Introduction
This assignment will investigate the decision making processes and the business environment for Etihad Airlines which is an international organization with central operations in Abu Dhabi and flights to numerous global destinations.
Part 1: PESTEL Analysis
The PESTEL analysis presents a critical analysis of an organization’s macro-environment in terms of the Political, Economic, Social-Cultural, Technological, Environmental and Legal factors that influence business effectiveness.
Political
The political environment for Etihad Airlines is marked with strict and endless government regulations, both in UAE and internationally where the airlines operates. Since Etihad plies different international routes, the organization has to follow strict political developments in different countries. The terror attacks and subsequent advisories on the same restricts the travel of passengers and this affects profitability and the growth of the airlines. The political uncertainties and civil unrests does affect different markets and consequently, the airlines is forced to discontinue or reduce frequency of travel to these destinations. Additionally, some US and European airlines lobby, for political reasons, to restrict access to their markets.
The airlines enjoys the government support in most operations since it is the national flag carrier into the world.
Economic
As an international airline, the operations of Etihad Airlines are subject to variations in the performance of the global economy. The global advances and changes in the global economy does affect the demand for air travel services and thus Etihad Airlines operations gets affected by the changes.
The variations in the oil prices does affect the operational expenses of the airlines and creates a competitive operating environment.
The trade protectionist policies adopted by some countries are unfavorable for conducive and smooth business operations.
Social-Cultural
The increasing population growth rate and the advancement of the social status leads to a middle class that is financially able and willing to travel by air. This has created a positive demand for air travel.
The economic recovery from global financial crisis has enabled the emerging regions to be lucrative markets for the airlines.
The number of people travelling for leisure and business is on the rise, and Etihad has responded effectively to attract this market.
Technological
Etihad has embraced rapid technological changes that has facilitated enhanced safety, and improved fuel efficiency. Moreover, technology has led to optimized service delivery and development to meet customer needs. The flexible customer expectations are well addressed by Etihad airlines through the use of technological means to manage bookings.
Environmental
Etihad Airlines operates in a business environment that is fast changing. There is increased demand for air travel services.
The airlines faces a major challenge in the management of air pollution resulting from the jet fuels used. This is being addressed through engaging in intense research on efficient, clean and sustainable fossil fuel alternatives.
Legal
Etihad Airlines has faced unfavorable legal challenges that hinder business. In the fight against terrorism, the US has made decisions that bring about serious legal challenges for the airlines.
Legislation on travel bans has denied the airlines access to some markets in Europe and US.
Part 2: Organizational Sub-Systems
This part analyses the activities and the functions of Etihad Airlines using the five interrelated organizational sub-systems: task, technology, structure, people and management.
Task
The main task of the Etihad Airlines is to safely and reliably transport people and cargo from one destination to another.
Technology
Etihad Airlines relies on modern cloud-based technologies that makes its I.T. infrastructure the best in the world and used to enhance guest experiences and offer better services to employees and partners. The technology in use facilitates security and improved efficiency in airlines operations. With the latest technology in place, the airline is able to realize innovative, cost-effective and sustainable profitability targets (Etihad Airways, 2018).
Structure
Etihad Airways is led by James Hogan who is the Aviation group President and the Chief Executive Officer. He is assisted by Peter Baumgartner who is the Chief Executive Officer Etihad Airways, followed by Chief Executive Officer Airline Equity Partners, Chief Executive Officer Etihad Airways Engineering, and Chief Executive Officer Hala Group. These constitute the structure of the airlines (PR News Wire 2016).
People
Etihad Airlines believes in strategic partnership with highly qualified staff who drive the business agenda. The airlines has competent personnel who constitute the Etihad Aviation Group consisting of the travel group and the global aviation personnel. These include the engineering team, and airport service providers. Also, the airlines has a board of directors, the executive team, and the airlines group CEO.
Management
The management roles at Etihad Airlines are undertaken by Tony Douglas who is the Group Chief Executive Officer, an executive team of twelve member including the CEO and the Board of Directors.
Part 3: Interview (500 Words)
A deeper understanding of the Etihad Airlines was gained through an interview with one of the CEOs who gave great insights into the organization’s decision-making process and shed light on the environmental factors that influence managerial choices.
Question 1: DO you involve all people who have a stake in or knowledge about the topic?
Answer: ALWAYS (7).
Before embracing any solution or making major decisions, the airlines has to involve a team of experts who are knowledgeable in the subject. It is through leveraging on the expertise of the different professionals that we are able to remain competitive and sensitive to our customer needs while being responsive to the modern trends in the aviation industry. Thus, any final decision made includes insights from a team of experts.
Question 2: We expressly state our hopes for the organization and specific hopes for each major project or decision.
Answer: Often (5)
The airlines has a clear vision of the intended direction to follow. With a clear path to follow, we are able to state our hopes which act as the guiding objectives that drives the organization towards realization of the set objectives.
Question 3: We listen to each person’s thoughts and feelings.
ANSWER: Always (7)
In order to understand the real issues that affects our operations, we always maintain open communication with all stakeholders who offer great insights on the real issues. Every perspective is important in our line of work.
Question 4: All options for a project or decision get out on the table.
Answer: Often (5)
Our team, when faced with a challenge, has to get the insight of every party involved and then deliberate on all the available options and alternatives before making a decision on the best course of action to follow.
Question 5: We focus our information gathering on how the options help us realize our hopes.
ANSWER: Rarely (3).
Though we work together in gathering of relevant insights into an issue, we usually do lots of delegating to the most qualified experts. Also, those who are most passionate are allowed to join the team and gather as much information on an issue, and they later report findings to the others.
Question 6: when reviewing available choices, we listen to everyone’s positives and negatives on each options before deciding.
ANSWER: Always (7)
Ours is a strong tea and every member play a key role in strengthening the team and thus we realize well thought solutions from different perspectives informed by each member’s positives and negatives. The credit for quality decisions goes to the entire team.
Question 7: Each member expresses their candid judgment on which choices would best advance the team’s hopes.
ANSWER: Always (7)
Every idea that is well researched and is best for business is welcome and for this reason, each member’s views are welcome. Every person is encouraged to share their ideas and sincere judgment of any situation without fear of being victimized. Sometimes we vote on ideas in order to get honest responses that will inform the decision making process.
Question 8: We summarize the individual conclusions and identify the most desirable course of action and other acceptable choices.
Answer: Often (5)
At Etihad Airlines, we work as a team. The best ideas gain the support of the team and these inform the decision making process. Rarely does the team only support a single idea, but always deliberate on several options before selecting the best solution as the most acceptable choices.
Question 9: We monitor decisions and promptly modify if necessary.
Answer: Always (7)
Considering that the business environment is constantly changing, every decision made at Etihad Airlines is subject to review after a period of time. Depending with the current circumstances, a decision made previously can be reviewed and adjusted in order to be effective depending with the new business environment.
Question 10: We celebrate the team’s progress and fulfilment of our hopes.
Answer: Always (7)
At Etihad Airlines, we constantly celebrate both the short term and long term wins. This fuels our commitments and gives the team morale to pursue the vision further.
ANALYSIS
On adding the scores, the groups scores a 60. This indicates that the Etihad Airlines management group demonstrates an outstanding level of teamwork in the environmental analysis and in decision making processes. This findings supports the fact that the Airlines continues to perform excellently in the aviation industry while taking advantage of the available resources and taking different opportunities for growth.
References
Etihad Airways, (2018). Etihad Airways trials virtual reality technology for future airport lounge experience. Retrieved on 4th June, 2018 from https://www.etihad.com/en-us/about-us/etihad-news/archive/2018/etihad-airways-trials-virtual-reality-technology-for-future-airport-lounge-experience/
PR News Wire (2016). New Etihad Aviation Group Management Structure Unveiled. Retrieved on 4th June, 2018 from https://www.prnewswire.com/news-releases/new-etihad-aviation-group-management-structure-unveiled-300264930.html