14396538 Ryanair Case Study

Ryanair case study

06/04/2009

Ryanair case study

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Executive Summary

The purpose of this case study was to evaluate the performance, management

functions and future perspectives for Ryanair, which strive to become the leader in

the budget airline industry in Europe.

Looking at the case study it is evaluated that Ryanair performance is based on

focusing the low cost sector specially focusing the budget influenced business and

recreation travellers. The organisation has attained success in the low cost market

with increasing organisational problems in decision making, planning, customer

service, ethics and corporate social responsibility.

The analysis from SWOT indicates the problem of organisational culture need to be

fixed in order to achieve future growth objectives; the organisational culture of

shared values will have a direct impact on their decision making, controlling functions,

customer service and create value for the organisation. So it is recommended that

Ryanair leadership should create an open and integrated departmental

organisational culture to create value for the organisation and differentiate form the

other budget airliners. This differentiation strategy of empowering people will create

the competitive advantage for the organisation, which cannot be imitated and the

organisation will have a clear path for its growth ambitions.

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Table of contents Executive Summary........................................................................................................... 2

Table of contents .................................................................................................................. 3

Situational Analysis ............................................................................................................... 4

Rayanair Performance....................................................................................................... 4

1. Environmental and stakeholder analysis ........................................................................... 5

1.1 Regulatory ................................................................................................................... 5

1.2 Economical.................................................................................................................. 5

1.3 Social .......................................................................................................................... 5

1.4 Technological .............................................................................................................. 5

1.5 Competitors ................................................................................................................. 6

1.6 Ryanair Culture............................................................................................................ 7

1.7 Ethics and CSR ........................................................................................................... 8

1.8 Customers ................................................................................................................. 10

2. Decision making at Ryanair............................................................................................. 10

2.1 Intuition influence on decisions .................................................................................. 11

2.2 Biases and errors ...................................................................................................... 12

2.3 Decision making style ................................................................................................ 12

3. Planning at Ryanair......................................................................................................... 13

3.1 Traditional goal setting............................................................................................... 14

4. Ryanair’s cost focus ........................................................................................................ 15

5. Ryanair’s Value Chain..................................................................................................... 16

6. SWOT Analysis............................................................................................................... 16

7. Critical Set of Issues ....................................................................................................... 17

7.1 Critical Issues Weightage .......................................................................................... 19

8. Problem definition ........................................................................................................... 19

9. Culture of shared organisational values .......................................................................... 20

9.1 Advantages of shaping the shared organisational culture .......................................... 21

10. Recommendations ........................................................................................................ 24

References: ........................................................................................................................ 26

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Situational Analysis The airline industry throughout the world and specially in Europe was facing hard

time prior to the incidence of 9/11 with declining passenger growth rates and

overcapacity was putting pressure on yields and margins. But afterwards budget

airlines continued growth and profits as compared to increasing deficits of the

mainstream airlines. European budget airline is considered very small having only

7% of the EU market as compared to 25% in the US, while European market is

having great potential for growth due to expanding EU borders and more population

as compared to the US.

Ryanair had a usual new company turbulent start with losses of IR£20m within next

five years. Then Rayanair shifted their strategy on the model of southwest airlines i.e.

became the no frills or budget airline & The Rayan family appointed new

management team headed by Michael O’ Leary. It was huge success and the

company floated their shares in international stock markets in few years.

Rayanair objective is to maintain its position as European leader in low fare airlines

operating frequent point-to-point short haul flights focusing on budget conscious

leisure and business travellers (O’ Higgins 2004).

Rayanair Performance Ryanair persistent growth and profitability for many years and its strong position in

comparison to struggling full service airlines put Rayan in bargaining position for

procurement of airplanes, maintenance, staff & airport services. Despite increase in

their operating expenses Ryanair kept on growing its profits. And their Passenger

volume increased by 42% in 2003 decreasing the fare by 6%.

In 2003 Rayanair acquired Buzz airline, a budget subsidiary of KLM based at

Stansed, acquiring Buzz and the Stansed airport’s slot became the competitive

advantage on that location.

Ryanair’s cost reduction strategy mainly focuses on

• Fleet commonality (keeping most of the airplanes alike e.g. Boeing 737)

• Outsourcing the services (maintenance, catering, baggage handling)

• Airport charges (preferring low airport charges locations or gaining subsidy,

avoiding main city locations)

• Staff cost (contractual basis, earning more due to more frequent flights)

• Marketing costs (using website bookings, reducing travel agent commission)

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1. Environmental and stakeholder analysis

1.1 Regulatory

Ryanair manipulated their strong position gaining illegal favours from some airports

resulting in regulatory fines by the EU commission; the company has also been fined

for their services to the disabled passengers. The EU and courts have also fined

Ryanair on many occasions due to illegal favour of airport subsidies from some

airport locations and other issues like their refusal to provide wheelchair to disabled

passengers. The EU and Irish legislators has criticised Ryanair for its employment

practises and not allowing trade union in the organisation (O’ Higgins 2004).

1.2 Economical

Ryanair has been doing their business and maintaining expenses, revenues mainly

in euro which provided stability due to increasing number of euro pact countries and

air traffic control charges to be paid in euro with the exception of some UK£ and US$

transactions. Increment in landing charges in the UK, Ireland and abolishing duty

free sales in the EU had been blow to the airline resulting in lost revenues to the

company and commission on in-flight sales for the staff (O’ Higgins 2004).

1.3 Social

Ryanair’s reluctance to provide services to disabled or older passengers has

resulted in court ruling and fines against them. In response to the court rulings

Ryanair increased the fare on all passengers and also started lobbing airports and

airlines (which provide free wheelchair services) not to provide free disabled services

(O’ Higgins 2004)

1.4 Technological

Rayanair has a combination of aircraft fleet with old, second hand and relatively

newer airplanes with an average age of 10 years. Due to its strong & growing

position after 1998 Ryanair has been able to make deals with Boeing on their own

bargaining conditions. Ryanair has preferred owning the airplanes rather than lease

because it saves lots of amounts in terms of depreciation costs and putting pressure

on the balance sheet.

Rayanair has set up the company’s website providing online booking facility, which

provides 95% of the total Rayanair bookings and saving staff, agents commission

costs (O’ Higgins 2004).

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1.5 Competitors

Rayanair approach toward competition has been very aggressive and in most of the

instances it has outpaced the competitors by reducing the prices further or by

increasing the number of flights on those routes. It seems that sometimes it became

the matter of personal ego for the Ryanair CEO. Ryanair has focused mainly on the

routes, which has more budget competition rather than adopting more sustainable

routes with low players in the area. Most of the budget airlines including Ryanair are

using Stansted Hub and there is intense competition among the operators.

Mainstream airline has not let themselves to be left behind, in response these

companies started their own no frills charter services and airlines like Lufthansa, BA,

Scandinavian airlines have reacted by introducing fare cuts on short routes, flying

larger aircraft with one passenger class, reducing in-flight service, internet bookings

and weekend offers. Mainstream airlines also intend to follow the budget airline

model to be executed on international routes.

EasyJet operating on main airports with strong financial position as other budget

airlines, more aircrafts 74, with age of 5yr, 84% load factor, 39 destinations, with

better recommendation to a friend (O’ Higgins 2004).

fig. 1.5

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1.6 Ryanair Culture

The organisational culture at the Ryanair seems to be decayed and gone below the

decaying process, while looking at the case study and evaluating on the seven

dimensions of culture it is assumed that their

• The outcome orientation at the Ryanair is very high which is resulting in poor

customer service; the focus is on no matter how you get the results but the

achievement of the results. This is creating stress at the work place focusing

more on the outcome rather than the quality of work.

• People orientation at the Ryanair is either very low or negligible because more

focus is given to the turnaround and the outcomes, due to these practises the

organisation has been criticised by the EU for their employment practises.

The organisation does not seem to take account of the people in taking any

decisions.

• There is no concept of team environment in the organisation and it seems to

be individuals oriented culture and that might be due to the leadership actions

whose behaviours send strong signal to the employees for their professional

behaviour towards others.

• The Ryanair culture gives the signal of status quo, due to their consistent

same behaviours and their decisions, which emphasize that they have high

stability factor in their culture.

• Innovation and risk taking is very low in their culture and people are not

appreciated for risk taking and making decisions on their own in this scenario

because there is the only one person who is making the risky decisions and

putting everyone at the stake.

• Attention to the detail is very low and employees are not performing according

to the standards they should exhibit and give attention to the details of their

work.

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fig. 1.6

1.7 Ethics and CSR The carrier has been under high criticism by the regulatory authorities, independent

watchdogs, customers and media about their behaviour towards the stakeholders.

The airline has refused to cooperate with international watchdogs or regulatory

authorities whose terms and conditions do not suit them. Ryanair has also rejected

to take the responsibility of lost luggage while putting the responsibility on the airport

services. Ryanair advertising activities has also been criticised while the company

kept on making money from these ads e.g. painting the airplane like a beer glass.

The company also gave some misleading ads as mentioning the main city location

while actually operating from an off-city location (O’ Higgins 2004).

Ryanair and Budget airline industry as a whole has also become a warning signal for

the green concerns due to their frequent landing and take offs in short times and not

showing any responsibility to take measures for carbon footprints, which forced EU

commission to put a charge on landing and take offs. In response to EU concerns

Rayanair formed a lobby with small companies to influence the EU but left alone

because the mainstream airlines did not want to participate in that lobby and

regarded it as Rayanair’s own agenda.

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As the corporate social responsibility is closely related to creating value for the

organisation and the classical view of CSR proves in saying that managers or

organisations are only to make profits (Robbins et al 2008). Does the decisions

made by the Ryanair have anything to do with the customers, social aspects or just

focusing on the profits? Due to the current turbulent economic conditions where the

customers are moving from drift to thrift and saving money, does this allow Ryanair

to rip off the customer’s money for everything? The simple example of Ryanair’s

social responsibility can be seen in the fig below. This means if a passenger is dying

and need oxygen then he/she has to pay for it or die and in emergency landing the

customer must pay to save his/her life.

The CEO actions send strong signal to the employees about their attitudes and

behaviour towards customers, colleagues and competitors resulting in not caring

about anyone and anything.

fig. 1.7, Source: Ryanair website 2009

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1.8 Customers

Ryanair has self acclaimed to be No. 1 in customer service i.e. in punctuality, fewest

cancellation or fewest complaints but the independent comparisons showed flip

results. Rayanair was ranked the worst airline on multiple scales of customer service

compared to Go, Buzz, Virgin Atlantic Aer Lingus and others. In addition Ryanair has

a very high number of customer complaints increasing on yearly basis as compared

to other budget and full service airlines. In view of the independent comparison it

seems that Ryanair does not even follow some steps mentioned in their own

“Passenger Charter”. Ryanair setup a company with the name of Ryanair Direct at

Dublin in order to facilitate the customers for selection of their reservations and extra

services provided by the company (O’ Higgins 2004).

Evaluating the carrier’s customer service seems to be the bus service in Pakistan

where it is normal that if a passenger is not satisfied with the journey the bus driver

might ask the passenger to get off from the bus without a refund. The pathetic

customer service of Rayanair is very similar to flying buses in the sky.

2. Decision making at Ryanair

Ryanair CEO announced in 2003 that they will shift from no frills airline to no-fare

airline with the prediction that by the year 2009 half of our passengers will be flying

free while on the other hand the company introduced cost cutting and revenue

generation modification to compensate the falls in the yields.

Ryanair’s CEO has dominated the decision making in the company and he seems to

be present on every front rather than allowing the concerned organisational

departments.

Due the arrogant behaviour and actions Mr. O’Leary has been classified as having

five attributes of unwanted executives i.e. ignoring change, wrong vision, getting too

close, arrogant attitudes and old formulae by Prof. Sydney Finklestein (O’ Higgins

2004). In pursuit of his ambitions of giving the passenger the free seat and charging

the passenger for everything else e.g. charging 1₤ for using the toilet has been seen

as an insane decision by the company.

Bounded Rationality the case does not give any evidence of rational

decision making rather the Ryanair has operated under the assumption of bounded

rationality because all the decisions seems to be individual based and satisficing

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e.g. when a London court fined Rayanair for their disabled passenger services,

Ryanair CEO immediately increased fare on all flights irrespective of locations.

There is also an evidence of escalation of commitment to the previous sayings or

objectives set by the CEO e.g. After making this media announcement the carrier

has clung on to that decision and even not adjusting their objectives in the current

financial crisis period. The other factors which has influenced decision making at

Ryanair are mentioned below.

2.1 Intuition influence on decisions The decision making in the Rayanair has been influenced by intuition as shown in

the illustration below.

fig. 2.1

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2.2 Biases and errors

fig. 2.2

Besides all the other biases the two biases mentioned are more evident than others

The anchoring trap After the 9/11 event when the mainstream carriers were

struggling for survival and budget airlines were making money so as the Ryanair.

The past success in that era has invaded into the decisions of the Ryanair by not

understanding the current volatile and unpredictable environment. Ryanair decisions

has been biased by the past success and giving too much weightage to that period.

The status quo trap the decision making in the Ryanair has also been biased to the

status quo trap i.e. the company or the leadership does not seems to change their

business decisions according to the situation in the unpredictable & volatile

economic scenario. It is clear that sometimes the egocentric actions and behaviour

of the CEO has come under criticism by the regulatory authorities, media,

competitors and general public and resulting in fines by the authorities but the

Rayanair CEO doesn’t seem to bother anything or give importance to customers,

rules, regulations or competitors and continue to peruse to his agenda.

2.3 Decision making style

The decision making style at the Rayanair has been somewhat mixture of multiple

factors, mostly influenced by intuition and dominant behaviour by their leadership,

but if we look in the following four dimensions this shows that

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• Somewhat directive, related to focus on the short term rather than in terms of

ambiguity.

• Little bit conceptual, in the sense of finding the creative ways of finding the

problems but not looking at the broad number of alternatives.

If the decision making at the Rayanair case study is evaluated then it can be

somewhat as illustrated in the fig. 2.3

fig. 2.3, Source: Robbins et al 2006

3. Planning at Ryanair

The goal of the Rayanair is to “maintain its position as Europe’s leading low fare

airline” (O’ Higgins 2004). As the quality of planning and its appropriate

implementation can contribute significantly to the organisational high performance

but it seems that due to pressure from the macro-environmental factors Ryanair has

been doing some informal planning and making adjustments in their formal planning.

But the organisation has stuck to their objective of gaining and marinating the cost

leadership.

The organisation has also mentioned its stated goals about their customers in their

customer charter irrespective of that the customer charter is followed or not but they

definitely have the stated goals to achieve.

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3.1 Traditional goal setting

The goal setting from the case seems very close to the traditional top to bottom

approached, while there is no evident goal settings by the divisions or there might be

some but when it is getting to the operational area and individual employees it is

definitely loosing clarity. That seems to be the main reason for all the departments

not on a single wavelength specially the customer services and cabin crew clearly

indicates that are working on individual basis without any team objectives or striving

to create value for the organisation. Because individuals don’t have the clear

objectives they are more focused on their individual commission on the flights or just

trying to make more hours in order to make earnings.

This kind of goal setting is influenced by the dominance of the CEO at the

organisation for being the largest shareholder in the company and dominated the

most decisions since he joined the organisation. Although the cards has been in the

favour of the Ryanair and the organisation kept on growing but the leadership of the

organisation should realise the current market situations where things might not be

smooth as Mr. O’Leary thinks to favour his personal hostile ambitions towards the

customers and the competitors. The organisation has to create an environment

where every individual in the work force understands own objectives as well as the

organisational objectives and this can only be done creating the organisational

culture of shared values.

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fig. 3.1

4. Ryanair’s cost focus

fig. 4.0

Ryanair has adopted the cost focus strategy, gaining a low competitive advantage in

the low cost area while they are aspiring to gain competitive advantage through

overall cost leadership in the broad competitive scope keeping the costs low and

giving a free seat to the customer and gaining profits through ancillary services.

Ryanair has been avoiding the place where there is intense competition with the

mainstream airlines at the main locations, and focusing on locations where they will

face less competition or where they can overcome the competitors through reduction

in the price or increasing the number of flights.

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5. Ryanair’s Value Chain

Table: 5.0

Besides many controversial decisions and steps by the organisation, the company

has been able to create the large market share in the Europe and specially

dominating the UK-Ireland market. The Ryanair value for the organisation is created

by some very initiatives in the operations. Outsourcing of maintenance and other

services, commonality of the airplane fleet, sales of ancillary services and online

bookings have created the difference between Ryanair and other budget carriers. As

these measures have created the competitive advantage for the company but this

advantage can be imitated so it won’t last long. The other budget carriers like

EasyJet having more resources, locations and routes can become challenging for

the organisation in the future.

6. SWOT Analysis Strengths

• Persistent growth

• Fewer overbookings

• Fewer cancellations

• Punctuality

• 37% of UK-Ireland market

• Frequent departures & turnaround

• Point to point flights

• Low fares/cost leadership

• Bargaining position for procurement of

airplanes

Weaknesses

• Illegal airport subsidies

• Opacity in regulatory dealing procedures

• Multiple Fines by regulatory authorities

• Poor or decayed organisational culture

• CEO making all the decisions

• Bounded rationale & intuitive Decision

making

• Escalation of commitment to previous

decisions

• Top to bottom traditional goal setting

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• Commonality in the aircrafts

• Ownership of airplanes (low depreciation

cost)

• Fuel risk management (hedge 70-90% of

fuel forecast)

• Acquisition of Buzz

• Dealing mostly in Euro

• Outsourcing services

• High seat occupancy, Load factor

• Sales of ancillary services

• Regional airport which offer lower

landing & handling charges

• No SMART objectives

• CEO most disliked person by the

regulatory authorities and competitors

• Poor corporate image mainly due to the

CEO

• Worst customer service compared to

other carriers

• Disabled customers service

• High customer complaints

• No luggage handling

• Remote airport locations

• High maintenance cost of old airplanes

• High cost of airplane ownership

• Misleading ads to customers

• Poor employment practises

• Head to head & offensive competition

• No respect for competitors or customers

Opportunities

• Main airport locations

• New regional bases

• Time flexibility (choice of flights)

• Decision making (entrepreneurial to

corporate)

• Customer service

• In flight services

• Comply to regulatory authorities

• Corporate image

• Business passengers

• Continental Europe

• Empowerment employees & trust in the

employees

• Fostering Innovations and suggestions by

management direct interaction with the

employees

• Low cost service which is desirous &

favoured by customers

• Change of CEO can change corporate

image

Threats

• EU airport regulations

• EU overbooking & cancellation

compensation

• EU regulations for climate protection

charge

• Disabled customers regulations

• Price wars

• Free seats giveaways announced by the

CEO

• Pilots forming union

• Pilots demand for change remuneration

• Ryan family selling shares

• CEO largest shareholder

• New entrants in UK-Ireland mkt.

• Increased landing charges in UK &

Ireland

• Regulatory pressure about trade unions

• Charter airline by main airlines & new

entrants & low fare subsidiaries of

mainstream airlines

• Strategies by mainstream airlines (fares

cuts, reduced service, internet booking)

• EasyJet operating on main airports with

strong financial position as other budget

airlines, more aircrafts and destinations

Table: 6.0

7. Critical Set of Issues

1. Create the organisational culture of shared values where employees are

willing and enjoy to work. Empower employees to do their job, support and

encourage them in their decisions. When employees are empowered and

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respected at the work place, they feel as part of the organisation and their

decision are appreciated, then they will work whole heartedly at the work

place irrespective of the department resulting in improved customer service,

less complaints and improved organisational performance. The better

customer service will result in creating better image for the organisation

providing low cost and desirous service.

2. Enhance organisational Decision making and planning process, the

organisation should provide clear objectives and specific plans to peruse

rather than directional plans or media announcement based objectives in

order to avoid future risks of heuristic and intuitive decision making. As

leaders play a key role in building organisational image. It is the leaders

whose actions and behaviours send strong signal to the employees to react in

the same way as the leaders do.

3. Improve Customer service, as many new & mainstream airlines are entering

the low cost arena to get share in budget market. By providing better services

and attract Business customers that prefer to fly from main airport locations,

can fly through Rayanair if receiving better customer service.

4. Ryanair should be more socially responsible by addressing the demands of

the stakeholders, as corporate social responsibility is very important for

growth of the business, as there is proven direct link with the organisational

performance and its responsibility in social issues. Building the sense in the

organisation being socially responsible will improve corporate image to create

value for the organisational.

5. Comply to regulatory authorities, EU commission requirements to avoid major

financial losses

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7.1 Critical Issues Weightage

8. Problem definition

Although Ryanair has got set of problematic issues but in view of the previously

mentioned external and internal environmental pressures, their decision making and

value creating areas, it can be derived that the organisation has become a

combination of individuals, which are not collaborating together in order to create the

value for the company. The Ryanair can only achieve its growth ambitions or their

objective to “maintain its position as Europe’s leading low fare airline” (case) if a

culture of shared values at the work place is created where employees are involved

in the process of decision making or at least they have the clear understanding of the

organisational objectives rather than receiving from the hierarchy without any

understanding of the objectives. As Ryanair ‘s focus has been mainly on the low cost

but they don’t have distinct competitive advantage, which can differentiate them from

the other carriers. The only difference and competitive advantage can be made by

the people, which can only be achieved through shared organisational culture.

The other problems in the critical set of issues like decision making, customer

service and corporate social are directly proportional and connected to creating the

shared culture. As the fig 8.0 elaborates that the shared organisation values has

direct impact on the organisational decision making, employee behaviour, its

marketing approaches and building team work environment in the company.

Issue Weight

1. Shared Culture 10

2. Decision Making 8

3. Customer Service 6

4. Corporate Social Responsibility 6

5. Regulatory Compliance 4

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fig. 8.0, Source: Robbins et al 2006

9. Culture of shared organisational values

The importance of shared culture and empowering of employees has been

highlighted by Brett Godfrey of Virgin Blue who emphasises on the importance of

empowering and supporting employees to do their job and make decisions, which

encourages the innovative thinking that can become the competitive advantage for

the organisation. This philosophy at the organisation not only provides changes but

also the best innovations within the organisation (Moore 2005). As this has been the

price sensitive segment so the competitive advantage created by the people cannot

be copied by other organisation, when employees are empowered and love to be at

their jobs resulting in high morale of the employees. It has been proven in many

cases that high morale also results in high customer service, customer satisfaction

and creates value for the organisation. If the customers are satisfied then no matter it

is the price sensitive market or premium price market the organisation always wins.

Moreover in case of the satisfied customers the sensitivity of the price will become

the secondary thing for the customers as compared to the employee’s attitude

towards customers. As it has been proven that the shared culture has a direct impact

on employee performance as shown in the table below.

Personal and

work

outcomes

High

internal

motivation

High quality

work

performance

High

satisfaction

with the work

Low

absenteeism

and turnover

Table: 9.0 Source: Robbins et al 2006

The evidence and role of shared organisational culture in its performance also has

been substantiated by the example of continental airlines in the US, which was

worse performing airliner in the US near to bankruptcy. The only thing that flipped

the image and performance of the organisation was creating the culture of shared

values through some good innovative solutions made by its leadership (Brenneman

1998). Good organisational leadership is the only key to create the culture and it is

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their responsibility to relate the people from different departments rather working in

silos and keeping in touch within the organisation (Moore 2005).

9.1 Advantages of shaping the shared organisational culture

• Build better communication channels within the organisation. The

communication within the organisation is a vital element in shaping the shared

organisational culture. The open culture can only be achieved if all the

departments in the organisation are inter-related. An example of inter-

departmental communication channel is highlighted in the fig below. The inter-

departmental open communication will remove the silos within the

departments and enable the mangers to set SMART objectives

fig.9.1

• Facilitate the mangers to set clear and SMART objectives. Objectives will

be understandable down the hierarchy, the sharing of information within the

departments on a flatter scale will enable the employees to coordinate and

understand where the organisation is striving to go. As the case shows that

the objectives presently set are not clear and do not provide clear destination

in a specific period which is not only hampering the organisational

performance, customer satisfaction rather hatred by the regulatory authorities,

competitors and customers.

• Improve the planning process at the Ryanair. The traditional top to bottom

planning can be improved, when the employees are involved in the

organisational decisions, the approaches top to bottom and bottom-up can

both be used in order to create an environment of equal understanding of

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objectives at all levels. Everyone in the organisation will strive and contribute

to achieve those objectives.

• Facilitate effective control functions. Empower employees, shared and

open door culture will create an environment of feedback mechanism for the

entire departments, which will enable the organisation to re-evaluate its

procedures and processes in order to provide better services. The shared

culture at the organisation will enable the departments to use feedback, feed

forward and concurrent controls at the time when required because the flow of

the information within the departments will facilitate this function. As planning

is directly related to the control systems so Ryanair control functions will help

the organisation for better planning in the future and measure their current

performance.

fig. 9.2 Source: Robbins et al 2006

Integrated departments within the organisation will facilitate Ryanair to

measure their performances not only at the departmental; organisational but

also at the individual levels. This integrated culture will enforce individual’s

sense of responsibility and understand Ryanair objectives clearly.

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fig. 9.3

• Enhance customer satisfaction, customer loyalty and increase market

share. The belief of the organisation that people can create the difference and

make sure that everyone believes it will create a working environment where

the customers will get the best.

• The competitive advantage as there is intense pressure on the Ryanair in

the competitive arena with many competitors entering the market; the shared

organisational culture with empowered people will provide the distinct edge

over the other entrants. In contrast to the current meagre advantage of cost is

not going to last long, if the organisation intends to attain long term

competitive advantage then it has to change its organisational culture.

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fig. 9.4

10. Recommendations

As the set of critical issues highlight the importance of several factors to be

addressed at the Ryanair in order to achieve their growth and maintain cost

leadership. But the most evident problem in the organisation is their culture. If fixed it

will create an environment in the organisation. The employee behaviour towards

customers, peers and managers will create the difference within the organisation and

in the market. Employees can only contribute in shaping the culture if the leadership

has got the intention to do that and employees will learn about culture as shown in

fig. 10.0.

fig. 10.0 Source: Robbins et al 2006

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As mentioned earlier the role of leadership in shaping the organisation and from the

example of continental airlines it quite evident that the leadership at Ryanair should

immediately adopt boundaryless environment in the organisation in order to correct

their consistent social, ethical, decision making, planning and customer service

problems. Ryanair has mainly profited from the financial crisis period due to the

customers cost saving strategy but as the financial crisis diminishes in future their

cost leadership strategy cannot provide them significant edge over the competitors.

So it is highly recommended that Ryanair should create a difference by adopting the

strategies mentioned earlier as this is the only option they can adopt without putting

too much financial investments. By adopting the changes Ryanair future position can

be forecasted in the fig. 10.2

fig. 10.2

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References:

Brenneman, G. 1998, Right away and all at once. How we saved Continental,

Harvard Business Review, September-October, pp. 162-164,166,168,170,172-

174,176,178-179.

Dundas, K. & Davey, T. 2009, Foundations of Management study guide. Southern

cross University, Australia.

O’ Higgins, E, 2004, Case Study Ryanair, University College Dublin.

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14396538 Ryanair Case Study

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