The Dubai Airport Free Zone Operation Case Study

Abstract

This paper is an attempt to investigate the fundamental philosophies of the operation of the Dubai Airport Free Zone (DAFZA) and draw recommendations for improving total quality management (TQM) practices. It focuses on identifying the potential gaps, which should be filled. In particular, it is concluded that the organization should pay specific attention to strengthening leadership skills and further development of the business ethics environment based on the national responsibility approach. As for the rest of the TQM determinant, the findings of the research suggest that DAFZA is successful in implementing total quality policies, as it is certified with ISO 9001 and integrity is one of its core values.

Introduction: organization profile

Dubai Airport Free Zone (DAFZA) was created in 1996. The primary objective of this organization is the administration of trade, industry, and service licenses and visas and their distribution among international companies interested in conducting business operations in Dubai, UAE. DAFZA is a provider of services. It serves as a comprehensive business environment for companies operating in different industries, from cosmetics and pharmaceuticals to aerospace and aviation.

At the same time, the organization offers services related to tax exemption, business ownership, and repatriation of earnings. In the simplest terms, the role of DAFZA is to help international companies incorporate their business operations in Dubai and obtain necessary business licenses. It should be noted that both the creation of new businesses and the opening of branches are administered by this organization (DAFZA: About us, n.d.).

As the organization promises exceptional services, the role of quality management programs and policies should not be underestimated. That is why this paper will focus on investigating currently deployed techniques and philosophies such as integrity and ethics-related practices, leadership, and identification and reporting of issues and drawing recommendations for improving them.

Mechanisms and Philosophies and Their Impact on DAFZA’s Success

As of now, DAFZA offers services to more than 1,600 international companies carrying out business activities in a variety of industries (Dubai Airport Free Zone, n.d.). In 2015, it achieved a 7% growth of total revenue and a 3% increase in total assets (DAFZA, 2016a). For this reason, its business model is an operational success. Several factors contribute to the exceptional performance of the organization. First of all, DAFZA focuses on the specific needs of customers.

This customer-centered approach is beneficial not only to the organization itself but also to the UAE economy as a whole. One key reason for DAFZA’s success is the allowance of 100% ownership, which means that there is no necessity to have a UAE business partner when setting up a company. Moreover, all services are provided based on individual approach so that work is not automated and customers’ needs are adequately addressed.

Also, DAFZA does not charge companies operating within its business environment any income or corporate taxes, which adds to the increase in the number of clients. What makes this organization more attractive compared to its competitors such as Jabal Ali Free Zone (JAFZA) is the fact that tax exemption is provided on a 100% basis, i.e. for the overall period of a company’s operation, while JAFZA offers a time frame of fifty years (DAFZA benefits and incentives, n.d.; Why Dubai, why JAFZA, 2016). Finally, the organization recognizes the significance of international certification. That is why it obtained an ISO 9001:2008 certificate (DAFZA: Accomplishments, n.d.).

It is essential to note that this standard is related to total quality management, and it is the only one in the ISO 9000 family that a company can be certified with, while others are recommendations for action. So, no further steps in certification are recommended except for maintaining the requirements of this and other standards.

Leadership Factors and Their Relation to Quality Programmes

Leadership is the primary determinant of TQM, and ignoring its significance is the most common error related to the implementation of total quality practices (Goetsch & Davis, 2012). At present, DAFZA senior management believes that support of leadership is a critical success factor and focuses on developing leadership traits and enhancing the participation of leaders in everyday operations of the organization and diversification of activities. Still, there are some significant issues related to leadership factors, as the above-mentioned facts about leader development are mentioned in DAFZA’s strategic plan (DAFZA, 2014).

Specific Ethics-Related Policies and Their Relation to Quality Management

When referring to TQM, it is essential to recognize the role of business ethics (Mullins & Walker, 2012). Following the principles of business, ethics is one of the organization’s core values (DAFZA, 2014). As for now, the primary ethics-related policy is the national responsibility approach. According to it, the focus should be on strengthening the national identity of the organization but still operating based on international standards of quality, i.e. working to benefit both customers and the national economy (DAFZA, 2016b).

Integrity-Related Practices

Integrity is one of DAFZA’s core values (DAFZA, 2014). According to this approach, the organization pays specific attention to the confidentiality of customer information. This strategy is chosen to satisfy client requirements as well as follow existing values and determinants of the corporate culture. Moreover, DAFZA works on diversification of business solutions as one more integrity practice. The implementation of this policy is motivated by the desire to maintain leading positions in the area of business operations and attract more new customers as well as increase the level of satisfaction with services provided to existing clients.

Practices Related to Identification and Reporting of Issues

The foundation of the reporting system is the review of all policies used by the organization once every two years. This strategy is implemented in the form of conducting a SWOT analysis and reviewing policies to establish if they are inefficient. A common practice is issuing a strategic plan for development and pointing out all challenges, and the ways to address them, as success indicators. The latest plan was issued for 2014-2016 with the focus on improving poor leadership, increasing competitiveness, land limitation, and transformation of policies toward a smart model of government (DAFZA, 2014).

Conclusion

To sum up, there are several determinants of total quality management such as strong leadership, detailed planning for strategic development, teamwork, customer-centered approach to conducting business operations, long-term commitment, and focus on providing services of exceptional quality (Goetsch & Davis, 2012). As it was mentioned, the organization pays specific attention to satisfying the needs of customers. Furthermore, it issues strategic plans every two years and believes that striving for constant improvement is a major factor in success. As for long-term commitment, it is determined by DAFZA’s tax and integrity policies. So, the only area of recommended improvement of TQM practices is the enhancement of leadership and participation of employees in everyday work.

References

DAFZA. (2014). Strategic plan 2014-2016. Web.

DAFZA. (2016a). DAFZA achieves exceptional financial performance during 2015. Web.

DAFZA. (2016b). DAFZA adopts ‘national responsibility’ approach to corporate governance. Web.

DAFZA: About us. (n.d.). Web.

DAFZA: Accomplishments. (n.d.). Web.

DAFZA benefits and incentives. (n.d.). Web.

Dubai Airport Free Zone. (n.d.). Web.

Goetsch, D. L., & Davis, S. (2012). Quality management for organisational excellence: Introduction to total quality (7th ed.). London, UK: Pearson.

Mullins, J., & Walker, O. (2012). Marketing management: A strategic decision-making approach (8th ed.). New York, NY: McGraw-Hill Education.

Why Dubai, why JAFZA. (2016). Web.