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HR practice

Students will prepare an assignment that evaluates a strategy for motivating and engaging workers in an organization in the business case study assigned individually.

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Deliverable Document 1: The Business Case Resolution (85% of total grade)

The Business Case Resolution should have no more than a 500-word executive summary and a 2’000-word main text.

It should comprise of the following key components:

I) A 500-word Executive Summary

II) Report:

Part 1. Selected HR practice related to leading success through human capital: critical literature review of a selected a selected Leadership topic, Organizational Behaviour (OB) aspect, a specific Human Resource (HR) management practice, for example Dysfunctional Leadership, such an OB aspect as Stress or Motivation, or such an HR practice as Recruitment, Selection, Training, Appraisal, Development, Compensation, Employee Relations, or alike (1’200 words minimum).

Part 2. Critical analysis of the business case (500 words minimum)

Part 2.a) Business case summary (200 words minimum).

Part 2.b) Identification of the strategy for motivating and engaging workers in an organization (50 words minimum).

Part 2.d) Description of a selected HR practice for leading success through human capital and evaluation of its relevance/effectiveness; justification of such evaluation by referring to the case study and the literature reviewed (250 words minimum).

Part 3: Global conclusion about the effectiveness of current strategy for motivating and engaging workers (300 words minimum)

d. Reference list, using at least 5 literature sources (using only English based literature from credible sources, such as a book chapter, a professional association review, or an academic journal article)

The coursework should follow the assessment brief. Please ensure that you do cite correctly the adequate number of references and follow the below guidelines in order not to lose any points for presentation elements unnecessarily:

1. Font size 12, Times New Roman

2. Spacing 1.5

3. Names of all the students including their student numbers need to appear on the cover page

4. Word count needs to appear on the cover page

5. A contents page also needs to be included

6. Main text pages need to be numbered and the topic also included in a footnote

7. Word count should not include cover page, contents’ page, appendices, reference list, only the main text

8. Use a variety of credible and academic references and strictly follow the Harvard referencing style

9. Ensure that you do utilize the e-resources available to you such as Emerald, EBSCO etc.

Deliverable Document 2: Presentation of Business Action Plan (15% of total grade)

The 10-minutes Presentation with 10 PowerPoint slides is followed by a Question and Answer session about the whole Business Case Resolution. If a student is not able to deliver a live presentation with the lecturer for a valid reason, an online presentation with audio/video camera on must be scheduled within 7 days after the originally scheduled presentation date at latest.

The Presentation should focus on Recommended areas of improvement and Action plan, by referring to the critical literature review results:

– Business recommendation (approximately 100 words): maintaining currently successful strategy for motivating and engaging workers in an organization or for improving it.- Action plan (approximately 300 words): objectives, strategy, and selected HR practice analysed in the literature review for maintaining currently successful strategy for motivating and engaging workers in an organization or for improving it. It can take form of a table with milestones and deliverables.The student should present the case findings in relation to the literature reviewed and the business case, as well as participate in “Question and Answer” session regarding the business case resolution.Assessment of the presentation is the following (each weighting 5%):· identification of the recommended continuation or improvement areas (business recommendation)· development of the action plan (objectives, strategy, and selected HR practice for maintaining currently successful strategy for motivating and engaging workers in an organization or for improving it)· justification of the proposed objectives, strategy, and HR practices· case discussion quality· reflection, quality, relevance, and originality of visual presentation materialsStudents will be allowed to submit drafts to check the level of plagiarism. Plagiarism is not tolerated, and if students are found to have plagiarized then the group project will be awarded a zero grade and referred to the Academic Board for evaluation and proposed further action.The Assignment will be assessed according to the following criteria:Overall clarity, style, logic, coherence of the written submission and use of Harvard style referencing =20% (the business report)Selection, review and application of appropriate literature=30% (the business report)Critical analysis, evaluation, and discussion quality=50% (including 35% allocated to the case evaluation and 15% allocated to the presentation of its resolution)

Etihad Airways: reputation management – an example of the Eyjafjallajökull Iceland volcano

Melodena Stephens Balakrishnan

Etihad Airways is the national airline of United Arab Emirates (UAE). From its formation in 2003 to

2011, Etihad has grown its fleet size to 62 aircraft that serve 72 destinations in 47 countries.

Like all international airlines, Etihad is no stranger to unpredictable crises, and has had to deal

with successive challenges arising from the SARS pandemic in 2003; the global recession from

2008-2011; the H1N1 pandemic in 2010; the Iceland volcanic eruption and resulting ash cloud in

2010; the extreme weather in the United Kingdom in late 2010; and more recently the earthquake

and tsunami affecting Japan in March 2011.

The 9/11 attacks in the USA and SARS the following year, were estimated to have cost the airline

industry over US$ 25 billion (www.iata.org/pressroom/speeches/Pages/2003-10-07-04.aspx).

According to former International Air Transport Association (IATA) chief executive, Giovanni

Bisignani, the industry lost US$ 9.4 billion in 2009 as a result of the global recession

(www.canada.com/story_print.html?id¼2634e836-695e-4769-99d6-ad03d59bf5ab&sponsor¼).

Still more recently in 2010, the first three days of Eyjafjallajökull volcanic eruption in Iceland

resulted in revenue losses of US$ 400 million each day for airlines. At one stage during the crisis,

it was estimated that 29 percent of global aviation and 1.2 million passengers a day were affected

by the airspace closure ordered by European governments (www.huffingtonpost.com/2010/04/

21/iceland-volcano-costs-air_n_545649.html). The entire event, which lasted over a week, led to

over 100,000 flights being grounded and caused an estimated loss of more than US$ 1.7 billion

for the aviation industry (www.theepochtimes.com/n2/content/view/36015/).

The Iceland volcano took the aviation industry by surprise when the main eruption on April 14

2010 sent pulverized volcanic rock, ash and glass shards as high as 11,000 meters (over 30,000

feet) into the atmosphere. Iceland can be avoided on most flight paths but what complicated

matters was that Eyjafjallajökull lay under a jet stream. A jet stream is a narrow stream of strong

concentrated winds extending from 10,000 to 40,000 feet above the ground. This resulted in a

plume of volcanic ash being blown towards Europe at strong speeds of about 400 km/hour

expanding at a width of 50 to 100 kilometers (Figure 1). This scattered ash reduced visibility.

Volcanic ash in the past was known to cause jet engines to stall, could affect sensitive electronics

and scratch glass[1]. This case documents how Etihad as an organization successfully managed

a crisis that took the whole aviation industry by surprise.

1.1. Etihad Airways: reputation management

Corporate reputation can be defined as:

[. . .] a collective representation of a firm’s past actions and results that describes the firm’s ability

to deliver valued outcomes to multiple stakeholders. It gauges an organization’s relative standing

both internally with employees and externally with its stakeholders, in both its competitive and

institutional environments (Fombrun and Rindova, 1996).

The reputation of a company is largely driven by successful management of the brand and

service (which includes operational reputation); and the congruence of brand elements with

brand identity components (de Chernatony, 1999; Figure 2). There is a strong relationship

between reputation and financial performance of a firm (Roberts and Dowling, 2002).

Reputation is managed collectively by all departments that directly interact with passengers,

including cabin crew; catering; and the network and operational safety team; and the

This case was written by Dr Melodena Stephens Balakrishnan. It was prepared using company information and interviews and its intention was to provide material for class discussion through publication. The author does not intend to illustrate either effective or ineffective handling of a managerial situation. The author may have disguised certain names and other identifying information to protect confidentiality. Copyrightq Balakrishnan 2011; Case Courtesy of UOWD Business Case Study Centre and AIB-MENA.

Disclaimer. This case is written solely for educational purposes and is not intended to represent successful or unsuccessful managerial decision making. The author/s may have disguised names; financial and other recognizable information to protect confidentiality.

DOI 10.1108/20450621111192753 VOL. 1 NO. 4 2011, pp. 1-17, Q Emerald Group Publishing Limited, ISSN 2045-0621 j EMERALD EMERGING MARKETS CASE STUDIES j PAGE 1

Melodena Stephens Balakrishnan is an Associate Professor of Marketing in the Faculty of Business and Management, University of Wollongong, Dubai, UAE.

marketing department, which also manages product and service development, marketing

communications and sponsorship.

1.1.1. Strong service and product

Etihad was set up by Royal (Amiri) Decree in July 2003 and commenced commercial

operations in November 2003 with Abu Dhabi (the capital of UAE) as its hub. In seven short

years, Etihad has established itself as one of the world’s fastest growing airlines. In 2010,

Etihad saw passenger numbers top seven million for the first time and revenue passenger

kilometres rise 20.1 percent. Etihad’s revenue exceeded US$3 billion in 2010. As part of its

long-term growth strategy, Etihad plans to operate to up to 100 major business and leisure

destinations around the world by 2020 (Figure 3).

As of July 2011, Etihad’s fleet of 62 aircraft and five fleet types; was operating over 1,000

flights per week and serving an international network of 72 destinations in 47 countries.

Etihad has 30 codeshare partners which increase its global reach and offer its passengers

more choice and convenience. Over the next ten years as part of its expansion strategy,

Figure 1 Spreading of the Ash Plumes

Sources: April 15, 2010; NASA’s Earth Observatory (available: http://earthobservatory.nasa.gov/NaturalHazards/view.php?id=44068)

PAGE 2jEMERALD EMERGING MARKETS CASE STUDIESj VOL. 1 NO. 4 2011

Etihad will take delivery of: three A330s by the end of 2011; 20 A320s between 2011 and

2015; 10 Airbus A380s from 2014; 25 A350s between 2017 and 2020; 35 Boeing 787s

between 2014 and 2020; and 10 Boeing 777s between 2011 and 2013.

Etihad offers exceptional service both on the ground and in the air. Ground services include

chauffer pick-up for premium passengers in 27 global destinations, and premium lounges in

Abu Dhabi, London, Frankfurt, Dublin and Manchester. In the air, Etihad offers a choice of

Diamond First Class, Pearl Business Class and Coral Economy Class; Onboard Chefs, a Food

Figure 2 Managing reputation

Figure 3 Etihad Airways – projected growth

VOL. 1 NO. 4 2011 jEMERALD EMERGING MARKETS CASE STUDIESj PAGE 3

and Beverage Manager delivers fine a la carte dining in premium cabins and all passengers

have access to a state-of-the-art, on-demand in-flight entertainment system which includes

over 600-hours of movies, TV shows, music and interactive games. Etihad has tied up with

Swarovski to create new amenity kits for male and female passengers travelling in First Class

to reflect its premium image. Etihad’s Loyalty program, Etihad Guest, which was launched in

August 2006, has in just four years attracted more than one million members. Etihad’s superior

service has also been recognized through a wide range of awards that reflect its position as

one of the leading premium airline brands in the world, including the ‘‘World’s Leading Airline’’

at the World Travel Awards twice in 2009 and 2010[2].

1.1.2. Strong operational reliability

The airline today enjoys a significant share of business in key markets across its network. The

geographical spread of this network, and the geographical spread of its network means a

crisis in one part of the world is very likely to affect its operations and impact upon logistics,

in another. For a deeper perspective; on average, Etihad currently operates around 150 flights

per day; 1,050 flights per week; 4,200 flights per month; and 50,400 flights per year (current

estimates) (see Figure 4 to get an idea of global reach). Etihad’s on-time performance (OTP) in

2010 was 72 percent for zero minutes, and 87 percent for below 15 minutes[3].

Safety is the most critical factor in operational reputation, followed by reliability and OTP.

Etihad has one of the youngest fleets in the world. Its commitment to using latest technology,

safety and customer comfort are evident in the fact that Etihad had announced what was at

the time the largest aircraft order in commercial aviation history at Farnborough International

Air Show in 2008, for up to 205 aircraft – 100 firm orders – 55 options (guaranteeing the price

of the aircraft and the delivery date) and 50 purchase rights.

1.1.3. Brand associations and sponsorships and promotions

Etihad means ‘‘Union’’ in Arabic. The Etihad brand value demonstrates the innate Arabian

Emirati qualities of respect, generosity and hospitality. Etihad’s mandate from the Abu Dhabi

Government has three main objectives: to be sustainably profitable; to be best in class; and

to support the economic diversification of the Emirate through the development of travel and

tourism and the provision of aviation links to key commercial centres.

Figure 4 Etihad destinations – route map

PAGE 4jEMERALD EMERGING MARKETS CASE STUDIESj VOL. 1 NO. 4 2011

According to a study conducted by Oxford Economics, a leading UK think tank and a world

leader in economic impact analysis; Etihad is playing an increasingly important role in

contributing to the economic growth of the UAE. In 2010, Etihad contributed US$5.5 billion to

the Abu Dhabi economy.

Besides the brand association with Abu Dhabi and the UAE, Etihad is associated with and

sponsors a number of premium sports brands and events including, Manchester City

Football Club, Harlequins, Etihad Stadiums in Melbourne and Manchester, the Sport

Australia Hall of Fame, and the Etihad Airways Abu Dhabi F1 Grand Prix that takes place in

November each year and is broadcast to a television viewership of over 80 million people.

Etihad also sponsors and engages with a number of regional and global celebrity brand

ambassadors including names like Danni Minogue from Australia; Katrina Kaif, internationally

acclaimed, multi-award winning actress from India; and the popular Pakistani rock band

strings.

1.1.4. CSR and philanthropy

Etihad Airways is fully committed to sustainability and has a partnership with the Masdar

Future Energy initiative to create a more fuel efficient fleet, and abide by the internationally

recognized environmental principles of ‘‘reduce, reuse and recycle’’. Two of Etihad’s

employees who are also the airline’s sustainability ambassadors took part in an once-in-

a-lifetime expedition to Antarctica with polar explorer and sustainability pioneer Robert Swan

in 2011.

Etihad receives public recognition for its support towards philanthropic activities. In 2004,

Etihad sent 18 flights full of humanitarian aid to Colombo, Mumbai, Bangkok and New Delhi

following the Tsunami on 27 December 2004. In January 2010 Etihad Crystal Cargo operated

a special Red Crescent and Khalifa Welfare Foundation charter flight to Haiti, carrying over

80 tonnes of medical and humanitarian supplies. In February 2010 Etihad Airways and its

employees made a combined donation of US$6,800 and shipped more than 6,700 kg of aid

to victims of the earthquake in Haiti. On 28 August 2010 Crystal Cargo provided a freighter

aircraft to carry 59 tonnes of medical and humanitarian supplies to Pakistan following

extensive flooding. Etihad staff collected money which was donated to the Emirates

International Mobile Humanitarian Hospital for Children, which has been operating mobile

clinics in flood ravaged areas and has treated 3,500 children. Etihad set up a program to

allow its Etihad Guest Loyalty members to donate their Etihad Guest Miles to a number of key

charitable organizations assisting with relief efforts and the results show a strong level of

engagement with the Etihad customer.

1.1.5. Corporate communications

A key element of Reputation Management to be greater emphasized is the ‘‘sword and

shield’’ approach adopted by the Corporate Communications department:

B The Sword approach actively promotes and publicises the brand qualities in a highly

credible way, beyond plain marketing communications, ensuring that it is engaged in

regularly communicating the latest news and developments to all internal and external

stakeholders across a variety of channels (intranet, newsletters, social media platforms,

figureions and events and a comprehensive local, regional and international media

relations program.

B The Shield approach provides rapid rebuttal on issues and topics that may negatively

impact and affect the airline and/or the industry, and that it has a tried and tested Crisis

Communications plan and trained personnel in place, should it ever be required.

Etihad’s goal is to ensure that external stakeholders and the local community are constantly

updated on its activities with a regular flow of news announcements appearing in the local

media. In 2008, Etihad issued 165 media releases; 175 media releases in 2009, and more

than 185 media releases till November 2010.

VOL. 1 NO. 4 2011 jEMERALD EMERGING MARKETS CASE STUDIESj PAGE 5

Etihad also constantly monitors the media coverage it gains in foreign markets. Etihad’s

Corporate Communications department plays an integral role in the emergency response

plan (ERP) and a robust process exists to manage crisis communications issues

appropriately. This includes a dedicated 24/7 ‘‘on-call’’ media roster, ensuring media can

reach Etihad at any time of the day with their enquiries. It also includes a process for collating

and assessing all the facts on an issue to ensure that the media and customers receive

accurate, relevant and timely information.

1.1.6. Guest affairs department and contact centres

The purpose of both departments is to ensure that all passenger queries are responded to

promptly and appropriately. There are 24-hour contact centres in Abu Dhabi, Australia,

Canada, India, South Africa, and the USA. Our customer care policy is clearly outlined in the

Etihad Guest Charter (www.etihadairways.com/sites/etihad/global/en/aboutetihad/

CustomerCare/customercarepolicy/pages/customercare.aspx).

1.1.7. Organization-wide response

To protect the organization’s reputation and the Abu Dhabi brand from the negative impact of

crises and major operational disruptions, Etihad has established a state-of-the-art corporate

ERP that lists the emergency role and responsibilities for each of the key departments across

the organization. The plan is extensive, and regular exercises take place internally and jointly

with external stakeholders to test the system and to ensure familiarity. During a crisis, Etihad

has to maintain the highest standard of safety and operational integrity whilst ensuring the

least disruption to the customer. While safety is always the priority, most passengers still

want to know at first instance whether their flights will still operate to the destination as

planned. Etihad is committed to keeping inconvenience to passengers to a minimum. This

takes the form of rerouting, scheduling more flights, and constant communication. To ensure

optimum performance during a crisis, Etihad draws from its skilled management team and a

well-defined organizational structure supported by over 8,000 employees, representing 120

nationalities.

1.2. Emergency response plan (ERP)

The ERP details Etihad Airways’ policies, plans and procedures to assist the company

during a major crisis. This includes all aspects of the investigation of incidents, as well as the

provision of humanitarian support for Etihad customers and employees, and for their

respective families. The Etihad ERP complies with all IATA, International Civil Aviation

Organization and General Civil Aviation Authority recommendations and requirements and

adheres closely to industry best practice for response to an aviation accident or incident.

Etihad regularly engages in disaster simulations internally and with business partners, to test

the system, benchmark and learn from other companies’ crisis management capabilities.

Internal exercises increased in 2010 to a total of seven from the previous three.

The ERP contains the following components:

1. ERP manual/station emergency response manuals. A comprehensive ‘‘master plan’’

publication for use at headquarters is supplemented by customized ‘‘local plan’’ manuals

for use at each airport and city office location across the Etihad network. At present this

includes more than 70 passenger and freight airports on five continents.

2. Emergency Response Centre (ERC). The implementation of the ERP is managed and

supported from the highly specialized ERC at the company’s headquarters. This

state-of-the-art purpose-built facility is operational (mission-ready) 24/7 and contains a

range of emergency applications, equipment and supplies. It is designed to function

independently of main building systems (power, air conditioning, etc.) and can accommodate

up to 35 nominated representatives that may be required to manage and resolve a crisis.

A separate meeting room located across the street from the main headquarters building is

designed as a dual-purpose daily meeting room and as the back-up ERC (should the primary

facility at headquarters become inoperable).

PAGE 6jEMERALD EMERGING MARKETS CASE STUDIESj VOL. 1 NO. 4 2011

A large call center capacity (supported by both the Etihad Global Call Centre and a specialized

emergency vendor) exists to handle the potentially thousands of emergency enquiries after a

major incident. Special toll-free telephone numbers are kept in reserve, ready to be published

immediately should the need arise.

3. Special Assistance Team (SAT) (family assistance) for humanitarian support. The SAT is a

standby group of volunteers from across the organization that is available to provide

humanitarian support after an accident, major incident or during a crisis impacting airline

operations. In-depth training provides the volunteers with the tools and knowledge

necessary to assist accident survivors and friends/family members of accident victims. In

2009, Etihad enhanced its emergency response capability by training 45 ERP staff and

500 SAT volunteers and all outstations were provided with online training modules. In

2010, the number of employees provided with ERP training increased to 190 – and the

number of trained SAT volunteers increased to 560 employees. All team members

undergo annual refresher training.

4. Critical incident stress management (CISM). The CISM Team comprises staff volunteers

uniquely trained to provide specialized peer support (in cooperation with the Etihad

Medical Department) for employees involved in critical incident emergencies or other

potentially traumatizing workplace events.

5. iSaturn emergency database application. iSaturn is a state-of-art web-based aviation

emergency information management system, which is interfaced with key resources, to

collect and input critical information for use by the ERC, the Global Call Centre, and for

on-line access throughout the Etihad network.

1.3. The case of the Eyjafjallajökull volcanic eruption

When the Eyjafjallajökull volcanic erupted on April 14, Etihad was operating over 90 services

a week to 12 destinations in Europe. As the volcanic ash cloud spread across Europe it

eventually led to a near-complete shutdown of European airspace between15 and 21 April

2010. For Etihad, the first impact was felt on 15 April, when all airports in London closed,

immediately affecting five of Etihad’s scheduled flights and hundreds of passengers either

going to or departing the UK.

Flight disruptions were at their most extensive from 17 to 19 April, as the crisis progressively

deepened and more airports across Europe were closed down. At one point in the airspace

closure, Etihad had to cancel all flights into Europe except Italy. Airports remained closed for

almost a week causing unavoidable mass flight cancellations (see Table I for Etihad flight

disruptions), precipitating a significant crisis situation for airlines operating within and into

Europe.

An Etihad aircraft was grounded in only one destination, and through successful monitoring

of the situation, the other aircraft were able to return to the airline’s hub in Abu Dhabi,

enabling Etihad to retain its operational capacity. This is critical in an industry where

significant revenue is lost for every hour a plane sits idle on the ground.

1.4. Etihad crisis management response

As soon as Eyjafjallajökull erupted, Etihad began monitoring the situation. By 14 April, as the

volcanic ash drifted over European airspace, the ERP went into action. The key focus for

Etihad was to manage the evolving situation by predicting the potential impact to its global

operations; finding collaborations and opportunities to mitigate reputational risk; and make

sure that customer inconvenience was minimized with no impact on safety and security of

passengers, crew and cargo.

To manage the crisis Etihad implemented some of the following steps which highlight the

extremely difficult and complex process embedded in reputation management and crisis

recovery:

VOL. 1 NO. 4 2011 jEMERALD EMERGING MARKETS CASE STUDIESj PAGE 7

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PAGE 8jEMERALD EMERGING MARKETS CASE STUDIESj VOL. 1 NO. 4 2011

B A crisis management team, led by the Chief Operations Officer and Vice President

Airports and Network Operations, was formed with representation from various key

departments. 24-hour monitoring of the event ensued, with regular meetings scheduled

and detailed communications provided frequently, so as to keep all departments

apprised of the latest situation (see Plate 1 of the Crisis Room). Briefings on the status and

security of the event, its impact on airports closed, flights affected, and passengers

stranded, were documented and the impact on each department were discussed.

Key departments or groups involved were the network planning; revenue management;

flight operations; ground services; technical operations; in-flight services; sales, security

operations; call centres, airport management, catering, cabin crew, insurance, corporate

affairs, insurance and legal and respective duty managers. The inclusion of all areas of

the business ensures a composite view of company operations at any point in time.

The focus was to secure, staff, customers and assets while managing the reputation of the

company. All this needed to be done whilst keeping in mind legal and financial costs.

For example, in the Europe Union, any customer booked on a flight with a six-hour delay

has to be compensated by hotel rooms and a penalty payment.

B Second the communications with passengers in general, especially those who had not

yet started their onward journey had to be managed. Customers were regularly updated

through the internet about the volcanic ash situation and flight status. A call centre and

helpline were opened on a 24/7 basis. The Call Centre was extraordinarily taxed by the

unprecedented volume of inbound and outbound calls, and the entire ERC in addition to

other company facilities were used to provide back-up support. All local offices were

prepared to handle Etihad Guests with queries and flight changes. After the UK airport

closures, press releases were distributed to all media and posted on the internet to

update customers on the status of their flights and tickets.

B Etihad aircraft were flown to their scheduled destinations, or diverted to alternate airports,

for as long as possible until ever-diminishing options for landing sites were finally

exhausted as the ash cloud spread across Northern Europe. The various special

arrangements made for specific sectors are listed in Table II.

B Exceptional measures were implemented to care for stranded passengers at outstations

across the network, and especially at the Abu Dhabi hub, where some 2,500 passengers

were accommodated at the expense of Etihad Airways. Such care included first class

Plate 1 Crisis Management Team

VOL. 1 NO. 4 2011 jEMERALD EMERGING MARKETS CASE STUDIESj PAGE 9

accommodation, meals, transportation, leisure tours, as well as on-site assistance from

Etihad representatives at every hotel assisting with travel enquiries and arrangements.

Visas were organized where possible for all passengers stuck in transit in Abu Dhabi.

Abu Dhabi Airports Company, Abu Dhabi Tourism Authority, and the airport police and

immigration authorities, worked with Etihad during this challenging period. The airline also

worked with embassies around the world to ensure the safety and care of passengers that

had been delayed in outstations. Tours were also organized for passengers stuck in

Frankfurt. Based on information provided by the metrological authorities, Etihad was able

to warn people not to undertake their journeys and promised to revalidate their tickets at no

additional cost. This was preferable to taking the risk of being stranded in transit. Managing

logistics at this time was key to managing passenger flows. The unsolicited testimonials

(see Exhibit) provide highly credible third party endorsements, and go far beyond being

just free publicity (Figure 5), and are key factors in building a positive reputation and

reinforcing, brand loyalty among new and existing customers. The testimonials also show

the effort the Etihad team put into managing the crisis across its international network.

B Tracking customer whereabouts, travel intentions and any possible post-event backlog

within the network proved to be a complex challenge. This task was made increasingly

difficult due to the ever-lengthening duration of the airspace closures and the unpredictable

nature of requests for alternate travel arrangements. Tickets needed to be revalidated or

re-routed, which was covered by the airline. In some destinations on the Etihad network,

passengers holding tickets to their original final destinations were uplifted to Abu Dhabi,

where they were accommodated on later flights to their final destination. Customers who

chose not to travel and cancelled their flights were also fully refunded the cost of their tickets.

Once flights returned to normal, James Hogan announced in a press release:

Bookings for passengers currently in transit, and UAE residents around the world will be priority for the

airline as services are reintroduced. Our staff will be communicating directly with those that are in

accommodation in Abu Dhabi and other cities to advise them of their updated travel plans, once available.

By 21 April, over 1,500 passengers had departed from Abu Dhabi to their final destination.

1.5. Post crisis: event summary

The Eyjafjallajökull volcano tested the worldwide airline industry. For Etihad specifically the

impact was huge as documented below:

B Passengers affected across the Etihad network. More than 22,000 Etihad passengers

were affected by flight cancellations and delays as a result of the airport closures.

Table II Etihad operational response to the crisis

Destination Special arrangements

London Heathrowa

15th – EY19 diverted to Paris 26 and 27 April – two additional flights: AUH-LHR and LHR-AUH Upgrading aircraft to increase additional seats

Dublin 15th: EY41 diverted to Munich 21st: two supplementary flights to Dublin and Milan via Munich, to accommodate additional passengers

Munich 21st: two additional flights Milan 21st: two supplementary flights to Dublin and Milan via Munich, to accommodate

additional passengers Parisa Upgrading aircraft to provide additional seats Sydney Flights diverted via Brisbane, and Melbourne. Passengers on on-board journey

advised not to commence 25th – additional flight Sydney-Abu Dhabi Two flights: Abu-Dhabi-Sydney (25-26 April) Etihad has 11 flights to Sydney per week which led to considerable backlog from European destinations

Note: aMajor hubs

PAGE 10jEMERALD EMERGING MARKETS CASE STUDIESj VOL. 1 NO. 4 2011

B Hotel accommodation in Abu Dhabi. Over 2,500 displaced passengers were

accommodated in 18 hotels, over a 100-kilometer radius.

B Press releases issued to the media. Etihad issued 12 updated media announcements

over the week long disruption.

B The week long disruption cost Etihad more than US$50 million in revenue (Salama, 2010).

The crisis concluded on 21 April with the reopening of affected airspace, and a widespread

recovery effort commenced. The Etihad network was declared officially clear and fully

normalized by 29 April 2010. The ERC then reverted to stand-by status, and the facility was

returned to normal.

1.6. Lessons learnt – getting the customer recovery right

The unprecedented event of the Iceland Volcanic Ash crisis taught the world’s airlines many

valuable lessons. Etihad Airways was no exception, and the airline’s management quickly

moved to innovate and improve the company’s emergency response capability with a

thorough analysis of all issues that arose from this extraordinary crisis. The event once again

demonstrated that communication and collaboration are key elements in managing a crisis

effectively. This was not just with customers but also with key stakeholders such as the

affected airports, the hotel industry, governments and other airlines. Etihad worked hard to

foster a collaborative spirit with partners to ensure it could be proactive during the crisis.

This volcano experience resulted in better processes being scoped out and the identification

of a number of enhancements required across different aspects of the business including:

travel visa management, large-scale hotel room sourcing and reservation, passenger data

capture and transportation, policy and process development and passenger

communications.

The lessons learnt proved effective when Grimsvitn (another Iceland volcano) erupted at

5.30 pm on 21 May 2011. Etihad Network Operations Control closely monitored the situation

through NOTAM updates from the London Volcanic Ash Advisory Centre; data from the

Figure 5 Publicity

VOL. 1 NO. 4 2011 jEMERALD EMERGING MARKETS CASE STUDIESj PAGE 11

Eurocontrol Aviation Crisis Cell and the relevant MET authorities in concerned countries. A

total of six updates were sent to all relevant stakeholders. All stakeholders were asked to be

prepared for a worst-case scenario. All high load flights to and from Dublin, Manchester, and

London Heathrow were identified. Diversion airports were identified. All flights with

perishable cargo were identified.

Staff was asked to feedback information from local authorities via e-mail despite the impact on

Etihad on 21 and 22 May being zero. A B777 crew was stationed in Dublin on standby to

facilitate the recovery of grounded flights if the case arose. Media clippings and press

coverage was closely monitored to assess public sentiment in response to the crisis. The

standby crew returned to Abu Dhabi on 26 May. As of 2.00 am on 25 May, the volcano ceased

to erupt though the volcanic ash continued to move over German airspace. Flight plans were

adjusted to avoid high density ash airspace and were to be updated two hours prior to ETA by

Flight Dispatch. As a precautionary measure flights into Europe were given additional fuel.

All aircraft on these routes were inspected for ash, pilots were asked for reports and when

there were no findings, the flight was cleared for further onward journeys.

The lessons learnt in the Iceland airspace closures were put to use again in May 2011 during

the ash cloud crisis in Australia. Qantas and Air New Zealand stopped operations whilst many

international carriers, including Etihad and Emirates, continued to operate into Australia.

Managing reputations in an uncertain environment is a complex process. In the airline

industry, this is compounded by the various possible scenarios that confront it. As a leading

international airline, Etihad needs to be able to predict various scenarios, learn from each

event and gear up the organization-wide response.

Notes

1. Pictorial representations of the spread of volcanic ash to be found at: www.Eumetsat.int (available

at: www.eumetsat.int/Home/Main/News/Features/717626 and http://EarthObservatory.Nasa.gov

(available: http://earthobservatory.nasa.gov/NaturalHazards/event.php?id ¼ 43253) which show

how wide spread this potential risk became.

2. See www.etihadairways.com/sites/etihad/ae/en/aboutetihad/Pages/OurAwards.aspx for a list of

Awards Etihad has won.

3. A flight is considered delayed when it arrived 15 or more minutes later than the scheduled.

Keywords:

Crisis management,

Reputation,

Brands,

Stakeholder management,

Corporate communications,

Aviation Industry

References

de Chernatony, L. (1999), ‘‘Brand management through narrowing the gap between brand identity and

brand reputation’’, Journal of Marketing Management, Vol. 15 Nos 1-3, pp. 157-79.

Fombrun, C.J. and Rindova, V. (1996), ‘‘Who’s tops and who decides? The social construction of

corporate reputations’’, working paper, Stern School of Business, New York University, New York, NY.

Roberts, P.W. and Dowling, G.R. (2002), ‘‘Corporate reputation and sustained superior financial

performance’’, Strategic Management Journal, Vol. 23 No. 12, pp. 1077-93.

Salama, V. (2010), ‘‘Etihad unlikely to break even, CEO admits’’, available at: www.arabianbusiness.

com/etihad-unlikely-break-even-ceo-admits-182515.html (accessed 3 May 2010).

Recommended readings

Balakrishnan, M.S. (2011), ‘‘Preventing brand burn during times of crisis: Mumbai 26/11 –

a case of the Taj Mahal Palace and Tower Hotel’’, Management Research Review, Vol. 34

No. 11, pp. 1309-34 (formerly Management Research News).

Coombs, T.W. (2007a), Ongoing Crisis Communication: Planning, Managing and

Responding, Sage, Thousand Oaks, CA.

Coombs, T.W. (2007b), ‘‘Protecting organization reputations during a crisis: the

development and application of situational crisis communication theory’’, Corporate

Reputation Review, Vol. 10, pp. 163-76.

PAGE 12jEMERALD EMERGING MARKETS CASE STUDIESj VOL. 1 NO. 4 2011

Crandall, W.R., Parnell, J.A., and Spillan, J.E. (2010), Crisis Management in the New

Strategy Landscape, Sage, Thousand Oaks, CA.

Meyer, A.D. (1982), ‘‘Adapting to environmental jolts’’, Administrative Science Quarterly,

Vol. 27 No. 4, pp. 515-37.

Exhibit. Customer testimonials

Dear Peter.

As my best contact with Etihad’s senior management, I wonder if you would be good enough to

pass on to the appropriate department my sincere thanks for the marvelously efficient and

sympathetic way that Etihad staff in London and Sydney dealt with the recent change of plans for

myself and my wife, brought on by the Icelandic volcano.

I travelled from Heathrow to Sydney, via Abu Dhabi, on 7-9 April as planned, and had two excellent

nights, but my wife, who was due to follow on 16-17 April, was grounded by the volcano fall-out.

After two false starts, Etihad staff rearranged her flight for 25-27 April, and she was full of praise for

their efforts, as well as the onboard service.

The delay meant that our planned fortnight’s holiday in Australia started a week later, which has

meant finishing a week later, and I experienced nothing but courtesy and co-operation from your

staff in Sydney, when I called into the office to make new flight arrangements for our return.

The result is that my wife and I will be returning on flight EY455 on Sunday 9 May, changing on to

flight EYl9 at Abu Dhabi on Monday 10 May.

Well done, Etihad.

Best regards,

Howard.

Hi Dan/Sheina

I am sure you probably will won’t remember me but I was a deliriously happy passenger on Etihad

flight EY81 to Milan on Monday 19th April from Abu Dhabi at 0810. The flight was diverted to Rome

after Milan airport closed due to the Icelandic Volcano. I was travelling with a Swiss lady who I had

met up with in Mumbai. I had arrived from Mumbai at 0630 with a connecting flight to Athens which

was about the only flight out of Mumbai to Europe at that time.

Firstly, I would like to say how helpful your staff were at the London office when I phoned to try and

get a flight out of India. Having tried British Airways for hours I got straight through to your London

office where the staff did a great job of getting me on a flight. Having arrived in Abu Dhabi, bound for

Athens, I spotted that there was a flight leaving for Milan, which is obviously a lot closer to the UK

than Athens! I went to the transfer desk, where again, the staff were so helpful and understanding

and they managed to transfer me and my luggage to the Milan flight with only about 20 minutes to

spare. Once I arrived at the departure lounge I was so impressed by yourself and your staff for

keeping us informed of exactly what was happening at a very stressful time. This service continued

on board the flight with your flight attendants and crew also being very attentive and helpful.

On arrival at Rome the airport was chaotic but, one of your staff, who I believe was travelling back to

Italy for a break took over (unfortunately, I didn’t get his name) and gathered all the Etihad

passengers together and coach transfers to Milan. I have to say I was extremely impressed,

particularly after the lack of assistance from AA. My assistance from AA consisted of a text saying

my flight was cancelled. When I finally got through to them they offered me a flight leaving 10 days

after the original flight which I declined. I was then promised a phone call to arrange flights and

other travel options which I never received.

On longhaul flights I have pretty much always travelled with AA as the ‘‘home carrier’’, but after this

trip I would always look to book with Etihad and will have no hesitation in recommending you. Once

again many thanks for your excellent service at such a stressful time. I actually managed to get

home only 48 hours after I was due to all thanks to Etihad!

Karen

VOL. 1 NO. 4 2011 jEMERALD EMERGING MARKETS CASE STUDIESj PAGE 13

Hi again!

I have to thank you all for the good support! Everything went well!

Since the flight to Jakarta was 2 hours delayed, we where picked up by your colleagues in Jakarta

and brought to the gate (they retagged the baggage, etc.).

We needed to retag the baggage all the way to Munich, but where told that Etihad in Abu Dhabi

would be able to retag the baggage again if we where to take another flight. We were seated

perfectly together and in very good seats (just after the business class). The family (not least the

kids, loved the flight – entertainment, food, etc.).

In Abu Dhabi, I went (as you advised, directly to the transfer desk). The service was excellent again,

and they were able to reroute us to a London flight the next morning (8:30). We where given 3 rooms

at a hotel to get some sleep. This was really good, and made the total trip much less stressful then it

could have been.

We arrived London 13:15 and the connecting flight to Stavanger left 16:50 (booked it from the hotel

in Abu Dhabi). We arrived Stavanger Saturday at 22:15 local time. We where tired, but we all agreed

that due to your help we got a very fine return travel.

I am now at work and the kids are at school. Thanks again!

Regards,

Jan

Khalifa,

I want to share with you my very positive experience with Etihad during the Icelandic ash ‘‘crisis’’. I

was travelling back from Jakarta and arrived in Abu Dhabi on Friday on my way home to Paris. My

Paris flight was cancelled and I was immediately taken care of by the Etihad staff at the airport and

accommodated in a good hotel with 3 meals a day (all at Etihad’s expense). I spent 4 days in Abu

Dhabi and during this time, Etihad communicated with me providing updates and also placed

someone at a desk in the hotel lobby 24 hours a day. I subsequently left on the first plane to Paris.

What Etihad did was commendable and went well beyond what would have been expected of an

international airline. Besides being extremely professional, all the Etihad staff that I met or spoke to

on the phone were highly sympathetic and very kind, clearly recognizing that people were stressed

at not being able to get home to their loved ones.

Thank you – truly excellent management of a huge crisis – commendable!

Dear Lisa,

Apologies for late mail, I would like to take this opportunity to thank yourself and your ground staff for

the kind; courteous and excellent service afforded to us prior to our recent trip to South Africa to visit

my father.

We were booked to fly ex Dublin via Abu Dhabi to Johannesburg on the 16th of April past; and were

delayed by the Icelandic Ash Cloud disaster. Although we lost a week of our holiday in South Africa;

we were very fortunate to be in the hands of such a caring Airline; and staff as yourselves.

We were put up initially at the Marriott Hotel outside of Dublin; and then on to the Carlton; where the

service given to us; as directed by the Airline; at both establishments; was both courteous and

exception under the circumstances. Customer service of this nature is a pleasure to experience and

we thank you.

This was our first flight experience with Etihad Airlines and it certainly won’t be our last. We

subsequently went on to have a most enjoyable stay in South Africa.

On our return journey on the 8th of May last; we chose to fly ex Johannesburg via Heathrow to home;

once again due to the ash cloud present over Ireland; where the service in Johannesburg and

Heathrow by the Etihad staff was first class.

Yours sincerely,

Ian and Glynis

PAGE 14jEMERALD EMERGING MARKETS CASE STUDIESj VOL. 1 NO. 4 2011

About the author

Dr Melodena Stephens Balakrishnan, is an Associate Professor (Marketing) and the MBA Program Director in the Faculty of Business and Administration, University of Wollongong in Dubai. Her areas of research are place branding and development (multimarket studies), crisis management, service marketing and customer relationship management. She has published and received multiple research grants in these areas. She has 16 years of corporate and industry experience and has lived in India, USA, Taiwan and UAE. She is the Founder and Chair of the Academy of International Business – Middle East North Africa Chapter. She is a Regional Editor for Emerald’s Emerging Markets Case Study Collection and the Editor for the book series – Actions and Insights. The first book: Actions and Insights: Business Cases from UAE was published in December 2010. Dr Stephens Balakrishnan won the UOWD Teaching Excellence Award in 2009 and she was a finalist in the ITC Staff Awards – Australia (2010): Exceptional Leadership by a Female Staff Member. Melodena Stephens Balakrishnan can be contacted at: [email protected]

VOL. 1 NO. 4 2011 jEMERALD EMERGING MARKETS CASE STUDIESj PAGE 15

Table of Contents Executive Summary…………………………………………………………………………………………. 3

1.0 Literature Review………………………………………………………………………………………..3

1.1 Leadership……………………………………………………………………………………………… 3

1.2 Situational Leadership Theory………………………………………………………………….. 4

1.3 Path-Goal Theory……………………………………………………………………………………. 6

1.4 Four-Drive Theory……………………………………………………………………………………8

2.0 Case Analysis…………………………………………………………………………………………….. 9

2.1 Case Summary…………………………………………………………………………………………9

2.2 The Leadership in the Case…………………………………………………………………….. 10

2.3 Evaluation……………………………………………………………………………………………..10

3.0 Recommendations…………………………………………………………………………………….. 12

Reference List…………………………………………………………………………………………………13

Executive Summary

This report is about a critical analysis of leadership in the case of Pho Hoa Dorchester, a Vietnamese restaurant. This report adopts the method of literature review. This report reviews the literature from four dimensions: leadership, situational leadership theory, path-goal theory and four-drives theory. Then the case is analyzed and evaluated according to the relevant theories in the literature review, and recommendations are given. The results show that the situational leadership theory is not applicable to this case because of the influence of Vietnamese culture on employees’ leadership style preference. The path-goal theory and the four-drives theory can provide recommendations for the management of Tam. Based on the path-goal theory, most employees of Pho Hoa Dorchester belong to the submissive, which requires Tam to adopt the guiding leadership style for the directive. In terms of the four driving forces, Tam lacks the consideration of comprehend and defend, and needs to incorporate them into the development of the action plan.

1.0 Literature Review 1.1 Leadership Leadership is the art of mobilizing people to work for a shared vision (Wang, Chontawan and Nantsupawat, 2011). It is the art covering foresight and planning, communication and coordination. Harold Koontz believes that the essence of leadership is power (Koontz and Weihrich, 2010). The concept of leadership evolved from leaders. In the early studies, the research on leadership is mainly focused on leadership characteristics, leadership mode, leadership behaviour, leadership style and leadership contingency. In earlier research, generally regard lead as the process in which leaders exert influence on followers (Kark and Shamir, 2013). The sum of influences power generated in this process is leadership. And this kind of influences power is usually based on professional knowledge, people respect and personal traits to achieve organizational goals by influencing followers’ behaviour (Oc and Bashshur, 2013).

Leadership traits theory is about discovering the commonalities of outstanding leaders. W.Henry points out that successful leaders should possess twelve qualities, such as good organizational ability, self-confidence and quick thinking (Henry, 1998). This point is supported by C.A.Gibb’s work. C.A.Gabb found that leaders with excellent leadership tend to possess seven traits, such as intelligence and eloquence (Gibb, 1947). However, in general, leadership trait theory has some limitations. There is no single trait that is a sure predictor of excellent leadership. Because it ignores the relationship between leadership effectiveness and the employees and the situation they are in.

The emergence of transformational leadership theory has brought change. Transformational leadership refers to the leadership that stimulates and expands the high-level demands of employees by making employees realize the significance and responsibility of the tasks they undertake, so as to make them put the organization interests above their interests (Wang, Chontawan and Nantsupawat, 2011). The emergence of this theory indicates that scholars gradually shift the focus of research to the collective’s characteristics and its relationship with a specific situation. The following, this report will conduct a literature review from three aspects: situational leadership theory, path-goal theory and four-drive theory.

1.2 Situational Leadership Theory

Situational leadership theory, which emphasizes that in varying situations, leaders need to adjust their leadership style to adapt to different requirements in specific situations (Northouse, 2021). Different from traditional leadership theories, situational leadership theory breaks the outdated thinking mode of binary epistemology, which emphasizes more that leaders should be flexible.

Ken Blanchard believes that every employee has their career path and personality traits. Therefore, different employees need to match different leadership styles.

Similarly, the same employee needs different leadership styles in different development stages and different work tasks (Blanchard, 2018). Therefore, based on the leadership life cycle, he and Paul. Hersey divided leadership styles into four leadership styles from two dimensions: directive and supportive (Figure 1).

Among the four leadership styles, employees are also divided into four different development stages. New employees are usually at D1, and they are not fully prepared for the job. Leaders need to take a directing approach to guide employees. Leaders need to tell employees exactly what needs to be done and how to do it. When employees are in D2, the leader needs to take a coaching approach to help employees.

Make employees achieve a certain level of confidence and ability, to improve productivity and work efficiency, become high-performance employees; When employees are in D3, the leader needs to take a supporting approach to match. Usually, employees have the certain ability but lack confidence at this stage, so they need psychological and atmospheric support and encouragement from leaders to help them establish confidence. When employees are in the D4 stage, leaders should adopt a delegating approach, and give full authorization and trust to employees. In order to obtain the best work effect, employees are fully responsible for tasks (Lynch, 2015).

In summary, an excellent situational leader needs three core competencies: Judgment, flexibility and building good partnerships. There is no best leadership style, only the most appropriate leadership style. Only by correctly judging the stage employees are in, and flexibly adjusting the leadership style accordingly, and reaching an agreement with the individual development stage of employees, can the organization achieve the best performance.

However, situational leadership theory also has a limitation. Demographic characteristics will influence employees’ preference for leaders’ leadership style (Northouse, 2021). Situational leadership theory doesn’t take this into account.

1.3 Path-Goal Theory

Path-goal theory is a contingency theory developed by Robert House. The theory aims to explain how to motivate employees to achieve specified goals. This theory is based on expectation theory and situational leadership styles (Northouse, 2021). In other words, excellent leaders need to help employees by clearly identifying their work goals and paths to their achievement, removing potential obstacles and providing support, making it easier for employees to do their work (Figure 2).

page7image33248544

Figure 2: Path-Goal Theory

Source: Confluence, 2018

According to path-goal theory, leaders’ behaviour patterns can be divided into four types: directive, supportive, participative and achievement-oriented. And according to personality characteristics, employees can be divided into four types: team, submissive, dominant and self-judgmental. Team-based employees need to match supportive leaders. They want to be cared for, and a warm environment can increase their enthusiasm for work. Submissive employees need to match directive leaders. They need straightforward task’s objectives and structure. Dominant employees need to match participative leaders. Let them participate in specific jobs and express their views. Self-judgmental needs to match achievement-oriented leaders. Make them passionate about the challenges they need to accomplish (Li, Liu and Luo, 2018).

In general, the application of path-goal theory follows a specific procedure. Firstly, the leader needs to make a correct judgment on the personality characteristics of employees; Secondly, the leader should have an accurate understanding of the goal and environment of the task; Finally, leaders should adopt appropriate incentive measures according to the changes in the actual situation.

The path-goal theory also has some limitations. In path-goal theory, the leader bears most of the responsibility (Northouse, 2021). It is easy for employees to become too dependent and lose the ability to carry out tasks independently.

1.4 Four-Drive Theory

The four-drive theory refers to the four basic emotional drives of human beings: acquire, bond, comprehend and defend (Meske, Junglas and Stieglitz, 2019). These four drives underlie everything people do. Leaders should also follow these four drives to motivate employees. Roy Choudhury believes that if one of the driving forces is weak, even if the other three are strong, the overall incentive degree of employees will be significantly reduced (Shafi, Khemka and Roy Choudhury, 2015). Therefore, to achieve optimal performance, leaders should not ignore anyone driving force.

Corresponding to these four driving forces, there are also four indicators to measure employees’ motivation: engagement, satisfaction, commitment and intention to quit (Harisa Putri and Ronald Setianan, 2019). Chalofsky and Krishna found that bond driving force had the most significant impact on employees commitment. Comprehend driving force is closely related to engagement (Chalofsky and Krishna, 2009).

In general, if an organization can coordinate all the four driving forces well, it can maximize the overall motivation of employees, to improve organizational performance. The four driving forces are independent of each other. There is no primary or secondary one, and they cannot be substituted for each other.

2.0 Case Analysis 2.1 Case Summary This case mainly tells a story about a family business of Pho Hoa Restaurant in Dorchester. Thanh Le is the founder of the restaurant. He joined Pho Hoa Noodle Soup as a franchise in 1992, and to establish Pho Hoa Dorchester. He now wants to hand over the restaurant to his eldest son, Tam Le, and enjoy his retirement. His eldest son, Tam, has been helping the restaurant since he was a child and has accumulated 15 years of experience. He is now the general manager of the restaurant. Before becoming the general manager of Pho Hoa Dorchester, he studied for an MBA and gained operational experience at other restaurants. Duong Le is Tam’s uncle. Has rich experience in restaurant operation. He currently serves as the unofficial front-of-house manager at Pho Hoa Dorchester. At the same time, when the kitchen needs help will also be involved in the kitchen.

Currently, Tam faces three significant problems before taking over Pho Hoa Dorchester. The first is how to build effective leadership in the employees. Tam and his family are of Vietnamese descent, as are the restaurant’s employees. In Vietnamese culture, respect and obedience are mainly based on age. Tam is younger than all of the restaurant’s key employees. He worried that he would not establish effective leadership when he took over the restaurant.

The second problem is how to overcome cultural barriers in the process of improving restaurant operations. Due to the influence of Vietnamese culture, the waiters in the restaurant are very resistant to having a positive interaction with customers. This will undoubtedly reduce the efficiency and performance of the restaurant, and reduce the income of the restaurant.

The final question is how to establish a structured organizational and management

strategy. Tam’s father, Thanh, runs the restaurant by instinct and experience. There is

no formal organizational structure and management process for both the front-of-house and the restaurant’s kitchen, and it is the most uncomplicated management by the most veteran employees. For example, Tam’s uncle.

2.2 The Leadership in the Case

In this case, Tam’s father relied on his intuition and experience to manage his employees. The employees obeyed his instructions unconditionally, based on respect for the elders in Vietnamese culture. Since Tam was younger than all the key employees, it was challenging for him to establish effective leadership after he took over the restaurant. In this case, Tam used the strategy of improving the restaurant environment and raising the salary to motivate employees in another restaurant before.

2.3 Evaluation

Under the Situational Leadership Theory, Tam’s father, Thanh, had used a directing leadership style for managing his employees in this case. Give them clear work instructions, and the employee obeys his absolute authority. Thanh’s leadership is based mostly on people respect. In Vietnamese culture, elders are treated with unconditional respect from others.

In terms of personal development stages, Pho Hoa Dorchester employees are mostly in the D1 or D2 stage. They don’t have a lot of relevant work experience. They needed to match the directing leadership style, which was also consistent with Thanh’s leadership style. But for the few back kitchen workers and Tam’s uncle Duong, they are all in the D4 stage. They have a wealth of relevant work experience. Directing did not match the leadership style they required. They need to match Delegating leadership style.

However, for Tam, the situational leadership theory is not applicable. Because the situational leadership theory does not consider the influence of employee demographic characteristics on leadership style preference. In this case, the employees were all of Vietnamese origin. Tam was too young to gain their respect. Even if he has good expertise. This weakens Tam’s power and prevents him from establishing effective leadership.

The path-goal theory is more applicable to this case. Tam’s plan list shows that he has defined the goals that employees need to achieve and the essential path to implementing the goals (Figure 3). Increasing revenue is the goal, improving service quality and achieving consistency is the path. Tam is also well aware that he needs to overcome cultural barriers to achieve his goals. Based on this, he developed incentive and support programs, such as raising salaries, training employees and optimizing working conditions.

But based on the four-drives theory, Tam’s plan does not take into account the comprehend and defend aspects. He’s only thinking about acquire. And the bond based on Vietnamese culture is always there. In the four-drives theory, all four driving forces need to be considered. The weakness of any one of the driving forces will reduce the overall motivation of employees.

3.0 Recommendations

In this case, Tam has excellent judgment and decision. Have a clear understanding of the goal and paths. Based on the path-goal theory and the four-drives theory, four recommendations will be given for the problems Tam faces.

First of all, since most of Pho Hoa Dorchester’s employees are submissive, Tam can manage them with a directive leadership style. Set clear and understandable goals and procedures for their work. And set up practical indicators for regular supervision and management. But for a small number of kitchen employees and his uncle, Tam needs to adopt the style of achievement-oriented leadership style to manage. Set high goals and give them more autonomy. Employees lack respect for Tam due to cultural factors. Tam can enhance his power by leveraging his expertise and great personality traits, so as to build effective leadership.

Secondly, for cultural barriers in the operation process, Tam can design the culture of its restaurant based on the Vietnamese culture. To convey a sense of identity to the staff and improve the stability of the restaurant. Moreover, Tam can design reasonable training and reward policies to motivate employees to break through cultural barriers and enhance the quality of service.

Thirdly, Tam should let employees understand their importance and significance to the restaurant, so that they feel they have contributed to the restaurant. And design transparent and fair process and mechanism, and build trust with employees.

Last but not least, Tam also needs to survey employees satisfaction and feedback regularly. So that he can adjust accordingly at any time. Because employees are not immutable, when their development level changes, their demand for leadership style will also change. Tam needs to adapt his leadership style to their changes continually. A good leader is often a fickle person. He will adjust his leadership style in time according to the employees’ development and changes in the environment.

Reference List:

Blanchard, K., 2018. Leading at a Higher Level: Blanchard on Leadership and Creating High Performing Organizations. 3rd ed. FT Press, pp.46-167.

Chalofsky, N. and Krishna, V., 2009. Meaningfulness, Commitment, and Engagement:The Intersection of a Deeper Level of Intrinsic Motivation. Advances in Developing Human Resources, 11(2), pp.189-203.

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