Secondary activities are:
-
Procurement - is the acquisition of inputs, or resources, for the firm.
-
Human Resource management - consists of all activities involved in recruiting, hiring, training, developing, compensating and (if necessary) dismissing or laying off personnel.
-
Technological Development - pertains to the equipment, hardware, software, procedures and technical knowledge brought to bear in the firm's transformation of inputs into outputs.
-
Infrastructure - serves the company's needs and ties its various parts together, it consists of functions or departments such as accounting, legal, finance, planning, public affairs, government relations, quality assurance and general management
Whatever the size or type of business, the primary and secondary activities used to combine inputs are performed by a mixture of functions, based on the principle of division of labour and specialisation.
4.32 Functions at Manchester Airport
I will explain the different functions at Manchester Airport
Human resources
The role of the Human Resources department can be anything from the interpretation of employment legislation or terms and conditions of employment. The team has a high level of expertise and acts as a source of information and advice for line managers and employees. Human resources will also be involved in sorting out recruitment or training and development. The human resources manager will work alongside the managing director of Manchester Airport to develop human resource strategies which will support the achievement of a business aim.
Finance
All organisations must take care in setting their financial targets, a business which meets their entire targets is said to be performing well.
Different factors influence the financial activities and performance of an organisation.
The finance department deals with the following:
- Debt
- Stock Control
- Budgeting
- Management Accounts
- Preparing Accounts e.g. Trading Accounts, Profit and loss accounts
- Paying Wages
- Obtaining Capital and Resources
Administration and IT support
Administrative responsibilities include:
- Health and Safety
- Planning
- Management Accounts
- Manchester Airports Developments
The role of the information services department is to serve the IT requirements of the business. This department is also responsible for:
- Safe and successful operation of the airport
- Supporting IT and communications
- IT security
- Facilities Management
- Health and Safety
- Aviation Security
- Airport Security Passes
- The baggage Handling System
This department has to have a very good understanding of all aspects of the business and its customers and suppliers.
Operations
There are many different operations at Manchester Airport these include:
- Teams of cleaners
- Specialist attend to fuelling
- Plane is prepared (food, drinks, newspapers)
- Controlling aircraft movements
- controllers operate to manage aircraft movement
- engineers look after radio navigation aids, radio, radars, computers
- responsible for managing the airfield
- Ensuring the airport complies with the Aerodrome Licensing Regulations
- Maintaining safety on the airfield
The operations also include keeping the runway clear and safe; Airfield safety officers are responsible for bird and hazard control, Also Weather forecasting, fire service, customs and immigration, baggage and handling. There is also a wide variety of shops at Manchester airport, facilities for children which include high chairs, bottle warmer, padded changing mat. They also have facilities for people with special needs including trained staff for sign language, hearing aids, and special vehicles.
They also have places for contemplation and pray.
Marketing, research and development
Manchester Airport depends in part upon the success of its partners, just as their success is partially dependant upon the airports, close working relationships are crucial in taking the business forward.
Aviation business development department (sales) this department develops and maintains relationships with its business partners, airlines, tour operators, cargo operators, and industry and governing bodies.
Market research and analysis, the airport operates in a competitive business environment, market research provides the airport with invaluable sources of information to help it make decisions and develop long-term business strategies.
The role of marketing is to promote the airport and its products to a specific target market; it is also responsible for the increasing awareness and appeal as potential business partners to airlines and tour operators around the worls.
Planning and development role is to help the airport grow.
Customer Service
The main customers at Manchester airport are the airlines with passengers being the end users, but there are many more customers of Manchester Airport, these are:
· Tour operators
· Travel agents
· Service partners
· Employees
· General public, meters and greeters
· Shareholders
The customers are the most important thing in a successful business because they bring money in and without them there would be no business. So it is vital that businesses look after their customers.
Manchester Airport will try and help their customers in anyway, they do this buy:
· Providing information desk
· Providing retail and food outlets
· Customer care cards
· Baggage handling
· Staff to help them around
4.32 Combining the Functions
It is essential the functional areas of an organisation are combined effectively if the organisation meets it targets. If the fictional managers pull in different directions each function will develop its own value and culture, which are at odds with what the overall organisation is trying to achieve.
Sometimes public relations will complain that the accountants are stopping them from carrying activates because there isn’t a clear flow of revenue that can be attributed to a PR campaign.
You have to clear set of company objectives that can be translated down into functional objectives, so that the functions are driven by organisation’s objectives.
Marketing Finance Production Administration
Objectives Objectives Objectives Objectives
4.33 Intergrading the functions
Most organisations there is far more integration of functions than ever before. The reason for this is there has been an importance on serving the customer and the use of IT has become more popular in the business place. With the use of IT it makes it possible for functional areas to share the same information, and to work collaboratively using this pool of information.
Very often this has involved the creation of work cells made up of a number of people from a number of functions who work together in carrying out one specific to meet customer’s requirements and needs.
4.4 Organisational Structure, Culture and Management Style
Definition: Organisations are social arrangements for the controlled performance of collective goals (Buchanan and Huczynski)
This is achieved through the inter-relationships, co-operation and, disagreement between its members. It allows people to pool their knowledge, experience, capability and resources, also to meet their needs for relationships with other people.
4.41 Introduction
All organisations are unique, and are designed and structured in many different ways according to factors such as: ownership, the markets in which they operate, size, age, staff skills and abilities, management style and organisational culture
The structure of a business will have a powerful influence on the way it works and performs
Whilst there is no best possible or ideal design, a well-designed structure will help management to perform effectively and efficiently and achieve its objectives. On the other hand an inappropriate structure can lead to poor overall business performance.
This could be because it leads to issues such as:
- Lack of customer focus
- Poor motivation and morale
- Lack of opportunities for personal development and progression
- Inappropriate delegation
- Poor communication
- Slow decision making
- Low creativity and innovation
- Inflexibility and unresponsiveness
Organisational structure
The organisation structure is very important. A clear and effective structure will enable the organisations to meet its objectives. Controlled performance is almost impossible without some kind of organisational structure. This divides up the work that needs to be done, and then put it all back together again, enabling high-quality business decisions to be made and carried out, which will help the organisation meet its objectives.
This involves:
Grouping together the tasks required to fulfil the objectives of the organisation, and assign appropriate roles, responsibilities, and resources for carrying them out to suitable individuals or groups. This may be done on the basis of function, geographical area, product or product type.
Co-ordinating and linking together the activities of these individuals and groups in a formal network of relationships based on high-quality organisational principles and good communication systems so that overall aims are achieved without gaps or overlap in the flow of work.
4.42 Strategy and Structure
Manchester Airport’s vision is to be the airport of choice, internationally recognised. Its’ other main business objective is to develop the profit growth of its Airport-related and other businesses in a manner that brings sustainable economic, financial and social benefits to the North West region, and minimising negative impacts.
The management writers Peters and Waterman at the consultants McKinsey &Co. have developed a model that explains that an organisation is not just Structure, but it consists of seven key inter-related and mutually dependant elements that needs to work together if the organization is to be successful.
Themanager.org website
These seven elements are divided into so called hard S’s and soft S’s. The hard elements (green circles) are more tangible, and therefore easier to identify. For this reason they are often the ones that gain greater attention. They can be found in strategy statements, corporate plans, organizational charts and other documents.
The four soft S’s however, are difficult to describe since skills, values and elements of corporate culture are continuously developing and changing. They are highly determined by the people at work in the organization. And it is much more difficult to plan or to influence the characteristics of the soft elements. Although the soft factors are below the surface and are harder to measure, and plan but they are equally important, as they have a great impact of the hard Structures, Strategies and Systems of the organization.
If one element changes then this will affect all the others.
When trying to make changes, many organizations focus their efforts on the hard S’s, of Strategy, Structure and Systems, and pay less attention to the soft S’s, of Skills, Staff, Style and Shared Values.
Peters and Waterman in “In Search of Excellence” commented however, that most successful companies work hard at these soft S’s. The soft factors can make or break a successful change process, since new structures and strategies are difficult to build upon unsuitable cultures and values.
Strategy - route and actions the company has chosen to achieve a sustainable competitive advantage in the market place in order to achieve its objectives
Structure - formal division of work, roles, responsibilities, and resources within the organisation
Systems - procedures, formal and informal, that support the strategy and structure, gathering and disseminating information and making the organisation work
Style - ingrained way the company conducts business. The culture of the organization consists of two components: Organizational Culture - the dominant values and beliefs and Management Style – the way managers regard and treat their staff.
Staff - the pool of people, who need to be developed, challenged, motivated and encouraged, and whose co-operation is very important if the business is to adapt and compete. This soft factor essential - without warm bodies there is no organisation!
Skills - closely related to staff is the distinctive combination of abilities, skills, and talents that an organisation possesses.
Superordinate goals - the last S is at the core of an organisation. The guiding concepts - values, concepts, ideas, aspirations and vision senior management bring to the organisation, and around which the business is built.
4.42 Organisational Structure at Manchester Airport
Introduction
The organisation’s overall performance and effectiveness depends on seven elements and the resources available to produce it, there is no ideal structure. Every choice that’s made depends on individual. This is also known as the contingency theory.
A formal organisation is one that is:
Deliberately planned and created in order to achieve Objectives through the interactions and efforts of People, channelled and coordinated through a Structure, based on certain principles (such as the division of labour) and through defined hierarchical relationships of authority and responsibility, and also directed and controlled by Management
The main purpose of structure is to guide or build a frame.
To make decisions about objectives or a strategy
To give out of work between members of an organisation, and the co-ordination to help the organization achieve its goals and objectives
To control order and command, this will achieve the activities of the organisation, which can also be planned and controlled by management.
The main points about an organisational structure are:
Structure is the means of improving organisational performance
It should be flexible and responsive, and needs to be reviewed at regular intervals and adapted in keeping with the growth and development of the organisation,
Whilst a good structure does not by itself produce good performance, a poor structure makes good performance impossible.
Structure not only affects productivity and economic efficiency, but has a powerful impact on the character the business and on the attitudes and behaviour of people working in it. It will affect morale, job satisfaction and the willing participation of the workforce.
In turn its operation and actual working arrangements will be influenced by the style of management, personalities of its members and the informal organisation and culture.
Building an organisation doesn’t just mean being concerned about the structure, it also means being concerned about all different things like the methods of work and technical efficiency.
It involves: Building a relationship between people and the organisation
Manchester Airport is a group of companies organised to gain the benefits of centralisation and decentralisation with none of the constraints.
Most organisations like Manchester Airport visually show their structure and the way they operate by means of an organisation chart (organigram). It displays:
How the work in the organisation is divided up and carried out by individual groups and departments as well as how it is co-ordinated to achieve company goals and objectives.
The vertical lines show the hierarchy or chain of command. The horizontal lines show how the business of the organisation is allocated. Jobs can be grouped in many ways according to the size, complexity and focus of the business:
∙ by product or service
∙ by function
∙ by customer
∙ by geography / territory
∙
Each method has its benefits and constraints. In the case of Manchester Airport, jobs are allocated by a mixture of function, geographical area and specialism.
Manchester Airport is the second largest airport operator in the UK, with airports at Bournemouth, East Midlands, Humberside and Manchester. This growth and development, both on-site at Manchester and elsewhere in the UK, as well as expansion into many other airport-related activities and businesses, has led to the recent restructuring of the business into a group of companies along operational lines, with a group holding company and five trading companies, forming a family of businesses.
This new company is still fully owned by the nine councils of Greater Manchester.
The Group's role is to deliver business and financial strategies for the business as a whole and to provide a policy framework.
The Group has its own Board and Chief Executive; and each company has its own Board and Managing Director.
Decision-making and control within organisations can either be concentrated centrally, with a few people at the top of the organisation or spread more widely amongst the various sections of the business. The extent to which there is centralisation is one of the main influences over the organisation's management style.
The aim of the reorganisation is to gain all the advantages of having a centralised structure at Group level:
∙ The majority of power, authority, responsibility and decision making for long-term policy and planning, and the co-ordination, monitoring and evaluation of performance is concentrated in the hands of a few, experienced senior managers. This can help ease and speed up the communication and decision-making process, particularly in a dynamic, fast moving, and competitive business like the provision of international airport facilities and services
∙ Tight control over the organisation, and its development, ensuring everyone follows the same standardised policies and procedure to ensure profit targets are met through the delivery of consistent, high quality services in a safe and secure environment
∙ Specialist facilities and staff can be developed and used by the whole organisation. This maximises administrative convenience, reduces duplication and costs, and removes a burden of work and responsibility from the operating companies, who have more time to focus on operational and tactical issues.
At the same time, the aim is to gain all the advantages of a decentralised or devolved structure at operating company level:
∙ Empowerment of local managers to make decisions, thereby improving motivation, innovation and a sense of involvement
∙ Encouraging a more flexible, faster response to local customer, competitive and environmental changes
The five trading companies are:
∙ Manchester Airport Division
∙ Manchester Airport Aviation Services
∙ Manchester Airport Ventures
∙ Manchester Airport Developments
∙ Regional Airports
Manchester Airport has been structured on sound organisational principles, namely:
∙ The hierarchical principle (or scalar chain of command)
∙ Span of control -- the number of subordinates a superior has authority over and is required to supervise.
∙ Unity of command
∙ Division of work and functional specialisation
∙ Line and staff functions
∙ The matching of authority and responsibility
Manchester Airport used to be a tall, hierarchical organisation, with many levels of management and supervision relative to the number of employees. But because there were so many managers and supervisors, the span of control at each level was very narrow. Although this made it easier for such a large organisation to be closely and effectively managed and controlled, there were disadvantages as well, such as:
∙ One of the major problems was that it actually made it more difficult for senior management to stay in touch with developments that happened at all levels of the organisation, and in its external environment.
∙ The long chain of command from the top to the bottom of the organisation, and the high level of specialisation by function, tended to make the business very formal and interfering.
∙ The many layers of authority meant that flow of information, both up and down, as well as across the organisation was not only slow, but information was being filtered and distorted. As a consequence, decision-making and implementation was slow and of poor quality.
To remedy these and other problems, Manchester Airport has carried out a programme of delayering and empowerment.
In the environment that Manchester Airport operates, as well as other large businesses. It has become increasingly more global and competitive. This has forced businesses to become more flexible and responsive to any changes.
4.43 MANAGEMENT STYLE AT MANCHESTER AIRPORT
THE PURPOSE OF MANAGEMENT
A definition:
"Management is the process of planning, controlling, co-ordinating and monitoring the acquisition and use of resources to achieve organisational objectives, within a changing environment, balancing efficiency and, effectiveness with equity"
MANAGEMENT STYLES
Management is a question of getting things done through other people. People tend to respond to the manner in the same way they are treated. Management behaviour, style and people skills are therefore as important as functional and technical management skills, and will control the level of motivation, effort, productivity and performance achieved by their staff.
For managers to be effective, they need to develop a style of management which suits the structure, staff and culture of the organisation, it is also important for a manager to be able to change their style of management depending on the situation.
Whilst there are many different styles of management, four main styles are recognised as being effective if used at the right time and under the right conditions.
Autocratic - Managers who adopt an autocratic or authoritarian style will take responsibility for everything and keep all authority to themselves. They will tell their staff what to do and how to do it. This may be appropriate in emergency or high-risk situations.
Consultative - Managers who are consultative discuss most issues with their staff but retain overall control. They will listen to their team but will take the decision themselves.
Democratic - Managers using a democratic (or participative) style will delegate some authority to their teams so that teams are able to make some decisions themselves. Where managers retain control they still discuss decisions fully with their staff and are heavily influenced by their opinions.
Laissez-faire - Managers who have adopted a laissez-fare style have delegated all their authority to the team. They believe the team is capable of making all the decisions themselves.
The decision is to decide which one is best and will depend on the circumstances of the situation. .
If we define a manager as someone who is in charge of getting things done through a group of people, then the appropriate management style will be influenced by:
The nature of the task i.e. its' complexity and importance. Complex, creative work may require close, co-operation between management and staff.
The personality of the leader e.g. the presence or absence of particular personality traits or characteristics. Some managers find it hard to 'let go'.
The personality of the group or team e.g. their skills, willingness to co-operate, accept responsibility, and perform tasks.
Size of organisation. Two sets of opposing forces are likely to be at work in a large organisation like Manchester Airport:
Internal 'pull' factors, such as the desire of management to standardise and totally control all operations, which tends to create centralised, autocratic organisations. This is particularly evident at Manchester Airport, where there are heavy pressures on management to make profits, cut costs, and comply with strict legislation to ensure that it operates a safe and secure environment for its customers and employees.
External 'push' factors, such as competitive and environmental pressures require organisations to be more responsive and customer focused. It is important in organisations like Manchester Airport, where its front line staff is directly involved in delivering services to customers, and is responsible for ensuring that customers have a 'helpful' experience.
THEORY X AND THEORY Y MANAGERS
The way managers approach their job, and the behaviour they display towards their subordinates is likely to be conditioned by:
- Their views about people, human nature and work
- Their own experiences
- The demands made on them by the organisation, its structure and culture.
If they adopt the central principles of McGregor's Theory X (direction and control through a centralised, hierarchical organisational structure, and the exercise of authority through sanctions and rewards), it is likely to result in an exploitative or authoritarian style of management.
In a highly competitive world, where customers are more demanding and employees better educated and more independent, there has been a change in the traditional boss-subordinate relationship. The result has been a move towards more responsive organisational structures, with flexible working, and the need for greater employee involvement.
These developments place greater emphasis on adopting a Theory Y approach, which attempts to integrate individual and organisational goals, requiring an inclusive, and participative, management style, based on trust and confidence in subordinates, rather than a traditional command and control.
The emphasis is on:
- Motivation, based on delegation and empowerment
- Rewards and incentives for the achievement of agreed goals
- Participation
- A high degree of teamwork and communication.
Responsibility for achieving the goals of the organisation is pushed down to all levels of the organisation. This participative style of management, which emphasises both' task' and 'people', is more likely to effectively harness the human resources of an organisation in order to achieve its objectives.
A CONSULTATIVE STYLE
Whilst there are many different management styles employed at the Airport, the overall management style is generally consultative, midway between the authoritative and democratic styles.
Consultative managers seek to confer with the team and other people before making or implementing a decision. They need to have good interpersonal and listening skills in order to understand the concerns of their peers and subordinates, as well as to draw on their expertise and commitment. To do this, managers at the Airport use mechanisms such as newsletters, team briefings, suggestion boxes, consultative committees, chief executive's breakfast etc.
Managers generally employ a Theory Y approach, showing a good deal of trust in their staff subordinates, motivating them with rewards, recognition and incentives.
There is a fair amount of teamwork and involvement at the Airport. Communication takes place both horizontally and vertically, and responsibility for achieving the goals of the organisation is now being spread more widely throughout the organisation.
4.44 Organisational culture at Manchester Airport
Communicating Culture
Organisational culture is described as the set of beliefs, and attitudes of both employees and management that helps to influence decision-making, and ultimately behavior and the way people interact, within organisations.
Part of any culture includes visible signs, such as the style of offices or what people wear, and the way managers and staff communication. These are often based on past incidents.
Communicating corporate culture begins from the day a person joins the business. New workers are keen to settle in and find their way in a job and the organisation. This will probably happen after a serious of activities such as induction and training. For businesses it is a way of putting their mark on employees, whereas for the latter it is a matter of learning how to survive from day to day and develop in the future
Culture matters
Culture is important because:
∙ It is deeply ingrained and pervasive, permeating the whole organisation, It can work for, or against the management and objectives of the organisation, impacting on its overall performance, by affecting:
Its strategy
Structure
Systems
Staff
Skills
Management style
Shared values
∙ For a business like Manchester Airport, culture is important determinant of company efficiency and productivity. Although the company may lay down objectives, initiatives, policies, procedures it wishes its people to follow, it is what is considered ‘normal’ in the organisation that will determine what actually gets done.
What determines Culture
There are a wide variety of factors that determine the current culture within an organisation like Manchester Airport. The most important include:
∙ Management style
∙ Past recruitment policy
∙ The organisation’s stated aims, objectives, and reward policy.
If the business recruits positive people, with the right attitude and good interpersonal skills, and offers good salaries and wages, then this will tend to create a more positive looking culture than if the business pays below the industry average for ‘bodies’ and ‘time-watchers’. The management of an organisation can have a significant impact on the culture of the workforce; indeed management behavior and beliefs are part of the overall business culture. This has important implications because the approach secondary workers take will be influenced by the actions of their superiors. This is known as the ‘shadow effect’ –superiors, by their attitude and behavior, cast a shadow down the organisational structure on to their subordinates, who will begin to adopt the ideas, convictions and behaviours of those they perceive to be the most important individuals in the organisation. A Theory ‘Y’ management style, in which employees are trained and given greater involvement in decisions, is likely to be self-reinforcing; a culture of participation is likely to develop in which employees come up with solutions to sort out their own problems, freeing management time for other issues. A more Theory ‘X’ approach, in which managers tend to distrust their employees and fail to delegate, may build a negative, cynical culture where workers develop a mutual mistrust of managers.
Changing Management Culture
Each organisation will have its own unique culture. The fact that organisations like Manchester Airport are organic, open systems, that is to say composed of workers constantly interacting with each other and their environment means that culture is not static and constant. The way the business operates can change, either intentionally through management action, or more likely through natural evolution. The main problem about management trying to control or change culture is that culture is built up over time and is deeply ingrained within the organisation. To be successful:
The workforce needs to change simultaneously, which requires a high degree of coordination and effort, and can meet with resistance.
Management needs to show strong leadership and commitment, and be prepared to change their own behaviour first.
The organisation must also be willing to confront short-term resistance from workers for long-term performance and prosperity.
The changing culture at Manchester Airport
Like most large businesses, Manchester Airport has its own unique culture. In fact it has a mix of different cultures and subcultures, according to the different groups, teams, or departments to which they belong. Some of these cultures actually conflict with each other and create a ‘them and us’ mentality’.
Until recently the organisational structure at Manchester Airport was relatively tall, hierarchical, and centralised. This encouraged a management style that was rather autocratic and formal, with power based firmly at the top of the organisation, and rigid, formal processes and systems based on clear job roles. This resulted in a ‘power and role’ culture. The culture was very bureaucratic, based on a person’s position in the hierarchy.
This was not an organisational culture or climate conducive to a responsive, productive, and creative customer-focused orientation which the company wanted to develop if it were to survive and prosper in a more dynamic and competitive environment, where customers had more choice.
The aim is to encourage a positive and proactive culture, where managers and employees alike are cooperative and supportive of each other's contributions and efforts. Whilst adherence to rules and procedures is important to ensure the safety and security of customers, flexibility and discretion is encouraged in the performance of their tasks.
This new approach has required the Airport to redefine the role of management, switching the emphasis away from a traditional autocratic and formal management style, based on close supervision and checking, to one that is more consultative and open, focused on ‘coaching’, developing, and empowering the workforce.
4.5 THE IMPACT OF ICT ON THE INTERNAL AND EXTERNAL COMMUNICATIONS OF THE BUSINESS
4.51 THE IMPORTANCE OF GOOD COMMUNICATION
Communication is ‘the transfer of information and understanding from one person to another person’. It is a social process, with people estimated to spend nearly 70 per cent of their waking hours communicating with other people.
Communication is used at work, to pass instructions, to provide people with information they need to make decisions, to motivate people, Telling them what needs to be done, setting goals and providing feedback.
Communication is important to people as we all have social needs that have to be met at work.
Good communication is essential for the organisation to work successfully.
Communication is to give out information, to make ideas and share ideas, attitudes and beliefs, to make links with other people, to persuade and influence and also to clarify information.
To operate effectively and achieve objectives, an organisation like Manchester Airport needs to communicate with a wide range of stakeholders. These are individuals and organisations including customers, competitors, employees, who are affected by the organisations operations, and have the opportunity to influence its performance for good or bad by supplying or withholding support.
Ineffective communications ccosts money in terms of time, lost business, delays and wrong decisions, and results in unproductive activity.
Manchester Airport needs to create appropriate communication channels with its stakeholders.
Communication network - the most common types are the wheel, circle, chain and completely networked. Manchester Airport is attempting to build a completely networked situation by emphasising open channel. This makes sense in meeting a range of organisational objectives like building strong relationships with customers and suppliers, becoming a market leader, developing a reputation for excellence, high quality service, competitive and changing markets, maximising sales and revenues.
It is only the introduction and application of new computer driven information and communication technologies that have enabled Manchester Airport to do this.
4.52 THE USE OF ICT FOR INTERNAL AND EXTERNAL COMMUNICATIONS
Information Communication Technology (ICT) refers to 'the mechanisms by which individuals and functions in business communicate and interact with each other using information technology'.
High profile developments include:
Fax
E-mail
Voice mail
Mobile phones / paging devices
MIS (management information systems)
Networked databases
Videoconferencing & teleconferencing
Multi-media communications
E-commerce
Internet
Intranets
Extranets
Bulletin boards
Internal use of ICT can be used to support:
Communication between individuals, functional areas, and customers internal or external to the business, the storage and retrieval of information, the control and monitoring of business functions, administrative functions and
Staff training.
External use of ICT can be used to support communication with other businesses, access to international markets by establishing a presence on the Internet, access to market information by researching via the Internet.
4.53 THE IMPACT OF ICT ON INTERNAL AND EXTERNAL COMMUNICATIONS
The benefits of ICT include:
New ways of communicating
Closer links with customers, suppliers and other stakeholders
Improved quality control, productivity and efficiency
Improved speed and quality of communication
Improved co-ordination, integration, and control of operations
Improved monitoring of the environment and performance indicators
Increased responsiveness
Potential for better, more informed management decision making
Greater flexibility in working arrangements
There are also potential costs associated with developing ICT provision, such as:
Ongoing development expense
Hardware and software upgrading costs
Staff training and development expenses
Constraints to operation / flexibility
Greater use of certain resources like paper
4.54 EVALUATING THE IMPACT OF ICT ON THE PERFORMANCE OF THE BUSINESS
EFFECTIVE AND EFFICIENT USE OF ICT
There are a range of factors that affect its effective and efficient use, such as
:
Legislation (e.g. Health & Safety at Work Act 1974, European Legislation, Data Protection Act 1998, Copyright Designs & Patents Act 1988, Intellectual Property Rights)
Need for security (e.g. internal fire walls, confidentiality, secure zones, free access to information)
Range of costs involved (e.g. of hardware/software, licenses, training requirements)
The size and function of the business organisation (e.g. the differing objectives of a local newsagent versus a multi-national telecommunications company)
Business location (e.g. the decreasing importance of physical location if ‘e-commerce’ is increasing)
The competitiveness of the business organisation (e.g. in terms of the type of market and consumer demands, and the nature of the product or services involved).
A business organisation like Manchester Airport may spend a large amount of money on the provision of ICT, but unless it is appropriate to the aims and objectives of that business, it may not prove to be cost effective. For this reason it will need to constantly evaluate its ICT provision in terms of:
Ease of use
Efficiency of the user
Interaction between people
Interaction with other businesses
Confidentiality
Security
Value for money.
Over the past twenty years rapid development in technology has greatly affected the way in which Manchester operates and performs in terms of the:
Skills and qualifications required by the organisation
Training required by employees in different functions
Communication methods available to the business
Competitiveness of the business and its ability to meet changing
Customer and market demands
ICT PERMEATES EVERY ASPECT OF THE BUSINESS
ICT now permeates every aspect of business at Manchester Airport, and its' effective use means the difference between success and failure. Without it the Airport could not function
Most managers’ involvement with IT limited to two types of computer systems: those that store and manipulate data, and those that provide fast and efficient communication between people and businesses. Recently, ICT has developed ever more rapidly, and it can be seen that many technologies.
Technological convergence - the convergence of computing and communications technologies has had a major impact on communications. The most important change is the ability to transform any communication medium into digital form. As a result there is limitless potential for transmitting, copying, sharing, storing and manipulating information. .
The information looks to the future to decide what needs to be done, and the world is changing so fast that businesses must attempt to predict the future. Information is now viewed as a valuable resource or commodity
PERFORMANCE BENEFITS
The increasing sophistication of ICT systems, coupled with a decline in real costs, means the Airport and its employees can work smarter. This is because ICT offers:
Greater speed, reliability, accuracy, flexibility, accessibility, convenience, interactivity.
The possibility of e-commerce
The ability to reach wider audiences – globalisation
A 24hours / 7 days a week environment
A revolution in marketing - new products, means of promotion, distribution etc.
Improved managerial efficiency and effectiveness through more informed decision making, greater monitoring, co-ordination and control - decision support systems (DSS), databases, executive information systems (EIS).
Closer and stronger business relationships and interactivity with its stakeholders - e.g. customers, suppliers, service partners along the value (supply) chain.
greater operating efficiencies, productivity, and lowered costs of value creation activities through decentralisation, the contracting out of work to service partners and other suppliers, fewer staff, automation of many unskilled and semi-skilled tasks, empowerment etc.
A 'transformed business' - runs according to business processes rather than functional specialism, which boosts quality, innovation and increases responsiveness towards customers
The negative effects of ICT:
The cost of initial investment, upgrades, training, new ways of working, unemployment etc.
Competitive and customer pressures means that the Airport cannot afford not to keep on investing in the latest developments in ICT. The Airport needs to accept, and keep up with constant change and new developments, by constantly reviewing and upgrading its business processes.
Information overload and stress on employees
Security threats (hackers, viruses, misuse)
Ethical and social issues (crime, privacy etc.)
4.55 CONCLUSION
Aircraft and airport technology
Information technology has revolutionised the air travel industry, improving the flow of aircraft and passenger traffic. With passenger growth increasing so steadily at least in the short-term, airport operators like Manchester Airport are seeking ways to use ICT to speed up and improve the flow of traffic, at airports in order to wipe out congestion and customer dissatisfaction, and to offer customers a stress-free experience. ICT is being increasingly used to improve efficiencies at check-in, immigration control and baggage handling.
In the future Mintel predicts the use of smart card technology at airports, which will dramatically improve the efficiency of passenger and baggage handling.
Internet and information technology
The Internet is being increasingly used by travellers to book flights as well as gaining necessary information pertaining to their travels.
The World Wide Web is becoming a great source of information for travellers not just for their destinations but also for the airports that they are flying to and from.
Manchester Airport has an extensive website covering all of its UK airports, offering a broad range of air travel information, including flight arrivals information, flight timetables, pre-booking car parking, pre-booking currency exchange, tickets and timetable as well as extensive information on airports, how to get there, terminal maps, shopping and catering, hotels, late availability packages, weather updates, health advice, travel plans, destination profiles and on-line flight booking.
Other technologies are being used to aid passengers in gaining information quickly once they are within airports too. The new interactive WAM touch screens and World information system gives out information to consumers, and also acts as an advertising medium.
4.6 OPERATIONS AND QUALITY
Manchester Airport Group plc is the company which manages the airport. Of the 19,500 people employed on site, only 2,200 work for the Airport Company itself. Whilst its core business is to provide the facilities, products and levels of customer service that meet the needs of its customers, and make their experience at the airport an enjoyable one.
The airport is acting as a landlord, and providing basic infrastructure and facilities such as buildings, taxiways, runways and land, including car parks.
It also makes sure the airport is a safe environment, by working with other organisations such as Greater Manchester Police, National Air Traffic Services, HM Immigration and Customs and Excise to provide fire and security services.
It also works in conjunction with other commercial organisations, known as Service Partners, who provide the additional services such as catering, baggage handling, retail outlets, and check-in facilities etc. which are needed on site.
Whilst the only direct customers of the Airport are the Airlines, with their passengers being the end-users, the Airport recognises that there are other stakeholders in the customer chain.
4.61 ADDING VALUE IN THE OPERATIONS PROCESS
The Airport using systems and procedures, aims to create added value, by effectively and efficiently combining inputs, to produce outputs that satisfy customer needs.
It is the service industries, like travel and tourism, that have seen some of the
greatest increases in value added in recent years.The importance and power of the customer in today’s highly competitive environment. The two major inputs of service industries like the Airport are people and information and communications technology. The role and importance of both front-line and backroom employees in delivering service.
The three main reasons for investing in ICT is increased productivity, competitive advantage, and improved responsiveness.
4.62 MEETING CUSTOMER REQUIREMENTS
Customer satisfaction has become the great watchword of business; across the world customers have become more demanding, this reflects the rise in disposal incomes fuelled by economic growth. Customers are responding with a will to the increase in the quantity, sources and variety of supply. Rising affluence and education have bred a race of highly active consumers.
ADDING VALUE THROUGH QUALITY
Tom Peters' argument that customers’ perceptions of product quality is the most important factor in determining its success. Quality as defined by the consumer , he argued, is more important than price in determining demand for most goods and services. Consumers will be prepared to pay for best quality. Value is added by creating those quality standards required by consumers. The three stages of development of quality are:
· Quality control (QC),
· Quality assurance (QA),
· Total quality management (TQM).
What Quality Assurance at Manchester Airport
This is the process of making sure that all quality standards are met and exceed in order so that Manchester Airports products, services and facilities, meet the customers expectations. If anything happens at the airport they are classed as the responsibility, so effective quality assurance is extremely vital.
What is Quality Control?
Manchester Airport has to make sure all the customers are satisfied with the services they have received. All products and services must be monitored and the standards must be reviewed when necessary.
How Manchester Airport relates quality to financial performance?
Manchester Airport believes that the way forward is to improve the service and standards provided at Manchester Airport. Manchester Airport also believes that by achieving the quality and service to a high levels means customers will become loyal and will create a high level of profit and cash flow.
What is the function of customer feedback?
Information at Manchester Airport is important because their main function is a service, and customers can’t just bring a service back and get a refund. Manchester Airport is collecting information from customer and using it to improve the level of customer service.
How Manchester Airport responds to comments?
Manchester Airport finds responding to customer feedback is a very important part of the company. So Manchester Airport will try to ensure that when they are replying to customers they always use:
· The correct Language
· They give a clear message
· Empathetic
· Also they have to demonstrates a caring attitude
A prompt response
Manchester Airport believes that it is a prompt organisation.
Prompt is shorthand for:
· Priorities
· Reliability
· Organisation
· Measurement
· People
· Technology
Michael Quinn suggested this idea to explain how a customer’s perception by the quality of service received at the airport.
4.64 CUSTOMER SERVICE, QUALITY STANDARDS, ASSURANCE AND CONTROL AT MANCHESTER AIRPORT
Customer service is the way, in which Manchester Airport plc treats its customers, giving them what they want and making their experience enjoyable.
Customer service is made up of:
Contact with customers
Products and services
Policies and procedures
Systems and processes.
Manchester Airport’s Sales and Marketing Team works hard at promoting the Airport and winning new business, new routes, new airlines and increased frequencies. However if passengers have a bad experience they may not come back to give the Airport a second chance and their experience can influence the reputation of the airport and affect the opinion of customers towards the airport. Competition today is intense and customers have an increasing choice of which airport to use e.g. Liverpool and Leeds-Bradford. It is therefore in the Airport’s best interest to ensure that no passenger has had a bad experience while at the Airport when moving from car park to aircraft via check-in, retail outlets, catering facilities, security and immigration, duty free and the boarding gate.
A SIX STAGE PROCESS
Customer service at Manchester Airport is part of a wider, planned and comprehensive system of customer care. It involves six stages:
Stage 1
Using market research, surveys, focus groups and consultative meetings, the Airport identifies and prioritises the specific needs, wants and expectations of its key internal and external customers.
Stage 2
Using the information derived from stage 1, together with requirements demanded by independent, external bodies such as IATA, the Airport establishes SMART quality standards and performance targets, which if met they will meet customer needs, wants, and expectations, leaving them delighted and coming back for more.
Since quality is highly subjective, successful customer service for an organisation like Manchester Airport is largely a question of effectively managing customer expectations and perceptions in five, interrelated key areas:
Reliability – Quality standards here focus on the Airport’s ability to provide the expected products and services consistently, dependably, and accurately first time around! Of the five elements, reliability is the most important!
Assurance –Does the competence, knowledge, skills, courtesy, credibility and security of the Airport’s staff and systems inspire trust and confidence, and does the customer feel that they are in a safe pair of hands?
Tangibles – Does the appearance and condition of the Airport’s facilities, equipment, and personnel, and the behaviour of other customers in the vicinity give the image of an effective, efficient, high quality operation?
Empathy - Are the staff customer focused? Are they committed to offering caring, considerate, sensitive, unhurried, individualised attention to customer needs? Empathy is enhanced by good communications - listening to customers, keeping them informed, making them feel important and appreciated, recognising them on sight, calling them by name etc.
Responsiveness – Is the Airports’ willingness to provide prompt, timely service, and help solve customer problems. It involves accessibility and approachability. Is the business easily accessible by rail, road and phone? Are calls returned? Is there little or no queuing or waiting times? It also the Airport’s ability to recover and respond quickly to any breakdown in customer service.
The Airlines top ten requirements are:
- Punctuality
- Speedy check in
- Clear signage
- Air bridges
- An effective security system
- Travelators
- Large gate lounges
- Adequate car parking
- Special needs catered for
- Proper, enforceable Service Level Agreements between the Airport and all service providers.
Stage 3
The Airport designs and installs the supporting quality assurance and quality control systems, policies, procedures, including enforceable Service Level Agreements and contracts which set minimum service delivery levels, together with equipment and technology required to achieve these targets and standards.
Stage 4
The Airport recruits people with the right attitude, equips them with the right customer service skills and knowledge through continuous training in customer care techniques, and motivates them, with the right rewards and incentives, to operate these systems, procedures, policies and technology effectively and efficiently, in order to deliver consistent and outstanding customer service.
The attitude and behaviour of staff is the foundation of all good customer service.
Stage 5
The Airport implements the programme!
Stage 6
The Airport monitors and controls the actual implementation of the programme through independent (IATA) and company run surveys and observations. Extensive use is made of ICT, checklists, and the use of Terminal Duty Managers, who police the systems and procedures on a day-to-day basis with regular spot checks. In addition the Airport obtains, and actively encourages feedback through:
- letters and phone calls
- the media
- Service Partner and customer comment cards
- a formal complaints system
- focus groups
- face-to-face meetings
- presentation by special groups
- mystery shoppers every three months
- The Audit and Compliance Department, who look at health, safety, and security issues
- MANTIS
- the Community Relations Department
- employee appraisals
- consultative committees such as Manchester Airports Consultative Committee (MACC).
The Airport enters the information into a data base, producing regular reports, and taking corrective action where necessary, making changes at stages 1 – 4 if appropriate. This means that management is provided quickly with the necessary feedback to ensure the programme responds quickly to failures in customer service performance, and can be adapted to changing customer needs.
MANCHESTER AIRPORTS’ MISSION STATEMENT AND CORE VALUES
Customer service is all about meeting customer needs and matching, or better still, exceeding their expectations. Good customer service results in satisfied customers which in turn results in repeat business which will lead to increased profitability to the economic, social and financial benefit of the North
West, which is the principal business objective of Manchester Airport Group plc.
Its approach is built on three core values:
QUALITY The Airport believes that sustainable business success will be best achieved by providing consistent high quality service. It believes in continuous improvement, that “quality is a journey rather than a destination”. This means that they must never be satisfied but continue to look for new ways to improve.
CREATIVITY The Company believes in teamwork, in order to provide customers with a seamless service. If a customer experiences a problem whilst at the Airport there are systems in place to ensure that it is rectified quickly thus ensuring the customer leaves with a positive impression of the Airport. This equates to the satisfaction circle: satisfied employees are happy staff who give good customer service, resulting in happy customers, which is good for business and results in a happy, satisfied management who treat their staff well! Quality is crucial at every level.
RESPONSIBILITY The Airport sees itself as a responsible organisation. Safety is its overriding priority. The Airport encourages new ideas. Training is an essential element in the company’s development.
TRAINING STAFF AT MANCHESTER AIRPORT
- the use of benchmarks and quality standards to measure service quality
- that the attitude and behaviour of staff is the foundation of all good customer service
- the importance of staff training
- the role of Investors In People
- the importance of feedback from employees, the Recognition and Suggestion Schemes
- the Chief Executive’s breakfast
DEALING WITH SERVICE PARTNERS
The role of weekly meetings and Service Level Agreements (there are currently six SLAs in place). The role of Marketing Services in providing information for the Service Partners
TECHNIQUES TO MONITOR CUSTOMER SERVICE:
The airport’s objective of operating for the social and economic benefit of the North West whilst minimising its negative environmental impacts, it’s handling of environmental issues (MANTIS).The role of the Community Relations Department and Manchester Airports Consultative Committee (MACC). The role and importance of customer feedback (the main reasons for wanting feedback is so the airport can improve and help the customers and find out what they want and need from the airport and the Airport users feed back their views, using comment cards and the Customer Comment Report) and handling complaints.
The Manchester Airport plc Customer Service Staff (the role of the Terminal Duty Supervisors and Managers and the Customer Relations Department)
help to improve customer service
QUALITY STRATEGY AT MANCHESTER AIRPORT
- Quality Standards Quality standards details the level of quality which a product, service or facility provided for customers must meet and is treated very seriously by Manchester Airport. Quality standards help the airport to monitor and evaluate aspects of its work against specific criteria and identify areas for improvement in the product or in the services it offers to its customer. When Manchester Airport decides to introduce a quality standard it establishes a review of its current position, including customer feedback, commercial requirement, administrative systems, training of employees, impact on the environment and procedures for the purchasing of stock. This gives the baseline against which it can measure future improvement, whether internally or externally set. Manchester Airport places great emphasis no quality, which is seen as integral to every job on the airport site.
- The role of the Quality Team
There are loads of aspects tot he role of the quality they include:
The introduction of new continuous improvement initiatives
Conducting the airport’s self assessments against the business excellence model
The collection, analysis and reporting of customer feedback to measure how effectively quality is being implemented airport – widethrough the airports own surveys together with other independant external surveys such as those conducted by the IATA
Helping and advising any part of the airport
Sharing best practice across the airport site
Encouraging passengers and other public visitors to comment on their experience
Collecting systematic and regular feedback from the customers
Conducting employee surveys
Producing a magazine for airport employees on quality issues
The establishment and development of the company
Working with employee development to developed training programs for employees
- Quality Standards used by the Airport
Quality standards set the criteria which must be met to achieve the desirable levels of service for a porduct, service or facility. Some quality standards are set and enforced by organisations external to the company such as trade associations, central government and other authorities.
- Independent Bodies and External Standards
The British standards institute outlines clear quality and safety specifications for design, production, installation and servicing. Following successful inspections an organisation can be awarded a kite mark which represents consistent achievement of quality and safety standards.
Working with airline and other service partners, Manchester airport has a continuous process of setting, receiving and developing jointly – negotiated Service Level Agreements as part of the measurement systems to assess performance standards.
- What is meant Quality Assurance at Manchester Airport
This is the process of ensuring that all quality standards are met and exceed in order that Manchester Airports products, services and facilities, all these must be met the customers expectations. If anything happens at the airport they are classed as the responsibility, so effective quality assurance is very important.
- What is meant by Quality Control at Manchester Airport
Manchester Airport has to ensure all the customers are satisfied and even delighted with the services they have received, but all products and services must be monitored and the standards must be reviewed when and as necessary.
- How Manchester Airport relates quality to financial performance
Manchester Airport believes that the only way forward is to improve the service and standards provided at the Airport. Manchester Airport also believes that by achieving the quality and service to a high level which means customers will be loyal and will create a high level of profit and cash flow.
- The function of customer feedback
Information at Manchester Airport is very important because their main function is a service and people can’t just bring a service back and get a refund. Manchester Airport is continually collecting information from customer and using it to improve their level of customer service.
- How Manchester Airport responds to comments
Manchester Airport finds responding to customer feedback as a very important part of the business. Manchester Airport will always try to ensure that when they are replying to customers they always use:
Correct Language
Gives a clear message
Empathetic
Demonstrates a caring attitude
Manchester Airport believes that it is a prompt organisation. Prompt is shorthand for these:
Priorities
Reliability
Organisation
Measurement
People
Technology
Michael Quinn suggested this idea to explain how customer’s perception by the quality of service received at the airport.
- Why Manchester Airport believes it is a PROMPT organisation.
Manchester believes it is a prompt organisation because it carries out all the points which mean prompt. (above)
5.0 CONCLUSIONS
This section of the report will examine how successful Manchester Airport is in achieving its objectives.
Manchester airport has a mission statement which it hopes to achieve.
It is: “To be the world’s best airport”
Manchester airport plc has set out core values which must be subscribed to in order for the company to meet its objectives. These are quality, responsibility and creativity.
The Airport’s vision, primary objectives, and strategy are Growth and profitable development like expanding the infrastructure and capacity of the airport i.e. more runways and terminals, expanding the ground transport interchange, expanding the cargo centre – a major source of profit they also serve the community and care for the environment (has charitable, non-profit objectives). They keep developing and retaining a skilled and motivated workforce and ensure that the customers stay loyal and keep them coming back for more.
Manchester Airport serves the demands of over 1.3 million passengers who live within a 30 mile market area. Manchester attracts the business of eight out of ten travellers. Manchester Airport is one of the Uk’s busiest
airports handling over 18 million passengers and186,000 aircraft movements each year. The environmental effects such as growth have been considered so that the airport maximises the economic benefits whilst keeping the social and environmental impacts to a minimum. Customers have needs and wants, producers seek to satisfy the demands. Manchester is the third largest airport with passengers of about 15 million which makes it two and a half times as big as Glasgow which is the next busiest airport. Manchester is the 14th busiest international airport is it also a very profitable business, it must generate and re-invest profit if it is to improve facilities, services and customer care. Over the years people wanting to use Manchester Airport has increased dramatically, by the year 2005 it is expected to double to 30 million per year. To help the company to achieve its mission (to be the best airport in the world) it has identified six core values one of which states that “as the airport grows, we will remain environmentally responsible in all that we do”
Traditionally organisations measured their performance using financial performance measures such as:
Sales growth
Profitability
ROCE
These financial performance measures remain a very important way of measuring performance. This is because ultimately, financial performance links into increasing shareholder wealth, which is the main objective of most organisations.
However, financial performance targets are often set and measured annually. This short term target setting and performance measurement period can result in decisions being taken which do no encourage good long term performance.
Balanced scorecard
The balanced scorecard approach widens the view managers have to take of the business. At its heart is the need to look at business success from four key long-term perspectives. For each of these perspectives the organisation has to create SMART objectives and measure their achievement using performance measures - key performance indicators (KPIs) – to ensure that they are achieved. This process also forces managers to ensure consistency between objectives and to overcome traditional functional barriers within the organisation.
Customer customers and other important stakeholders see a business is critical, but financial measures do not directly provide this view. Customers are generally concerned with quality, performance, and time, and managers need to track performance in these areas. For example, surveys carried out to measure customer satisfaction on things like value for money, pricing, service levels (waiting time, complaints, moves to the competition etc.)
Internal perspective. Managers have to identify the critical internal functions and processes that will allow them to satisfy customer needs. The focus here would be on things like product development, health and safety, quality issues (complaints, wastage, rework, costs etc.)
Innovation and learning perspective. An organisation’s ability to create value is inextricably linked to its capacity to continually improve through innovation and learning. The focus here would be on things like spending on R & D, employee training and development, development time for new products and services etc.
Financial perspective. This allows the organisation to see how the business looks from the shareholders’ point of view. This perspective measures the success of the organisation’s strategy but also its implementation. Here the focus will be on sales, profits, ROCE etc. Manchester Councils have a much wider agenda for the business than a pure financial return in terms of dividends and an increase in the value of their shares. They are seeking benefits for a large number of stakeholders in the community.
6.0 RECOMMENDATIONS
Manchester Airport is a successful business in meeting its objectives. In order to maintain a sustainable and differential competitive advantage in a highly competitive international marketplace, the Airport needs to be responsive to changing customers requirements and continue to offer consistent high quality facilities and services that meets the needs and wants of its customers, internal and external. For Manchester Airport, quality is a journey rather than a destination, a process of continuous improvement. It has adopted quality control and quality assurance systems and procedures, but now the next stage of development is to fully embrace a system of Total Quality Management (TQM).
TQM (total quality management) has been defined by Mullins as: "A way of life for an organisation as a whole, committed to total customer satisfaction through a continuous process of improvement, and the involvement of people".
TQM is the way of managing for the future, and is wider in its application than just assuring a product or service quality, it is a way of managing people and business processes to ensure complete customer satisfaction internally and externally. TQM combined with leadership, results in an successful organisation doing the right things right, first time, and every time, happy customers which keeps them coming back for more.
The essential components involved in TQM are creating a quality culture so that every employee will seek to make the customer happy, communication of the quality message, putting the customer at the heart of the production process, getting it right first time, leadership and the commitment. Everyone in the organisation needs to be involved, quality chains, process alignment, and management of the customer-supplier relationships, quality and performance management system: the installation of rigorous quality standards, testing and controls to ensure and verify customer requirements are being met, making continuous improvements.
The benefits of using TQM are:
Improved quality
Increased productivity
Reduction in waste and complaints due to zero defects
Increased profits
A more competitive and responsive business
A more motivated workforce
Release of employee potential
TQM can be difficult, costly, and take a long time to implement, as radical changes may be required in the organisation like:
The introduction of new systems, processes and ways of doing things
The need to eliminate barriers between departments and functions by improving communications and teamwork
A readiness on the part of everyone to accept constant change and continuous education and retraining
Resistance: a change in culture and management style could be required
Complete and permanent commitment from top management and the involvement of all staff etc.
For: Mr John Little / Tutor Ref: BAW 1