Question: Top management is organized by function. Under Michael O'leary as chief executive are two deputy chief executives who are also chief operating officer and chief
Top management is organized by function. Under Michael O'leary as chief executive are two deputy chief executives who are also chief operating officer and chief financial officer respectively. There are executives in charge of pilots, customer service, engineering, legal affairs, ground operations and personnel/in-flight. The board of directors consists of the chief executive and eight non-executive directors - senior managers in other businesses. Managers are responsible for delivering the strategy - to bring the benefits of flying to as many people as possible. They control costs rigorously by: - using a single aircraft type (Boeing 737-800), which simplifies maintenance, training and crew scheduling; - using secondary airports (away from major cities) with low landing charges and less congestion; - staff typically preparing an aircraft for its next flight in 25 minutes (many airlines take an hour), which allows aircraft to spend more time earning revenue (11 hours a day compared to seven at others); - not assigning seats simplifies administration, and passengers arrive in time to board early; - flying directly between cities avoids transferring passengers and baggage between flights; - cabin staff collecting rubbish from the cabin, saving costs. Managers soon saw the benefits of online booking, and it now sells over 99 percent in this way. It has tried to minimise staff costs by introducing productivity-based incentive payments - such as awarding a bonus to cabin staff based on in-flight sales, and to pilots based on the number of hours they fly, within the legal limits. Over 90 percent of flights arrived on time in 2015-16, helped by a daily conference call between the company and airport personnel at each base airport. These record the reasons for any flight or baggage delays and aim to identify their root causes to prevent them from happening again. Sources: The Economist, 20 July 2004; company website. Case question: Make notes showing examples of the tasks of management in the Ryanair case
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