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Corporate Culture & People � A Critical Analysis


Easy Jets founder appears to believe in the people element of his business. Believing that staff are key to delivering excellence, Easy Jet set-about instilling a work hard play hard culture. Party nights and social events are paramount and a working group set up from the employee base contributed to employee participation and empowerment. Business transparancy is key with employees being allowed to see potentially sensitive documents. The founder believes that culture is created “bit by bit” and that human nature lends itself to competition, people generally want to win in competitive environments.


At this time it is unclear as to whether or not a strategic Human Resources Management plan exists. Such a plan is critical to the success of the organisation. Additionally, competitive factors exist in the form of people. Easy Jet has modelled their organisational structure and culture on USA low cost carrier Southwest Airlines. The founder now finds himself competing against the likes of Ryanair who’s CEO was involved in the running of Southwest and can possible create advantage through knowledge and experience.


Key Success Factors (KSF’s)


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Keniche Ohame of McKinsey & Co. define KSF’s as


“The variables that management can influence through its decisions & that can affect significantly the overall competitive positions of the firms in a given industry…Within any particular industry, they are derived from the interaction of two sets of variables, namely the economic & technological characteristics of the industry…and the competitive weapons on which the various firms in the industry have built their strategies”





Fig 5.0 Identifying Key Success Factors


Prerequisite for Success


What do Customers Want? How does the firm survive Competition?





Analysis of Demand Analysis of Competition


Who are our Customers? What drives competition?


What do they want What are the main dimensions?


How intense is competition?


How to attain advantage


Key Success Factors


Easy Jets Key Success Factors follow


· Ability to meet its mission


· Profitability


· Attain competitive advantage


It would seem that Easy Jet is en-route to meeting its founders mission statement, however, as outlined above, care will be needed to continually adapt to the social, economic, technological and political nuances it is exposed to. Constant re-design of its operations will be required in such a cost sensitive market. It is imperative that its service levels are not compromised by cost.


Profitability in the Airline business is calculated by Grant as operating income per available seat mile (ASM). A general look at the Airline business gives us the following profitability factors.


Table .0 KSF Comparisons Of Selected Budget & National Airlines


Airline Operating Income ($m) ASM (m) Profitability Factor


Easy Jet .8 .714


Go () .1 -15.00


Ryanair 70 .0 .


Virgin Express 1 .7 .70


Southwest 684 76.1 8.


BA 806 161. 5.00


Swissair 45 40.5 11.1


The yield and load factors coupled with unit costs gives us further insight into each airline and its operations. In this way we can see Ryanair doing well with Go performing extremely poorly. Easy Jet is profitable and viable but require attention in arena of competitive advantage.


Table .0 Traditional Financial Analysis


Airline RoS% Rev/ Passenger ($) Profit/ Passenger ($) Profit/ Employee ($k)


Easy Jet 1.6 71 . 10.1


Go -4 5.5 -11 -44.5


Ryanair 1 61.8 1 5.4


Virgin Express -1.1 100 -1.1 -4.6


Southwest 16 7 8. 16.7


BA 5.6 16 7. 5.1


Swissair 6. 57 1 5.


Word Count ca. ,000 (excluding Figures & Tables)


References


D’Aveni R. (14) “Hypercompetition � Managing the Dynamics of Strategic Manoeuvring”, New York, Free Press.


Fahey L. & Narayanan V.K. (186) “Macro environmental Analysis for Strategic Management”, St Paul MN, West Publishing.


Grant R.M (15) “Contemporary Strategy Analysis”, Blackwell, Oxford Press.


Hofer C. & Schendel D (17) “Strategy Formulation � Analytical Concepts”, St Paul MN, West Publishing. 17.


Mintzberg H. (10) “The Design School”, Strategic Management Journal.


Porter M.E. (185) “Competitive Advantage”, New York, Free Press.





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