Tiger Airways - Managing in the Global Environment - Case Study Example

Name: XXXXXX Course: XXXXXX Institution: XXXXXX Date: XXXXXX Tiger Airways Introduction Tiger Airways has in the recent times experienced several challenges which have seen it post five successive quarterly losses. Decline in air travel due to global economic uncertainty, intense competition in the airline industry and legal restrictions on its operations in major markets such as Australia have accounted for particularly challenging times for the once profitable airline (Teo 2012, Bottomley 2012). To address the decline and return the airline to profitability, the board of directors has recently appointed Mr. Kaoy Peng as the new CEO whose mission statement is to return Tiger Airways to profitability. This essay critically analyses the important role played by three fundamental aspects of business management as extracted from the articles on Tiger Airways by Kaur (2012), Bottomley (2012), Teo (2012), Sreenivasan (2012) and Contify.com (2012). It begins by exploring the importance of decision making as a function of management in the Tiger Airways case scenario. The essay then highlights some of the decision making models visible in the article as well as the complex nature of the decision making process. It also highlights the need for a global management perspective and how this impacts on company performance and decision making. It emphasizes on management maintaining a holistic picture of the business environment in the different geographical locations it is operating to effectively manage and steer the company forward. Finally, the essay concludes by outlining the role played by information management systems in aiding data collection, processing and transfer for effective communication and decision making. Decision Making According to Bouyssou et al (2010: 1-2), decision making is a cognitive process that eventually leads to the selection of an appropriate course of action. Decision making as a function of the management is one of the key features highlighted by Kaur (2012) that will enable Tiger Airways achieve a turnaround from successive quarterly losses. Waddell et al (2007: 194-195) and Kusluvan (2003; 632)note that, decision making may determine the success or failure of an organisation. The importance of decision making is highlighted when the company appoints a new Chief Executive Officer, Mr. Koay Peng, who is expected to inject new ideas and spearhead the turnaround for Tiger Airways (Kaur 2012, Contify.com 2012). The process of head hunting for a suitable candidate for the CEO position is a strategic decision by the company reflecting the general direction the company has taken. The decision is also reactive rather than proactive since it appears to be remedial action by the board to return the company to profitability. In reference to Yvonne & Connell (2002 p.41) reactive decisions are usually taken in response to stimuli and are meant to ‘firefight’ a situation or mitigate the consequences of a problem (This is also a non programmed decision since it is new and involves a complex process of analysis, brainstorming and evaluation (Yvonne & Connell (2002 p.41). It is plausible to argue that, the Tiger Airways board must have first identified a number of potential candidates and then evaluated each candidate individually, analyzing their strengths and weakness and finally narrowed down to one candidate whose attributes closest matched the demands of the position. The board therefore has employed classical model of decision making in appointing Mr. Koay as the company’s new CEO. Griffin (2012: 244-245) notes that the classical model employs three steps. The first is to identify and note down all possible courses of action, in this case short listing all the possible candidates for the CEO position. Secondly, each course of action is evaluated by listing them in a chronological order from the least desirable to the most desirable. At this stage, the board must have considered each candidate individually and in relation to one another and then ranked them according to their attributes. The final step is to select the most desirable course of action to realize desired outcomes where the board made the decision to hire Mr. Koay as the new CEO. Tiger Airways chairman, Mr. JY Pillay highlights this when he states that Mr. Koay has ‘proven leadership and strategic skills, capacity for incisive thinking and facility for building cohesive teams’ (Griffin 2012: 244-245). Another strategic decision was the announcement by Mr. Koay that Tiger Airways was planning to team up with other “like-minded” airlines to offer baggage transfers. This decision is a departure from the company’s traditional budget model mode of operation. Coming immediately after his appointment, Mr. Koay seems have employed the recognition primed decision making model to arrive at this decision. According to Bruce(2011: 22), the recognition primed model developed by psychologist Dr. Gary Klein emphasizes on the use of intuition derived from clues and hints which give recognizable pattern to aid the decision making process. Experience is a key factor in helping establish these clues and hints and guides the decision maker in identifying patterns which can point to a certain desirable course of action (Marquis & Huston 2009:8). As the decision maker, Mr. Koay has a wealth of managerial experience derived from his many years in top level management for different firms such IMC Corporation and therefore has accumulated experience which can guide him in identifying recognizable patterns to use in making strategic decisions. For instance, one such pattern is the need to be in tune with consumer needs and trends such as convenience in baggage transfers which would nurture the growth and development of the company (Kaur 2012). Decision making is one of the key roles to be played by Mr. Koay at Tiger Airways. This is emphasized in the chairman’s statement that Mr. Koay has ‘incisive thinking’ skills which will definitely play a vital role in shaping the direction the company will take in order to return to profitability. Mr. Koay’s decisions will mainly be of the non programmed type since the case scenario for Tiger airways is complex and sensitive and he has to carefully evaluate all facts and possible courses of action. The problems and challenges facing the airline are complex and intertwined making decision making very difficult. For example, the airline is facing challenges such as intense competition from other airlines, rising fuel prices, the negative effects of disruption of its operations in Australia and the general downturn in air travel in Australia as a result of global economic uncertainty. On the other hand, there is pressure from the shareholders for the airline to return to profitability after posting five successive quarterly losses. These challenges highlight the complex nature of the decision making process that Mr. Koay will be faced with (Kaur 2012). Managing in the Global Environment Tiger Airways has a global presence and therefore the aspect of management in a global environment is vital to the company. The business environment in its Asia hub is different from that in Australia. For example, industry analysts in Australia indicate that there is a down turn in air travel (Teo 2012). However, the routes that serve the resource industry continue to show growth. This growth has attracted new players such as China Eastern Airlines while existing airlines are increasing the number of flights serving these areas. As a result, competition has intensified due to the reduction in number of air travelers as well as from new competitors and growth of the existing players. The scenario is different in Singapore where it is reported that the industry is growing (Teo 2012). This boom is attracting new players and therefore bringing stiff competition in the market which has significant potential for growth. By examining these two case scenarios between the business environment in Australia and Singapore, it emerges that the fundamentals of management in a global environment are vital for Tiger Airways. First, the company has an international presence and therefore its management should have a greater understanding of each of these diverse markets in which the company operates. This is also highlighted by the company’s global search for a new CEO. Ghuman & Aswathappa (2010: 37-38) observe that the challenges from each of these foreign markets are unique and are fuelled by the diverse political, social, economic, legal and technological. For example, the legal aspect is highlighted by the operational restrictions imposed on the company’s fleet in Australia while the rest of its fleet continues to operate in the Asian market uninterrupted (Teo 2012). This underscores the fact that operating a business in a global environment multiplies the variables to be taken into consideration during decision making (Dainty 2008:2). These variables and interdependences make managing and leading a global organization complex since the management has to have a holistic picture of the global environment in which it is operating. Wadell et al (2007) and Dainty (2008:6) point out that managing in a global perspective is quite different from domestic management although there are some common aspects such as motivation and human resource management which remain the same irrespective of the environment. The appointment of Mr. Koay, who has vast experience in managing cross cultural organizations, is a key indicator of the importance the company has placed on global business management. Therefore, Mr. Koay needs to be equipped with skills that will enable him to communicate, cope with ambiguity and changes, manage conflict and effectively operate across different cultures (Wadell et al 2007: 193-195). Information Management Another important factor emerging from the article which will have a large bearing in the success of the company is the management of information. Information management refers to the process of applying management techniques for the purposes of collecting, processing, and communicating the information to facilitate decision making (Johns 2002:3). Tiger Airlines handles a great deal of information on a daily basis, transporting more than five hundred passengers on a monthly basis to and from different geographical areas across the globe. This is testament to the vast amount of information and data it handles on a monthly basis and emphasizes the important role played by information management systems within the company. According to Daft (2010:298), efficient information management facilitates reliable and quick decision making processes which in turn improve service delivery and adds a competitive advantage over rivals. Tiger Airways has been named has one of the most reliable and on-time performers in the industry for eight months in a row. For the company to achieve this, it must have invested heavily in concrete, efficient and reliable information management systems that aid in the creation, capturing, processing, distribution and usage of information. The company handles an enormous bulk of data and information especially due to its global presence. This data needs to be processed rapidly so that the correct decisions or actions can be taken. For example, a passenger who needs to make a reservation for a flight from point A to point B will need to be furnished with information regarding the available flights, time schedule and other relevant information. This means that the person attending to the customer needs to have real time information with regard to all the flights available in order to provide the correct feedback to the customer. Taking into account the fact that the company attends to more than five hundred thousand customers on a monthly basis serves to emphasize the important role played by information management systems in the company (Daft 2010:298-300). Moreover, Khosrowpour (1999, p.704) notes that information management also facilitates the effective use of data to guide planning and the decision making . Mr. Koay states that in order to run the company effectively he will be greatly concerned about the needs and wishes of the customers (Kaur 2012). However, while Mr. Koay is not in a position to talk to all customers individually, he will rely on data accumulated on the company’s database to facilitate decision making and setting of strategic goals. Such data may be in the form of customer requests, travel patterns, inquires, reports among others. To facilitate this, an electronic information technology management system that employs computer applications is vital. Such systems are capable of handling and processing an enormous bulk of data and transmitting the information to the required recipients almost instantaneously. In addition, they have inbuilt data and information storage facilities which will offer quick retrieval and dissemination. It also provides a seamless channel of relaying information hence facilitating effective communication between two parties who could be in distant geographical locations (Baldauf & Stair 2011, p.27). Mr. Koay, will need to get update to date report on the progress of the company in its Australian branch in order to facilitate decision making. Due to the use of electronic information technology, such information will be relayed to him simply by a click of a button despite the enormous distance between Australia and Singapore where Mr. Koay will be based. Information management systems are therefore very important and crucial for the successful daily operations of Tiger airways. Implications of Decision Making, Managing in the Global Environment and Information Management The articles by Kaur (2012), Bottomley (2012), Teo (2012), Sreenivasan (2012) and Contify.com (2012) highlight several implications for decision making, managing in the global environment and information management for Tiger Airlines. The decision makers in the case of Tiger Airlines have to take into account the challenges facing the airline and bear in mind that the final decision should have a positive impact in addressing the challenges faced by the company. Mr. Koay will have to rely on his intuition in decision making and apply past experiences, expertise and feelings on the situation to turn around the fortunes of the airline. Managing and leading a global organization is also complex. Therefore, Mr. Koay needs to be equipped with skills that will enable him to communicate, cope with ambiguity and changes, manage conflict and effectively operate across different cultures. He will also need to take advantage of the electronic information technologies to facilitate communication between the airline’s various divisions to ensure a successful turnaround of its fortunes. Conclusion Decision making, management in a global environment and information management are critical aspects which are highly visible in the articles by Kaur (2012), Bottomley (2012), Teo (2012), Sreenivasan (2012) and Contify.com (2012). These three aspects have complex interlinkages with each other and will have a significant impact in guiding Mr. Koay in running the operations of the company. For example; Mr. Koay will need to be well acquainted with the ever changing business environment in all the geographical locations where the company has business interests and this will only be possible through efficient information management systems that will collect, process and relay the information in a format that will aid his decision making process (Wadell et al 2007). Decision making will heavily relay on the situation in the global business environment the company operates in and this process will be aided by the efficient information management systems put in place by the company to facilitate the collection, processing and relaying of information. The importance of these three aspects can therefore not be over emphasized as they play a crucial role in the company’s future growth and development. References Baldauf, K & Stair, R 2011, Succeeding with Technology, Cengage Learning, Boston. Bottomley, D 2012, ‘Tiger wants customers to look beyond pricing ; Performance, reliability to be the new focus in airline’s bid to improve its bottom line’, TODAY online, 18 September. Retrieved on 30 September, 2012 from < http://www.todayonline.com/Business/EDC120918-0000028/Tiger-wants-customers-to-look-beyond-pricing> Bouyssou, D., Dubois, D. Prade, H. & Pirlot, M., 2010, Decision Making Process: Concepts and Methods, John Wiley & Sons, New York. Contify.com 2012, ‘Tiger Airways to appoint new directors,’ Singapore Government News. Daft, R 2010, Organization Theory and Design, South-Western Cengage Learning, Ohio. Dainty, P 2008, Leading and Managing in a Global Environment: Developing Executive Competencies for the World Stage, MBS Working Paper Series. pp.1-28. Retrieved on 30 September, 2012 from < http://works.bepress.com/paul_dainty/2 >. Devettere, R. 2010, Practical Decision Making in Health Care Ethics: Cases and Concepts, Georgetown University Press, Washington DC. Ghuman, K & Aswathappa, K 2010, Management: Concepts, Practice & Cases, Tata McGraw Hill Education, New Delhi. Johns, M 2002, Information Management for Health Professions, Delmar, New York. Kaur, K 2012, ‘To fly high, Tiger's ready to change its stripes’, The Straits Times, 18 September. Retrieved on 30 September, 2012 from Khosrowpour, M 1999, Managing Information Technology Resources in Organizations in the Next Millenium, Ideal Group Publishing, London. 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