Discussion 3

Topics: Management, Decision making, Organization / Pages: 7 (2090 words) / Published: May 26th, 2015
An organization is made up of many departments. Every department must be in good working standards in order to be effective. The article “A new organizational model for airlines” by Mckinsey, explains that the airlines switched from the functional organization to a business unit organization. Business unit structure is a horizontal design allows each airline group to work independently by focusing on the essential capabilities to increase the effectiveness as a whole. Moreover, business unit provides its own departments such as call service center, catering, rental, finances and so on (Mckinsey, 2006). This helps the leaders to concentrate more on the productivity and profitability of the company. In addition this model is beneficial for the cost reduction, advance manager strategies. Issue that can be raised with the hybrid model within the airline organizations is that it can generate duplication within the departments (Jones, 2013, p.334). This could bring unnecessary roles and functions to the industry and generates coordination problems. This is costly and produces a lost towards to the cost-savings in the departments.

Nevertheless, the functional airline structure is a vertical design holds a CEO with the main dependent functional groups. It does not permit various mangers to work together where CEO is usually responsible for the day-to-day operations. There are no essential responsibilities for productivities and profitability of the senior level managers for the daily operations and tasks. According to Jones, 2013, an advantage of the functional model is that it pulls together the groups with the same skills and capabilities to learn from each other to work effectively (P, 404). This strategy works well in a low- cost airlines that are involved in outsourcing. Organizational functions start distancing from each other (Jones, 2013, p. 405). Airlines arise the communications issues within the airline departments. They would have difficulties finding

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