Executive summary
Emirates Airlines is a model of leadership and management, a primary reason why this should be the focus for a study on organizational culture.
It has attracted the attention of researchers because despite its being a business owned by an authoritarian regime, its people are not corrupted, but more focused on contributing to the organization’s success and expanding its fleet, which is composed of eco-friendly airplanes.
This essay is about Emirates Airlines, a part of the Emirates Airlines Group, composed of about 50 divisions or companies, and based in the United Arab Emirates.
The Emirates Group has shown business skills when it tapped the east and west resources of the world, and has benefited from the recent economic boom in the Asian continent. It closely caters to the fastest growing economies of the world, namely China and India.
This essay will focus on leadership and organizational culture, along with the problems and challenges the airline has encountered. This organization has a multi-cultural workforce who come from many parts of the Middle East and of the world. Cultural integration is one of the major problems when it comes to human resource management.
Where there are many constraints and environmental factors to deal with, it seems that business, in such conditions, cannot be largely successful. However, Emirates has been experiencing successes one after another, in terms of the many challenges airlines encounter, in particular economic crises, high oil prices, and so on.
Culture is what the people practice and believe, which has become the foundation for all the other activities and policies the organization has to follow. Organizational culture refers to the norms and values the owners have implanted on the organization. How Emirates dealt with a multicultural workforce is the main thrust of this essay.
Introduction
The government of Dubai, owners of Emirates Airlines, claims that their company is the largest airline in the world, serving millions of customers with thousands of employees who are multi-cultural and coming from the different parts of the world.
We have chosen this expanding company in the UAE for our case study because of this seeming impossibility in providing a pleasant work environment, at the same time the airline has to provide customer satisfaction and attain profits.
In 2010, Emirates served 5.72 million customers, and this must have doubled in 2015. Sarabdeen, El-Rakhawy and Khan (2011), who conducted a study on the airline industry in the Middle East, argue that Emirates is a ‘people’ company, which means the firm is employee- and customer-focus.
Since it is a people company, it must have an effective human resource management (HRM) and the organization must know how to deal with a multi-cultural workforce.
Leadership and company culture have paved the way for organizational achievements. Its workforce is a source of competitive advantage, at the same time a challenge considering that it is multicultural. The labor force has reached 28,686 employees, who come from 160 countries (Emirates Group Careers 2015).
It shows that it is a ‘people’ organization and considers its employees as its most valued asset (Sarabdeen, El-Rakhawy, & Khan 2011).
Emirates has built the reputation of being ‘people focused’ employer because of its significant HRM practices. It has a level of selection method to produce ‘a crème of the crop’ labor force. Applicants undergo a rigid training and development.
Emirates also focuses on CSR programs and concerns, which benefit not only the community, but the employees and the customers.
Business organizations in the UAE accumulate only about 10 percent of their operating expenses to pay their employees, while others provide as much as 40 percent of operating expenses for salaries and allowances. In other words, there is no problem with cost pertaining to hiring expatriates.
The problem lies in the multi-cultural background of employees (Nataraja & Al-Aali 2011).
How do large airline organizations manage their employees despite the many constraints in the industry? Has Emirates combined corporate social responsibility (ethics and employee motivation) and profits?
We will focus on the effective leadership and organizational culture as the underlying factors and emphasis why the company is a success story. In our investigation, we draw primary data and information from the company’s website and from the employees.
Emirates’ organizational structure
Because of technology and innovations in organizational structure, the world has become flat. Other authors call this the age of ‘the global village’. Emirates is affected by the ‘flattening’ of the world.
It has a narrow ownership structure, wherein the airline President oversees the entire aviation business and reports to the executive Vice Chairman of the whole Group. The President has other responsibilities like taking charge of the central carrier operation, to include the freight business, airport services, and the hotel and holidays business.
This flat structure, which permits clear communication and rapid decision, has contributed to its growth and development (Nataraja & Al-Aali 2011). (See appendix for organizational chart of Emirates Airlines.)
Changes in management and constant innovation result in team-based structure. A study was conducted which found that about 60 percent of firms have used teams to respond to the changes caused by globalization and technology innovations (Lawler et al., cited in Wu, Wang, & Tsai, 2010).
Because of team work, jobs are accomplished faster than before the advent of the information age. A team-based structure can help provide leadership effectiveness because it allows vertical and horizontal interactions, in which team leaders and members can directly communicate with each other and with top management at the same time.
This means they communicate without the traditional communications protocol. Decisions are made right away without much hustles. Management encourages the formation of teams, and managers are always there to respond to the needs of the teams.
Svensson and Wood (2005) discussed leadership effectiveness using different models. Leadership effectiveness in management and business is changing in various aspects. It is a continuous process. These dynamics and continuity depend on contextual considerations in the marketplace and society, and other aspects affected by time.
Leadership effectiveness relies on the accuracy of these considerations. Contextual precision is about a leader’s contextual perception, whether he/she is right or wrong in the marketplace or in the community.
On the other hand, ‘timely precision’ relates to the leadership’s timely perception in the business and societal environments at a given point in time (Svensson & Wood 2005).
The story behind Emirates
We made contact with Emirates’ website administrator, who was kind enough to accommodate us and provide valuable information for this study. Direct communication with this large organization is possible. The website provides customer interaction, wherein we can ask questions and suggest ideas about people and business.
The administrator informed us that all of these are regular features of the company and that they are continuing to improve their service with customers’ suggestions. People focus means to be constantly in touch with customers, asking their ideas and opinion and how they can be served better.
They provided us with downloadable information regarding their organization, including their programs and policies. The company website provides news and stories about the airline and the Emirates Group, and their various services, including corporate social responsibility and HRM practices like training and development.
What are the values that Emirates employees and managers learn from and practice in the organization? This was a question we posed to the organization’s website. There might be self-centric information that they provided this researcher, but we tried to analyze the details and compare this with data coming from the employees themselves.
The results became a part of a ‘folder’ of evidence to support the contention that organizational culture and good leadership result in organizational achievements and good performance.
Emirates has abundant human capital, a multi-cultural workforce, which does not demand higher salaries, a fact that is different with others from the United States and the UK in terms of labor costs.
The employees’ regular training and development through their program, Plateau Learning Management System, empowers the workforce by providing additional knowledge and motivating them to work hard for the organization’s success.
Salaries and benefits are one of the highest in the region, and allowances and bonuses are given on an equal and fair method (Sarabdeen, El-Rakhawy, & Khan 2011).
Management improves organizational knowledge by conducting training and development. Emirates provides effective customer relationship management (CRM) through its interactive website. Customers of the various services are well informed.
Corporate social responsibility (CSR)
The company has applied CSR by focusing on eco-friendly measures to achieve fewer carbon footprint. Emirates’ environmental leadership is stressed on their website. The Chairman’s message about environmental sustainability is a CSR concern that cannot be ignored.
The Emirates Group recognises its responsibility to protect the environment (Emirates: the Emirates Group commitment to acting sustainably 2015). The company aims to reduce environmental abuse by shortening flight and constant planning and discussion on how to provide comfort to passengers.
Carbon emission has been reduced by not burning jet fuel discriminately.
The company’s leadership has long promoted and enhanced CSR principles. CSR objectives focus on environmental sustainability and reducing carbon emission. The problem is that jet fuel continues to emit carbon, which exacerbates climate change.
How can a company promote CSR but at the same time continue to abuse the environment through carbon emission produced by jet fuel?
They can only help preserve the environment if they stop business because jets cannot fly without fuel. The fact remains that business and commerce need air transportation to transport cargo and people from one place to the other side of the globe as fast as they can.
Emirates has addressed the problem of jet fuel emission. Environmental impact due to fuel and engine-related emissions can be reduced by providing environmentally optimum airplanes.
Cultural diversity
Cultural diversity is an important aspect of international or global organizations, and has become a significant concern among firms, research institutions and policy makers (Sultana et al. 2014).
Contemporary researchers have regarded cultural diversity as a significant distinction between firms, ‘a description that covers a wide range of obvious qualities and hidden capabilities’ (Ivancevich & Gilbert; Nkomo & Cox, cited in Sultana et al., 2014, p. 134).
To have a real meaning of cultural diversity, it is significant to understand first the concept of culture.
Adler (cited in Sultana et al., 2014, p. 134) defines culture as ‘an acquired behavioural aspect assigned to a person and his group by which the individual is identified, expressed and transmitted through symbols, distinguishing mark, its values and beliefs.’
Culture includes a wealth of principles and sentiments which, once articulated, can be put side by side with those from other cultures and provides arguments for positive learning (Sultana et al. 2014).
Organizations that develop the virtues of cultural diversity are destined to better put together the global and active labor market controlled by a large multiethnic and multicultural power of that particular segment (Jain & Verma, cited in Sultana et al., 2014).
The idea behind ‘managing diversity in the workforce’ has become popular of late because of the realization of the method of ‘equal opportunities’ for all (Sultana et al. 2014, p. 134). Cultural diversity in the workplace is advantageous for organizations because of the cohabitation of workers from different cultural milieus.
This cultural diversity needs a kind of management in which its organizational culture recognizes employee advancement in their careers unobstructed by ‘gender, race, nationality, religion,’ which are insignificant to performance (Bryan, cited in Sultana et al., 2014, p. 134).
The culture also respects the rights of everyone, and no group is more privileged than the others (Torres & Brussels, cited in Sultana et al., p. 134).
Sultana et al. (2014) identified five key dimensions of cultural diversity to enable firms attain competitive advantages with ‘creativity, innovation, image and marketing, higher productivity and competences of work force in a systematic work environment’ (p. 139).
Managing cultural diversity positively influences organizational factors, such as human capital and innovation capital. This form of management can also impact positively on customer equity and shareholders. A systematic cultural diversity management also results in the firm’s competitiveness.
Airline Innovation
Emirates’ success formula is provision of innovative and creative ideas in looking for opportunities and their way of solving problems.
Its positive culture fosters new ideas, often not in line with current industry’s view, as can be perceived in their unique services like personal entertainment systems in all seats, private first-class suites, use of mobile phones in the plane, and their unique ‘SmartLanding and SmartRunway safety solutions’.
Nataraja and Al-Aali (2011, p. 473) indicated that, ‘Emirates believes in doing things that seem right and leaving things that functionally do not quite fit.’ We have to note here that this cannot be accomplished by management alone, but by a multi-diverse workforce.
A survey was conducted in 2010 on seven major and long-distance airlines, including Emirates, Air France, British Airways, Etihad Airways, Qatar Airways, and a range of others.
The aim was to measure the airlines quality service in terms of customer experience, all the way from flight booking up to final baggage claim. Emirates emerged as the top in the list as the best service provider (Nataraja & Al-Aali, 2011).
Management conducts workforce planning and employee development. The workforce is effective because of this. Planning is the initial stage of training and development, which is an important aspect of human resource management. One important feature of the airline’s branding is leader support.
They regard employees as important to the success of the organisation (Nataraja & Al-Aali, 2011).
Practically, we can explain Emirates’ successes by ideas in the literature that suggest the association between achievements and effective leadership in the organization. It is the result of management accuracy, timing and organizational culture, which also relates to common practices within the organization.
When there is precision, there are positive business results (Svensoon & Wood 2010).
The company’s programs and policies emphasize leadership, customer focus, and corporate social responsibility, which is about environmental sustainability. Although, these features cover several topics in organizational behaviour, we focused on leadership and organizational culture as the foundation for the company’s success.
Emirates’ leadership
What do we mean when we say leadership and organizational culture are the foundation of organizational success? Does this mean that the professional managers are responsible for Emirates’ successes?
The emphasis for this analysis is the leadership team of Emirates. This includes the owners, the top management, the middle-level managers, and the people behind this leadership.
Emirates is run by a strong and steady leadership team that creates effective and calculated decision-making. Their leadership traits include ‘business ethics and customer focus,’ the foundation of the airline’s success (Nataraja & Al-Aali 2011, p. 473).
The airline is owned by the ruling family of Al-Maktoum, who had the vision in making Dubai the envy of the world. Another important factor is the blending of an excellent geographic location and an effective management, put together by an ambitious master plan set by an ambitious personality (Nataraja & Al-Aali 2010).
Leadership and employee focus are clearly defined in Emirates. Sarwar (2013, p. 10) defined an ‘ethically effective leadership,’ which is different from the simple term, effective leadership. Anyone can be a leader, but has to be ethically responsible for his/her actions with the people around them.
If we refer to the leaders in a business company, they have to be ethically responsible with the employees of the company. This goes with the question of accountability, which must not be taken for granted.
Leadership is different from management, but to be effective in business, managers must be good leaders. No organization can be a success unless it has an effective leadership, supported by a good management team. Leaders also depend on their teams and team members who will help in carrying out plans and policies.
Theories state that leadership causes, or motivates, an organization to become successful. Management has a role on these theories (Svensson and Wood, 2005). There are other theories that relate leadership effectiveness and organizational achievements.
Leadership is defined according to their categories. Bass (Svensson and Wood, 2005) categorized these definitions as: the focal point of group processes; a matter of personality; a matter of inducing compliance; the use of influence; the use of limited discretionary influence; a way of behaviour, and a way of persuasion.
Transformational leadership
This is a different type of leadership, which can also provide organizational achievements. The leader uses charisma in motivating the members to act selflessly for the attainment of organizational objectives. It raises the follower’s degree of maturity for him/her to achieve and work for others and the organization (Erkutlu 2008).
Transformational leadership emphasizes charisma and motivation as underlying factors for members to work, participate, and become leaders themselves. Some researchers emphasized the significance of ‘behavioural integrity’ in creating trust between leader and follower as a core aspect of transformational leadership.
Transformational leadership is effective through ‘impression management’ techniques, and one example is ‘exemplification,’ which is similar to ‘behavioural integrity’ (Pounder 2001, p. 282). Common qualities include providing attitude to others, and giving risks and personal sacrifices to attain organizational goals.
Gardner and Cleavenger (Pounder, p. 282) suggested ‘ingratiation’ as an example of impression management technique related with transformation leadership.
Organizational culture
Organization culture is ‘a shared meaning held by members’ that differentiates the organization from the others (Robbins 2001, p. 508). Organizational culture has something to do with Emirates’ success. The values and norms of the founders and the people are well-established that they lead to organizational success (Wu, Wang, & Tsai, 2010).
When effective leadership is emphasized within the organization, i.e. employees and managers focus on management timing and accuracy, and they observe and practice this to the point that it becomes a part of organizational culture, there will be effective leadership outcomes and organizational achievement.
Lee and Tsai (cited in Wu, Wang, & Tsai, 2010) argue that organizational cultures which foster organizational learning, communication and sharing between group members, and collaboration can lead to organizational performance. Organizational culture can provide a clear way for the future.
Organizational culture is the beginning of ‘significant competitive advantage’ (Fortado & Fadil 2012, p. 283). Authors and theorists argue that a strong culture is associated with organizational performance. Leaders can develop organizational culture and use this in implementing programs to attain competitive advantage.
Fortado and Fadil (2012) analyzed the different faces of organizational culture. In 1920s to 1960s, a study was conducted on a phenomenon in the industrial field research known as human relations.
At the Western Electric Hawthorne plant, the researchers launched the human relations field movement (Fortado & Fadil, p. 284), wherein they focused on sociological concepts and methods. This group became the first to call the term ‘organizational culture’ (Fortado & Fadil, p. 284).
The researchers conducted the study in the scientific management tradition, wherein they made use of the test group and control group. The Hawthorne study conducted the initial lighting experiment, in which they compared the production in the two rooms as the level of lighting was varied in the test room.
As production in the test room was increased, production in both rooms also increased. Then, lighting was also reduced in the test room, and production in the test room and in the control room rose.
There were inconclusive results to this study, although it was the beginning of more studies on the subject of human relations and organizational culture.
The study of Elton Mayo (Fortado & Fadil, 2012) and colleagues made some progress. The experimenters focused their attention on the Relay Assembly Test Room, wherein they studied the impact of rest period in between work, snacks, length of work hours and length of work week during production.
Improvements in working conditions increased production, but when these improvements were reduced, the level of production was maintained contrary to the researchers’ expectations.
The researchers made some inductive research and actual interviewing. They also conducted the Bank Wiring Observation Room experiment. Their study revealed that there were important unknown features of the experiment. Their inductive research found that the existing employee feelings played a significant role.
Another important factor was social situation at work, which influenced the employees’ sentiments. After this study, the researchers found how a change could develop and be understood as such.
Fortado and Fadil (2012, p. 284) concluded that, ‘The meaning of a change would be as important, if not more important, than the substance of the change.’
The Hawthorne researchers also observed that instead of thinking as individuals, the members should contribute and think along with the group. In the experiment, there was a formal organization, which had a shadow counterpart known as the ‘informal organization’. The employees discussed their feelings, frustrations, and fears.
This increased the morale of the group and a bond was formed among the members, in which they began thinking as a group or a team.
They were motivated to work with each other even if there was no need of doing so. Shared sentiments were found on employees not working too fast or too slow, not revealing to managers about actions that would hurt peers. These practices and norms were given by way of verbal demands, taunting, name calling, isolation, and binging.
The researchers concluded that there were pragmatic reasons for the workers’ actions. They argued that if managers were placed in the same social situation as their workers, they would do the same as the workers did.
Barnard (cited in Fortado & Fadil, 2012) provides theories about how informal association always comes first after formal organization. When a manager provides formal control, the informal association simply adjusts.
These formal and informal associations are closely related and one cannot exist without the other, or they are ‘symbiotically intertwined’ (Barnard, cited in Fortado & Fadil, 2012, p. 285).
Organizations are like living organisms because they work according to how living organisms operate. The different parts of the system in the organization are interrelated in complicated ways.
Changes in one area of the system will affect the other parts of the system. The initial state of affairs matters when a distraction occurs. A calm condition might have a disturbance, but it can be rekindled by the same disturbance in an agitated state.
In the 1960s, Geert Hofstede studied culture, in which he referred to it as the unwritten knowledge ‘with rules of the social game’ (Hofstede, Hofstede, & Mikov 2010, p. 4). The values children learn at home until they reach the age of ten form a culture that is so deep, and they become ‘the software of the mind,’ in the words of Hofstede.
The software becomes the basis for the social construct under the tutelage of adults around the individual.
Values are affected by environmental factors, such as rituals, symbols, heroes, and so on.
In a study of IBM employees, Hofstede identified the cultural dimensions (power distance, collectivism against individualism, femininity against masculinity, and uncertainty avoidance), which became the basis for other studies on culture and organizations. Hofstede’s study became a pioneering work in the subject of organizational culture.
How multicultural issues were resolved
In the context of Emirates Airlines, organizational culture has been formed ever since the owners, members of the Royal family of Dubai, founded the organization. The owners emphasized the value of people and customers. One of the significant aspects of valuing their employees is the selection process.
They recruit the best people qualified in the field, and once they are selected, turnover is very low, which means they stay up to retirement. This is very important in building a workforce, as it has positive results for the organization.
Organizational culture played a significant role in providing an effective leadership; but it can also be said that leadership was the key to a ‘progressive’ organizational culture, paving the way for a successful organization.
Nataraja and Al-Aali (2011) added that business ethics, customer focus, and brand awareness of Emirates through sponsorship of sports and games, caring for their employees and stakeholders, as well as the environment and the communities Emirates serve made the company a success and will provide direction for the future.
The survey research
We conducted survey research on the multicultural employees of Emirates. These were the survey questions.
- What is your degree of satisfaction with Emirates?
- The team is led by a responsible leader.
- Leadership fosters performance and good behaviour.
- The leader is effective.
- There is effective communication.
- There is flexibility among leaders and members.
- The company is people oriented.
- Management is responsive to the needs of employees and customers.
- Customers and employees are first in the mind of management.
- You undergo regular training and development.
- You feel motivated in the team.
- You have independence in your job.
- You can suggest your ideas and opinion.
- You have promotion, development and career advancement.
- You find yourself twenty or thirty years in the company, or until retirement.
- You love your work.
- You find fulfilment in your job.
- There is work-life balance.
- Management is concerned of your personal problems.
- You are left alone in your job.
- You have power as member of the team.
- You feel satisfaction as part of the team.
- You will tell others about your job.
- You will convince qualified friends to be a part of your company.
- You feel creative as part of the team.
- You rate your company as the best company.
The employee-participants were asked to rate their responses within the five-point Likert scale: ‘strongly disagree,’ ‘disagree,’ ‘neutral,’ ‘agree,’ and ‘strongly agree’.
Results/Analysis
There were five variables or themes taken from the questions in the survey. It can be concluded here that of all the variables, leadership had the greatest impact, 0.81%. This was followed by company aspiration and motivation. Teamwork was also quite high.
The variable organizational support garnered 0.69%. All the other variables had positive impact on employees.
Conclusion
This essay is about organizational culture and leadership, and the multi-cultural background of Emirates’ workforce. Emirates has a unique organizational culture and is heavily influenced by globalization. Multiculturalism is a common feature of globalization.
In the primary research, good leadership and motivation of employees emerged as intervening variables to deal with multiculturalism. Teamwork, organizational support and company aspiration were outcomes of leadership and motivation.
Recommendation
Emirates employees learned the art of good human interaction. The values and norms introduced by the owners of Emirates formed part of the organizational culture.
Organizations should cultivate organizational cultures that must be imbued with ethical standards and leadership traits because this will influence employee behavior and will result in organizational performance.
Appendix: Organizational chart of Emirates
Source: Nataraja and Al-Aali (2011)
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