Ryanair is one of the taking air hose companies of Europe. This air hose company is known for its low cost and high quality service. It operates more than 1,400 flights per twenty-four hours from 44 bases and 1100+ low menu paths across 27 states, linking 160 finishs ” ( Ryanair-a, n.d. ) . This paper endeavours to analyze Ryanair, with particular accent on state of affairs analysis, determination devising, planning and commanding procedure, leading and organizational construction. This paper will reason with some plausible recommendations on future growing and advancement.
SWOT is a really helpful direction tool for analyzing the state of affairs of a company. Ryanair was established in 1985, and despite its defects it established a strong place in the market.
Ryanair has developed a strong trade name name in air hose industry as a low cost service supplier. Ryanair has been in the air hose company since the last 25 old ages and has gained sufficient experience in it. Ryanair has developed its cyberspace installations and has made it an of import merchandising point. This helps the company to extinguish the costs of agents. Ryanair ‘s fleet includes aircrafts with high sitting capacity and low care cost. Ryanair ‘s services public presentation is of high criterion with punctual fleet timing.
To salvage cost, Ryanair charges its riders for services like refreshments, wheelchair etc. It creates really impression among riders about the company. It is non a preferable air hose with the high category riders.
The European Union market is spread outing with clip and most of the riders prefer low menu for their air travel. Regions like North America and Asia have greater range for low cost supplier like Ryanair.
The bing air hose companies are following schemes that lower the cost and hence competition within the industry is increasing with clip. The oil market is a major provider to air hose concern. In recent old ages, monetary value of oil has increased significantly. The clients are going really monetary value and service medium.
Porter ‘s 5 Forces
The bargaining power of providers is really high as the figure of aircraft maker and oil providers are really less in the market. Availability of proper airdromes is besides really of import for this industry. However, airdromes dickering power is rather low as they depend on aircraft companies. The dickering power of clients is really high as they have many air hose service suppliers to take from. The barrier entry of air hose industry is rather high as it requires heavy investings and proficient expertness. Airline is the fastest manner of transit for abroad and long distance travel. No other replacement can fit the service of air hose industry. Competition among bing challenger is the most import factor in this industry. The challengers are viing with each other for increasing their market portion. In European Union, Lufthansa, Ryanair, Easy jet etc are taking air hose companies.
3. Decision Making
3.1. Decision Making Process in Ryanair
Ryanair provides low cost and high quality air hose services to its clients. It places client satisfaction above all other precedences. The determination devising procedure is chiefly centred on concerns sing ways to supply higher client services. Fleet planning, air hose menu, fleet programming etc are some of the main facets of Ryanair ‘s effectual determination doing procedure.
3.2. Decision Making Approach
Decision doing attack can be defined as strategic approached of an administration. Ryanair ‘s direction squad aims to follow ‘rational determination doing attack ‘ . The rational determination doing attack is an on-going and dynamic procedure. This attack helps to place the implicit in jobs and to happen relevant solutions ( Kroon, 1995 p.187 ) . For illustration, in 2004, when the company was go throughing through a fiscal crisis, rational determination doing attack non merely helped it to get the better of it but besides paved the way of growing.
3.3. Types of Problems and Decisions Making In Ryanair
In 2004, Ryanair was one of the worst performing artists in FTSE Eurotop 300 index. During that period, competition in air hose industry was really high in the European states as many new companies entered the market. Despite the stiff competition, the company enjoyed a healthy growing rate boulder clay 2003. But the direction ‘s inability to understand and rectify the built-in failing of its determination devising procedure stunted its growing.
3.4. Decision-Making Conditions in Ryanair
While bordering the strategic move for any determination devising procedure ; Ryanair ‘s first precedence will be to analyze the elements of external competition. The European air hose industry is crowded with many taking companies like Lufthansa, Virgin, Aer Lingus, and British Airway etc. Consumers ‘ demands are besides really of import for Ryanair ‘s decision-making. Prior to 2003, the company ‘s concern for client service was really low, except the low menu advantages.
3.5. Decision-Making Manners
The determination doing manner of Ryanair ‘s direction squad seems to be affected by different factors. However, the determination devising methods are rather flexible. After analyzing its rapid growing during 2002-2003, it can be claimed that it focuses on short term objective instead than long term ends. Creativity is another major characteristic of its determination devising manner.
3.6. Decision- Making Biases and Mistakes
Ryanair ‘s impermanent autumn during 2004 brought into forward many drawbacks of its determination devising procedure. Robbins has identified some unexplained biass and mistakes of determination devising like prejudices associating to overconfidence, grounding, verification, handiness, escalation of committedness etc ( Robbins, 2009, p.126 ) . Ryanair ‘s determination was affected by two major prejudices i.e. grounding prejudices and position quo biasness. Its determination devising was based on the past success that failed to take in to account unfavorable macro-economic conditions ensuing from 9/11 onslaught on WTC.
4.1Vision and Mission Statement
Vision and mission statements help an administration to fix a roadmap for its operational activities. Ryanair ‘s official web site does non hold the vision and mission statement of the company. However, the public statements of Michael O’Leary and other higher executive member of Ryanair indicate that it aims to accomplish growing and success by being the lowest cost supplier in air hose industry ( Box and Kent, 2007 ) .
4.2. Purposes of Planing
In general, the intent of planning is to convey effectivity and efficiency in the operational activities of a concern. The implied mission and vision of Ryanair ‘s clearly states its intents of planning. To counter the increasing competition, the company has decided to follow low cost scheme. Hence, its planning is designed after taking into consideration this aim.
4.3 Planning And Performances in Ryanair
Harmonizing to Riezebos, planning is a really important component of operational activity that affects the public presentation degree ( Riezebos, 2001, p.12 ) . Planing is one of the major tools of actuating participants to accomplish the common organizational end. Due to rational determination doing attack, the company is able to be after its operational and strategic activities decently. Ryanair is able to accomplish its mark with the aid of an efficient planning procedure.
4.4 Types of Goals in Ryanair
The primary end of Ryanair is to go the lowest cost air hose service supplier in Europe. The thought of offering low menu proved successful for the company. However, ab initio it failed to understand the necessity of good service for client. Presently, the company is committed to supply lower menu, high quality service and punctual air agenda ( Ryanair-b, n.d. ) .
4.5 Types of Plans in Ryanair
Ryanair ‘s determination devising procedure follows rational attack and it besides follows rational theoretical account for its planning procedure. Basically, planning can be divided as short term end and long term end. The company ‘s direction squad was concerned merely with the short term end. The company frequently changes its program as per the demands of the market. In 2002, the company ‘s program was to supply low cost menu and after 2004, its planning procedure besides took note of service quality.
4.6 Contingency Factors in Planing
Ryanair faces three major eventuality factors. First, the organizational degree affects the operational planning of in-between and low degree directors. Second, the uncertainness of macro-environmental or other external factors affects the planning procedure. Therefore, Ryanair aims to develop a flexible planning system. Third, the long and short term aims of Ryanair affect its planning procedure. The company ever tries to concentrate on its current aim.
The primary aim of Ryanair is to achieve cost leading in European air hose market. However, to accomplish this aim, the company needs to concentrate on other long term end. These include increasing its operational activities to come in new markets like North America, developing client centred concern theoretical account and increasing the usage of cyberspace as a major merchandising point ( O’Cuilleanain et al, 2004 ) .
4.8 Management by Objectives ( MBO )
Management by aim ( MBO ) attack of direction leads to increase in the public presentation of administration. “ MBO is a result-oriented, non-specialized managerial procedure for the effectual use of organizational resources by incorporating persons with the administration and the administration with the environment ( Goyal, 2005, p.304 ) . During 2004, in order to get the better of its crisis state of affairs, the company introduced MBO attack to better its public presentation.
4.9 Strategic Management Process
Ryanair ‘s strategic direction procedure is based on its aim of accomplishing cost leading in European air hose industry. The company has improved its placement by implementing proper strategic direction procedure. The cardinal elements of its strategic direction include low menus, high frequence of point-to-point flight within short paths, proper path pick, decrease in operating cost, increase the cyberspace usage for merchandising, care of safely and high quality service etc ( O’Cuilleanain et al, 2004 )
5.1 Administration Structure and Design
Proper organizational construction and design helps to develop efficient direction public presentation. There are four elements of administration construction and these are departmentalisation, span of control, centralisation and formalisation. Appendix 1 depicts the administration construction of Ryanair. Michael O’Leary is the Chief executive officer of the company and there are seven Directors and a Chairman. For each section like client services, finance, HR etc, there are single caput direction forces holding a squad.
5.2 Chain of Command
The Chain of bid in Ryanair is based on its organizational construction. The appendix 1 portrays that the CEO is the main individual of bid of the administration. However, the determination doing procedure in Ryanair includes all the senior directors of each section. To keep high degree of transparence and to develop ‘two-way ‘ communicating system in transverse functional sections, the concatenation of bid is really indispensable.
5.3 Span of Control
The span of control in Ryanair is effectual and helps to keep a sound organizational growing. The span of control of the CEO Michael O’Leary is the highest and most effectual. As per appendix 1, the full section is required to describe on the on-going activities to the CEO. The Chief executive officer along with the Directors and Chairman is responsible for doing the concluding determinations of the administration. However, for better planning and execution, the employees should be involved in the determination devising procedure.
5.4 Centralization and Decentralization
The determination of centralisation or decentalisation depends on the nature and enlargement of concern. Ryanair is a transnational company holding different units in European states and North America. For the air hose industry, decentalisation is more preferable over centralisation. However, Ryanair follows a centralised organizational theoretical account. Decentralization of administration will assist it to vie with the major rivals of different markets.
5.5 Mechanistic and Organic organisation
The mechanistic administrations are those holding a well defined hierarchy. Ryanair has a centralised organizational construction and it is an illustration of mechanistic administration. Appendix 2 shows the major difference between the mechanistic and organic administration. The company has been really rigorous in keeping its relationship with the employees. However, such organizational construction of Ryanair creates prejudices and mistakes in determination devising procedure.
5.6 Eventuality Factors
There are many factors that affect the organizational construction of a company. The industry tendency, the growing construction, the societal and demographic features of employee & A ; clients and vision and mission of the company etc are the major eventuality factors that help in planing the organizational construction. The leading quality of the higher direction besides affects the organizational construction. The organizational construction of Ryanair is besides affected by external competition and its leading manner.
5.7 Job Characteristics Model
One of the primary aims of Ryanair is to supply high client services and in this regard the employees are the most of import resource. In order to enrich the quality of occupation, the company motivates its employees to accomplish the common organizational end i.e. growing. The company “ purpose to offer competitory wages with first-class benefits that are simple and easy to understand ” ( Ryanair-c, n.d. ) .
The leading manner is an of import influencing factor organizational growing and success. The major leading accomplishments of Ryanair ‘s direction focal point on the low cost menu for air hose. The fleet of Ryanair includes single-class aircraft that increases the seating capacity. However, the leading accomplishments of Ryanair have led to its success of 2002-2003 and failure of 2004. The leading in Ryanair strives to concentrate on place, senior status and authorization.
7.1 Control Process
The control procedure is the cardinal component for Ryanair as it wants to accomplish the lowest cost leading. In order to ease effectual and efficient control system, employees must be decently organized. Ryanair has developed proper system for modulating the control procedure by pull offing its employees.
7.2 Types of Control
Ryanair strategic moves and policies control assorted facet of the administration. First, cost controlling activity is the major standards for low cost menu air hose and it includes labour cost, selling cost, airdrome charges. It besides reduces the service cost by commanding many activities. For illustration, in 2003, it did non offer repasts of refreshments to riders who faced holds ( O ‘ Higgins, 2004, ) .
7.3 Managerial Approaches to Implement Controls
Ryanair ‘s ‘management squad attack ‘ for execution of control, strives to convey down the fiscal disbursals. However, proper administration civilization and operational activities are besides really of import to better its service qualities. Fleet control and market control are necessary for accomplishing the competitory scheme. The market control managerial attack of Ryanair involves the comparing of net income and disbursals with that of its rivals.
7.4 Management Information System
For set uping better direction system, Ryanair has brought technological promotion in its administrations non-operational activities. For illustration, it has developed its web site for utilizing it as a major merchandising point. The increasing usage of cyberspace has made the managerial activity more efficient. At present, the company is taking to accomplish 100 % cyberspace ticket engagement.
Eventuality Factors in Control
Like the determination devising procedure, commanding activity of an administration is affected by uncertainness of macro-economic factors and the cultural and societal features of employees. In the air hose industry, the major eventuality factor is the competition and struggles related to organizational aims. Ryanair ‘s direction aims to avoid these eventualities factors related to employees by honoring them for their attempts.
7.6 Corporate Administration
Ryanair is listed on London and Irish Stock Exchanges in Europe. The company is responsible for following proper concern moralss and conformity as per the corporate administration. The full direction squads including the Directors and CEO are committed to keep the standard corporate administration. Its concern policy clearly defines the function of Directors and other members in run intoing its corporate duty.
Balanced mark card is the most popular direction tool used by administrations. Ryanair ‘s strategic direction system can be explained with balanced mark card. To convey efficiency in its operational activities, Ryanair concentrates of four major countries i.e. finance, client, concern procedure and acquisition and growing.
To accomplish the aim of going the lowest cost supplier in the European air hose industry, Ryanair has set its benchmark for cost controlling activities. At present, it is the lowest cost supplier in the industry and hence, it has developed its ain benchmark. For illustration, in 2003, the company reduced its cost for wheelchairs services by conveying a 3rd party wheelchair providers who charged riders for providing wheelchairs.
8.2 Value Chain
The value concatenation of the company strives to supply the lowest menu possible. Appendix 4 portrays the value concatenation which includes other of import facets of the air hose industry. To develop a cost effectual operational procedure, the company has combined its balanced mark card, benchmarking and value concatenation.
To guarantee success, Ryanair must convey some alterations in its direction and concern theoretical account. Some of the utile recommendations are given below. It must concentrate on its services to run into the riders ‘ minimal outlook. The company should include the employees in the determination devising procedure. As many other challengers are besides following low cost scheme, Ryanair can convey certain inventions in its service procedure. Internal communicating should be encouraged for better transparence and motive. It should develop its public image by increasing corporate societal activities. For keeping low cost menu, it should underscore on the fiscal facets.
- Box, T. M. and Kent, B. 2007. Ryanair ( 2005 ) : Successful Low Cost Leadership. [ Online ] . Available at: hypertext transfer protocol: //findarticles.com/p/articles/mi_qa5452/is_200705/ai_n21289700/pg_2/ . [ Accessed on November 03, 2010 ] .
- Goyal, R. C. 2005. Hospital Administration and Human Resource Management. 4th Edition. PHI Learning Pvt. Ltd.
- Hellriegel, D. and Slocum, J. W. 2007. Organizational behavior. 11th Edition. Cengage Learning.
- Kroon, J. 1995. General Management. 2nd Edition. Pearson South Africa.
- O’Cuilleanain, E. S. et Al, 2004. Ryanair Plc. [ Pdf ] . Available at: hypertext transfer protocol: //dev.ulb.ac.be/cours/alle/PDF/BuspPresRyanair04.pdf. [ Accessed on November 03, 2010 ] .
- O ‘ Higgins, E, 2004, Case Study Ryanair.
- Riezebos, 2001. Design of a period batch control planning system for cellular fabrication. University of Groningen.
- Robbins, S. P. 2009. Organizational behavior: planetary and Southern African positions. 2nd Edition. Pearson South Africa.
- Ryanair-a. No Date. About United states: History of Ryanair. [ Online ] . Available at: hypertext transfer protocol: //www.ryanair.com/en/about. [ Accessed on November 03, 2010 ] .
- Ryanair-b. No day of the month. About United states: Passenger Charter. [ Online ] . Available at: hypertext transfer protocol: //www.ryanair.com/en/about/passenger-charter. [ Accessed on November 03, 2010 ] .
- Ryanair-c. No day of the month. Careers. [ Online ] . Available at: hypertext transfer protocol: //www.ryanair.com/en/careers/working-for-ryanair. [ Accessed on November 03, 2010 ] .
- The Official Board. September 15, 2010. Ryanair. [ Online ] . Available at: hypertext transfer protocol: //www.theofficialboard.com/org-chart/ryanair-holdings. [ Accessed on November 03, 2010 ] .
- The Performance Institute. 2009. Balanced Scorecard. [ Online ] . Available at: hypertext transfer protocol: //www.performanceweb.org/events/training/program-performance/sub7/ . [ Accessed on November 03, 2010 ] .
- Jack Baskin School of Engineering. No day of the month. Airline Industry Analysis. [ Ppt ] . Available at: hypertext transfer protocol: //www.soe.ucsc.edu/classes/ism158/Winter03/istcch04.ppt. [ Accessed on November 03, 2010 ] .