Business Context: Analysis of International Airlines Group

This report analyzes the chosen airline, International Airlines Group, and its SWOT and PESTEL analysis. It also discusses the different leadership styles and suggests a suitable leadership style to meet business objectives.

Context Of Business
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Table Of Contents
INTRODUCTION…………………………………………………………………………3
TASK 1
For the chosen airline do the SWOT and PESTEL analysis……………………………….3
TASK 2
With respect to the analysis in task 1 explain how the swap in PESTEL elements has affect
the chances and warnings of work. And also remark in the critical manner that how the airline
is label their powers to invalidate warnings and weaknesses influencing their chances……5
TASK 3
Collate and disparity of the different styles of leadership. At the chosen airline comment on
the appropriate leadership and management style…………………………………………….6
TASK 4
Suggest a suitable leadership style that will help in meeting the business objectives. With the
appropriate literature justify the choice……………………………………………………….7
TASK 5
With the support of evidence from the research comment on the corporate social
responsibilities in the processes in the critical manner………………………………………8
CONCLUSION…………………………………………………………………………….9
REFERENCES……………………………………………………………………………..11
INTRODUCTION
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The business context refers to the understanding of the factors impacting on the
business from various perspectives. It includes what the business is ultimately trying to
achieve and how the decisions are made. To identify the key implications for the execution of
its strategic initiatives then the business context is used by the IT. In this report, the analysis
has been done on the chosen airline and about the changes in PESTEL factors which has
influenced the opportunities and threats of business. (Zakka, J. S. and Fahed-Sreih, J., 2016).
The analysis has been done on the different styles of leadership. The research has been done
on the corporate social responsibilities in the process in the form of critical manner. The
chosen airline is the International Airlines Group. International Airlines Group is an Anglo
Spanish multinational airline holding company with its registered office in Madrid, Spain. It
is headquartered in London, England. It was formed after the agreement between the British
airways and Iberia. The International Airlines Group is listed on the London Stock Exchange
and Madrid Stock Exchange. In the new company, the British airways shareholders were
given fifty five percent of the shares. IAG has expanded its portfolio of operations by
purchasing other airlines.
TASK 1
For the chosen airline do the SWOT and PESTEL analysis
SWOT analysis of The International airlines group
STRENGTHS: The IAG group has the strong free cash flows that provides resources in the
hands of the company to expand itself it into new projects. Based on the conditions in the
market, has enabled the company to scale up and scale down. (Tkachenko, N. O. and
Hromovyk, B. P., 2018). It is all possible through the automation of activities which brought
consistency of quality to international airlines group. It has also successful track record of
developing new products and the innovation.
WEAKNESSES: The company has the limited success out of the core business. It needs
more investment in new technologies. There are gaps in the product range which is sold by
the company.
OPPORTUNITIES: The company has its new trends in the behaviour of customers due to
which it opens up the new market for the International Airlines Group. The lower inflation
rate brings more stability in the market.
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THREATS: Due to new environment regulations under Paris agreement could be a threat to
the existing product categories. The demand for particular products which are seasonal in
nature in terms of highly profitable manner. (Tkachenko, N. O. and Hromovyk, B. P., 2018).
Changing behaviour of consumers buying tickets from online portal could be a threat to the
existing physical infrastructure driven supply chain model.
PESTEL analysis of The International Airlines Group
Political Factors: There are some political factors which affect the decision making power of
the airline industry. BREXIT is on the big reason of the political influence. There are some
government rules and regulations which influence the decisions of some particular countries.
Economic Factors: Economic factors also play important role in the working of some
particular industry. The low fuel prices supports in terms of covering the number of miles of
kilometres. Interest rate also gives relaxation to the airline industry. It has also been observed
the market growth in airplane suppliers.
Social Factors: Social factors has its own influence on the decision making power of the
airline industry. Due to frequent employee strikes it becomes difficult to continue the services
in a positive manner. (Manrai, and et.al., 2019). Due to growth of social media and its
importance with the changing environment it becomes challenging to adopt this kind of
pattern of working.
Technological Factors: Under this head, the digital disruption also creates problems in the
execution of the work. ( Díaz-Casero, and et.al., 2017). Due to growth of multiple technology
it becomes difficult for the industry to decide for the adoption of particular technology.
Environmental Factors: Terrorist attacks also influence the decision making power of this
particular industry because the surroundings also get affected by such kind of environment.
Due to lots of air traffic the air quality has also affected and the noise level has been affected
by this level.
Legal Factors: Under this head, the agreements have been done in an open manner so that
decisions can be taken into the right direction. The decisions and changes made by the airline
industry has been also influenced by the consolidation in the market. (Safwat, A. M., 2015).
This has happened when there is no shift in the price and also indicates the moments of
market indecision.
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TASK 2
With respect to the analysis in task 1 explain how the swap in PESTEL elements has affect
the chances and warnings of work. And also remark in the critical manner that how the airline
is label their powers to invalidate warnings and weaknesses influencing their chances
The changes in PESTEL factors has influenced the opportunities and threats of
business into the positive manner and somewhere to the negative extent also. Due to changes
in the government rules and regulations, it gives the opportunity to the airline that it can
explore to other countries as well as increase their area of operation. Lower fuel prices also
gives the opportunity to travel to long distances. In terms of threat factor when customers are
mostly shifting towards the digital area then this threat has converted it into the new
opportunity due to which doing bookings through online mode becomes the trend as well as
the modern way of working also. (Fainshmidt, and et.al., 2017). Due to adoption of various
kinds of technology the airline comes in the category of ultra modern and unique type of
working category. For making the environment more secure and safe the business has taken
initiative to increase the security and tried to convert this threat into the positive manner.
Somewhere when the decisions have to be made by the airlines with respect to the legal
manner then it provides the opportunity to take the decision into the free environment and
this will convert it into the form of opportunity for this sector.
The airline has the strength that it has proper cash flow due to which it does not need to
worry about the limited success in terms of the core business. But the proper cash flow has
maintained until that period of time when the business is continuously is moving towards the
positive direction. The sudden situation like pandemic can create hindrance in the business of
the airline industry. With the changing period of time and technological advancement the
customers has shifted towards the online bookings which reduces the importance of the
physical infrastructure.
But due to online bookings and digital working there are chances of hacking the accounts of
different customers. There are chances that viruses can steal the data or finish all the
information of the entire airline system. Investment into new technologies is also kind of
expenditure which the airline has to do due to which it has to diversify its profits into the
preliminary expenditures also. (Mendy, and et.al., 2020). Developing new kinds of products
and innovation is good for the business but it does not guarantee about for how much period
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of time this new pattern or product will exist in the international market. Lower inflation rate
also gives the opportunity for the customers to travel through airlines. But this will increases
the willingness in the middle class people to travel through the airlines. But this kind of
pattern of change in the behaviour does not long lasting because the market does not move
into the positive spectrum it will go up and down with the period of time. So it will hurt the
sentiments of the customers of middle class people in the future because the inflation rate
can’t be remain same in the coming period of time.
TASK 3
Collate and disparity of the different styles of leadership. At the chosen airline comment on
the appropriate leadership and management style
There are five different styles of leadership which has been defined in the following
manner:
1. Autocratic guidance: It allows a leader to impose the expectations and also define the
outcomes under this type of leadership. (Geissdoerfer, and et.al., 2018). When leader
is the most intelligent person in the team then the individual person can turn out to be
in the successful situations.
2. Participative Leadership: This type of leadership is rooted into the democratic theory.
It is important to involve the team members in the decision making process.
3. Delegative Leadership: It is dependant on the delegating initiative of the team
members under this type of leadership. If the team members are competent, take
responsibility and prefer engaging in individual work then this will turn into the
successful strategy.
4. Transactional Leadership: It focuses on the transactions between a leader and his or
her followers under this type of leadership. To get the job done into the positive
manner it can be in terms of rewards and other exchanges.
5. Transformational Leadership: The leader duty is that to always motivate their team
members with a proper vision and encourages them to achieve it. For the purpose of
vision, as a role model the leader always serves.
At the chosen airline, the appropriate and management style which is adopted by the
international airline group is the participative style of leadership. Because employees under
this airline work in the collaborative manner. And the company also focuses on such type of
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working where the decisions have been made with the collaboration of every employee
working in the airline. (Van Grembergen, W. and De Haes, S., 2018). Due to this type of
leadership, it is important that to understand that every employee point of views has been
come into consideration due to which it becomes easier to understand that which type of
decision is favourable or not for the employees. The kind of leadership which is followed by
this airline also ensures that the employees are aware about their roles and responsibilities
due to which they can execute their work in a proper manner and give their full potential to
their work place. Participative type of leadership also gives the responsibility that the big
decisions should be taken after considering the all aspects into the practical manner and
physical world also. So this kind of management and leadership is very appropriate at this
level for the international airlines group.
TASK 4
Suggest a suitable leadership style that will help in meeting the business objectives. With the
appropriate literature justify the choice
According to the suggestion manner, the leadership style which is adopted by the
airline should be the Authoritarian Leadership. Under this kind of leadership, the expectations
has been imposed and outcomes should be defined into the positive manner. This kind of
leadership has been decided because the airline objective or vision is that to be the world’s
leading airline group. The focus is on maximizing the sustainable value creation for its
shareholders and customers. (Taschner, A. and Charifzadeh, M., 2016). When the target has
been decided then it becomes easier for the employees to give their results because they have
come to know that this is the particular saturation level which they needs to achieve into a
positive manner. To become the world’s leading airline group, it is important that they should
focus on their quality of services, to the point approach, result oriented work and the time
frame in which they have to execute their services into a successful manner.
Business objectives can only be achieved when there is a discipline environment into the
organisation and all the employees take their responsibilities into the sincere manner. Defined
outcomes under this type of leadership also increases the chances of achieving the vision of
the airline and it also ensures about that the results have been achieved into the right
direction.
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The choice of this kind of leadership is absolutely perfect according to the business objectives
of the International Airlines Group. This type of leadership brings the discipline and sincerity
within the organisation. And the employees are already aware about their goals that they need
to achieve their goals with this saturation level so that outcomes can be defined into the
perfect manner. In this type of leadership, the leader is very strong and effective because he
knows how to reach their airline to that particular level. So it is all about the individual
control about the overall decision making power. There is very less input from the team
members. Because with the involvement of point of views of different team members also
creates confusion and it becomes very challenging part to take the final decision for the
execution of any type of work. (Taschner, A. and Charifzadeh, M., 2016). When the leader is
already very knowledgeable in the team then he or she can take the decision in a very firm
manner and accurate way. Under this kind of leadership, when the methods and processes are
defined in a perfect way then it becomes easier for the employees to follow their job roles and
execute it within the period of time. One thing is that creativity has been discouraged but
reaching to the highest level the work should be done into the competitive manner so that the
airline can reaches to its final stage and can stand into the market in a strong manner. So in
the justification manner, the choice of authoritarian type of leadership is very good and
accurate in terms of achieving the business objectives.
TASK 5
With the support of evidence from the research comment on the corporate social
responsibilities in the processes in the critical manner
Corporate social responsibilities can’t be defined and decided into the particular
manner because it all depends on the type of culture, identity and environment of the
organisation. There are lots of corporate social responsibilities which is in the terms of social,
economic, environment and for the nation perspective is also there. Corporate social
responsibilities are those which has been done by the different kind of organisation for the
welfare of the society. (Eger, and et.al., 2019). The corporate social responsibilities include
the eye check-up campaign, blood donation campaign, funding for the different orphanages,
giving education to slum-side children in terms of financial support. Sometimes doing the
corporate social responsibilities work creates a kind of responsibility on the organisation and
somewhere the dependency has been created over the period of time. When organisation do
not fulfil these responsibilities it creates a negative impression into the social terms. Due to
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which the standard and image into the market has been degraded and also get fall down as
compared to their previous situations. For different orphanages and different support schools
create a kind of dependency in their mind in terms of financial manner then it becomes
difficult for them also to move forward into the positive direction.
Although corporate social responsibilities is a good and ethical work which is beneficial for
the society and it also brings positive change into the social environment. But it is also
required by the organisation to take care of themselves that they do not totally indulge
themselves into the corporate social responsibilities that they forget about their own finances.
They have to always maintain a surplus that they can face the challenges into the negative
situations in terms of financial parameter. (Top, and et.al., 2015). Corporate social
responsibilities not only contribute towards the development of the nation into the indirect
manner but it also supports the common people of the nation who are not so much financially
very strong. From the perspective of aviation industry they have the large amount of financial
support system because they also deal at the international level. Due to which they have
international reserves also. So they can arrange the corporate social activities at the large
scale.
But it somewhere comes into the negative strain because in the open environment it comes
into the notice that particular industry has large amount of financial support. That’s why they
arrange such kind of activities at the larger scale. Due to this some negative people have tried
some of their efforts to make some losses in that particular airlines. (Buchholz, N., 2019).
And within the organisation due to politics reason some unethical activities can happen so
that it creates hindrance in the regular working of the airlines. Corporate social
responsibilities somewhere brings good fortune for the International airlines group but it also
sometimes creates problems for them in achieving their targets. So its important that they
maintain some boundaries and lines within the professional work as well as the social work
so that the work can be executed into the positive spectrum.
CONCLUSION
Context of business plays a very important role in achieving the organisational goals
and objectives. It is very important to understand what is the vision and aim of the business
and into which context they want to do their business. So that they can make proper planning
and strategy for achieving their goals into the realistic manner.
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Airlines have to also do their different kinds of analysis so that they can further proceed
towards their work into the positive manner. These type of analysis gives the idea about
where to work and in which direction they have to work for their further progression. It is
also important for the business to make the leadership very strong so that their vision should
be clear and the team members work in the defined outcome manner. (Khan, and et.al.,
2018). Having the strong type of leadership gives the motivation to their team members and
a kind of support system in the negative and challenging situations. It is very important to
decide the particular kind of leadership by the businesses so that they can define their
objectives into that particular manner. And also they can work into the positive spectrum
towards their goals and objectives.
REFERENCES
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Books and Journals
Khan, and et.al., 2018. Review on upgradability–A product lifetime extension strategy in the
context of product service systems. Journal of cleaner production, 204, pp.1154-1168.
Top, and et.al., 2015. Information value in a decision making context. Radboud University
Nijmegen.
Eger, and et.al., 2019. Employer branding: exploring attractiveness dimensions in a
multicultural context. Technological and Economic Development of Economy, 25(3), pp.519-
541.
Taschner, A. and Charifzadeh, M., 2016. Management and cost accounting: tools and
concepts in a Central European context. John Wiley & Sons.
Taschner, A. and Charifzadeh, M., 2016. Management and cost accounting: tools and
concepts in a Central European context. John Wiley & Sons.
Van Grembergen, W. and De Haes, S., 2018, January. Introduction to the Minitrack on IT
Governance and its Mechanisms. In Proceedings of the 51st Hawaii International Conference
on System Sciences.
Geissdoerfer, and et.al., 2018. Business models and supply chains for the circular
economy. Journal of cleaner production, 190, pp.712-721.
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economic and social barriers on SMEs' internationalization in an emerging country context:
Implications and future directions. Thunderbird international business review, 62(2), pp.199-
211.
Fainshmidt, and et.al., 2017. MNE performance during a crisis: An evolutionary perspective
on the role of dynamic managerial capabilities and industry context. International Business
Review, 26(6), pp.1088-1099.
Safwat, A. M., 2015. Corporate social responsibility: Rewriting the relationship between
business and society.
Manrai, and et.al., 2019. Determinants and effects of cultural context: A review, conceptual
model, and propositions. Journal of Global Marketing, 32(2), pp.67-82.
Tkachenko, N. O. and Hromovyk, B. P., 2018. Modern professional pharmaceutical
education of Ukraine in the context of social responsibility.
Tkachenko, N. O. and Hromovyk, B. P., 2018. Modern professional pharmaceutical
education of Ukraine in the context of social responsibility.
Zakka, J. S. and Fahed-Sreih, J., 2016. Lebanon: Father–Daughter Succession in Family
Business within a Middle Eastern Culture (pp. 67-76). Routledge.
Díaz-Casero, and et.al., 2017. The influence of university context on entrepreneurial
intentions. In Entrepreneurial Universities (pp. 65-81). Springer, Cham.
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