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EMIRATES GROUP 1 Analysis of Business Excellence Criteria Running head: ANALYSIS OF BUSINESS EXCELLENCE CRITERIA: EMIRATES GROUP 1 Analysis of Business Excellence Criteria: Emirates Group Name of Student Name of University Course Title Date ANALYSIS OF BUSINESS EXCELLENCE CRITERIA: EMIRATES GROUP 2 Abstract The paper is a survey that is based on the EFQM model. It analyses the Emirates Group on 9 parameters of the model through survey results. The results are analysed and it helps in determining key strengths and weaknesses of the company. Based on the analysis, the paper concludes in recommendations of suggested practices. ANALYSIS OF BUSINESS EXCELLENCE CRITERIA: EMIRATES GROUP 3 Introduction Despite the slump in the global economy in 2007 that hit companies all across the world, the company posted a delivery of 34 A380 aircrafts, opened the first ever A380 dedicated facility, the Concourse A and a stunning $622 million worth of profits. Despite the 9/11 hit back, two consecutive gulf wars and rising fuel prices, the company has not witnessed a loss since the past 25 years. The company under the purview of this paper is Emirates Group, one of the largest global carriers in the aviation industry (Arabian Aerospace, 2013). This formula for such unflinching success has come through none of what management books could preach. The story behind the rise of Emirates Group lies in being an opportunist and seeking the opportunity at the right time and solving all their problems as and when they came through. This can be highlighted as one of company’s key strengths. Emirates has been working in a multicultural environment where the company seeks to address whatever shall keep the company motivated and ensure team functions to perform well. The key business practice is that things keep running as they are if they appear good defying the conventional wisdom of not having any functional fit in the organization. Emirates group is run like a family rather than a management driven organization. It is a fully owned government organization based in Dubai. As a part of business strategy, the company has a policy of not entertaining any alliance and believe in making strategic partnerships with its competitors to move forward on the path of success. Its range of services includes commercial airlines offering all of passenger, postal and cargo services. It also sells consumer goods in airlines as ANALYSIS OF BUSINESS EXCELLENCE CRITERIA: EMIRATES GROUP 4 wholesale as well as retail. It also operates in hotels and resorts and engineering products is leisure and destination management (The Emirates group, 2013C). As a part of company strategy, Emirates group does not believe in a fixed organizational structure and has built its company structure based on people strengths. Also, the company does not have a board of directors that comprises of executive and non executive directors. They have a group of 30 people who discuss an agenda openly. The senior management and HH Sheikh Ahmed bin Saeed Al Maktoum act as the sole decision making body. This senior management belies in focussing on detail rather than the bigger picture. Emirates also follow a strategy of hiring people from all across that world. Staff salaries are pegged to their home country bases but recruitment from across the globe has its own economic advantages. Employees get attracted to the company despite its comparatively lower salary because of lack of tax implications in Dubai. This allows the company to have a competitive advantage over its staff costs. Methodology In this section, the research methodology has been discussed. It is to be noted that the research was carried out by means of a questionnaire based on the EFQM excellence model. The questionnaire was answered based on the secondary data obtained from various print and online sources. Based on self assessment study, the answers to the questions were formulated wherein each answer is based on information obtained through secondary source of data. No outside person, group of persons or body corporate was approached for seeking answers to the questionnaire. ANALYSIS OF BUSINESS EXCELLENCE CRITERIA: EMIRATES GROUP 5 The question response format was based on a Likert scale of 1 to 6. However, each one of these numbers were defines in terms of attributes as Zero Base, Very Weak, Weak, Acceptable, Strong and Extremely Strong. The scores were assigned as 1 for very weak and 6 for extremely strong. The scores assigned to each question within each one of the nine parameters were based on personal judgement and knowledge. Difficulties were observed in terms of making a judgement between closely related attributes like Very Weak and Weak or Zero Base and Weak, Acceptable and Strong and Strong and Extremely Strong. Another difficulty experienced in answering the question was gaining relevant data for each one of the sub-features. Analyses and Recommendations Leadership Emirates Group functions under the strong leadership of Sheikh Ahmed. It has been stated that all major decisions need to be approved by Sheikh Ahmed before it is implemented into action. There is no board of directors in the company. All major decision are taken by senior management and come into action only when they are approved by them and Sheikh Ahmed in priority. Leadership style at Emirates is inspired by that of family leadership style which means that each member is encouraged to connect to the other member and also other groups of stakeholders within the conglomerate. It is democratic form of leadership in the sense that even shareholders are encouraged to take part in the decision making process and help the company arrive at a final decision after due shareholder engagement (IATA, 2012). ANALYSIS OF BUSINESS EXCELLENCE CRITERIA: EMIRATES GROUP 6 The leadership has always encouraged innovation which is why the company takes pride in being the first mover in many popular customer centric innovations including the audio video on demand feature, in flight showers, on board spa and in flight calling (The Emirates group, 2013G). Cooperation between the leadership and management has allowed Emirates to grow to a position at which it stands today. In 2002, the leaders realised the need of education, development and training of individuals to become future leaders and thus introduced the Leadership development function within the company. The leadership parameter obtains a score of 44. This score indicates that the company has an extremely strong top order. Its decisions are taken by a group who have sound business knowledge and maintain good relations with its stakeholders. The success of its binding agreements reflects the strength of supplier relationships of the company. Also customer satisfaction levels are a good representation of customer leader relationship. As a part of its staff policy, the company finds its employees to be the strength of their functioning. One major drawback of the leadership is their accessibility to the mass. All decisions, issues and complains have to be routed through the channel of management and there is no means to address the top level executives directly for both employees and the consumers. A system wherein people can reach out to the leaders for serious issues could be brought in place for managing stakeholder issues. Policy and strategy The company’s weakness lies in the policies and strategies. It operates and caters to high income and class of traveller group. There is no option yet for budget and middle class travellers. With its wide geographical base, the company has tremendous scope to develop this segment of airline services. It might face stiff competition from competitors like Etihad and Gulf Air. In Asia, ANALYSIS OF BUSINESS EXCELLENCE CRITERIA: EMIRATES GROUP 7 low cost carriers like Air Asia and Jetstar Asia might eat up Emirate’s entire market share. Existence of these low cost carriers makes Emirates less competitive. The company also lacks strongly on the innovation front. The company has been putting concentrated efforts on its expansion plans by increasing fleet size and geographical base but on the innovation front, there has not really been any significant earmarking change. In the competitive landscape within which the company functions today, making more room for innovation is urgently required to keep competition at bay. The company has to recognise and create demand through innovations in order to thrive in the industry (Sull, Ghoshal and Monteiro, 2005). Emirates also need to review its strategy of not undertaking any alliances and making the path forward through alliances alone. The era today is of consolidations. Airline companies are in the mode of expansion via acquisition. In such a scenario, it is a matter of time when some large airline company might wash away the business of Emirates by acquiring smaller airlines and expanding its market share. In the US, American Airlines and US Airways have merged to form the largest airline company in the world. Similarly, United Airlines merged with Continental Airline to grow larger in the airline industry. The Emirates code of agreements needs a review and urgent attention needs to focus on strategic acquisitions (Traveller, 2012). The company scores a 40 on the policy and strategy front on the EFQM analysis indicating strong business strategies and sound business policies. The company has been objective in deciphering needs of the organizations and that of its agreement partners. The binding agreements that are signed between them are strong and working well in most of the regions. On the stakeholder front, the company has been consistently providing profits and dividend reflecting a very good stakeholder policy. ANALYSIS OF BUSINESS EXCELLENCE CRITERIA: EMIRATES GROUP 8 The company has sound strategies but is yet to recognise the potential in the low cost airline group. It shall stray away from company policy of delivering luxury and comfort but yet has great untapped profit potential at given geographical base of company operations.
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