining popularity. SIA use Qantas’ transformation program as reference and transform its own operations on its budget subsidiaries where it is facing intense competition from other low-cost carriers’ airlines.
4. Is the problem structured or unstructured and 2 reasons?
The problem is an unstructured problem. This is because of the changing of the landscape of the aviation industry and the rising competition from competitor airlines. The problem is new and it occurs rarely where SIA has to adapt to the changing dynamics of the aviation industry. The other reason is that this problem require a custom made solution to resolve as the information is ambiguous and incomplete. That is why SIA needs to undergo the transformation to keep up to the trends and dynamics of the aviation market to sustain its revenue and reputation.
5. Another example of structured problem in SIA’s workplace.
An example of a structured problem in SIA’s workplace would be when the airline receives a customer complain. This is a structured problem as a customer complain will occur again and SIA is familiar in customer complains as the service industry often faces customer complains. SIA should have already established a process on how to deal with customer complains as the information of the problem is available and complete in the complaint itself.
6. Kind of decision making style would be the least appropriate for the situation published in the article and its reasons.
The least appropriate decision-making style in this situation would be the Directive decision making style. This decision making style is the least appropriate because it is important for the leader to have all the pertinent information to make an effective decision (Study.com, nd). This style is suitable for situations that needs the decision to be done quickly and has low tolerance for ambiguity and uncertainty, it is more suited for structured problems in which this case mentioned in the article is not suited.
Analytical style is better compared to Directive style as it seeks detailed information before making a decision and it goes by a rational thinking to make the decision. Whereas, Conceptual style makes decisions with a view for long term considerations that possesses broad vision and creative outcomes, hence Conceptual Style is better than Directive style in this situation. Behavioral Style is also more appropriate compared to Directive Style because it seeks stakeholders or members view of the problem and the decision made is based on whether it feels right and if the decision will motivate the employees to perform. Comparing all four styles, it can be clearly seen that Directive Style is the least appropriate.
Directive style requires the leader to internally work out the pros and cons based on detailed information which he possesses of which in this case the information CEO SIA has are not detailed enough. This style is not the best style as the decision will affect large number of people in SIA. (Klazema, 2014). This situation requires careful considerations and planning. Directive decision making is focus on short term results instead of long term solutions hence in this situation it is not appropriate to use this style to make the decision. This situation requires an approach where views of others are consulted, researched for more information and examples and a long term view is to be made into consideration hence the other three styles are more appropriate as compared to Directive style.
7. Apply the first 5 steps in the Rational Decision Process with elaboration for each step in the context of SIA’s problem.
1.The first step of the Rational Decision Process is to identify the problem. In this context of SIA, SIA has to define the problem on why SIA incurred an operating loss of S$41million. Is it the problem due to outdated process and methodology of operations, unnecessary spending of budget or is it the intense competition of the aviation industry due to the change in landscape of the industry. In this context, the problem is due to changing landscape of the industry in which SIA is required to explore avenues to increase revenue, improve processes more efficiently to be able to stay competitive in the aviation market.
2.The next step is to gather information on the problem. Research is required on the problem. By seeking trends on the industry, the trend that competitor airlines are going or heading to, the mindset of the passengers in the market and if the operating processes currently are efficient and no cost wastage. SIA needs to also research on case examples of the success and failures of other airlines and compare with SIA’s current problem. Gathering information on avenues to increase revenue, the lacking in current processes and if the price SIA currently charges is favorable for passengers or does SIA needs to roll out a more price competitive plan.
3.The third step is to choose on the appropriate decision-making style. In which in SIA’s context, the Conceptual Decision making style would be appropriate, as the conceptual decision making style reflects a creative and intuitive way of thinking and the decisions are made based on long term considerations and looks at the wider picture of the situation. Creative outcomes may be generated as a result of this decision making style.
4.The fourth step is to develop solutions or options to resolve the problem. By generating alternatives and ideas to the resolve the problem and listing the solutions out. For example, SIA can undergo its business transformation in looking into more effective budgeting, cost efficient operating processes, alternate avenues of revenue and resignation of jobs to ensure improved efficiency and more cost savings. Another solution SIA could look into is to introduce plans or services gain the customer based or to attract customers by offering a wider range of services.
5.The fifth step is to decide on the best option among the list of solutions stated. This is done by listing and evaluating the strengths and weaknesses of each and every option available. Also to evaluated each and individual option to see if the option helps resolve the identified problem. After listing the strengths and weaknesses and evaluating the workability of the solutions, the options are being compared with each other and the best option and solution is being chosen. In SIA’s context, the business transformation of SIA is being chosen. The transformation includes generating more revenue, improving processes to ensure job efficiency and relevancy, improving cost efficiency, reducing cost and to implement a more competitive edge in the market.
8. Identify 2 important leadership qualities of SIA CEO that is necessary for him to transform the organization to regain its position of strength in the airline industry and explain why they are important.
One of the important leadership qualities of SIA CEO that is necessary for him to transform the organization to regain its position of strength in the airline industry is leading by example. Leading by example has been the cornerstone of Goh’s quiet and efficient management of the airline (Sehl, 2016). This quality is highly the reason that SIA staff are so receptive of his direction for change. Leaders must lead with their actions as well as their words. Leaders can effectively translate intention into reality by acting on the concepts and messages they teach and the things they say to those around them. Leadership is the act of setting the right example for those who follow. Leadership is about actively demonstrating your belief, not just talking about it. People who say one thing but do another eventually lose credibility. That is why leadership by example or actions is necessary for SIA CEO to transform SIA to regain its position in the industry.
The other important leadership quality is creative and innovation. In order to get ahead in today’s fast-paced world, a leader must be creative and innovative at the same time. Creative thinking and constant innovation is what makes the organization stand out from the rest of the industry. By thinking out of the box to come up with unique ideas and turn those ideas and goals into reality is a leadership quality of SIA CEO is necessary to have.
The above 2 leadership qualities are necessary for SIA CEO to have to enable him to transform SIA to regain its position in the airline industry as they both enables the organization to move forward and enables the staff internally to be receptive and follows the direction of that SIA CEO set religiously.
References
Klazema, A. (2014, May 5). Decision Making Style and How best to use them. Retrieved from Udemy.com: https://blog.udemy.com/decision-making-styles/
Sehl, K. (2016, October 5). C-Suite in Profile: Singapore Airlines CEO Goh Choon Phong. Retrieved from APEX: https://apex.aero/2016/10/06/csuite-in-profile-singapore-airlines-ceo-goh-choon-phong
Singapore Ailines. (2006, nd nd). Mission & Vision Statement. Retrieved from Singapore Airlines: https://www.sias.org.sg/index9.php?handler=ir&action=ir_content&ir_content_title_id=36
Singapore Airlines. (2006, nd nd). Principle Activities. Retrieved from Singapore Airlines: https://www.sias.org.sg/index9.php?handler=ir&action=ir_content&ir_content_title_id=37
Study.com. (nd, nd nd). Decision Making Styles: Directive, Analytical, Cinceptual and Behavioral. Retrieved from Study.com: https://study.com/academy/lesson/decision-making-styles-directive-analytical-conceptual-and-behavioral.html
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