MGBBT0UBN Understanding Business Organization Case Study

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Introduction of Understanding Business Organisation Structure at Virgin Atlantic Airlines Case Study

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This report will discuss the Virgin Atlantic airlines organization structure that outlines the activities of the business to achieve its targets and goals. The case company is operated in Crawley, UK, and across Europe. The organization transports millions of passengers to over 35 destinations across the world. Virgin Atlantic Airways has a positive organizational culture that motivates employees to deliver high efficiency and productivity. The company is known for its interior values and high customer orientation. The report will also highlight internal and external factors analyzed by the company to improve its performance in a competitive market. The business analyses the various needs of customers to invent the most appropriate business strategy for its operations. The business uses its resources to deliver attractive and appropriate services to customers (Wang and Zhou, 2019). The report will highlight emerging issues faced by the company during the crisis and pandemic. Virgin Atlantic can make a considerable contribution to the economic recovery by providing essential competition to its customers.

The organizational structure

Virgin Atlantic is an airline company that was formed in 1984 and was operated in Crawley, UK. The company has over 9000 employees and 38 aircraft in its fleet. Virgin Atlantic is a huge company with varied interests in travel, financial service, air travel, fitness, music, and telecommunication. The organizational structure refers to the framework that concludes the hierarchical pattern within an organization. Functional, multi-divisional, flat and hierarchical structures are the four different forms of organisational structures. Others include network, circular, and team-based arrangements. The Virgin Atlantic Airline company has a hierarchical structure utilized by large businesses (YILMAZ, 2022). They have a long chain of command from the top, medium, and lower level employees. The company's organizational structure is well organized, increases productivity, and distinctly outlines. The company gives workers responsibility and trains them to learn more skills. The airline company also helps workers to satisfy with their work by motivating them. The employees have different levels of authority and responsibility and have a clear hierarchal chain of command in an organization, which will increase their productivity. Virgin Atlantic Airlines have a functional structure and has group its workforce into dissimilar serviceable area according to their skill, knowledge, abilities, and speciality. They are cost specific and prefer dynamic structures which can adapt to business needs. 

Virgin Atlantic airlines are affected by both external and internal factors. Internal factors also referred to as entity factors include personality, attitude, perception, demographic factors, traits, and abilities and skills of persons working within the organization. Some of the internal factors in Virgin Atlantic include a positive attitude toward the leader's diversified workforce and employees. The manager provides openness that gives confidence to the employee to open up and share their views towards the organization. The company provides plenty of opportunities for the worker to realize their suppleness and prospective to attain a well work-life. External factors referred to administrative factors like job requirements, direction, values, culture, norms, and many others (Christodoulou and Cullinane, 2019). Virgin Atlantic Airlines' business performance is exaggerated by various external forces. To achieve its goals and objectives the company should analyze various forces or factors which can eventually affect its performance.

Business Environment Analysis

Pestle analysis can help the company to examine forces like political, social, legal, economic, technological, and environmental which can affect the productivity and revenue of an organization (Gupta, et. al. 2019). The analysis can help the company to improve its business dynamics effectively.

  • Political factors: the government opposes various regulations, rules, and policies on the Virgin Atlantic Airline. There are many political factors like labor costs, trade restrictions, and taxation policies forced by the government, which have a huge impact on the airline industry. The company faces major challenges like bureaucracies, licensing, and different parameters and control of the company's operation by the government. The government also charges various taxes in different countries for fuel, landing, and many more. These political factors need to be given importance by the industry to increase their future performance.
  • Economic factors: many economic factors have been a major challenge for the company. Virgin Atlantic should lower its flight rates by doing a price analysis with its competitor. The company offer first-class tickets at low prices and also provide seatback entertainment arrangement for the economy-class passenger. This would help the company to grab the opportunity to gain a competitive advantage and earn more profits.
  • Social factors: The business needs to put safety measures in place. Virgin Atlantic operates in various nations, thus they must keep an eye on things like spending patterns, culture, demographics, gender ratios, etc. Since the UK contributes for the majority of the company's revenue, the company cannot afford to ignore the social issues in the UK (Leigh, 2009). Air traffic control strikes are another major danger to the airline sector, as they make it harder for the airlines to operate.
  • Technological factors: Technology plays a big part in the airline industry since it is always improving, which enables businesses to raise their standards for safety and cut operating costs. This element is crucial to any company's ability to obtain a competitive edge over rivals. Companies now have a number of chances to help with the economic disruption brought on by increased digitization.
  • Legal factors: legal aspects are legislation designed for the airline industry to ensure passenger safety. Due to penalties and temporary service interruptions, Virgin Atlantic cannot possibly neglect these rules and laws. It must abide by many domestic and international rules. New legislation has been created by the governments of several nations to limit the COVID-19's spread, preserve space between passengers, and ensure thorough sanitization.
  • Environmental factors: Because consumers are becoming more ambivalent about the environment, these environmental considerations are becoming increasingly important in the airline sector, including Virgin Atlantic. They are aware of how carbon emissions affect the environment and human health. Airlines are frequently criticised for their excessive carbon emissions, which contribute to a lot of problems. The business wants sustainability to boost its wellbeing.

SWOT analysis

The SWOT analysis can help Virgin Atlantic Airlines to focus on opportunities and strengths and reduce the threats and weaknesses within the company. The company's strength gives benefit to gain competitive advantages. The company provides efficient services and a strong foundation. It has a satisfied customer base and carries over five million passengers. The case company is one of the largest airlines with 35 destinations (Pegiotis, 2016). They have effective advertising and innovative techniques which will help the company to increase their performance. The weakness of the company is its limited global presence, especially in emerging economies. Virgin Atlantic also limits market share to severe competition. Virgin Atlantic's opportunities can lie in product improvement, better communication, and geographical expansion (Sezgin and Yuncu, 2016). The company can leverage its brand by expanding globally. The company can also increase its destinations and international routes to increase its performance. The threats can create a negative impact on every business. The airline industry can face changes in aviation regulations and a rise in fuel costs. They can also face heavy competition in the global market and a rise in labor costs.

The weaknesses includes the factors of affecting the working culture such as, Globalization has increased to a great extent. The companies have developed their products with technology and innovation to expand their business successfully. Tourists are addicted to traveling to different cities or countries by flight at cheaper rates. Virgin Atlantic has broadcast plans to resize and reshape their company to make sure that is it fit for the future, in response to the harsh impact of the Covid-19 pandemic on the worldwide economy, nations, and travel and aviation industry (Priyono, et. al. 2020). The exceptional market circumstances brought on by the pandemic have harshly reduced the revenues of Virgin Atlantic airlines. The company has taken important actions to reduce and preserve cash, and costs, and protect jobs as many as possible. The company has to safeguard the future of the airline industry so that it can come out of crisis and gain sustainable profits (Sun, et. al. 2021). Virgin Atlantic focused on customer satisfaction to emerge from crisis and sustainable leader in the airline industry which can become an emerging issue.

Conclusion

This report discussed virgin Atlantic British Airline Company which offers world-class services to their passengers. The company provides premium and upper-class products and services to over 400 destinations. The company has a hierarchical structure that is well organized and has a lengthy chain of command. The employees of the airline company are motivated and provide better performance to their customers. Virgin Atlantic uses a democratic leadership style to persuade their staff in sharing opinions, and ideas and encourage them to participate in the decision-making process which increases their overall performance. The report has also highlighted the internal and external factors affecting the operations of the company. The company can use pestle analysis and swot analysis to overcome these challenges. The company can by finding its strength and opportunities in order to enhance its performance in the long-term (Shah, et. al. 2020). The case company should work within a functioning constraint to determine the services to be offered in future with rules and regulations.

References

Christodoulou, A. and Cullinane, K., 2019. Identifying the main opportunities and challenges from the implementation of a port energy management system: A SWOT/PESTLE analysis. Sustainability11(21), p.6046.

Gupta, A., Gupta, N. and Gupta, M., 2019. British Airways-A SWOT and PESTLE Analysis-The impact of Europe 2020 policy. NOLEGEIN-Journal of Corporate & Business Laws1(1), pp.1-11.

Leigh, D., 2009. SWOT analysis. Handbook of Improving Performance in the Workplace: Volumes 1?3, pp.115-140.

Pegiotis, I., 2016. Feasibility study for the establishment of a new airline company in Cyprus.

Priyono, A., Moin, A. and Putri, V.N.A.O., 2020. Identifying digital transformation paths in the business model of SMEs during the COVID-19 pandemic. Journal of Open Innovation: Technology, Market, and Complexity6(4), p.104.

Sezgin, E. and Yuncu, D., 2016. The SWOT analysis of Turkish Airlines through Skytrax quality evaluations in the global brand process. In Development of tourism and the hospitality industry in Southeast Asia (pp. 65-81). Springer, Singapore.

Shah, F.T., Syed, Z., Imam, A. and Raza, A., 2020. The impact of airline service quality on passengers’ behavioral intentions using passenger satisfaction as a mediator. Journal of Air Transport Management85, p.101815.

Sun, X., Wandelt, S. and Zhang, A., 2021. Technological and educational challenges towards pandemic-resilient aviation. Transport Policy114, pp.104-115.

Wang, S. and Zhou, X., 2019. New insights into organization structure and business process: an integrative point of view. Open Journal of Business and Management7(04), p.1953.

YILMAZ, R., 2022. Evaluation of organizational ethics in terms of businesses: The case of Virgin Atlantic Airways and British Airways. International Journal of Aeronautics and Astronautics3(2), pp.98-109.

 

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