Organisation Theory and Practice

This report evaluates the operations of business organisation Thomas Cook, focusing on organisational structure, culture, power, motivation, and management styles. It also explores the leadership style of Thomas Cook's CEO and the types of motivation used in the organization.

Organisation Theory
and Practice

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................4
A) Management Style and Functions of Management................................................................4
B) Organisational Structure and Culture at Thomas Cook..........................................................5
C) Leadership style of Thomas Cook’s CEO..............................................................................7
D) Power, Conflict and Influence at Thomas Cook....................................................................8
E) Types of motivation................................................................................................................9
RECOMMENDATIONS...............................................................................................................10
REFERENCES..............................................................................................................................12

INTRODUCTION
For a business organisation to operate successfully within the business environment, it
needs to possess effective organisational structure, culture, power, employee motivation and
management styles. If a business organisation happens to possess all of the prior requirements,
its operations will be largely successful within the operating industries with the intention to
generate optimum productivity, performance, efficiency and profitability for the business
organisation (Waring, 2016). This report evaluates the operations of business organisation
Thomas Cook. Thomas Cook was a business organisation founded by Mr. Thomas Cook in
1841, an astonishing 178 years ago in Leicester, England, UK. The business primarily operated
in the hospitality and tourism industries, with initial function upon foundation being to transport
supporters of the temperance movement in UK between various cities such as Birmingham,
Nottingham, Derby and Leicester by the use of railways. In 1871, with the son of the Mr.
Thomas Cook joining the business operations as a strategic partner, the name of the business
organisation was changed to Thomas Cook & Son. Along with the railways, in 1948, the
business organisation was also nationalised by the Government owned British Transport
Commission, between the periods of 1948 to 1972. After de-nationalisation of Thomas Cook &
Son, in 1972, it continued its operations as a private business organisation, operating successfully
within the hospitality and tourism industries of UK. In 1992, Thomas Cook & Son was bought
out by Westdeutsche Landesbank, a German commercial bank and in 2001, the business
organisation was again acquired by the German business organisation C&N Touristic AG, which
resulted in the business organisation changing its name from Thomas Cook & Son to Thomas
Cook AG. Thomas Cook AG, operated from its headquarters in Rochdale, UK and operated
within the tourism and hospitality industries by selling products and services to consumers such
as flights and packaged holidays through the 3 in house airlines which it possessed for its
operations. In 2007, Thomas Cook AG merged with MyTravel Group plc, which resulted in the
formation of Thomas Cook Group plc. Thomas Cook Group plc was lead and managed by Mr.
Peter Fankhauser, who operated as the CEO of the business organisation from 2014 to 2019.

MAIN BODY
A) Management Style and Functions of Management
Management is the strategic process used in business organisations such as Thomas
Cook with the intention to relate the distinct functions of organising, planning, controlling,
directing and applying these so that the available resources of the business organisation can be
used in an effective and efficient manner to achieve the end objectives and goals of the business
organisation. There are five primary functions of management within any business organisation
in the world. These are as follows:
Planning: Planning is the strategic management process, through which a manager identifies and
sets the performance goals that the business organisation needs to achieve and plans for
operational actions and methods through which the business can achieve these objectives in the
future.
Organising: Organising is the strategic management process that involves analysing how the
different departments, teams, operations and jobs responsibilities of a business organisaiton will
be structured or organised, so as to achieve the planned objectives.
Staffing: Staffing is the strategic management function relating to the hiring and retaining
operations of a business organisation, so that it can come to possess a suitably skilled and
talented workforce at both managerial and non managerial positions.
Directing: Directing is the management function that focuses on motivation, supervision,
communication and leadership of employees to encourage them towards optimum operational
performance and efficiency.
Controlling: Controlling management function focuses on ensuring that the operations of
business organisations do not deviate from the planned and organised approaches of the
manager.
The CEO of Thomas Cook uses management style as is prescribed by the Scientific
Management Theory (SMT) of management. SMT focuses on improving the performance and
efficiency of employees within a business organisation such as Thomas Cook. It places great
focus on increasing production by making use of innovative technologies (Su, 2017). The

management style of Mr. Fankhauser has effectively incorporated all principles of SMT into his
management operations, such as:
Scientific Management: All decision making operations at Thomas Cook are done by using the
scientific investigation approach as opposed to traditional rule of thumb, as is prescribed by the
SMT.
Scientific Recruitment: All recruitment and selection operations of Thomas Cook are also done
using scientific approach, by assessing the skills and talent that their job vacancies require and
then filling these through scientific recruitment and selection.
Optimum Outputs: CEO of Thomas Cook has also aligned the objectives of its management
with that of their workforce so that optimum outputs can be achieved (Oberoi, 2016).
Shared Responsibility: All operational responsibility is equally shared by Thomas Cook’s
workforce and management with the intention to achieve optimum productivity and profitability
in consumer markets.
B) Organisational Structure and Culture at Thomas Cook
Organisational structure of a business organisation such as Thomas Cook determines how
its operational activities such as supervision, coordination, allocation etc., are directed so that the
end goals and objectives of the business organisation can be effectively achieved. There are
primarily 5 different types of organisational structures in business organisations. These are:
 Functional: Most common organisational structure that structures the business
organisation based on the experience and skill of its employees.
 Geographical: Organised the business structure on the basis of geographical
locations of its present workforce.
 Product: Organises business structure on the basis of the business’s diverse
products.
 Matrix: Organises business structure on the basis of job specification of
workforce, with jobs often merging together.
 Virtual: Organises physically apart workforce of a business by making use of the
internet.

Thomas Cook operates using the Functional organisational structure as each of tis
departments are vertically structured on the basis of their employee’s skills and experience.
The organisational culture present within a business organisation such as Thomas Cook,
also has immense impact on the productivity, performance, efficiency and profitability of the
business in consumer markets. The organisational culture at Thomas Cook can be evaluated by
making use of the strategic model of Charles Handy’s organisational culture typology (Brenyah
and Obuobisa-Darko, 2017). On the basis of this model, business organisations such as Thomas
Cook can possess four different types of organisational cultures such as:
Power Culture: Businesses possessing power organisational culture, have their operational
power reside with select individuals that are ranked high within the business, with the influence
and control of these individuals spreading throughout the business organisation. These
individuals crate all organisational rules and policies and conduct all the operational decision
making operations, without consulting others, allowing for faster decision making but reduced
motivation and job satisfaction within employees.
Task Culture: Businesses possessing task culture operating by using dedicated groups and teams
with the intention to find innovative solutions to tasks collaboratively. Operational tasks are
provided optimum focus, with all operations of teams aligned towards completing the assigned
task (Elsmore, 2017). This culture encourages teamwork, cooperation, creativity and innovation
amongst employees.
Role Culture: Businesses possessing role culture have power reside between employees based
on their position within the hierarchical structure of the business, with employees high up within
the business’s chain of command possessing more power than their subordinates. All employees
are consulted for decision making operations making them feel valued and motivated.
Person Culture: Businesses possessing person culture observe their individual employees to be
more significant, essential and superior to the parent business, with the business only present to
facilitate the operations of the employees (Intezari and McKenna, 2018). This culture provides
employees with autonomy, creativity and discourages teamwork.

Thomas Cook possesses role organisational culture as all powers reside between
employees on the basis of their position within the functional organisational structure of the
business, so as to maintain employee motivation and job satisfaction.
C) Leadership style of Thomas Cook’s CEO
There are various leadership models and frameworks that a competent leader can make
use of to shape their own leadership style and approach. In order to effectively manage, guide
and lead the employees of Thomas Cook towards increased performance and efficiency so that
Thomas Cook can itself operate with optimum productivity and profitability in the consumer
markets, Mr. Peter Frankhauser makes use of the transformational leadership framework. This
leadership model states that a competent and effective leader of a business organisation such as
Thomas Cook, is required to inspire and motivate all of their organisational employees towards
success, in order to create or innovate new business technologies, bring about any kind of
meaningful organisational change, which can help the business organisation and its employees to
operate with increased performance and efficiency resulting in increased productivity and
profitability of the business organisation in the consumer markets (Hawkins, 2017). By making
use of transformational model of leadership, a transformational leader such as Mr. Peter
Frankhauser, sets operational examples within the highest level of the business organisation like
Thomas Cook, creates an effective, ethical, productive and healthy organisational culture with
the business organisation, mentors and guides their employees towards achieving optimum levels
of operational performance and efficiency and also provides them with necessary freedom and
autonomy in relation to their job by refraining to micro manage the operations of their
employees. For a leader such as Mr. Peter Frankhauser to effectively make use of the
transformational model of leadership and become an effective and competent transformational
leader, who is actually capable of motivating and inspiring their employees towards increased
performance and efficiency, the leader needs to possess several skills and qualities which are of
paramount importance for a transformational leader (Thibault, Gulseren and Kelloway, 2019). A
transformational leader is required to be open, honest, ethical, fair, truthful in addition to
possessing a sense of integrity towards their operations if they hope to inspire, motivate and lead
their employees within the business organisation to increased performance and efficiency and
implement an organisational changes within business organisations such as Thomas Cook in

order to aid the growth and development of the business organisations towards increased success
in the future.
D) Power, Conflict and Influence at Thomas Cook
While power and influence within a business organisation such as Thomas Cook can
have varying effects on the business organisation’s performance, efficiency, productivity and
profitability in the consumer markets, organisational conflicts amongst employees most often
have a negative effect on the organisational culture, performance, efficiency, productivity and
profitability of the business organisation in the consumer markets. The effect of power within
Thomas Cook can be analysed by making use of French and Raven’s model of five forms of
power within businesses such as Thomas Cook (Pfajfar, Brenčič and Shoham, 2017). These five
forms of power are:
Reward Power: Management and leadership of a business uses their power with the intention to
create rewards and incentives for employees within their organisation who perform at optimum
levels with efficiency.
Coercive Power: Leadership and management of a business organisation uses their power to
punish the employees who perform at levels that are below expected standards of the business
organisation through fines and penalties.
Legitimate Power: Power resides with individuals on the basis of their position within the
business’s organisational structure and chain of command (Howell, 2016). This form of power
encourages high performance in order to get promoted higher up the chain of command.
Expert Power: Power is granted to individuals who possess exclusive expertise, experience or
knowledge within a business that others do not, encouraging employees to broaden their
knowledge and skillsets.
Referent Power: Power deriving from a leader’s personal charisma, characteristics or traits.
Thomas Cook possesses reward form power, which has a positive effect on its operations
as it provides rewards and incentives to deserving employees within Thomas Cook, encouraging
optimum performance and efficiency from all of its employees, while increasing their job
satisfaction and motivation metrics. Contrastingly, conflicts amongst employees of Thomas

Cook have a significantly negative effect on its performance, efficiency, productivity and
profitability. The leadership and management of Thomas Cook is advised to resolve all
operational conflicts amongst employees in a swift and effective manner, in such a way that
these conflicts do not have any lasting impact on the performance, efficiency, productivity and
profitability of Thomas Cook.
E) Types of motivation
It is very important for organizations to provide motivation in an organization so that
there is a better functioning and operations in the market. There are a lot of motivations theories
which have been applied in Thomas Cook which are Maslow’s hierarchy of needs which has five
stages in it. Stage one is basic need like sleep, water, breathing, etc which has to be provided to
the employees in the organization so that there is a faith in the employees which can be raised in
the organization. The second stage and expectation of the employees are safety which is health,
security, property, etc rights which all the individuals have in the organization so that they can
have a better lifestyle (Pedler and Burgoyne, 2017). Third stage come the belongingness in the
employees which can be created by the managers and the leaders in the organization so that the
employees can feel welcomed in the organization and increase their comfort level as well. Forth
stage is esteem which is confidence, respect, achievements, etc which people must get when they
accomplish a target which has been allotted to the employees so that they continue to do that
each time and the company will be able to benefit from it. And the final stage is self actualization
which is creativity, problem solving, morality, etc which is that when the employees are aware of
their strengths and weaknesses then they will be able to improve them effectively which is a
great factor for the organization as well.
The organization will have to use different theories to motivate the employees from time
to time so that there is a better functioning. Only when there is motivation in the organization the
organization will be able to have a stable platform for them in the market. Motivation can get in
the changes in the market effectively in the organization so that there is a better functioning
which is going to make the organization have a better functioning for them. There has to be a
satisfaction level of the customers and the employees in the organization which is going to help
in getting motivation in the organization (Hayes, 2018). The demands and needs of the customers
are increasing which have to be met by the organization which is going to result in higher profit

margins. There is going to be a direction in the organization as well which will be followed by
the employees of the organization so that the target can be met in the market and the industry
competition.
Literature to justification
Thomas Cook has been in this industry from a long run therefore they have understood
the element and the functioning of the employees. The customers’ expectations are shifting as
well which have to be controlled by the organization so that there is a better functioning in the
organization. Thomas has been able to provide the employees with the basic needs in the
organization but the competition has risen so much that the organization will have to find more
ways to get the employees loyal to the organization which is going to make the operations more
effective in the market. The organization has got in a lot of changes in the organization which is
making the organization be able to function effectively in the market from so long. Though there
have been a lot of changes in the market but the company has not had a loss because of the brand
image and the reputation the organization has gained in this market over the years. There is a
motivation for the customers to invest in the organization but the employees of the organization
have been not thought of from a long time (Veugelers and de Groot, 2019). It is very important
for the company to understand the needs of the employees as well so that the organization can
have a better functioning and operations for themselves in the market. The organizations which
came in the industry after Thomas Cook have got a larger share in the market which is why it is
very important for the organization to be able to have a better and larger competitive advantage
in the market.
RECOMMENDATIONS
It is very important for the organization to get in the changes in the organization
effectively so that they can satisfy the customers from time to time which is a very essential
factor for the company. There is a standard which the company has made for themselves in the
market which is why it is very important for the company to be able to make a base for
themselves in the market (Berger, Feldner and Passmore, 2020). The organization will have to
increase the wages and incentives in the organization so that the employees of the organization
can give their best. There have to be more privileges which have to be given to the employees of

the organization so that they can give their best in making the tourists satisfied with the facilities
which are being given to them. The customer’s culture and beliefs also have to be followed in the
organization so that there is a better functioning in the market.
The organization will have to make the decisions according to the employees which are
working in the organization so that the right decisions can be taken in the company. The
organization must analyse the internal factors as well so that there is a better functioning which is
going to help the organization to have a better functioning (Antonacopoulou and et.al., 2019).
Thomas Cook has been in the market from a long run therefore they know the right decisions
which have to be taken by the organization to have a better brand image in the market. There
have to be attractive and creative measures which will have to be discussed and then
implemented slowly in the organization so that the employees can adapt to them which is going
to help Thomas Cook to get back the competitive advantage in the organization.

REFERENCES
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Hayes, J., 2018. The theory and practice of change management. Palgrave.
Howell, C., 2016. Dynamics of power in the organization.
Intezari, A. and McKenna, B., 2018. Creating organisational culture. Leadership: Regional and
Global Perspectives, p.160.
Oberoi, R., 2016. Frederick Wilson Taylor’s Scientific Management Theory.
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