The Study of Planning, Organizing, Leading, and Managing Processes and Activities in the Context of Airbus Company. The study uses a business context and a case study of the Airbus Company to analyze the idea of planning, organizing, leading, and managing processes and activities as the fundamental managerial functions. One of the top aviation companies in the world, the Airbus Company makes aircraft.
Importance of Management Functions in Airbus Company
Leading, planning, controlling, and organizing activities and procedures within an organization are all functions of management. Leading, inspiring, and coordinating are recognized as essential for employees based on the instance of the Airbus Company to ensure they have sufficient leadership, motivation, and knowledge to operate in any condition and environment. The paper reveals how Airbus management performs the four essential tasks of organizing, controlling, leading, and planning. The management of the company successfully balances the four tasks and maintains them in accordance with the standards for work processes and activities, and more importantly keeps workers motivated.
Today, the key challenge encountered by managers and organizations is to address business problems creatively. Typically, the principles of management (planning, organizing, leading and controlling) are guidelines that business managers can use to address business challenges. The principles of management are classified into the four essential functions of leading, planning, controlling and organizing commonly identified as the P-O-L-C framework (Williams 84). Such functions are different, although they are interconnected in inseparable and nature. They support and blend the performance of every other function in a company. Airbus Company has a team of management professionals involved in planning, organizing, leading, and controlling activities and processes of the organization. Airbus is a European organization based in Blagnac, France. The company was created as a consortium to compete with American aircraft companies. There was a need to establish a competitor company in Europe. Since its inception, Airbus has increased its competitiveness by building modern aircraft that nowadays dominate the market.
Environmental Analysis
Planning is an important management function which deals with creating objectives and determining actions for accomplishing such objectives. Planning expects managers to be aware of environmental conditions (i.e. customers, competitors, economic conditions) that face the company and then make strategic, tactical, and operational plans to define the course of actions to accomplish company objectives (Williams 91). Organizations normally use PESTEL framework to study external economic factors affecting the industry and then create strategies to withstand the impact of such factors on their businesses.
Aircraft Industry Challenges and Strategies
The aircraft industry faces stiff competition in the global market. Airbus and Boeing are the main competitors in the aircraft manufacturing industry, and they compete firmly to control the market (Al-Najjar 13). Although they are the two key players, there is great expertise and huge investment involved in the aircraft manufacturing. The long business cycle of the aircraft industry only attracts the patient investors who can wait for their investment to unfold into profit. To achieve success, any business relies on compliance with political-legal issue. Schmid and Altfeld identified that Airbus collaborated with the UK, France, and Germany in the establishment and advancement of the organization so that to attract potential customers to the firm (289). The success of Airbus has been accomplished through cooperation with competitors. Ideas and resources from varied stakeholders in the industry are significant in the creation of new products. Airbus embraces collaboration with many governments to develop its acceptance in the international market. However, high fuel costs and the rising environmental concerns affect the aircraft business. The company also uses risk-taking strategy to build competitive products and readily taps opportunities in the market to develop its competitive advantage.
Political, Economic, Socio-Cultural, and Technological Factors
Political climate favors Airbus in the countries where it is established since the company obtains support from the European nations. Regarding economic factors, Airbus faces many challenges as the market shrinks due to the poor performance of economies. The industry remains sensitive to the economic changes in the world. Concerning socio-cultural factors, the market in the aircraft industry has increased because nations order military aircraft from Airbus (Witt 145). The company is given contracts to manufacture military aircraft and other machinery for countries. Regarding technological factors, the increase in technology and science has enabled Airbus to manufacture various products that match the market demand. Airbus continues manufacturing many advanced models to suit the market demands.
Organizational Strategy
Organizing is the second management function that involves allocating human resources and creating an organizational structure to enable the achievement of company objectives. The structure within the organization is the system in which departments are coordinated, resources are deployed, and tasks are delegated and executed (Williams 73). Airbus’ organizational strategy addresses overall processes as well as client relationship management, the distribution channels for all aircraft, supply chain management, operations management, and corporate leadership and corporate marketing strategies that consequently help to bring huge revenue to the organization.
Airbus’ Vision, Mission, and Strategy
The vision of the company is to create the safest and best aircraft. Its mission is to manufacture the most comprehensive and modern aircraft on the market, complying with the highest standards so that to meet the needs of airlines and aircraft operators. Its goal is to provide strong output in a sustained way while commanding more than 50% of the global aircraft market (Bodily and Lichtendahljr 47). Its objectives include building its customer service, concentrating on main geographic markets, further internationalization, and restoring its competitive advantage by concentrating on efficiency and flexibility.
Airbus' Guiding Principles for Organizational Strategy
Airbus follows the following guiding principles for its organizational strategy. First, Airbus management team believes in leading by example. Airbus has constantly grown despite having encountered several challenges. The organization has set examples of strategies concerning outsourcing, environmental regulation, business procurement decisions, business direction, and lean implementation (Al-Najjar 16). Secondly, the company is equipped to perform. Managers are expected to demonstrate efficient performance, and they are equipped with resources, skills, and staffs so that to show the highest productivity and best performance. The prosperity of the firm depends on the way its managers are equipped. Managers obtain frequent training to develop professional competencies and remain updated on the current business standards.
Airbus' Growth and Outsourcing Strategy
Moreover, the organization believes in development and growth. According to Witt, since Airbus was established it has been growing significantly by creating business operations, acquiring expertise, and establishing itself in new markets (136). The organization is aware that the future lies in international operations thus focuses on expansion to facilitate the development process. Also, the company outsources several of its operations to diversify risks involved in business operations. Airbus outsources about 80% of A380’s operations. The company utilizes time-tested technology and collaborates with long-term dealers to ensure excellence. Airbus also strategically works on future plans to respond to market demands and to maintain its competitive edge. The company has proficiency in making aircraft with a unique cockpit and designs at lower costs, a factor which has made it come ahead of Boeing (its competitor) in the number of transports. Also, the company has adequate assets and finance with ethnically diverse employees and has multiple suppliers who provide an opportunity to choose a supplier offering materials at lesser costs.
SWOT Analysis
Strength
- Market share: the company enjoys a 57% market share - Innovation: it always focuses on innovation in design and technology
Weakness
- Operational inefficiencies: the company always has been regarded as inefficient in operations when compared to the competitor - High production costs
Opportunities
- Growing demands: the company has anticipated a demand for 33,070 aircraft over the next 20 years - Increasing passage traffic because of increasing middle-class in emerging countries
Threats
- Tough competition: Boeing remains a strong competitor - Losing vital markets because China and Russia are planning to create their own commercial aircraft (Source: Schmid and Altfeld 302)
Leadership in Airbus Company
Leadership refers to a process of influencing people to engage in work behavior which would lead to the accomplishment of goals. An effective leader must offer leadership and direction to motivate workers to achieve necessary tasks within the expected time frame (Wensveen 71).
Airbus' Leadership Philosophy
Airbus philosophy is to always listen to its clients and to maintain its vision – the forward-thinking that has placed the company in the leading position of the aircraft industry. In the company, there is nothing taken for granted. Witt revealed that Airbus management links such value of excellence and innovation with a partnership culture – collaboration among the managerial levels and employees with customers and suppliers (138). The focus is a two-way flow of ideas, views, and technical ideas. The company’s leadership idea is about exchanging ideas and sharing responsibilities among all levels and employees so that to obtain the best results, a factor necessary to build a robust leadership with clear guidelines.
Tom Enders' Leadership Style
Tom Enders is the Airbus CEO whose leadership style shows that he is an employee-oriented leader. He demonstrates an employee-oriented leadership style whereby he works with employees to identify required change, developing a vision to guide the change through inspiration, and creating change in collaboration with employees (Bodily and Lichtendahljr 41). He always encourages employees to express their own ideas through meetings and pledges rewards for workers who demonstrate good performance. He highly emphasizes on the interpersonal relationship with workers. He is a role model leader because his leadership style increases employee’s job satisfaction and team productivity. He always communicates with workers about the vision, organization goals, industry, market, future plans, and business information and invites workers to give their feedback (Bodily and Lichtendahljr 38). He is aware that a smart organization always actively and constantly asks feedback from its internal customers (workers) to figure out how effective the organization meets their needs. He has the capacity to realize workers’ talent and put potential workers in the right position. He effectively plays his managerial role in the leading phase of management through influencing and motivating people within the company to follow procedures, policies, and plans to achieve the company’s goals.
Controlling and Conclusion
Related to the function of leading, controlling is the fourth management function important for monitoring the company’s performance to ensure the accomplishment of objectives. Williams explained that controlling means measurement of achievement against the standards and correction of any defect to ensure that things run in accordance with the standards (106). Controlling deals with the manager’s responsibility that contributes towards the achievement of departmental and organizational objectives. Tom Enders (Airbus CEO) monitors the company’s processes and activities through daily or regular review of the progress reports. He also always calls for meetings with various departments and levels to evaluate the daily schedule and address possible problems. Sometimes, he acts as a supervisor by visiting production floors and job sites to assess the work progress. He also communicates and interacts with employees at the shop floor level and schedules meetings with them to understand issues at the lower level (Bodily and Lichtendahljr 44). Tom demonstrates an effective management style that has enabled Airbus to achieve its organizational objectives and meet customer expectations. The company rarely changes its leaders. Airbus always respects and treats both leaders and employees well, which explains the high retention rate within the company. It is a better working place that many people admire working for.
Conclusion
It is clear that controlling, planning, leading, and organizing play a significant role in building a company that accomplishes its mission, vision, objectives, and goals. The report shows that Airbus management team effectively understands the company’s objectives and efficiently plans for the company’s resources and activities required to accomplish expected goals. Also, the managers demonstrate the better function of organizing the company that includes organizing resources and workforce. Moreover, the managers demonstrate effective leading skills that motivate and inspire employees in a work behavior. Airbus management team effectively achieves the company’s objectives, and the organization is successful, nowadays ahead of its competitor (Boeing) in the international market. Airbus needs to focus on its strategic direction to maintain its forefront position in the industry for the next 5 or 10 years and the future.
Work Cited
Al-Najjar, Nabil et al. “Boeing and Airbus: competencies strategy in the very-large-aircraft market.” Kellogg School of Management cases, vol.1, no.3 2017, pp11-19.
Bodily, Samuel and Lichtendahljr, Kenneth. “Airbus and Boeing Superjumbo decisions.” Darden business publishing cases, vol.3, no.1, pp.35-48.
Schmid, Stefan and Altfeld, Frederic. “Airbus–managing the legacy of a complex international merger.” Technology, strategie, and organisation, vol.4, no.1, 2016, pp.287-308.
Wensveen, John. Air transportation: a management perspective. Routledge, 2016.
Williams, Chuck. Effective management. Cengage learning, 2015.
Witt, W. “Supply chain quality management within the aeronautical industry.” Case study at the airbus Single Aisle Fuselage Assembly, vol.2, no.1, 2016, pp.131-154.
