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Topics: Leadership, Strategic management, Airline Pages: 5 (1575 words) Published: March 27, 2014
CSuggested answers to questionnaire
Questions
1. Air India comes directly under the Ministry of Civil Aviation, Government of India. The Board of directors and CMD have to work under the guidance of bureaucrats and politicians. What in your opinion have been the influence and effect of such a leadership on the strategic management and decisions taken on Air India over a period of time?( learning outcome 1.1 Explain the link between strategic management and leadership) Answer 1

Leadership in Air India
Since 2003 Air India has been run by IAS officers with no experience of running a complex global business. The CMD’s Arvind Jhadhav was secretary industries in Karnataka and Mr V Tulsidas chief secretary of Tripura. Rivals like Jet airways had expact management .The AI chief looked to their superior boss the Secretary Civil Aviation for directions Ministers Ananth Kumar,Sharad Yadav,Shahnaz Hussein,praful patel who were at the helm when the decline was steepest were unable to put the air line on the recovery path It was a typical bureaucratic leadership style sometimes coupled with a laizzes faire attitude Strategic management

SWOT analysis of Air India to be carried out
Strengths
Updated fleet of Boeing 777 and AirBus 320
Competent repair and maintenance organization
Financial backing of government
Presence in 19 countries and 96 destinations
Weaknessess
Poor customer service, poor work ethics ,weak marketing
Leadership- no strategic direction
Large staff 250 per air craft as compared to 190 industry average Operation-low profitability and low utilization of capacity
Poor financial state, high cost structure
Political interference, poor HR policy ,large number of unions Opportunities
Expanding economy,large middle class,NRI population,tourists and large IT personnel and students using air travel Threats
International air lines operating in India and same routes,more efficient private air lines capturing market share Indian Railways
Rising fuel costs,infrastructural costs
Implications
Improve internal operational efficiency;better fleet utilization,reduce manpower,route rationalization,passenger load factor from 63% to 80 % Consolidate financial state;reduce cost,expenditure,restructure Requirement of a proactive management,Board and CMD to be given independence authority and responsibility to turn around the airlines Offer a distinct value proposition

2. While deciding to merge both the carriers the resulting synergy of operations and optimum use of resources to obtain greater profits was one of the main motives. However, the merged Air India has been making losses and there have been major issues at the working level. Analyze the impact of leadership style on the strategic decisions taken for merger including purchase of large number of aircrafts(learning outcome 1.2 Analyze the impact of management and leadership style on strategic decisions) Answer to cover the following aspects

Analysis of merger
Strengths
Common marketing,economy of scale in purchasing,combined pooling of resources,avoid duplication, Weakness
Both AI and IA not ready to yield an inch,different HR policy,different culture Two net works in reservation smooth transition from one to other not possible Opportunity
Increase in travel,smooth flight international to national and vice versa Threat
Increased competition in Airlines,foreign companies stepped up capacity,private carrier becoming strong going into international routes Actions required to be taken for merger which were not fully implemented Create a team from both and a concrete plan of action,motivate the change by overcoming resistance Creating a vision and developing support from unions,pilots,technical staff,communication by CEO to all Sustaining momentum plan was carried out till tenure of Mr Tulsi das thereafter lost momentum Human aspects not tackled properly.involvement of all stake holders should have been ensured from beginning Decision to purchase...
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