Global Challenges for Business

Introduction

The theories of management have evolved from the ancient practices of management to the modern theories of management. For the scientific management, the main intention of management was to enhance employees’ performance by designing job opportunities in a manner that would improve the delivery of services. In this regard, this paper will take into consideration Taylors approaches to management, since he was the father of management and was influential in this study (Alvesson & Wilmott 1996, p.25).

Taylor attributed that employees are the vital human asset essential for the achievement of efficiency in the company. In this case, he advocated that the improvement and development of employees will serve to attain maximum productivity for the company. This goal or objective can only be realized through the consistent reviewing of the company’s programs and employees’ motivation strategies (Child 2005, p. 18). As a result, the employees’ morale would be improved, and, by the provision of the best tools and knowledge, employees would perform as expected.

Since Taylor was a rational theorist, some ways he advocated for the enhancement of employee morale and productivity is motivation. He considered that motivation plays a crucial role since it influences the conscience and loyalty of the employees to the firm. Based on his analysis, he regarded that one way to influence employees is provision of high salaries with respect to their performance, which improves their productivity (Mayle 2006, p.34). In addition to this, there are multiple theories he developed, which serve as a guide in the management functions of most organizations.

In the case of Easyjet, the application of Taylor’s principles has been magnificent since it has improved the level of management and employee satisfaction. Through the application of the principles, the workers selection, recruitment and retention has been improved, in the company. In addition to the above benefits to the company has benefited from the design of a values framework that has enabled to achieve a high level of performance and increase productivity of employees. The leadership design of the firm has been structured in a manner that reflects Taylor’s concepts. As a result, the impact of the management theories that have been adopted by the company is considered in this paper, in terms of the challenges and strengths of the company.

The Organization

The study focuses on the management and industry challenges facing Easyjet organization. Despite the recession, which influenced many airline companies on the globe, Easyjet has survived the turmoil and made significant returns, in the period. Initially, in conducting its business operations, the airline has a structure of its operation design from the top management to the subordinates at the tactical level. In this case analysis, the company selected to recruit and maintain their employees on a structured approach that ensures equality for all, so that committed workers are retained in the organisation. At the operational level of the organization, the leadership styles used are democratic and collective-participate styles. As a result, the employee’s morale and performance has improved drastically leading to general growth in returns of the company. In addition, the company can save up to eighty million dollars due to reduction in labour turnover.

For employees, who have been recruited, the company engages in continuous training and development in their specialties. As a result, the company can retain highly skilled and knowledgeable employees in the company. Similarly, the management style that is used by the company contributes to the enhancement of employees’ morale and productivity in the company. The company handles its employees appropriately and only hires new ones when there is a need, such as on booms. This implies that employees are mostly recruited on a contract basis and evaluated based on performance standards of an individual.

The cabin crews and other vital employees in the company are usually assessed on a consistent manner, in terms of evaluating their performance and capabilities. The incidents and /or air accidents can be curbed immensely, through this program. Similarly, this personnel play a crucial role since these professionals are responsible, in most cases, to customers on the flight and thus, are allocated with due respect. In addition, when the management is making decisions, it adopts a framework through which all the staff matters are handled as expected according to the companies policies and ethical standards.

The Challenges

The operation of the Easyjet within the European market is prone to many challenges that emanates from the internal and external environment. These crucial challenges affected the company during the recession period drastically, though it was able to manoeuvre successfully, especially, considering comparison between the periods. Considering the challenges that the company is exposed to, many models or approaches have been used to elaborate the rampant forces that organizations face, while in operation, which include the PESTLE approach, Porters’ Five Forces, and Resource analysis. All these models seek to illustrate how the company could counter the forces in strategic and ethical means, resulting in increased productivity and profitability. In addition to these approaches, the SWOT analysis is used. Based on the illustration of the market nature of the Easyjet, these approaches clearly demonstrate the multiple challenges, to which the company is exposed, and varied approaches of tackling them.

The analysis of the company using the PESTEL model depicts the multiple forces coming from the surrounding environment. This approach encompasses the political, economical, socio-cultural, technological, environmental and legal issues.

The political environment entails the regulations of skies and ownership rules, the taxes levied by different countries and fuel taxes, threat of wars and terrorists. Through these fundamental political factors, EasyJet has been able to counter the problems and inefficiencies of the market. The economic environment revolves around the currencies being used, interest rate changes, and oil prices, instabilities of customers, recession, and foreign exchange variations. Some of the social-cultural factors include such as the consideration of safety measures, population growth, services offered, and demographic factors (Thompson and Walsham 2004, p. 739). Taking into consideration the technological factors, Easyjet has multiple challenges that it has to comply with, in order to meet the needs of the clients, such as the IT developments and changes in aircrafts used. The environmental factors include the issues like the pollution and exhaustion of oil. Another crucial aspect is the legal factor, which entails the regulation of the airline industry, security issues, and conduct of business.

These factors have been hugely influential in the conduct of business. Some of the crucial elements that they influence include the competitiveness of the business with regard to its performance and position in the industry. With the political changes, the airline has been experiencing multiple challenges, due to the variation in the political condition evolving with time. As a result, this has led to coping with changes, which becomes demanding and inconvenient with the operation of the business. In this case, it implies that the airline would have to conduct new negotiations. This factor has influence on the operation since it affects the market of the airline, and customers are bound to reduce despite the provision of cheap flight transport (Parker & Ritson 2005, p. 285).

The economic factors play a significant role in the performance of the airline. In this regard, most of the European currencies are breaking up from the Eurocurrency. This implies that the airline has been affected by the instability of the common currency, which could cause serious effects to the performance of the airline. Through such phenomenon, the airline anticipates the decline in revenue while an increase in expenses. Based on this analysis the many factors that play a significant role in the performance of the airline have been affecting the company (Pedlar et al. 2004, p. 125). These factors include issues like the interest rates of long-term debt and exchange rate fluctuations. Similarly, the instability of supply of oil affects their prices, which adversely affect the performance of the airline. In this case, the anticipation of future shortages of the oil supply indicates that future trends of the performance of the airline would be affected. On the side of the customers, it is essential to realize that the fluctuation in their disposal income and decline in employment opportunities affect the performance of the airline industry. This emanates from the declining number of customers who travel less while demand cheaper flights. Despite the multiple factors affect the airline industry from within, there are other factors, like the globalization, which leads to increased traffic in the airline operation region. This implies that the competition would be stiff, and the airline suppliers would be more demanding, which would result in the massive costs. Therefore, the airline would be affected in the long-term during the period of recession (Thomas 2003, p. 421).

The crucial socio-cultural factors affecting the airline include such issues as precautionary measures adopted both in the air and on the ground. In this case, the airline must thoroughly provide the aircrafts with proper maintenance. As for the crewmembers, they are given training and development with respect to their specialties. In the region operated by the airlines, it is essential to analyse the population growth, which affects the consistency of the flights and the popularity of the holidays in foreign countries (Moynagh & Worlsey 2008, p. 148). Through the fluctuation of the population, the performance of the airline has been experiencing a series of vicissitudes. In some cases, the advertisement of services, which do not exist in the real sense or are inaccessible by the customers, affects the performance of the airline. In addition, the occurrences of some unexpected events like the air accidents, terrorism attack and pandemics affect the operation of the airline. In this case, the operation of Easyjet meets multiple challenges from economical environment, which influence its image in the industry.

Technological factors are the other crucial element of Easyjet, which affects its operation. In this case, the airline needs to keep in pace with the advancement of technology. With the rapid evolution of technology, the company has to adjust by incurring immense costs that meet the business needs. Some of the crucial element of this is the use of IT technology, which encompasses the web-system used in offering services to customers. Similarly, the provision of services in the web-based system has to be managed to ensure that quality and secure services are guaranteed to the customers. In case of the change in regulation with respect to the technological components of the aircrafts, the company must comply with the regulations.

Environmental factors that influence the performance of the company include the management of pollution and use of natural resources. In this regard, these vital resources are particularly crucial in management of the ecosystem. This implies that the airline must put measures to regulate the level of pollution caused by the aircrafts through their emissions. On the other hand, the airline is bound to experience multiple challenges due to the consumption of fuel, which exhausts the natural reserves. As a result, the prices of oil will be fluctuating due to the harmful impacts that oil usage imposes on the environment (Moore 2005, p. 57).

The legal environment is another critical area, where the airline company has to comply with the regulations and policies formulated. Some of the regulations enforced in the airline industry include the security, environmental, and airport regulations. There are enormous costs that are to be invested to meet the standards of the airline industry, due to these regulations. This implies that the regulations enforced affect the airline company by influencing its reputation, financial base, and market share (Boddy 2008, p.141). Moreover, the inconveniences caused by the misinterpretation of the regulations are detrimental due to immense fines and penalties.

Based on the PESTEL analysis of factors influencing the performance of the business, it is clearly reflected that the company must incur immense cost and practice ethical standards within the business conduct. In this case, the airline company is exposed to various threats, which entail the competition from its rivals, entry permits to the main airport hubs, and access to fuel. This implies that the management has to be structured and organized appropriately to counter the forces that exist within the internal or the external environment. As a result, the top management have to analyse various factors to come up with ways of enhancing the performance of the company. With this consideration taken in palace, it will depict the ability of the company to earn large returns despite the recession being experienced on a global scale.

Recommendations

Through the application of Taylor concept of management, the airline would need to develop means of improving its performance and position in the market. In this regard, several factors have to be taken into consideration like the development of employees, provision of appropriate facilities while on operation and compliance with the set regulations. This implies that the airline industry have to structure programs, which provide additional knowledge and skills to their employees on a consistent basis. This could be done by use of training or further education. With this, company will comply with the needs of customers and regulations conditions. Though the company may experience immense influence from the external forces like labour unions, it is necessary to comply with their conditions and reward employees based on their contributions to the company, to boost their morale (Quinn et al. 2003, p. 145).

On the other hand, the airline has to provide their employees with the best facilities, which include well-maintained aircrafts and technological advanced tools being used. As a result, the efficiency of operation would be enhanced resulting in increased the level of performance and reputation within the public domain. In addition, the airline company has to comply with the regulations and policies set by the governing bodies since this have vital influence on the conduct of the business and rating of the company, in the industry (Tayeb 2005, p. 245). This implies that the company would be able earn respect compared to its principal rivals, and return in the long term would be magnificent.

Conclusions

The challenges that Easyjet faces in its operations are vital in designing various policies within the airline. This implies that the PESTEL approach of the challenges attributed to the firm would be reflected on the performance and productivity of the company. Despite these crucial challenges, multiple policies have been designed, which favour the airline compared to its competitors in the industry. In addition, the addressing of the challenges will boost the rating of the airline within the customers. As a result, the employees would gain from the services of the company while improving their loyalty to the firm. Based on the management theories, it indicates that the management would be able to overcome many barriers in the industry.