Thomas Cook: CEO Leadership Style and Organizational Impact

This report provides a comprehensive analysis of the organizational theory and practices at Thomas Cook, focusing on the leadership of CEO Peter Fankhauser. It describes the management style, principles, and functions employed by the CEO, highlighting the use of a democratic approach. The report examines the organizational structure, emphasizing the decentralized model and its impact on performance, along with the company culture and its influence on employee motivation and loyalty. It delves into the CEO's democratic leadership style, discussing its benefits and occasional use of autocratic methods. Furthermore, the analysis covers the effects of power, influence, and conflict, as well as the different types of motivation utilized within the company. The report uses examples and literature to justify its stand, and it concludes with suggestions and recommendations to enhance organizational performance.

Organization theory and practice

Table of Contents
INTRODUCTION......................................................................................................................2
Describing the management style and principle and function of management used by CEO
................................................................................................................................................2
Steps taken to organization structure and organization culture at Thomas Cook..................3
Leadership style of CEO of Thomas Cook............................................................................5
Analyze the effect of power, influence and conflict of Thomas Cook..................................6
Different types of motivation used in Thomas Cook.............................................................7
Using example and literature justifying the stand..................................................................8
Suggestion and Recommendation..........................................................................................9
CONCLUSION..........................................................................................................................9
REFERENCES.........................................................................................................................11

INTRODUCTION
Organizational theory is define as the set of interrelated concept and definition to
explain the behavior individuals and groups in order interact with each other to perform the
activities which further assist to meet the define aim. Also, through the study, it will help to
shed the light on organization theory and management. It is also stated that through effective
organization theories, company identify the pattern and structure which in turn assist to solve
the problems, maximize the efficiency and productivity in order to meet expectation of
stakeholders.
It can be said that organizational practices are described as behavior and act of
workers. It converts ideals and values in a company culture into practical movements and
actions that keep business running or operating actively as well as effectively. More
essentially on an upward trajectory in terms of profit margins and businesses. It is really very
significant that a firm follow good and ethical practices that are better enough to sort things in
place and assure the procedures drive in right path and to also assure timely recognition of
issues for improvements.
The current study is based on Mr Peter Fankhauser Chief executive officer of Thomas
Cook. This report will explain management style & functions and principles of management
used by CEO. It will analyze stage taken in context of company structure in order to achieve
intense performance and state company culture at Thomas cook and their impact on staff.
Furthermore, this assignment will clarify leadership style of CEO of organization to enhance
operational effectiveness and also justified effects of influence, power and conflict at firm. It
will also discuss different types of motivation used at company. Moreover, this assignment
will explain right corporate examples & literature to justify stand and suitable
recommendations to increase organizational performance.
Describing the management style and principle and function of management used by CEO
Style of management is specific way managers within companies go about
accomplishing and achieving set objectives of business (Salehi and Baboli, 2017). It
encompasses term they make decision regarding how they plan and manager work, and how
they exercise administration. There are six types of management styles accessible in market
used by professionals and experienced person in their organizations. It includes directive,
authoritative, affiliative, participative, coaching and pacesetting. In regards to Thomas Cook,
CEO of company is using democratic management style that is quite beneficial for business

success and growth for longer period of time. It includes managers reaching decisions in
context of specific things with input of existing as well as new applicants but being
accountable for taking final judgment.
Mr Peter Fankhauser is the CEO of company they used effective and appropriate
function & principles of management to enhance business performance and sustain for long
within market place. Before taking any action organization CEO make suitable plan which
means define performance or actions aims for company and identify what actions and assets
are required to achieve aims in systematic and ethical manner. With this function He defines
what future of firm should be and how to obtain there (Jervis, 2016). After making or
developing plan, CEO of Thomas cook decide how company will be structured. He utilize
organizing function which includes assigning accountability and authority to different
departments, defining how tasks of teams and individuals will be coordinated and allocating
available resources across firm. Above function are quite beneficial in term of increasing
profitability and productivity as well increase operational efficiency rather than before.
Management principles are concerned with company level results such as social,
economic or environmental performance (Vergés and et.al., 2019). CEO of company is
following logical stepwise path in finding appropriate solutions, he is able to solve difficult
issues quickly or put things together in many ways once he have grasped wide picture. He
follows or used all the principles of management for making his business more successful. It
can be said that by following all the principles and function of marketing Thomas Cook CEO
will work productively.
Steps taken to organization structure and organization culture at Thomas Cook
Organizational structure is designed as system utilized to define a hierarchy within a
company (El Talla and et.al., 2018). It is a structure that outlines how definite activities are
directed and managed in order to achieve aims of business in effective manner. These
activities can include roles, rules, policies and accountabilities. It also identified how
information or data flows between levels and varied departments within firm. Structure of
company influences performance and productivity level of staff. Here, few steps taken with
regards to firm structure discussed that aid to achieve high performance and set aims. To
work effectively and run business functions management within Thomas cook Company take
few steps towards creating and managing organization structure that are really very essential
for business growth.

Figure 1 Organization Structure
(Source: Thomas Cook Group, 2019)
Organization operated based on decentralized structure where board of directors are
accountable for delegation of duties and tasks to subsequent committees as well as other sub
boards. Structure operates along a high and lower or vertical integration trend in firm. First
step in developing or creating this framework is to lay down business objectives in clear
terms. It will aid in determining basic and types of features of firm, infact company activities
are detailed in terms of aims to be achieved. With clear and well defined things it is easy for
workers to work or perform much better than before towards achieving objectives and aims
of organization. Thomas cook follow decentralization organizational structure in which day
to day operations and decision making accountabilities are delegated by BOD. By following
this structure and determining activities within it company is able to gain high performance
that is quite beneficial for them.
Organizational culture-
It is defined as underlying assumptions, ways, beliefs and values of communicating
that support to different social as well as psychological environment of an company. In
context of Thomas Cook, organization values loyalty by consumers and workers, there is
culture of deep trust among all staffs and this faith is shared to target market which adds to
their loyalty. This type of culture in company can impact on applicants performance and
motivational degree positively as it allow them to be more creative and innovative which in
return enhance performance and sales of business rather than its competitors. It analyzed that

Thomas cook group is considered as one of the best travel organization to work for. That is
one of the reasons their employee turnover is well below average for its industry.
Leadership style of CEO of Thomas Cook
The leadership style of Mr Peter Fankhauser, CEO of Thomas Cook is democratic
leadership style which is also known as participative leadership style. Through this style, the
leader of a company keep enhancing the organizational performance such that it is that style
in which the member of a group take participate in the decision making process. That is why
Mr Peter Fankhauser also uses this style where he involve all the members and get to know
the views which assist to determine whether the decision is correct or incorrect.
Another reason for choosing this leadership style is such that it helps to provide job
satisfaction of the existing employees of the firm and also encourage innovation and generate
creative solution in order to solve the organizational issues and problems. Therefore, it is
stated that through this style, CEO of Thomas Cook wants to realize every employees that
they are an important part of the company and that is why, there is a need to involve all the
members into the group decision making process so that they provide best solution (Anderson
and Sun, 2017). However, it is also analysed that through the democratic leadership style, it
develop a strong connectivity and team members and employees understand that they are also
an important part of the company as well.
On the other side, there are some situation, where of Mr Peter Fankhauser did not
involve any person and this time, it is reflected that they use Autocratic leadership style
which in turn assist the company to meet the define aim and objectives. In addition to this,
this leadership style is also characterised by the individual who only control all the decision
without involving others (Yu, 2019). It is necessary for the company’s CEO to make some
decision on the basis of their ideas and judgment because it will indirectly help the company
to get success or make a business at further level of success as well. But actually, the
company‘s CEO uses democratic leadership style by default where he consult with Board of
Directors, shareholders and other important stakeholders before making any decision final.
This will assist to make sure that the firm is in good hands, where majority of the decision are
taken by involvement of others and this in turn assist to increases the performance level of the
company as well.

Analyze the effect of power, influence and conflict of Thomas Cook
Power: The term refers that the control which is used by the company in order to
handle the situation and clashed between the employees. Thus, by using French and Raven
fives forms of power, it is analyzed that Thomas Cook uses this model. Such that it uses
reward power, in which company provide bonus to their team members as a reward for
attaining the define aim and objectives (French and Raven’s 5 different types of power,2019).
Next is expert power, which is also used by Thomas Cook such that it has the expert in
every field who help the company to meet the define aim and also, have an ability to deal
with any problem. Third is, Legitimate power which refers to the top position posses by the
company and Thomas Cook have such position like, CEO, Executive and other similar
powers to make high decision.
Fourth is, Coercive power,which is opposite of reward in which only leader has an
ability to control their team and there are some situation, where the company uses this
method. Last is referent power, which is based upon the perception and own ideas. This is
not used by the company because it did not any specific logical reason to use this and that is
why, it is ignored (Schneiderand et.al.,2016).
Influence:Influence is that term which is used when the company has to influence
their employees on any situation. During this time, company systematic approach in order to
prepare the employees to accept the changes and also focus on their mind- set and behaviours
of workforce. This is also assist to prepare the employees to accept the changes and influence
them to do the work without any error (Saleem and et.al., 2020). In addition to this, company
provide special training programs which in turn assist to meet the define aim and also
influence the employees of Thomas Cook to accept the changes as well.
Conflict: It is fore- sure that every company has conflict and clashed in between its
team members and management authorities. But, managers and leaders has to make sure to
develop a strategy in order to reduce the conflict. Thus, Thomas Cook, uses model of conflict
resolution which is define under 5 strategies to solve the issue such that avoiding, in which
employees ignore the clashes, next way is competing in which people who go into conflict
planning to win (Conflict resolution strategies, 2019). Third is accommodating, in which one
party surrenders in front of others to resolve issue. Fourth is collaborating, under which both
party is assertive and cooperative in which both party contribute to present solution. Last is,

compromising, where both parties are partially assertive and cooperative to finish the
conflict. In this manner, the company solve the conflicts.
Different types of motivation used in Thomas Cook
Motivation is that term which is used to determine the needs and desire within
individuals so that they help the company to meet the define aim. There are different types of
motivation used by Thomas Cook which are as mentionbelow:
Herzberg’s two factor theory:This theory state that there are some factor i.e.
motivating factor which cause job satisfaction, while other factor i,e, hygiene factor that
cause dissatisfaction. For example, it can be stated that when Thomas Cook who provide
salary and positive working environment to their employees then it leads to satisfied the
employees. Which is known as motivating factor, in addition to this, it is also analyzed that
when the employees get an opportunity to personal growth then they are ready to meet the
define aim of the company (Hanus and Wu, 2016). On the other side, if the hygiene factor
such that security and unsuitable at the workplace is also lead to dissatisfied the job. In the
same way, Thomas Cook also uses this theory in order to keep motivating their employees
and uses five factors of job satisfaction such that achievement, recognition, work itself,
responsibility and advancement.
Adam’s Equity Theory:This equity theory state that people are motivated only when
they are treated equitably and also receive their fair cost of effort as well. Such that as per this

theory, if people put their best contribution to their workplace such that effort, experience,
energy, in return they also expect to get some outcomes in the form of monetary benefit,
reward, promotion, verbal recognition (Motivational theories, 2019). This will help to keep
the challenging work in equal manner so that they further assist to meet the define aim or the
company and ready to accept new challenges as well. For example, when Thomas Cook
assign a duty to the manager and ask to complete the same within specified deadline, it is the
duty of manager to motivate the employees and put their efforts in order to meet the define
aim. In return, the company also provide the reward system to them which assist to keep
motivating.
This shows that the company put its efforts in order to motivate the employees and
also provoke to meet the define aim as well.
Using example and literature justifying the stand
In accordance with the Yahaya and Ebrahim(2016) effective leadership style will help
the company to lead the business at positive direction and that is why, Indra Nooyi who is the
CEO of PepsiCo and Bill George which is senior executive at Honeywell and Litton
Industries are also uses democratic leadership style in which leaders are involve their
employees in order to take suggestion form their employees. On the other side, Ryan and
Deci(2017) stated that there are many models and theories of motivation which assist the
company to keep motivating the employees. Such that by using Hilton hotel which is the top
hotel in UK also uses Maslow Theory of Motivation which motivate the employees in order
to meet the define aim
Also, another example is Tesco which is a top retail firm in UK also uses Adam’s
equity model of motivation in order to keep providing best way to increase the performance
level of employees and this in turn assist to meet the define aim and objective of the firm as
well. Also, it is analyzed byAnderman(2020) motivation is the experience of desire and with
the help of effective communication and collaboration with the company’s team member,
company attain the define aim and solve the issue. Also, through using of effective power and
influence, the company is able to convince the employees and sort out the clashes. Generally,
Thomas Cook uses negotiation as a conflict resolution strategy that will assist to meet the
define aim and this in turn help to sort out the issue and take a business at further level of
success. In the same way, TUI also uses 5 strategies of conflict negotiation which in turn

assist to meet the define aim and objectives, also sort out the problem between team
members.
Suggestion and Recommendation
In order to increase the organization performance, there are different suggestion
provided to Thomas Cook which are as mention below:
 It is recommended to the firm to communicate the expectation to employees in better
manner such that Manager and leader of Thomas Cook should introduce direct one to
one meeting session with the employees whenever, new project is introduced. This
will help to let employees understand the situation and prepare them to take better
decision (Zhu, Hawk and Smetana, 2020).
 It is also suggested to the firm that organize proper training and development session
for the new employees in order to let them understand about the policies and
procedure of Thomas Cook. This in turn help to developing term relationship with
employees and as a result, improve overall organizational performance as well.
 Further, it is also suggested to Thomas Cook to monitor and evaluate the job
performance of each employees at every moth and with the help of these, it will be
easy to determine the employee performance during each month (Chenand et.al.,
2018). Also, encourage feedback throughout the year and this will help to meet the
define aim of the company and in turn assist to increase the employee performance as
well.
 To increase the company’s performance level, it is essential for the company to
improve the productivity. For that, motivate the employees so that they will easily
meet the define aim and start using advance technology that help the company to
reduce the time and minimize the workload (Tsaiand et.al., 2016). This is assist to
meet the define aim and take a business at further level of success as well.
CONCLUSION
By summing up above report it has been concluded that of Mr Peter Fankhauser has
democratic leadership style and with its effective management style, he is trying to sort out
the complex situation within a firm. Further study concluded that by using French and Raven
model of power, company is able to influence the employees and also meet the define aim as
well. Lastly, it has been concluded that Thomas Cook uses Herzberg’s two factor theory and
Adam’s Equity theory in order to keep motivating the employees.

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