Organisational Structure and Effectiveness in Qantas Airlines
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This report discusses the organisational structure, leadership style, and strategies of Qantas Airlines. It highlights how Qantas has adopted a matrix type organisational structure and situational leadership style to achieve their objectives and goals. The report also covers the company's strategies within the Australian and overseas market.
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ORGANISATIONAL STRUCTURE AND EFFECTIVENESS
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1 Contents INTRODUCTION.................................................................................................................................1 Company’s structure..............................................................................................................................2 Leadership style.....................................................................................................................................3 Companies strategies within Australia and overseas market..................................................................4 Comment on structure and strategies.....................................................................................................5 CONCLUSION.....................................................................................................................................6 REFERENCES......................................................................................................................................6
2 INTRODUCTION Modern day business has changed significantly and hence it has become essential for the companies in various industries to ensure that they have an effective organisational structure. The same is the case in Australia where the organisations need to understand their position in the Industry and make strategies accordingly. Leadership style plays a very crucial role in the development of the organisation and achieving goals and objectives of the firm (Grant, 2014). Airlines industry has extended its reach in the global market. This got possible only due to the strategies they have made. It has also become essential for the Airlines firms to make an organisational structure that brings smoothness in their work. Travel and tourism industry has also empowered airlines industry. Airlines Industry has played a very major role in making the world a global village (Sridhar, 2011). A lot of technological advancements have been seen in this industry hence making flights lot safer. Due to lot of turnouts in the Industry there are large numbers of companies who have come up. This has made business a bit difficult for the companies that were operational in this industry from past decades. Qantas Airways is one of the largest airlines by fleet approx. 124, international destinations around 85 and international flights. It is the third oldest airlines in the world and has been found in the year 1920. QANTAS stands for Queensland and Northern Territory Ariel Services. It is also known to be as “The Flying Kangaroo” (Swanson, 2012). Qantas owns Jestar Airways which is known for their low cost flights that operates in both domestic and internationalservicesfromAustraliaanddomesticserviceswithinNewZealandand Australia. Qantas owns a share of 65% in domestic market of Australia and 14.9% of the internationalpassengers.ItssubsidiariesincludesQantasLink,QantasFreight,Jestar Airways, Qantas Holidays, Qantas ground services, Jetconnect, Express gound handling, Snap fresh, Q catering. In 2015 it earned revenue of 15.8 billion American dollars and is having employee strength of 29,596 individuals. This report illustrates the organisational structure of Qantas Airlines as well as the leadership style that is followed within the company. It also depicts the strategies that are used by Qantas Airlines in the domestic and International strategies for the business operations. Company’s structure Every organisation has some or the other structure that is somehow unique to them. Organisational structure plays a very crucial role in their operational mechanism. It is
3 important for identifying the way in which power, roles and responsibilities are monitored, coordinated and allocated (Homsombat, Lei and Fu, 2014). It is very crucial for managing of the information that gets generated in the business process. Organisational structure highly depends on the strategies and objectives they have made for themselves. Majorly there are two forms of organisational structure that exist i.e. centralised or decentralised structure. Qantashasadoptedboththetypesoforganisationalstructurei.e.centralisedand decentralised. Qantas comprises of several subsidiaries headed by different executives. Every executive are assigned with specific roles, authorities and responsibilities. These are exercised under their specific area of their operations. Employees of Qantas have been arranged in such a manner that smoothness of the work process is maintained and hence contributing significantly in achieving their objectives and goals (Sarina and Wright, 2015). The management of the firm is based on distinct businesses, Qantas International and Qantas domestic. Both of them are managed by the Chief executive officer. Additionally, there are two business divisions having functions related to commercial and operational units. Such an organisational structure has been adopted for focusing on the strategies of the firm related to transforming the Qantas International business and improving the business of Qantas Domestic business. To be precise they have adopted a structure that is of matrix type. Companies top most management comprises of individuals that are related with corporate governance as well as an executive top management team (Hierarchy structure, 2018). The top management is responsible for making of policies and practices that has been adopted and implemented within the firm. Under the leadership at the top, there are several departments like commercial business administration, administrative management, functional management and project management (Whyte and Lohmann, 2015). All these departments are working with several teams for making sure that organisational objectives and goals can be achieved. Matrix organisational structure helps in providing stability to the work process as this organisational structure helps them in facing challenges that are confronting their business. This Organisational structure is highly flexible and helps them in managing the issues that are present in the industry and will be coming in the future (Sarina and Lansbury, 2013). There is a disadvantage associated with this organisational structure is that it is complex and hence management of information becomes a problem. This is because there are several nodes attached with this information system that is implemented in such organisational structure.
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4 Leadership style Leadership style followed by an organisation plays a very crucial role in the management of the operations. Leadership style is always responsible for confronting the challenges that a firm faces in their day to day operations (Dobni, Klassen and Sands, 2016). Success of the organisation in terms of managing the business processes in a better way depends on the style of leadership. It is crucial for any leader to understand the organisational behaviour of its employees and make changes in their leadership style accordingly so as to improve the effectivenessof the firm. Leadership style is paramount in finding the organisational direction and success. In the modern day business leadership style is an important and effective management aspect. This is because it is directly connected to motivating the employees, implementing the strategies and plans so as to achieve the objectives they have made for themselves. Leadership style has the direct role in the making of decisions. In authoritarianstyleonlyleadersareresponsiblefor themakingof decisionswhilein democratic style other employees are also included in this process. Qantas Airlines have implemented all the aspects of leadership style in their management of activities and operations within the firm. Top management plays a very critical role handling the management of people that comes from different cultural background in order to avoid any kind of conflict between them (Crawford and Northey, 2013). There is a mixed leadership style in the organisation. This is because sometimes they adopt authoritative while sometimes they have adopted democratic and participatory style. This helped them in making decisions that are highly favourable. Sometimes they also have faced several criticisms like closing of the Singapore. This was attributed by the fact that stakeholders said that leadership needs to follow more of a democratic style. This suggests that their leadership is following more authoritative leadership style rather than democratic style. Qantas leadership style founds the following elements: Vision: Top management leadership of Qantas is providing strategy, vision and direction to help the firm’s employee in the execution of their operations. Diversemanagementteam:Qantasmanagementmustcontainindividualfrom different fields. Firm’s diverse field must offer several types of education, skills and views that help in improving the management of Qantas. The cited airlines must recognise the importance of worker’s perception and the leadership must adopt a particular style accordingly. Top leadership plays a crucial role consulting other stakeholders while making of the decision. Democratic leadership plays a highly
5 crucialroleinencouragingandmotivatingemployeeswhichisnecessaryfor improving their productivity. ď‚·Collaborative: Qantas management feels that the leader must be collaborative, open and honest. This helps in bringing the confidence inside the workers as they start understanding themselves to be important. Companies strategies within Australia and overseas market Company has adopted various types of strategies in the operations so as to maintain their competitiveness in the market. In the stiff competition that Qantas is facing in Australia and overseas market, they need to make sure that they attract large numbers of people towards their services. In order to gain competitive advantage in the domestic market, they need to adopt diversification strategy (Skotnicki, 2012). It has helped them in enhancing the growth opportunities in the market. This is because the company is offers various products for different types of consumers. Lower product pricing is another strategy they have adopted in order to attract the price lovers (Qatas, 2011). The want to market their services as the highly cost efficient services that is having capability to attract both domestic and international target customers. Using the diversification and low pricing strategy they have been able to attract consumers from different sections of the society like leisure travellers, business travellers and corporates. Cost leadership has been their prime focus over the years and has helped them in easily making their name in the market (Kolesnikoff, 2011). Along with this they have used expansion strategies where they offered products in the region that is less dominated by airlines. This was primarily seen when they expanded their services in the Asian region when no other players have reached in the market (Biddle, 2012). They named this strategy as the gateway strategy that focused on connecting Australian people with other parts of the world. They have done this with the help of their subsidiaries. This also helped them in capturing the larger part of the market and hence becoming market leader in Australia and other overseas market. Comment on structure and strategies The organisational structure that they have is very appropriate as it helps to make the work process easier which is necessary for the growth of the organisation in the competitive environment around the firm. The matrix type structure of Qantas can help in solving problems related to various domains inside the organisation. With important people sitting at
6 the important positions they have been able to solve the problems they are facing on the long and short term basis (Lohmann and Spasojevic, 2018). This organisational structure will become better when they will involve larger numbers of people in their decision making. It will provide stability to their work process which is necessary for their growth.Their organisation structure has helped them in checking the interest of all their stakeholders. With such an organisational structure they have been able to make strategies and implement it in a better way which is necessary for their development. This also aided them in putting them on the roads where they can achieve their mission, vision and objectives in a better manner. By adopting various leadership styles in different situations they have been able to address the problems that they encountered in their strategies. Adoption of situational leadership has helped them in achieving the strategies that have made for themselves. Along with this there strategies like cost leadership has played a greater role in their capturing of larger market share (Aharoni and Noy, 2012). This is due to the fact that people these days wants air fare to be on the lower side. This is highly effective strategy in the modern day context where there is heavy demand for the cheaper services. This is difficult for the cited company as the fuel prices are increasing in the market at a much faster rate. Differentiation also played a major role in their growth as this strategy made them capable of satisfying the need of their wide ranged target section. Their strategy of entering into the new market has helped them in expanding their market base which is necessary for the making edge over their competitors. It can be well seen in the case of its expansion in Asian region where in many countries they have become the market leader. CONCLUSION From the above based report it can be said that Qantas is one of the biggest airline company in various terms. They have adopted a matrix type organisational structure which has helped them in solving the problems they have faced over the years. With their effective strategies utilised within the organisation they have made edge in the Australian market and has also helped them in their expansion in the overseas market. Qantas airlines have adopted a leadership style that is situational. This has helped them in solving their various challenges which they have faced over the years and hence ensure long term growth. Their situational leadership has also assisted them in their process of achieving their set objectives, mission and vision.
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7 REFERENCES Aharoni, Y. and Noy, E., (2012) The components of airline business strategy and their impact on revenues.Editorial and Advisory Board,3(2), p.52. Biddle, I., (2012) Outsourcing operations at Qantas.Busidate,20(3), p.5. Crawford, H. and Northey, G.A., (2013) The role of the internet in international competitive strategy: the case of Qantas.International Marketing: An Asia-Pacific Perspective, pp.658- 663. Dobni, C.B., Klassen, M. and Sands, D., (2016) Getting to clarity: new ways to think about strategy.Journal of Business Strategy,37(5), pp.12-21. Grant, R., Butler, B., Orr, S. and Murray, P.A., (2014)Contemporary strategic management: An Australasian perspective. John Wiley & Sons Australia, Ltd.. Hierarchystructure,(2018)QantasManagementHierarchy.[Online].Availableat: https://www.hierarchystructure.com/qantas-management-hierarchy/. [Accessed on 20thmay 2018]. Homsombat, W., Lei, Z. and Fu, X., (2014) Competitive effects of the airlines-within-airlines strategy–Pricing and route entry patterns.Transportation Research Part E: Logistics and Transportation Review,63, pp.1-16. Kolesnikoff,V.,(2011)ASACEO:QantasWoesShowtheNedforLong-term Vision.Equity,25(10), p.11. Lohmann, G. and Spasojevic, B., (2018) Airline business strategy.The Routledge Companion to Air Transport Management, p.139. Qatas, (2011) Building a Stronger Qantas - New International Strategy. [Online]. Available at:https://www.qantas.com/travel/airlines/media-releases/aug-2011/5157/global/en. [Accessed on 20thmay 2018]. Sarina, T. and Lansbury, R.D., (2013) Flying high and low? Strategic choice and employment relations in Qantas and Jetstar.Asia Pacific Journal of Human Resources,51(4), pp.437-453.
8 Sarina,T.andWright,C.F.,(2015)Mutualgainsormutuallosses?Organisational fragmentation and employment relations outcomes at Qantas Group.Journal of Industrial Relations,57(5), pp.686-706. Skotnicki, T., (2012) ALAN JOYCE: CHANGE MANAGER-Mt examines the Qantas CEO's radicalstrategyfortheairline.ManagementToday-Australia'sLeadingMagazinefor Managers, (2), p.12. Sridhar, K., (2011) An empirical analysis into the reframing approach of organisational behaviour.International Journal of Business Excellence,4(3), pp.245-262. Swanson, C., (2012) Flying high.Superfunds Magazine, (371), p.36. Whyte, R. and Lohmann, G., (2015) The carrier-within-a-carrier strategy: An analysis of Jetstar.Journal of Air Transport Management,42, pp.141-148.