The purpose of this essay is to select a company to analyze the roles and responsibilities of managers and leaders to develop a strong organizational culture, the difference between management and leadership, the four functions of management, and the recommendation of two major strategies. However, this report selected Ryanair Holding Plc to discuss the factors mentioned above with real evidence. The rationale behind choosing this company is it experienced serious leadership and management problems in the 1990s.
The Roles and Responsibilities of Leaders
The company’s success depends on the efforts and capabilities of the leaders; thus, they have some special responsibilities, such as making a decision for the development of the company, motivating the employees to give the best performance to provide quality service, and ensuring equal opportunity for all employees. However, the top management team, including the CEO of Ryanair, are responsible for making key decisions to sustain the global market leader in short-haul routes; for example, the CEO has fixed the price range from €0.99 to €199.99, introduce a one-way pricing strategy, control the operating expenses, and take other initiatives to improve the position from previous years.
According to the Annual Report 2010 of Ryanair, the leaders and managers ensure equal opportunities for all employees to build a healthy organization and they provide other facilities in accordance with the requirement of the EU regulation; therefore, they recruit dynamic and educated people for particular posts and never considers social background, ethnic groups, and religious belief of the candidates.
Also, the leaders have to develop the stakeholders’ confidence towards the company; however, they spend a large amount of money on maintaining corporate social responsibility and ethical codes. For instance, in 2008 and 2009, it invested €18,062,000 and €18,081,000 on social welfare. On the other hand, they have to save the company from an adverse economic position like Ryanair’s financial position was not stable in 2004. It faced the challenge of the global economic crisis in the fiscal year 2008-2009. Still, in every situation, this company successfully recovered its leading position by implementing a top management strategy.
Differences Between Management and Leadership
Kotter (1990, p.17) differentiated management that has aligned to cope with complexities pointing to the details, regulate with consistency and aimed to bring results in a short time by eliminating risks and ensuring effectiveness at the bottom-line while leadership concerned with organizational changes through innovation focusing on long term vision and capabilities to lead people in the right direction. In modern corporate practice, the term ‘management’ and ‘leadership’ are two different attributes. In contrast, an individual positioned in the management may not be a leader, and an individual positioned in the leadership- may not necessarily be a part of management. Both management and leadership are essential to establish a successful business entry with a strong customer base and accelerated market share.
Bennis (2003, p. 43) pointed out that a manager administers the organization while the leadership innovates a new strategy or new product or services. Still, the management engaged in maintaining, the leadership is devoted to developing something new to jump the organization in an upper tier. For any ill circumstance or organizational crisis, the management accepts reality. Still, the leadership drives to investigate the situation and analyze the facts and findings to come to the right solution (Coutts, 2000, p. 1). The management always relies upon control, focusing on the system and structure of the organization.
At the same time, leadership is always people faced and drives to inspire their trust in the organizational system and culture. Recognizing the status quo, the management may argue with short-term views keeping his eyes to the baseline. Still, the leadership looks for long-term perspectives keeping his eyes to the horizon. While the management imitates any plan, the leadership jumps to originate them with full effort and eager to encounter any challenge.
Montgomery (2008, p. 3) at Harvard Business Review presented a different view arguing that the leadership enduring with the responsibility of the prime strategist and may not isolate from the management. Thus the corporations hire CEOs with high spending while the board of management allows CEO to refashion the features of the strategy.
Pointing to the case of Ryanair in 1994, the management was really afraid while the Irish airline came into the Dublin–London route with fifty percent lower than Ryanair, Michael O’Leary the CEO, presented his ‘low-cost business model’ to encounter the situation and his leadership turned Ryanair as the leader of low-cost airlines industry with remarkable profitability.
The Roles That Organizational Managers and Leaders Play
Table 4: The roles that organizational managers and leaders play in Ryanair.
Contribution of Four Functions of Management to Maintain Ryanair
Planning
Effective strategic and operational planning is one of the most important functions for the company; otherwise, the company can fail to achieve its goals. For example, from the last quarter of 1990, Ryanair had flown through a lot of turbulence with losses of more than IR£20 million despite enlargement in passenger volumes. In this context, Michael O’Leary, who employed as a director from 1988 and CEO from 1994 had changed many strategic decisions those assist the company to recover its financial situation, and it enjoyed a better financial position by 1995; therefore, the most prominent cause behind the success of Ryanair is the contribution of O’Leary (Johnson, Scholes & Whittington, 2008).
From the very beginning, the CEO had taken many initiatives to expand the business in a new zone, which influenced the company to order 45 new Boeing 737- 800 aircraft (189-seat capacity) worth $2b in 1998, and joined the NASDAQ-100 in 2002; therefore, Air Transport World magazine declared it the most lucrative airline in the world in 2006. However, the strategic, operational, and contingency planning depend on the prime purpose of this company, as it would like to hold a strong position in challenging operating environment; therefore, it sells seats on a one-way basis and offers low-fare services to stimulate market demand by creating a loyal customer base.
Organizing
All the employees, cabin crew, and pilots of Ryanair work as a team to provide the best services. For example, this company was in a bankruptcy situation due to share price plunged from €6.75 to €4.86 before 2004, and its sales revenue decreased dramatically. Still, they saved the company by organizing its resources and activities properly.
Leading
According to the annual report 2010 of Ryanair, O’Leary has extraordinary power to motivate the employees to show their highest effort to give quality service to Ryanair’s customers. However, both current and former staff and executives of this airline have admired O’Leary’s leadership style because he has the talent to lead people without any kind of leadership training and he has inside power to motivate and inspire the employees as well as the customers (Johnson, Scholes & Whittington, 2008).
Controlling
As the low-fares airline “Ryanair” is a large airline in short-haul routes, it should require numerous management teams to control and monitoring the functions of different sectors. For instance, it has a separate audit committee to control the internal financial position and report for external use. However, the higher-level management team and the staff are the key assets of this company. It has above 2,859 full-time and more than 3304 part-time flight and cabin crew along with 869 ordinary employees and newly appointed 1,200 employees to control all units (Ryanair, 2010).
According to the annual report 2010, the higher-management team has already demonstrated their performance and capabilities to manage human resources and create brand awareness in European short-haul routes, which also help the company if it wants to enter in long haul routes.
Recommendation
The managers and leaders can use the following recommendations for the future development of the company.
The implementation of strategies and technological development
The managers and leaders of Ryanair should concentrate on implementing the strategies and contingency plan as it is in the summit in the success in terms of market share, customer base, and profitability level in short-haul flights. Still, it can lose its position due to the competition among the low fare airlines. To achieve competitive advantages, this company’s leaders are highly concerned about the safety of passengers and employees, maintenance of aircraft, training to develop skills, and other issues to build the confidence of the customers to use low-cost services.
However, the Chairman of this company stated in the annual report 2010 that the company offered low prices during the recession. The employees performed well talent and resilience in the adverse economic condition. Therefore, this report suggests introducing effective communication and management tools to manage the company more effectively, such as SAP, ERP, CAL, etc. However, this company has already invested more than $10.0 million to purchase the necessary software.
However, Guardian (2009) reported that cloud computing could develop the organizational culture in case of green campaigns and other integrated marketing communications programs though this application could increase operating costs in different stages. As a result, this report recommends the company to integrate advanced information technology, such as a calculator, to estimate costs, which will help the customer to assess whether the price is lower than the competitor’s price; however, British Airways introduces this technology in the company’s website.
Carry on the business without anti-dumping activities
The leadership capability of Michael O’Leary to motivate the employees has discussed in the previous section, and the annual report confirmed that Ryanair is not intended to lose any high-qualified senior executives until it gets a qualified person for replacement, and this corporate philosophy designates that he should carry on until this company finds out a suitable person for this post. Though O’Leary contributes to rebuilding the company, the problem arises when he gets involved in criticism due to his rivalry attitude and hostile comments towards the competitors in the airline industry.
Consequently, the policymakers, regulators, EU commissioner Philippe Busquin, and the competitors like EasyJet and Aer Lingus have not considered him as a suitable person for next term. However, this report recommends that Ryanair reassign O’Leary for the CEO post, as he proved himself the most suitable person for the company. Still, he must stop to make such a decision those incur the company in legal barriers or the anti-dumping regulation of the European Commission though the market is too competitive.
Reference List
Bennis, W. (2003). Learning to Lead: A Workbook on Becoming a Leader. (3rd ed.). NY: Basic Books.
Coutts, P. (2000). Leadership Vs. Management. Web.
Guardian (2009). Will cloud computing become the RyanAir of the future? Web.
Johnson, G., Scholes, K., & Whittington, R., (2008). Exploring Corporate Strategy: Text and cases. 8th ed. Pearson Education Limited.
Kotter, J. P. (1990). Force for Change: How Leadership Differs from Management. (1st ed.). NY: Free Press.
Montgomery, C. A. (2008) Putting Leadership Back into Strategy. Harvard Business Review. Web.
Murray, A. (2011) What is the Difference Between Management and Leadership?The Wall Street Journal. Web.
Ryanair (2010). Annual Report 2010 of Ryanair. Web.