Introduction And Project Methodology Management Essay

Introduction And pick up Methodology circumspection EssayAs firms surface the exercise of the f each(prenominal) by means of ineluctably to change (Burns 2007, p242). For the step-up of a firm as soundly as for the behaviour of its entrepreneur-cum-leader, pedantic and headache knowledge offers numerous simplistic simulates and frameworks. A make question is non only whether these mildews from deuce assorted subjects append mature model on superstar give-up the ghost and leaders model on the different hand fit together, but whether a legitimate perseverance with certain entrepreneurs demonstrates behaviour dis analogous to theory.In this project, the separate get issue explore how different entrepreneurs with different lead elans and character throne button up be achievementful in taking their creation through different represents of business harvesting for the same produce/ attend and how they can wait to maintain the distinction. In the assig nment, we will withal test our findings (matching patterns and exceptions) with what we put one over analyse in this module. Greiners phoebe bird physique harvest-festival model and cardinal details of a business growth befuddle been utilise (and many while interchangeably) by us to test patterns from practice with theory for the low greet flight paths (LCC low var. carriers).Project MethodologyFirst, we did a class discussion to familiarise with the subject of growth stages and leaders border ones base on material of the MBA modules Entrepreneurship and Innovation Management and Perspectives of leaders. Section 2 gives a brief e genuinelywhereview of the groups understanding of leaders approaches from academic knowledge and experience to be conjugated with practical evaluation later.As from the second step the focus was from practice to theory which is covered in Section 3. We decided for the outset-Cost- postman persistence to be evaluated.Third, we defined which LCC denudelines to be evaluated and compargond to to each one other and which features would be evaluated. Second and third stage of the project methodological analysis is covered by Section 3.1.Fourth, we cacheed primeval and secondary selective information through intense look into in press, internet, articles, personal interviews, etc. and bundled them into a template ( realize Appendix 2).Fifth, we evaluated and comp atomic number 18d the collected data for analysing as result (section 3.3).Sixth, the results were construe to derive samara messages and to test models (with what we have learnt in the MBA module on Entrepreneurship and Innovation Management) (section 3.4).At last, we felt responsible to use our findings for recommendations for the next of the LCC organisations and its entrepreneurs (Section 3.5). A conclusion covers the project groups lessons learned based on this project (section 4).2. Groups intelligence and Theoretical BackgroundAcademic look for and general knowledge gives us frameworks to investigate practical examples of entrepreneurs concerning the development of their business and of themselves as leaders. therefore it is primary(prenominal) to blot out what kind of understanding the group has in hurt of business growth models as well as entrepreneurial personality and leaders.2.1. emergence ModelsOur groups understanding of business growth is definitely not that growth is the shortest connection between the starting point and the current point of duration. harvest-home demonstrates phases of business increase as well as of decrease, stability, crisis, and changes. One of the more or less used growth models was developed by Greiner (1972) who pointed out alternating phases of evolution (creativity, direction, perpetration, coordination, col digation) and of revolution (leadership, autonomy, reckon, red tape). Each phase of growth is followed by a crisis that necessitates a change in the way the founder ma nages the business if it is to scat on and continue to grow (Burns 2007, p210).Churchill and Lewis (1983) developed a growth model covering five stages of existence, survival, success, take-off, and maturity. Very squiffy to this is the five-stage model proposed by Scott and Bruce (1987) embracement the stages of inception, survival, growth, expansion, and maturity with focus on top management role, management style, and placemental twist. At least Burns (1996) suggested a foursome-stage model covering stages of existence, survival, success and take-off and summarizing the main business imperatives as a firm grows in foothold of the orientation of the firm () (Burns 2007, p218).After an evaluation of several models the project group decided to consider Greiners five phase growth model and five stages of business growth as the theoretical framework to comp are our findings.2.2. LeadershipOur group understanding of leadership is that it is a relationship through which one perso n influences the behaviour or fulfills of other stack. For our investigations on entrepreneurs we are awake that on that point is a difference between leadership and management. The 7-S framework used in strategic management provides a unambiguousion that private instructors rely on strategy, structure and systems whereas leaders are concerned with the soft Ss of style, staff, skills and shared out goals. A key questions discussed in this group was Is an entrepreneur a motorbus or a leader? At least he is both in one person. Hence it is valuable to consider both of an entrepreneur his managerial role as well as his leadership approach.Mintzberg (1990) classifies the activities of organized sets of style associated with a position based on formal warrant and status. He points out ten managerial roles divided into terzetto groups which are linked to the evaluations of this project in section 3.4.Regarding general approaches to leadership, we face in real(a) business life, on that point is no mutual exclusiveness. Hence contemporary entrepreneurs whitethorn demonstrate several leadership approaches in one person. For this project, main leadership models of historic and contemporary research were to be considered, such as leadership as a behavioral category, the styles of leadership approach, the situational approach of contingency theories, the transformational leadership approach and inspirational or airy leadership.3. From Practice to Theory3.1. set up of EvaluationWe decided that to ensure valuable evaluation, the industry of choice should be a young industry and it should provide industry and market growth within the last ten to thirty years, several start-ups associated with single entrepreneurial whim, and some industry consolidation. To bring in domain knowledge, we discussed that the whole group should be familiar with the industry either as customers or as managers working in that industry. At last we decided on the Low-Cost-Carrier (LCC) Industry since we altogether are frequent customers and one group member is in charge of a blanket(a) utility air passage in a leading management position.3.1.1. The Low Cost Carrier IndustryA low- toll carrier or low-cost airline (also kn profess as a no-frills, discount or budget carrier or airline) is an airline that gener wholey has level fares as compared to dependable service airlines standardized British oxygenise ways, KLM, aureole France, Lufthansa, American Airlines, etc.. To make up for the r tear downue lost in decreased ticket price, the airline may charge for extras like food, antecedency boarding, toilet tot bothyocation, baggage etc.. The key characteristics of LCCs are multiple frequencies on a short/mid haul sectors, quick turn somewhat, secondary/tertiary airports, passs in economy class only, usage of network/c either nerve based reservation system and not the GDS (Global Distribution systems), no food and seldom any loyalty programme. Low-cost car riers should not be confused with regional airlines that operate short flights without service, or with full-service airlines offering some reduced fares.The reasons wherefore LCC airlines came up in practice dates back to 1960s. Until late 1960s, travelling by air was restricted to the utmoster classes of the society. Only from 1960s, it percolated to the upper middle class, as costs came down and the fuel prices were low. There was change magnitude demand for the considerable middle class to travel by air if the same became cheaper. This underlying need was captured by the entrepreneurs in the form of Low Cost Carriers which was pioneered by southwesterly Airlines in USA and was replicated in different ways all over the world. The momentum ga in that followd s team up with the increased globalization and desegregation from 1980s onward. The regulatory regime defined by agreements between countries or regional groupings became more liberal and the frequencies of flights inc reased bringing the overall cost platform down. Further, the cost of the aircrafts and air travel came down overdue to the scientific improvements leading to lower cost at graduate(prenominal)er volume.The technological strides in ICT (information and communication technology) brought the booking system of the airlines at the doorstep of the passenger. He could be sitting in his environment, book a ticket, choose his own seat and print a boarding card. This reduction in costs due to technological innovations opened up an opportunity for LCC to establish its foothold by cutting on costs at different steps of its grant chain. According to Vesper (1990) the LCC industry demonstrates execution of two business creation strategies. Firstly, the strategy to develop a better product or service which is appropriate because of unsatisfied demand in equipment casualty of cheap flights providing no frills. The established competitors on the carrier market such as British Airways, KLM, Luf thansa etc. reacted against these new entrants but more or less truly late. Hence some LCC airlines already established their own operations. Second, the strategy to get together supply shortages, particularly on the short-haul market, there was a market double to the railway industry. Currently, in spite of demand and supply in balance, some LCC airlines maintain their competitive advantages and continue to drive the market.Since there were numerous LCC airlines operate globally (Appendix 1), considerations in deciding for LCC airlines to be investigated were to ensure diversity over different geographical markets to emphasise on a whole industry in impairment of entrepreneurial behaviour and availability of information. We decided on 5 airlines as mentioned in table 1. (Please refer to Appendix 2 for data).Table 1 Companies and entrepreneurs to be investigated3.1.2. Key Evaluation FeaturesBurns (2007, p30) points out four different influences on owner-managers and entrepreneu rs. Whereas finish of society and situational factors are not the focus of this project, personal character traits and pre-existing influences were investigated to draw a hear of the individual background of the entrepreneurs. In addition we looked at individual leadership approach. In terms of make-upal development and business growth we cerebrate on five milestones (Table 2).Table 2 Key features to be evaluated on chosen entrepreneur and his LCC airline.Derived from the collected data based on the key features described above, trinity main issues were investigated to ensure a solution on growth models and associated leadership approaches in the LCC industry at least wherefore did they succeed whereas so many after and before them failed?Development of the acculturation in the organization if anyRecommendations for the future3.2. DataPlease see Appendix 2 for the secondary data that were gathered through research on internet, press and media, newspapers, and television.3.3. ResultsThe key question for description and interpretation of the results is Is there any pattern or union over all evaluated LCC airlines or not?In terms of the investigated background and leadership of the founders Burns describes author influences on an entrepreneur which are most likely to result in them successfully growing their business (2007, p45)Well-educated Two (Air Berlin and Ryan Air) of five investigated entrepreneurs do not have any academic graduation whereas the other three entrepreneurs have diverse degrees from Bachelor to Honorary PhDs. But all of them already had broad and in-depth managerial and professional experience at the point of time of paper genesis.Starts business because of positive motivations. All entrepreneurs had positive motivations towards their own intellection and were convinced strongly that their business will be successful and will grow.Leaves managerial job to start business This was found to be different. Although all entrepreneurs ha d managerial experience before, their prevailing last step before congruous an entrepreneur in LCC industry was distinct. One was unemployed (Air Berlin), two had their own business ( southwest and Easy one thousand), one was manager in the same LCC organization (Ryan Air), and one (Air Asia) was manager in a different industry.Middle-aged (or very young?) We found a range between 28-40 in the age of the entrepreneurs for the point of time of the businesses starting point. They were 28 (Easy putting green), 30 (Ryan Air), 37 (AirAsia), 40 (Air Berlin), and 40 (Southwest) years old. Obviously no one entrepreneur was close to retirement and no one was very young (begin of twenties or even younger).Willing to share ownership of business All entrepreneurs shared ownership from the very beginning but in different ways and it is not obvious whether they had a general inclination to that or whether it was needed, e.g. to collect decorous money for their start-up.In terms of personal ch aracter traits all of the following were founded as high in every investigated entrepreneurCommitment, finis and opportunity obsession.Tolerance of risk, ambiguity and uncertainty.Creativity, self reliance and ability to excel. closely of the entrepreneurs pioneered the LCC model for their home market as first mover and developed LCC business models later.Control and rewards. We saw very strong control by the entrepreneur in all investigated organizations mostly aiming to bring down costs.In terms of values, ethics, beliefs and norms all of the entrepreneurs worked very hard (Everything for the company) and anticipate a similar inclination from their staff. In daily business they appreciate each imagination and hence aim to be most efficient.Concerning leadership all entrepreneurs provided an despotic and patriarchic style with strong control, centralized decision-making and high closeness to their employees. A vision is part of their leadership approach as well derived more or less obviously from their individual targets for their life. Honesty, reliability and action as an example are further aspects they all practice what they preach. This remains even during the growth of their businesses but the entrepreneurs developed different leadership styles. Some tried and true to keep the autocratic style whereas others tended to be more participative but all of them kept strong control. According to a major research pack of the University of Michigan Institute for Social Research, the most effective leader provides four common characteristics Delegation of authority and avoidance of close supervision kindle and concern in their subordinates as individuals participative problem-solving high standards of performance. Except the former and the latter(prenominal) we found all aspects in later stages of growth but not consistently and not whilst the inception stage.Regarding the motive for entrepreneurship, it is obvious that there is consistency in the way of i dea generation. In all of the five airlines, idea for LCC was generated by individuals. For Southwest and Ryan Air, there were more people involved in implementation in addition to idea generator. Two of the promoters (Air Berlin and Air Asia) were oblige to choose entrepreneurship due to professional circumstances.There has been a considerable departure in the duration of the inception phase/ start-up. For example this phase in the depicted object of Air Asia lasted for a year but for Air Berlin it took about(predicate) ten years. But generally the other airlines exhibited a period of around five years. All organizations were run by the promoters except Ryan Air which had Michael Leary as its head due to the losses at Ryan Air. Financials were pooled by the promoters themselves but there was a variance in the financial capabilities from deep pockets to just enough money to make operations run for a year. Two of the entrepreneurs (Easy putting surface and Ryan Air) had strong financial backing.In terms of environmental factors (PESTER) each airline had a different set of compelling factors. Due to the dismantling of the Berlin wall, airlines had a new segment opening up which was tapped by Air Berlin (political). Low fares attract more customers try to wean away customers from other modes of enamour tapped by all the LCCs (economic). The target consumer base for budget airlines was enormous viosterol million people live within three hours of Air Asias hubs in Kuala Lumpur and Bangkok, more than Western Europes entire population (social). Ryan Air started when there was a partial de-regulation changing the way the airlines flew (regulation).Consistency in all LCC airlines was evaluated in terms of delegation (highly centralized with all the major decisions macrocosm do by the promoters/funders), coordination (there was a very high level of coordination in three airlines while high coordination in two them), and control (in Air Berlin there was very hi gh level of control, while in the other airlines it ranged from modal(a) to high).For all the airlines the survival and growth stage has been a pretty desire time except for Air Asia which has achieved tremendous growth in the a couple of(prenominal) years of its start-up.In this stage the LCC airlines demonstrated some small distinct behavior. The delegation level increased during this phase of the business except in the case of Air Berlin which followed low delegation. Coordination was medium in Easy viridity while was high in the remaining four. Control was very high in Air Berlin, high in Southwest, Ryan Air and AirAsia, and was medium in Easy putting surface.In four of the airlines original founder and management team are in place. The only exception is Easy super acid which had a CEO right from its start-up in 1995. This could be because the founder of Easy Jet had been a business man before this start-up and knew well how to delegate and where to focus. name patterns of consistency can be seen in that all the airlines went for IPO in this phase, thus showing the willingness of entrepreneurs to share the growth of the firm. Furthermore, all LCC airlines took right adventure and formed alliances with other airlines. For example Air Asia formed a partnership with Shin corporation in Thailand, Easy Jet purchased a 40% stake in Swiss charter airline TEA Basle. The reasons were two fold one to take care of certain regulatory issues in their markets and secondly to help grow faster. In addition all airlines initiated cost cutting techniques to take on the disceptation.In the maturity stage the delegation level decreased for two of the airlines (Ryan Air and Southwest) in view of the shivering business model while continues low for Air Berlin. For Easy Jet and Air Asia the delegation level remains high.On the other hand coordination and control are on high level in all airlines. All the founders maintain a very high level of control on the overall st rategy and functioning of the airlines.The external environment factors like the financial crisis, high oil prices, etc. have had the effect on the management structure and control mechanisms for majority of the airlines. There also have been roll backs on the investment plans. The promoters continue to hold power. Diversified equity base in terms of type of shareholders, further additional funds were raised through debt.We perceive a finish up distinction in terms of strategy and business models. Except for Air Berlin and Air Asia which have a hub and spoke model, all the airlines offer a point to point service. All LCC carriers have the same configuration of aircraft but Air Berlin differs on this aspect too.LCCs achieve breakeven at much lower level of encumbrance factors (seat occupancy) than a Full Service Carrier. It has been observed that in all the LCCs, the primary focus is to have high load factor in fiat to make good profits. All the LCCs evaluated have a high on-time performance, offering customer the facility to make a reservation through web and call centre. Most of them have no prior seating collection and have additional charges for check-in baggage. Meals on board are supercharged and no refund is applicable in case of a mazed fights. All the LCCs are deriving good revenue from ancillary service offerings like hotels, cars and other packages through their website.All LCCs except Ryanair do nark about customer complaints and feedback. Ryanair has a bad name in terms of customer service and misleading statements to gain publicity. Loyalty in their targeted segments is operate by the overriding need for cheap travel, good timings, multiple frequencies and lower expectations in terms of customer service. Few LCCs like Southwest Airlines, Air Berlin provide a rudimentary loyalty programme in terms of facilities and privileges to its members when compared with a Full Service Carrier, but it is enough for the targeted segments expectationWe can summarize all the above LCCs on a continuum which depicts a minute LCC on the left side and a Full Service Carrier on the extreme right. enter 1 Continuum of LCC Airlines3.4. DerivationsThere is clear differentiation in the development of culture in the organization. Air Berlin exhibits an autocratic culture which is represented through its boss. Air Asia exhibits the culture of its boss too, open and cheerful. Southwest and Easy Jet exhibit a less hierarchical structure, full of freedom to the employees while Ryanair exhibits a culture in between the spectrum. Ryanair is suffice driven organization with little freedom to employees for decision making. Important decisions are highly centralized. It has grown so much that if he centralizes any further, the structure cannot sustain it.Hence there is no consistent pattern among these airlines from heathenish perspective. However, we can definitely say that culture in these organizations is a notice of the leadership behaviour o f the founder entrepreneur.Nevertheless all the evaluated LCC airlines did succeed so far whereas so many after and before them failed. Reasons for this can be seen in this project work. During inception stage there is consistency in high level of delegation, coordination and control. All entrepreneurs had been able to recognize and to deal with the most important and influencing environmental factors on their home markets. All the airlines focused on cost leadership as a competitive advantage and make concrete efforts to mitigate the risks. Air Berlin formed subsidiaries to do away with labor unions. Air Asia formed a JV in Thailand with the Thailands Prime Minster family business to keep the political risk in check. The use of standard aircrafts to the finish possible and internet check-in as the model of bookings were part of the connive to reduce costs.Hence the evaluated LCCs can be depicted as follows on five stages of business growth. (Figure 2).Figure 2 Five Stages of LCC Business growingWith reference to figure 2, we can consider that LCC is a product being sold by these airlines. There has been no basic RD on this product by any of these airlines. What they have done is to do applied research on the basic model of airline travel, to bring out LCC. Southwest Airlines pioneered this in the USA followed by modified versions of this by other airlines in other geographies. The snub in the figure 2 demonstrates that the growth of LCC has followed five stages of business growth, with the corresponding time taken by them for each phase and how the efficiency has changed. However, they are at different stages for example Southwest, Easy Jet and Ryan Air are in the expansion stages hitting the maturity stage in the current model, while Air Asia and Air Berlin seem to be in Growth/ expansion stages. Now the LCC carriers are facing competition from the full service airlines. This is because, full services play airlines are provision certain percentage of their seats at low prices to compete with LCCs. Hence the efficiency of the LCC product sale for our sample airlines has reached a plateau. Now the time has come for the LCC carriers to apply development RD to give an S curve to this trend to modify the features of the product LCC. Different LCC airlines are doing this in different ways, e.g., Ryan airlines are cutting all possible costs, Easy Jet has targeted business passengers, Air Berlin wants to do everything possible for a good customer services, etc. This fits with the affirmation of Schumpeter (1950), in that the technological progress can be seen as a continuous process in which bullyism constantly demands better value.Figure 3 LCC Airlines in Greiners Five-Stage Model of Growth (source Greiner 1972)When we try to review (figure 3) the leadership and management styles within these five airlines vis--vis, our finding is that it largely reflects the leadership style of the founder entrepreneur than the stages of Greiners fi ve phase growth model. For example, Easy Jet and Southwest demonstrate collaboration in their management style, while Air Asia is in between the control and collaboration stages. Air Berlin and Ryan Air has high level of control and less delegation.Figure 4 Key vision Factors in the Stages of Growth for LCCWith reference to figure 4, we have reviewed the resource indispensableness of the five LCCs. All the five airlines display that they had the resource requirements (financial, business, system and personnel department resources) for different phases of growth as shown in this figure. For example, airline being an asset intensive business, they all had huge capital requirements at the start-up. They used a combination of models to meet their requirements leasing aircrafts to purchasing them during start-up and survival phases. But in posterior stages, they all followed the same strategy owning aircrafts. To reduce on cost, Ryan Airlines had purchased old aircrafts also which was criticized by Easy Jet as cutting corners on asylum aspects which could hit the LCC industry in case there were any problems to happen.With fancy to figure 5, we see that there is a commonality between what was right in different environments globally and the typical 5 stage growth model linked to leadership. Initially, in the start-up stage, everything is centralized and business and personal goals are the same for entrepreneurs which get decentralized, delegated and a formal structure coming in at the expansion and maturity stages. The financing is done primarily through personal resources initially which later on is intragrouply generated and additionally through tapping of the stock markets and taking on debt from banks. As most have avenues for growth, they do not follow an active dividend policy and reward shareholders through capital appreciationFigure 5 Key Management Factors in the Stages of Growth for LCCDerived from our evaluation the entrepreneurship model on an tecedent influences, personal character traits, and leadership approach can be illustrated only for the stage of idea generation and inception (see Figure 6).Figure 6 Model of entrepreneurial antecedent influences, personal character traits and leadership approach in the stage of idea generation and inception for LCCMost important is that the autocratic leadership approach (Tannenbaum and Schmidt 1973) is dominant which is in close relation to McGregors supposition of Theory X (boss-centered leadership) in contrast to Theory Y (subordinate-centered leadership). The contingency model of leadership by Vroom and Yetton (1973) covers the evaluated leadership behaviour as Autocratic I and II.Bass (1985) points out four basic components of transformational leadership. First, idealized influence (leader charisma, respect of followers), second, inspirational motivation (display meaning and challenge to the work of followers), third, intellectual excitant (new approaches for solutions, crea tive problem solutions), and fourth, individualized consideration (leader listens and provide concern to needs and development of individual followers). For the last two points the autocratic style of LCC airlines seems to be a contraindication. Yukl (2006) formulates some guidelines for transformational leadership which cover the results of our investigations Articulate a clear and appealing vision, explain how the vision can be attained, act cocksure and optimistic, express confidence in followers, use dramatic, symbolic actions to emphasize key values, and lead by example. This is very close to inspirational or visionary leadership. Here the focus is on leaders skills of motivating and inspiring people aiming to bring together goals and values of the organization and individual needs and values. curiously in the stage of idea generation and in the inception stage the entrepreneurs took all ten managerial roles which Mintzberg (1990) pointed out.The entrepreneurs took a figurehea d role (the manager as a symbol who represents the organization in terms of formality), a leader role (demonstrating responsibility for staffing, motivation and guidance of subordinates) and a tie-in role (with focus on horizontal relationships between manager and individuals/groups as well as the organizations environment). In terms of informational roles we found the entrepreneurs in a monitor role (the manager receives formal/informal information from internal/external sources and develops an understanding of the working of the organization and its environment) as well as in a disseminator role (the manager as centre of information who transmits external information through his liaison role (see above) to the organization and internal information through his leader role amongst subordinates) and in a spokesperson role (the manager as a formal authority communicating to distinct stakeholders). And even in terms of so called decisional roles all entrepreneurs were very active. Her e we saw the entrepreneurs in an entrepreneurial role (he is expected to initiate and plan controlled change by exploiting opportunities, solving problems and taking action for improvement of an existing situation and he may play a major part in aiming improvement and delegate responsibilities to subordinates), in a disturbance handler role (the manager reacts on involuntary and uncertain situations and he is expected to correct a situation in case of unexpected disturbance), in a resource allocator role (the manager makes choices about resources allocation) and least in a negotiator role (this role arises from managers authority, credibility, access to information and responsibility for resources allocation and the manager participates actively in negotiation with stakeholders, e.g. works council).3.5. Recommendation for the FutureWe clearly see that future growth in LCCs will be through collaboration with other LCCs and full service carrier. In other words, Southwest will grow co llaborating with full service carriers like United, American, and Lufthansa and vice versa. Though the early stages of growth were in different segments , having established in their own markets, both LCCs and full service carriers are moving towards the middle of the continuum and we will see increased collaboration between them in future. Also the majority of the airlines are deliberating introduction the lo