Formed in October 2013 as a result of a number of mergers, Travel Group (TG) is a public limited company. TG’s head office is in Germany and The Group employs 56,000 people worldwide. Providing services to more than 40 million customers from around the world, TG’s key operational areas are 1600 travel agencies, 7 airlines, 350 hotels and 14 cruise liners. Travel UK is the UK tour operator subsidiary and airline. Travel UK has the following operational divisions: Airline, Commercial, Customer Operations and the following business support departments: Finance, IT, Marketing, Public Relations/Business Change and Human Resources. Each operational division is clearly defined and has its own sphere of competence. Each division has a hierarchy that is clearly defined with operational rules and processes that guide managers in making objective decisions. Each operational division has its own business support departments. Following the most recent merger a decision was made to put in place new organisational structures in recognition of the duplication that existed in some functions, and where different brands were in place for travel agencies these have now been rebranded Travel UK.
Differences also exist in terms and conditions of employment and working practices of TG’s employees depending on which pre-merger company the employees worked for. Some of these differences can clearly be identified in job descriptions whereas others exist in agreements that were the result of consultation and negotiation with trade unions. The trade unions are strong and have high levels of membership. For example, in the UK department heads have been reluctant to make changes to cabin crew hours and working practices because of the underlying threat of strike action. Joint Consultative Committees meet on a monthly basis and the scope of issues can include almost anything from terms and conditions of employment to costs and allocation of employees to flying schedules. This consultative machinery has a significant impact on decision making.
Organisational performance is measured in a number of ways. In addition to the standard financial measures (such as turnover and profits that are important to all public limited companies) TG as the parent company has three key non-financial measures. These are customer satisfaction, employee engagement and sustainability. In this highly competitive market, customer satisfaction is crucial in ensuring that customers book future holidays with TG and recommend TG to friends and family. The second key non-financial measure is engagement. TG believes that happy and engaged employees will help to achieve sustained competitive advantage in a fairly turbulent market. The third measure, sustainability within the travel industry, is seen as crucial. The Global Sustainable Tourism Council (which establishes and manages global sustainable standards with the aim of increasing sustainable tourism knowledge and practices among public and private stakeholders) sets two criteria.
Their website states these two criteria are, ‘…those that relate to destinations and those that relate to tour operators that provide the guiding principles and minimum requirements that any tourism business or destination should aspire to reach in order to protect and sustain the world’s natural and cultural resources, while ensuring tourism meets its potential as a tool for conservation and poverty alleviation’. Practical examples of how TG meets these criteria include using e-ticketing, reducing waste, saving water and reducing carbon emissions. Sustainability is a key organisational goal and TG aspires to be included on the Dow Jones Sustainability Index (DJSI) and the FTSE4 Good Sustainability Index. Having the right organisational culture is viewed as being central to achieving this goal.
The travel industry has been affected by a number of different external factors in recent years including: terrorism affecting flights, airports and resorts; industrial action taken by baggage handlers and air traffic controllers at various airports in Europe; volcano ash and extreme weather grounding or rerouting flights; Norovirus on cruise ships, etc.
Write a 3000 word report in which you:
- Critically analyse TG’s current organisational structure. Evaluate its appropriateness for the future.
- Provide a detailed analysis of external factors currently affecting TG and the impact that these may have on change and organisational development at TG.
- Produce organisational development and design recommendations of how TG can achieve its sustainability goal. In doing so you should consider the extent to which organisational culture can be changed and whether a culture change is important in achieving the sustainability goal. You should use research evidence and your knowledge of organisational practice to support your recommendations. Consideration should also be given to possible implementation issues and/or tensions.