Case Study Ryanair and Virgin Atlantic

Case Study Course clip lead and ORGANISATIONS BABA SDL 2012-13B new Atlantic and Ryan spread This case examines two organisations that imbibe galore(postnominal) similarities as well as a event of significant differences. The necessary technology and systems behind each organisation may be genuinely similar, exclusively the record and style of management and its consequent pretend on the way people working in these organisations think, feel and behave have created very different organisational cultures.So what atomic number 18 the similarities and what are the differences? The most obvious relation is that both sodding(a) Atlantic and Ryanair operate in the UK passenger air captivate industry. Both are relatively recent creations and tycoon be seen as new entrants to the sector double-dyed(a)s air transport business was founded by Richard Branson in 1984 and Michael OLeary took over as Chief Executive at Ryanair, a small Irish air delineate which had been founded as Guinness Peat Aviation in 1985 (Creation, 2004).Both started demeanor in tilt with study national flag carrier airlines (British Airways and Aer Lingus respectively) and grew to be major challengers to these established companies. As they grew, their scale of operations brought them into competition with a much larger number and frame of airlines operating from the UK Bransons Virgin Atlantic competes with nearly major US and other intercontinental companies such as American Airlines and United Airlines OLeary competes with the likes of Flybe and EasyJet in the short-haul market.Both Branson, who was born in 1950, and OLeary, who is ten age younger, are individuals with strong and distinctive personalities, who have a relentless relish for media presence and who construct extensive use of themselves in their frequent selling communications. They engage in advertising stunts, readily appear on the intelligence activity media in relation to stories around the industry, and their faces and personalities are easily associated with their companies. Charting different courses thither are, however, some major differences. First, they differ in their choice of markets.Virgins air transport business originated in the long-haul, mainly transatlantic market which might be highly profitable but is overly extremely competitive. As the business grew, offshoots were founded as indep destroyent companies for instance, Virgin Blue in Australia and Virgin pull which has its hub in Brussels and serves European destinations outside the UK and does not compete outright with Ryanair. Ryanair started as a short-haul carrier and has remained so, focusing on European destinations from a small number of airports in the UK and Eire. The two companies competitive positioning is also very different.Ryanair is well known as The Low Cost Airline the offshoot thing that hits you in its exotericity material is the price and this is very clearly the core of its business strate gy (Ryanair website). The no frills approach means scarce that even the in-flight nutriment is limited to sandwiches and costs extra. Virgin, by contrast, attracts passengers by offering a superior experience and is firmly positi oned at the quality end of the market Publicity material emphasises style and comfort, and there is a range of in 1/4 Case Study Coursework LEADERSHIP and ORGANISATIONS BABA SDL 2012-13B light extras which, even at the economy end of the price range, includes in-flight food and drinks and packs of amenities such as flight socks, eye shades and lip balm. As was noted, both men love publicity stunts and often use wit in their public communications. Branson is usually smiling and in poses which indicate gambol and a desire to show close links with his staff and popularity with employees, customers and the public in general. OLeary is much more liable(predicate) to be acerbic, critical and uses what might euphemistically be called colourful language in hi s public statements.He seems to care short(p) about public opinion of him as an individual and has been in trouble oneself with the advertising standards authorities in the UK and Eire on more than one amour for offensive adverts that have up destine people from British Airways (who were accused of cosmos valuable ba * * * * ds in an Evening Standard advert in 1999) and the Catholic Church (the Fourth Secret of Fatima advert of 2000 featured the Pope) (Creation, 2004). The discolouration determine are also very different. Virgin as a sight of businesses does everything from running trains, manufacturing contraceptives and cosmetics o offering financial work. All these enterprises are coupled by the single powerful central sign of the founder and the trace red livery Ryanair does one thing and one thing only, but in doing so sets an almost buccaneering tone, readily taking on authorities such as the European Union over competition policy and the British Airports Authoriti es over charging practices. Branson has certainly had his conflicts with British Airways, notably over the dirty tricks affair of the early 1990s, but is not likely to challenge governments.Virgin tries hard to build customer trueness and gain recap business done brandrelated service values Ryanairs repeat business (and for some customers the Ryanair experience is one which inspires the thought never again) is on price, not loyalty to the brand. These differences have a significant effect on the nature of employ relations and the psychological contract between the two companies and their employees. Working for Richard and Michael all(prenominal) companys brand image and treatment of customers have a bearing on the nature of organisational relationship with staff, and vice versa.Aspects of organisational behaviour therefore show through in a variety of interconnected ways to create lucid and very different cultures. At Virgin Atlantic, cabin crew are there to be helpful and welc oming they are important projectors of the brand image and their cable is partly to encourage the allimportant customer loyalty which generates chronic profit. The importance of staff as carriers of company values is clearly reflected in the recruitment material and other statements about the nature of work at Virgin Atlantic.Virgin Atlantic brings together all manner of people in all manner of images, all playing a crucial role in the smooth running of a very complex operation. hardly whoever you are and wherever you join us, youll never stop thinking of our customers and what 2/4 Case Study Coursework LEADERSHIP and ORGANISATIONS BABA SDL 2012-13B we can do for them. From frontline cabin crew to IT analysts, everyone here plays a role in delivering the Virgin brand. That means using initiative, taking responsibility for your actions and being ready to actualise those around you at all times.Similarly, youll play your part in maintaining the friendly, outlawed professionalism that makes Virgin Atlantic such a unique place of work (Virgin Altantic website). The recruitment process is lengthy and includes a group interview which acts as a filter for further tests before job offers are made. reading programmes for cabin crew and other staff are run from a dedicated training centre, and there is a wide range of benefits for regular staff including seven free flights a year, private pensions and medical schemes and discounted goods and services across the Virgin group.At Ryanair, the cabin crew work for a supplier organisation called Crewlink. You can discover whether you qualify to apply for a job by answering a series of 11 on line questions. Successful applicants for cabin crew posts are trained at one of Crewlinks centres and are expected to pay an up-front charge of 1,200 for the fiveweek course (or with a cd deposit it can be offset against initial years salary at a total cost of 1,300). Students are not paid to appear the course successful graduat es get a three-year contract with Crewlink to work on Ryanair flights on a shift-work basis.Ryanair crew are not expected to make overnight stops at its destinations. Post-tax starting salary is listed as being ? 1,100 per month (? 13,200 pa) Crewlink suggests that after the initial three years, and subject to satisfactory performance, a permanent job with Ryanair itself might be available at a salary of up to ? 25,000 pa. Staff must be flexible in terms of their work placement across the 15 European centres and Crewlink does not guarantee work if individuals specify a preferred work location (Crewlink website).By comparison with long haul, a short-haul operation involves very tight verso times and Ryanair aims for 20 minutes. This creates a very different pace and set of pressures on the workforce compared with those at Virgin, which is likely to have higher staffing levels and to institute crew longer rest breaks in the destination locations between flights. The nature of custo mer relations, by contrast, might be more demanding at Virgin than at Ryanair staff and customers are together for longer and the brand image must be maintained.Complaints and horror stories can be found about work at both organisations however, Ryanair is subject to a more arrogant and organised campaign of criticism for its employment practices by trade heart organisations. In particular, the internationalistic Transport Workers Federation has run a major campaign on its website since 2004 called Ryan-be-fair, the purpose of which is to pressurise the management at Ryanair into accept the role of trade unions in representing the workforce.It collects comments from disgruntled crew and former workers which join a flavour of the operational stresses and organisational culture. Both organisations have been successful Ryanair has false in significant profits for several years in a sector which is prone to disruption and financial loss and which has seen a number of brands disap pear (Buzz, Go and Debonair) (BBC, 2005). Virgin also continues to go from power to strength commercially. But the cultures and values which get them off the ground could hardly be more different (BBC, 2006). /4 Case Study Coursework LEADERSHIP and ORGANISATIONS BABA SDL 2012-13B References Creation, S. (2004) Ryanair How a Small Irish Airline Conquered Europe. Arum Crewlink website www. crewlink. ie International Transport Workers Federation website www. iftglobal. org Ryanair website www. ryanair. com Virgin Atlantic website, Working for Us, http//www. virginatlantic. com/en/gb/careers/workingforus/index. jsp BBC News articles News website www. news. bbc. co. k Profits Jump at Virgin Atlantic (27 May 2005) Ryanair Profits Jump on Hot floater (1 August 2006) Question Using relevant leadership and organisational theory, explore the impact of organisational features and external environment influences on the leadership and management styles and performance of Richard Branson and M ichael OLeary. Critically evaluate the effectiveness of their leadership approaches in their specific background with their specific set of strategic challenges. (1500 words) Closing date 1st April 2013, impart on StudyNet by 23. 30 UK time 4/4