Organizational Behavior in Multinational/Global Aviation Essay

Introduction Over the past few years the aviation industry has continued to face challenges on how well to manage the industry on both operational and management level in relation to interests of different stakeholders in the industry. Customers have increasingly demanded for better services while shareholders demand for more profits. With globalization of aviation industry, the market has become more competitive and demands the industry to be highly competitive to survive on the global market. This issue of global competition further complicates the achieving of customers, shareholders and other stakeholders needs by the industry. Thus, the industry needs to change its organization behavior and structure to overcome these new challenges. Studies show that industry performance is highly affected by its behavior. Dessler (2001) stresses this point when he points out that, organization behavior and structure determines the success of an industry. These new challenges has made the industry to rethink its business behavior, objective and aims coming up with strategies that has made the industry more successful than before. (Dessler, 2001) Globalization Globalization has had varied influences on policy making in the aviation industry, by influencing the making of key decisions in the industry. Globalization in this case has influenced economic policy making in aviation industry.   One of the effects or influence to economic policy making in aviation industry is that, it has made it more complex. According to top managers in aviation industry, globalization has made this policy making quite challenging due to the very many factors that are globally affecting it and the various needs of the different stakeholders that has to be fulfilled. Globalization has affected aviation industry in its decision making. This is because all the decisions made in this industry have to comply with international standards. This is so because globalization comes along with standards which all the industries have to adhere to. Decisions that are made in aviation industry also have to be according to international trade policies. Aviation industry faces big challenge in line with global competition and balancing of various stakeholders needs. (Dessler, 2001) Stakeholders Many times different stakeholders’ requirements do conflict, and at times the requirements of each group are not well understood. Balancing the requirement for the different groups in the industry becomes a challenge to the policy makers in the industry, many questions have to be asked before formulating a structure that can satisfy each individual group. Some of the questions asked when formulating policies are; How to balance the needs and know when trade-off can be applied How to analyze the needs to come up with a win-win resolution for all the concerned groups How do to conclude if the win-win- solution for each group is real possible Eventually economic and some other needs has to be included in the policy making process in relation to satisfying the various groups with a stake in the industry. Stakeholders and requirements The aviation industry like any other industry has nine basic or generic stakeholder groups with different class of people in each group. These groups are; (Cox, 2000) The government Board of directors Owners/ shareholders Management Executive Customer employees Suppliers Community We shall examine only four groups which are; owners, customers, employees, local environmental groups which are very important in the industry and how their individual needs are balanced. Shareholders Shareholders in an industry or a company are the owners of the industry; the capital invested in the industry comes from the shareholders who expect a reasonable return over the invested capital. Freiberg & Freiberg (1998) clearly states that, the objective of shareholders in an industry is mainly long term financial growth or short term financial gain in terms of dividends. The needs of shareholders may also include greater social enhancement, protecting the environment among other things. Shareholders basically put their financial capital in the business to have an opportunity of making money. (Freiberg & Freiberg, 1998) The executive management group in aviation industry is the one which is answerable to the shareholders in terms of results of the business, in a situation where the executive management to do produce positive results, the shareholders may replace the executive management or the shareholders may withdraw their money and invest it elsewhere. Any industry which is not well managed at the end it will have to collapse. The shareholders in the aviation industry basically expect the following from the industry; Long term financial returns (increase in relation to shareholders amount) Short term financial returns (dividends) Observance of social norms (environment and ethics) Freiberg, K., & Freiberg, J. (1998 Customers In any particular industry the most important group of stakeholders are the customers. Normally, customers demand high quality of services and a competitive price. (Legge, 2004) In order for the industry to realize profits it has to provide quality services at competitive pricing so that it attracts more customers to increase profitability of the industry. Supposing the level of profits falls and losses are made, the shareholders will complain. Thus, the challenge is to set prices and quality that can attract the customers and at the same time make profits that can sustain the industry. (Legge, 2004) Customer segment in this industry do not differ so much, customer will have different expectations from the industry and the executive managers will face different challenges in formulating ways to satisfy the varied requirements of the customer segment. One particular issue that has raised a lot of concern in the industry is the security issue. Ever since the September 11 terrorist attack in America, the concern of security in aviation industry has increased and all stakeholders and in particular the customers have demanded for high security and safety in the industry. (Legge, 2004) It is important that customers have to be listened to so that their needs are understood, in order to make improvements where possible, and where not possible customers be informed of the impossibility. Generally the industry is pursing customer requirements that are in line with the interests of other important stakeholders. Basically, customers’ demands in the aviation include; Improvement of the services the industry is providing especially in terms of security and safety Better competitive pricing A commitment of the industry to address their requirements (Legge, 2004) Employees This groups consists of all levels of employees who are down the executive management level, at times it may also include the upper middle level management, the middle level management, the supervisors and individual employees. The biggest concern of all employees in any industry is having good working condition, secure workplace and financial security. However, other requirements also exists that employees require. (Cox, 2000)   Basically employees require the following; Competitive salaries and benefits Job security Opportunities for career development and growth Safety Community The community though is a less formal stakeholder group in the industry, it is still important and it has a big influence on the industry. Yukl (2002) explains that, the community can either decide to support a business or not, depending on whether they concur with the way the business or industry is carrying out its activities. (Yukl, 2002) Yukl (2002) further explains that, the main interests of a community in any industry are safety of the environment, employment for the local community and cooperation from the industries in other community issues. Community members may become nuisance to the industry or be a support base for the industry depending on the relationships that exists between the industry and the community. The community has three main requirements which are; Environmental Economic Safety (Yukl, 2002) Balancing stakeholders needs The biggest issue thus is how to balance the various needs of the above mentioned stakeholders. It seems that there are three major issues or challenges that aviation industry faces in balancing the different requirement of the diverse stakeholders, this are underlined below; Identifying the specific main stakeholders in the industry in relation to different business situations Understanding the different needs and the main priorities that should be given to this needs Balancing the requirements which conflicts with each other (making trade-offs) (Cox, 2000) In order to solve the above challenges the industry has formulated a matrix formula, this has highly helped the industry in solving the challenges and in balancing requirements of each group of stakeholders. Generally using the matrix implies identifying the most important needs of each group of stakeholders. These are generally similar for each kind of stakeholders, for examples all customers will need better services and competitive prices, and all shareholders, whether ordinary of preferential will need high returns over their capital. To achieve this, the industry has undertaken different approaches to satisfy each group of stakeholders. (Cox, 2000) Balancing Shareholders needs The main aim of shareholders is to get good returns on their capital they have invested. To this end the industry has to attract more customers to achieve high profits so as to ensure high returns on the capital invested by the shareholders. This can be attained through prudent management and good policies and marketing to achieve high profits at the same time ensure that other stakeholders’ needs are taken care of. The industry has responded well by using new technologies in improving its services. The industry has utilized the use of online marketing and also incorporated the use of new technologies in production and operations activities which has resulted in significant increase in revenue and thus attained the shareholders goals. The industry generally has responded to globalization by redefining its services and expanding to new markets to increase its market share and hence profitability of the industry. (Larson, 1997) Balancing the needs of customers   Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚  Ã‚   Industry has continued to provide better services and at the most cost effective prices which have increased the number of passengers over the years. Another aspect that the industry has undertaken in relation to customer is improving security in airports, in the aircrafts and even coming up with better designed aircrafts and air fields which put safety/security of the customer as a first priority. (Phegan, 2000) Customer satisfaction is vital for the success of Aviation industry. Phegan (2000) points out that, with ever increasing competition on the global market those industries that focus on customer orientation and customer satisfaction have chances of maintaining and even improving their customer base. Customers remain the most important group which ensures survival of any industry. Aviation industry has clearly balanced the goals of the customer (in relation to customer loyalty, satisfaction, profitability and sales) compared to other industry stakeholder needs. A significant consideration the industry has undertaken is an overall altitude of organizational commitment to customer objectives, without taking this commitment customer satisfaction will have a very limited impact. Aviation industry has made strategic market plans, which includes, how the company should divide the market and which segments of the market the industry should focus on basing on the Aviation industry capabilities and or industry competencies.   Aviation industry has to have a clear consideration of how the customer satisfaction will be ultimately balance with other needs of other stakeholders. (Phegan, 2000) Balancing employees needs Today, employees are no more human resource to be exhausted but employees have become human capital, thus an asset to an organization that need to be protected and developed. Globalization has opened up new opportunities and employees have become more difficult to retain in an industry that is not competitive enough. To this end aviation industry has to undertake motivation as the main aspect of getting well qualified professional who can achieve the goals of the organization and even surpass them. (Robbins, 2004 Motivational practices To be able to be successful in the current global and domestic markets, motivation, for any organization’s workforce is a solution in realizing competitive advantage. Aviation industry therefore, has the ultimate function of retaining good staff members who are the main drivers of the industry. It takes a considerable amount of time to train an employee in the industry to attain better standards for any specific duty. To lose such an employee at any stage of the production process is suicidal for the industry. Specific emphasis is therefore taken into account to make sure that such employees are kept for as long as they are required. (Robbins, 2004) Better conditions for service and financial rewards are examples of measures applied to motivate employees within the industry. In addition the industry is motivating the employees in terms of annual, leave, insurance or shorter working periods. Aviation industry has set good employee wages to attract human capital in the industry. Top managers in aviation industry have provided information that is useful in the making of decisions for the Aviation industry with regard to balancing the amount of wages to be paid to employees and the actual financial situations for the industry in relation to other stakeholders. It must be noted that, employees play the most important part in realizing the targets of the industry. The aviation industry currently is among industry with well paid employees, this has ensured that the employees are satisfied and thus they can drive the industry to new heights and help it achieve the other stakeholders’ needs. (Robbins, 2004) Balancing community needs The issue of community social responsibility has become an important issue in the recent years. Today, many customers want to be associated with companies that have good community social responsibility policies, and many industries are realizing that for them to succeed they have to operate within community social responsibility framework. Many industries all over the world are adopting and practicing community social responsibility. At the same time the local communities have become more aware of their environment and demand industries to protect it. Aviation industry has balanced this need of the community by becoming more environmental conscious by focusing on ways of reducing environmental degradation issues such as global warming and pollution. It is possible for the industry to achieve this at the same time satisfy other stakeholders. The aviation industry also gives the local community a say in issues concerning environment management and employment to ensure peaceful coexistence that can enable the industry to grow without friction with the community. (Handy, 1985) Conclusion Different stakeholders have different needs in any industry, customer, shareholders, employees and the community remains important to the success of an industry. The aviation industry has a challenge in balancing these needs. The industry has undertaken changes in its organization behavior and its marketing policies to balance these needs. Some of the changes that the industry has undertaken are prudent management to satisfy the needs of the shareholders, high quality services and secure industry to respond to the needs of the customers, good remunerations and better working conditions to satisfy the employees and being more environmental conscious and taking more social responsibility to respond to the needs of the community. However, in this global era the industry will still be faced with challenge on how best to formulate policy decisions which can satisfy all needs of the various stakeholders in the industry.       Reference: Bartol, K, et al. 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