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Etihad Airways Company’s Organizational Behaviour Case Study


Introduction

Etihad Aviation Group is a multinational company with a complex hierarchy and multiple departments. It is known that the organization sets forward the working principles that are not only beneficial for the company’s incomes and overall growth but carry value for the social, economic, and environmental development of the area where it operates.

The fact this group is directly involved in the biofuel industry development characterizes the company as an organization making its significant contribution to the general welfare. Considering the factors leading to more effective cooperation with stakeholders and higher employees’ satisfaction (communication system, insurances, travel flights, and other motivation programs), one may suggest that the Etihad Aviation Group has all the potential for further development and overcoming the occurring challenges. Moreover, it can pave the way for working standards establishment.

Organizational Structure

The organization, Etihad Aviation Group, consists of a major department Etihad Aviation Group PJSC Board, which includes more than 13 employees. The detailed organizational structure is shown in Figure 1:

The corporate structure of Etihad Aviation Group.
Figure 1. The corporate structure of Etihad Aviation Group

The current Interim Group Chief Executive Officer is Ray Cammell, whereas Kareem Nagy as Chief Executive Officer in Chairman’s Office. The majority of employees are accountable to the Group Chief Executive Officer. PJSC Board also consists of several committees, whose duties include audit, nomination and remuneration, and financial management.

Six Key Elements

1. Work Specialization

Each of the employees is responsible for specifically assigned duties, for example, support services (Harsh Mohan), corporate affairs (Amina Taher), or airport services (Chris Yolen). Interim Group Chief Executive Officer was responsible for the Emiratization strategy that helped the company create a performance-driven culture (Etihad Airways, n.d.). According to the company’s website, all employees work on the aim to make Etihad Airways the best airline in the world (Etihad Airways, n.d.).

2. Departmentalization

The organization is separated into five different business divisions that focus on performing different functions: Etihad Airways, Etihad Airways Engineering, Etihad Airport Services, the Hala Group, and the Airline Equity Partners (Etihad Airways, n.d.).

3. Chain of Command

All employees at the group are inferior to the Interim Group Chief Executive Officer Ray Gammel, who is responsible for managing and consulting all departments in the Etihad Aviation Group. Chief Executive Officer Kareem Nagy is not superior to other departments, even though he is a member of the PJSC Board.

4. Span of Control

The span of control within the major business divisions is narrow since all inferior directors and chiefs are inferior to the Interim Group Chief Executive Officer Ray Gammel. However, due to the decentralization, each chief is responsible for hundreds to thousands of employees engaged in various services (airport services, engineering, etc.).

5. Centralization and Decentralization

Etihad Aviation Group is a decentralized organization that is divided into several major business divisions, where top managers are responsible for decisions made in their division. Such decentralization allows decreasing the level of responsibility that the Chief Executive might bear and increases employees’ autonomy. Thus, employees are authorized to partake in crucial decision-making within their divisions.

6. Formalization

Since Etihad Airways strives to be transparent, the formalization level at the organization is high. Information gathered in organizational documentation is included in annual reports that are published on the Etihad’s website (Etihad Airways, n.d.). Etihad Airways emphasized corporate responsibility, which indicates that the level of formalization is maintained persistently (Etihad Airways, 2015).

Functions and Responsibilities

CEO is responsible for maximizing the company’s value and developing the company’s vision and mission.

Interim Group Chief Executive Officer is responsible for business growth, company culture, and Etihad’s positioning in the employment market.

Interim Group Chief Financial Officer is responsible for external and internal financial operations.

Chief Group Support Services Officer is responsible for providing quality support services to Etihad’s stakeholders (including shareholders, clients, employees, partners, etc.).

Group Chief Strategy & Planning Officer is responsible for the development, organization, and implementation of strategic organizational initiatives.

Group Chief People & Performance Officer is responsible for regulating human resource management initiatives and aspects, as well as providing global internal strategies related to HRM.

General Counsel is responsible for regulating, addressing, mediating, and reporting legal issues that arise in all departments of the Group.

Vice President Corporate Affairs is responsible for managing organizational policies and corporate communications (both internal and external) with different stakeholders and the press.

Organizational Culture

Organizational culture is based on the following slogan: greener, growing together, working together, giving together. It emphasizes environmental protection, employee engagement, and social responsibility to the community. Health and wellness are also supported as indicators of a healthy lifestyle, together with transport safety (Etihad Airways, 2015). Furthermore, the company also works on sustainable aviation biofuel industry to reduce the environmental impact of its operations. Innovation and outcome orientation are supported by multiple training programs for employees from different social classes, as well as volunteers and other part-time employees.

Motivation Programs

Employee motivation is supported via benefits packages that include highly competitive salaries, life insurance, critical illness cover, dental insurance, pension plan, performance bonus, work from home, flexible hours, free lunch, gym membership, company car, professional development, and job training (Glassdoor, n.d.). Vacation and paid time off helps employees avoid burnout, as well as increase their commitment to the company. The salary is not taxed, and the employees’ income is not affected by it.

As it was mentioned above, due to decentralization employees are capable of providing complex decision-making and are empowered to prove and defend their decisions.

MOSAIC leadership program focuses on young leaders (24-35 y.o.) that partake in a two-week residential conference where they can communicate with respected and awarded leaders and coaches (Etihad Airways, 2015).

Decision-Making System

Decision-making system depends on employees’ duties; top managers responsible for different departments are the key decision-makers, who, however, consult their inferior colleagues during meetings or teamwork. The Decision-making process is based on the rules expressed in the business code of the organization: comply with the law and the code, consider your actions, respond to concerns, and deliver best practice (Etihad Airways, 2012).

Communication System

Communication in Etihad Airways Group is also based on the business code of the company. The active communication process is the responsibility of managers who ensure that the staff understands their responsibilities and the importance of the code. Creating an environment where employees can communicate safely with managers and raise concerns is also one of the multiple managerial duties. Direct and indirect bullying is addressed in the form of disciplinary actions, and employees are encouraged to report inappropriate behavior via the Ethics Line (Etihad Airways, 2012).

Leadership Style and Attributes

Etihad Airways President describes his leadership style as attentive to vision and mission, multinational, and based on a just culture that represents best-in-class (Walker, 2016). It appears that the organization’s President uses modified transformational leadership that also regards specifics of the region and culture he works in. The leader particularly values performance rewards and internal communication.

Employee Satisfaction

Employee satisfaction at Etihad Airways is guaranteed via benefits packages that include competitive wages, insurance, travel flights, housing allowance, end of service benefits, diversity program, employee discount, and medical department that operates 24/7. Moreover, performance recognition also occurs through the Abu Dhabi Award for Excellence in Government Performance. It can lead to further promotion or additional employee benefits. The Emiratization program also focuses on hiring and training Emirati employees to decrease the unemployment rates among Emirati citizens and provide them with the same opportunities as expatriates have. Thus, the company supports diversification.

Challenges and Opportunities

According to employees’ reviews, among the main challenges in the company are corruption, neglect of business ethics, and difficulties in the promotion (Glassdoor, n.d.). Corruption among higher management leads to skewed power balance, thus affecting all employees in the hierarchical system. Neglect of company ethics may result in unfair treatment of employees, penalties, fines, and reduced employee benefits. The first two factors cause difficulties with promotion for employees at lower levels of the organization, undermining the company’s image and leading to high turnover rates at such positions as waiter/waitress, cabin crew, flight attendants, etc.

Opportunities include top management training in ethical leadership towards employees. Additional coaching for senior managers can potentially decrease abuse of power and skewed power balance among them.

Recommendations

To reduce the corruption levels, Etihad Airways can apply job rotation to increase performance efficiency among top management and other key figures. Transparent documentation (with decreased formalization) can indicate possible issues due to which corruption continues to occur (e.g. improper storage of documents, lacking transparency among employees with greater power, unclear records management policies, etc.).

Staff training and awareness can improve the implementation of company ethics in practice. If the staff is aware of what behaviors are inappropriate and how they should be reported, it is more likely that power balance among different hierarchical levels will be restored. However, it is only possible if the organizational environment is not hostile and fosters attention to fraud and mistreatment, whereas employees are not afraid to report inappropriate behavior to the Ethics Line, and any attempts of top management to intervene are interrupted or impossible.

Conclusion

Etihad Airways is a large multinational company that values quality performance, environmental protection, and employee engagement. It ensures employee satisfaction by providing them with benefits packages and completive salaries. However, so far the company was unable to address corruption and neglect of corporate ethics in employees with greater power. Etihad Aviation Group needs to provide additional training and focus on transparency of its operations to address the identified challenges.

References

Etihad Airways. (2012). .

Etihad Airways. (2015). .

Etihad Airways. (n.d.). Corporate profile.

Glassdoor. (n.d.). Etihad Airways.

Walker, K. (2016). .

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"Etihad Airways Company's Organizational Behaviour." IvyPanda, 6 Sept. 2020, ivypanda.com/essays/etihad-airways-companys-organizational-behaviour/.

1. IvyPanda. "Etihad Airways Company's Organizational Behaviour." September 6, 2020. https://ivypanda.com/essays/etihad-airways-companys-organizational-behaviour/.


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IvyPanda. "Etihad Airways Company's Organizational Behaviour." September 6, 2020. https://ivypanda.com/essays/etihad-airways-companys-organizational-behaviour/.

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IvyPanda. 2020. "Etihad Airways Company's Organizational Behaviour." September 6, 2020. https://ivypanda.com/essays/etihad-airways-companys-organizational-behaviour/.

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IvyPanda. (2020) 'Etihad Airways Company's Organizational Behaviour'. 6 September.

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