TABLE OF CONTENT

1.0     INTRODUCTION                                                                   2

2.0     HOW ORGANIZATIONAL BEHAVIOUR HELPS
          MANAGERS IN ORGANIZATION                                        2

3.0     CHALLENGES IN RYANAIR                                                4

          3.1     Management Autocratic-control Approach                       4

          3.2     Stress and Lack of Motivation                                         6

          3.3     Staff Turnover                                                                8

          3.4     “Weak Culture”                                                              10

4.0     RECOMMENDATION

          4.1     Utilising Ouchi’s Theory Z                                              11

          4.2     Alderfer’s ERG Theory                                                   12

          4.3     Culture Change                                                               13

5.0     CONCLUSIONS                                                                     14

1.0              INTRODUCTION

Ryanair is an Irish low cost air-carrier, created by the Ryan family in 1985 with a share capital of £1 and a staff of 25 people.

The company, after 29 years since foundation, operates more than 1.600 daily flights, with an average of more than 500.000 flights every year, from 57 bases which enable to connect 180 destinations in 29 different countries and carrying nearly 80 million passengers (Ryanair official website, 2013).

Ryanair is passenger airline serving short-distance routes between Ireland, the United Kingdom, Continental Europe, as well as Morocco, unique country out of Europe.

According to the Ryanair annual report (2013), over the years the company has had a steady increase of employees, by reaching in March 2013 more than 9.000 people, including management, administration, maintenance, ground operations, pilots and flight attendants.

Ryanair, unlike the majority of the other European airlines, features delivering a “no-frills” service, without reclining seats, rear seat pockets and with safety vests stored overhead and not under the seat. Such typology of delivered service permits the company to save on aircraft costs and accelerates cleaning and safety controls in the turnaround situations.

2.0       HOW ORGANIZATIONAL BEHAVIOUR HELPS MANAGERS IN

            ORGANIZATION

Organizational Behavior can be seen as a field of study that investigates the impact that individuals, groups and structures have on behavior within an organization, to enable applying this knowledge towards improving organizational effectiveness. Organizational Behavior is an important concept for any organization, since it deals with the three determinants of behavior in organizations: Individuals, Groups and Structure. Organizational Behavior then applies the knowledge gained about individuals, groups and the effect of structure on behavior in order to make organizations work more effectively. In a nut shell, OB is concerned with the study of what people do in an organization and how their behavior affects the organizations performance. Seeing as OB is concerned with employee related situations, it tends to emphasize behavior related to jobs, work, absenteeism, employment turnover, human performance and management. The organization’s base rests on management’s philosophy, values, vision and goals. This in turn drives the organizational culture which is composed of the formal organization, informal organization, and the social environment. The culture determines the type of leadership, communication, and group dynamics within the organization. The workers perceive this as the quality of work life which directs their degree of motivation. The final outcomes are performance, individual satisfaction, and personal growth and development. All these elements combine to build the model or framework that the organization operates from. The ability to use the tools of organizational behavior to understand behavior in organizations is one reason for studying this subject. A second reason is to learn how to apply these concepts, theories, and techniques to improve behavior in organizations so that individuals, groups, and organizations can achieve their goals. . Managers are challenged to find new ways to motivate and coordinate employees to ensure that their goals are aligned with organizational goals. Organizational Behavior addresses the following points:

A manager’s job is to use the tools of organizational behavior to increase effectiveness, and the organization’s ability to achieve its goal. Management is the process of planning, organizing, leading, and controlling an organization’s human, financial, material, and other resources to increase its effectiveness.

3.0       CHALLENGES IN RYANAIR

Patrick Sills (1975) maintains that “behavioral science knowledge is power” and that knowledge can be used in responsible and irresponsible ways. The manners in which Ryanair’s organisation is designed and functions affect several factors, from employees’ health and well-being to wider social and economic conditions (Buchanan, Huczynski, 1997). Despite Ryanair is holding a strong position in the low-cost market and increases its income every year (Ryanair Annual Report, 2013), its poor reputation in terms of customer service and job satisfaction (The Guardian, 2014) may have a negative effect on its success in the future. The main organizational behavior issues, which Ryanair is facing, are the autocratic control approach of management over employees, stress and lack of motivation, staff turnover and weak organizational culture (Bamber et al., 2009).

            3.1       Management Autocratic-control Approach

Ryanair’s human resource management is characterized by a rigid autocratic control, using often threats of cutting down retributions or firing in order to stimulate employees’ action (Bamber et al., 2009).

As argued by Mullins (2010) in the autocratic leadership style the source of power is the manager and all interactions in the organization get through to the manager, and the employer controls decision-making process, defining policies and methods to achieve objectives, work activities, relationships and also decides compensations or deserts.

This is particularly relevant in Ryanair. The organization tends to emphasize status and ritual behavior through a clear-cut division of labor and a high degree of task specialization, permitting to reach a more efficient decision making process because it is in the care of only one person (Creaton, 2004), even though the employees could not accept such made decisions.

In reference to McGregor’s Theory X-Y (Mullins, 2010) the nature of human beings can be expressed by managerial practice and he divided individuals in two competing theories which dominate the managerial thought-world. On one hand Theory Y says that people are active rather than passive in their environment, they long to grow and assume responsibilities, on the other hand Theory X maintains that the human beings are lazy and self-centered, they don’t like change and their lack of ambition brings them to prefer to be told what to do.

Ryanair management, in order to keep focused on the cost-cutting and low-cost airline leadership’s goals, adopts a strict control over its employees and this could lead to the assumption (Shay Cody, 2005) that, according to the management, the employees present the typical features of Theory X.

Unlike Southwest airline, American low-cost carrier, whose human resource management practices focus on a commitment approach which enables the company to reach high levels of productiveness through a frequent and well-timed problem-solving communication among functions, held up by relationships of shared purposes, knowledge and mutual respect (Bamber et al., 2009), Ryanair’s employees focus on doing their own jobs and do not interfere with each other, bringing the communication to a minimum level and they are rigidly supervised by the managers as “one cost among others” (Wallace et al., 2009).

It has been estimated that 90 per cent of all process problems have their root causes at the barriers between departments (Develin and Hand, 1993), and this means that the lack of communication within the Irish organization determines in most cases conflicts and less efficiency.

The control approach can motivate employees to do their best whether followed and assisted by managers; however Argyris (1964) explains it can also create situations in which the employees feel dependent on their superiors and fearful of the staff in charge.

Ryanair’s employees are pushed to fulfill their mechanical commitments without improving their personal satisfaction (Bamber et al., 2009). According to Maslow’s hierarchy of needs (1943) employees’ behavior is not just influenced by monetary rewards and reinforcement, but it requires internal needs like self-esteem and self-actualization which are really low within Ryanair organization and this lack can affect the company results in terms of creativeness, innovation, growth and loyalty.

3.2       Stress and Lack of Motivation

Stress and lack of motivation are highly correlated to the notion of autocratic control approach applied by the management of Ryanair.

As indicated by Bamber et al. (2009), the company does not stimulate its employees appropriately and bad working conditions means low morale among staff.

According Creaton (2004) some cabin crew members work six-way flights per day, including weekends, and in some cases also seven consecutive days without a break.

These employees work conditions to bring out, exhausted and dissatisfied.

Unlike the pressure that can be considered a positive factor because it is difficult, leads to innovation and improved performance, stress is generally regarded negatively, because it stems from too many demands on the employee, overwork, too many responsibilities, too little time to rest and the accumulation of too much pressure (Mullins, 2013). Ryanair employees a health risk increasing stress due to these circumstances and can suffer emotional for consequences such as anxiety, fatigue, depression and low self-esteem.

In addition, the negative effects of stress affect employees and the company itself in the long period, but also because their customers perceived service quality will drop down with bad service received (Gronroos, 2007) , which derives from the enmity and frustration of workers during the flight and the front office.

Ignoring the low level of job satisfaction affects relationships either with colleagues or with clients. This means that on one hand the employees are less likely to help each other to do the job successfully and to support the success of the other members of the organization; Moreover, the negative attitude towards customers will not help them to respond effectively to problems or requests and this will result in a worse service provided.

Herzberg, in his two-factor theory (1987), indicates that the factors involved in job satisfaction and therefore motivation (motivators) are detached and different from those that guide job dissatisfaction (hygiene factors ).

This means that the lack of visible motivation in Ryanair stems from a request of the few motivators such as achievement, recognition from peers and supervisors, work itself, responsibility, and career growth progress. However, prior to satisfy and motivate employees, it is necessary that Ryanair management eliminates sources of dissatisfaction (Bamber et al., 2009) such as poor working conditions, the rigid and autocratic supervision, poor communications and long working hours, which are composed of negative influences arising from the atmosphere and work environment.

According to Herzberg, solve problems causing discontent will not lead to satisfaction and increasing both satisfaction will not eliminate dissatisfaction.

While the CEO O'Leary gives someone a promotion, it will not be adding to his / her satisfaction because there are other health factors that need to be improved before.

3.3       Staff Turnover

Employee turnover is considered to be one of the persisting problems inside organizations (Armstrong, 2009) and it means that another company may gain a new knowledgeable employee who can become its competitive advantage, while the former organization loses that knowledge (Branham, 2005).

From the management’s point of view (Ryanair Annual Report, 2013) Ryanair assesses its relationships with the employees to be good, with different negotiations with groups of employees, however the low average period of employment of 4.8 years (Ryanair, 2013) proves that employees do not consider these relationships in the same way.

Staff turnover issue inside the organization is highly correlated to and a consequences of low salary and little competitive reward systems, recruitment and training methods and last but not least uncertainty for the future (Urbancová and Linhartová, 2011).

Though the company claims that it guarantees among the best salaries in the low-cost airline industry (Ryanair, 2013), we can assume that this is not properly the truth. In base on a survey conducted by the International Transport Workers Federation (ITF, n.d.) Easyjet, the second largest low-cost airline after Ryanair, pays its staff better than the Irish carrier and in addition the employees of the latter are expected to pay their own uniform, around £360, mandatory safety course, around £1,800, and their training, around £2,000 (The Guardian, 2013).

The compensation for Ryanair’s pilots and flight attendants is made partly of salary and partly of efficient performances such as the number of flights carried out and the income generated by on board-sales, for examples magazines, drinks and foods (Box and Byus, 2005).

Furthermore, the reward system is not competitive and does not motivate employees to do their best.

In reference to Vroom’s expectancy theory (1964) an employee is motivated in doing his/her job if his/her effort will lead to a performance, such a performance will be rewarded and the value of the reward is highly positive. Therefore as the employees consider the rewards offered by the company insufficient, there could be a chance that they do not want to put so many efforts in their performances and by consequence their motivation decreases, leading to turnover in the long term (Lunenburg, 2011).

As the staff turnover is very high in Ryanair (Creaton, 2004), it is possible to maintain that the company is one of the proponent of Pareto principle (Koch, 1998), better known as the 80/20 principle, which states that generally in any situation a few (20%) are vital and many (80%) are trivial, in other words 20% of employees provides 80% of the production.

Ryanair is strongly in line with this principle, based on the key staff management theory, and in case of not very decisive roles like those in which senior staffs are employed, the airline “does not encourage employees to leave, but neither tries to stop them from going away” (Bamber et al., 2009) because it can easily replace them with new people, especially from Baltic states and Poland (The Guardian, 2005).

3.4       “Weak Culture”

Corporate culture can be defined as the belief system, values, traditions and practices that are spread and shared by different people within the organization (Legge, 1995).

Glinow and McShane (2005) argue that the corporate culture helps workers understand the organizational situations through sharing of superior quality and a more effective and efficient communication, achieve better levels of cooperation with each other.

However, due to the low cost of suffocation and lack of continuing dialogue within the organization, the culture of Ryanair may be considered low (BBC News, 2014). According to Deal and Kennedy (1982), low culture in a company occurs when the rules are strictly enforced by employers, bringing employees to consider their personal goals in a different way compared to the common goals of the organization.

The low culture affects not only internal relations between employees, causing a feeling of instability, lack of trust and sharing common values ​​difficult, but also the attitude towards customers.

Indeed, Ryanair employees are not able to respond to client requests if they do not concern their field of work and many more alarming is the aggressive and hostile service to customers (Telegraph, 2013).

Minimizing costs and providing a service with the lowest price is the most important goal for Ryanair CEO O'Leary, although these go at the expense of customer service and attention.

4.0       RECOMMENDATION

            4.1       Utilizing Ouchi’s Theory Z

Ryanair’s management aims to reach its end without giving the sufficient importance to its means: the employees.

Theory Z management approach, formulated by William Ouchi (1981), suggests that involved employees are the key to increase productivity and it rests upon the awareness of management’s subtlety and the trust between managers and workers. Within Ryanair the form of coordination based on shared purposes, shared information and respect is stifled by the autocratic leadership style, which leads to functional goals, rigid specialization, disrespect and infrequent and delayed communication (Gittell, 2003).

According to this theory, Ryanair should guarantee a more stable employment, thereby reducing the staff turnover rate and increasing at the same time loyalty towards itself, and extend the number of people involved in the decision making, for instance even flight attendants can provide an important input in corporate decisions because they are every day in contact with the customers and they know better than anyone else what consumers need and expect.

Furthermore, following the concepts of theory Z, in the Irish organization should be adopted an implicit control mechanism, which derives from a sharing of common values and allows the employees to respond similarly when problems arise thanks to a greater responsibility.

These “humanised” working conditions would increase not only the profits for Ryanair, but also the self-esteem for the workers, favoring a more pleasant and productive work environment (Ouchi, 1981).

4.2       Alderfer’s ERG Theory

While the hierarchy of needs expressed by Abraham Maslow is rigid structure, as it considers this necessary follow a specific hierarchy so that an individual can not meet a need of the highest level up when a level of need less has been satisfied, Alderfer ERG theory is more flexible need can be operational at the same time and it assumes that the top-level requirement can be met even if lower is not.

According to Alderfer (1972), if an employee cannot meet his / her growth, self-actualization and expectations he / she regresses to a desire to satisfy relational needs such as communication, exchange and interaction.

As discussed above in the second chapter, lack of communication and difficult working conditions in Ryanair does not allow employees to be motivated and of course the lack of recognition and progress do not grow them work more effectively.

Society must understand that workers are not machines and they need to be guided towards goals through a friendly working environment, sharing information and empowering employment.

If Ryanair management considers employees as fundamental assets and motivated them, the organization would be much more powerful, the number of people leaving the company and reduce long-term success is more stable.

4.3       Culture Change

The well-known film director Clint Eastwood, in one of his masterpieces entitled “Invictus” (2009), recalls the powerful meaning of culture and highlights how to create a solid one over time. In an emotional dialogue between the South African President Nelson Mandela, played by Morgan Freeman, and the leader of South Africa’s rugby team Francois Pienaar, played by Matt Damon, it emerges that in order to inspire the others to do their best it is necessary “to lead by example” (Invictus, 2009). It reflects clearly the way to follow in order to change the culture within an organization. Leadership is the first step to face if Ryanair wants to change its culture and gain a remarkable competitive advantage over competitors.

The behavior of the chief executive O’Leary has to inspire that of the other employees, so they can perform their work in a better manner without the oppression of stress, the threat of firing and demotivation. Even customers would benefit from this situation because they would find a welcoming environment within the aircraft during the flight and a more friendly services for checking in.

Changing organizational culture is a process complicated and difficult to achieve because, once set, shared values, interpretations and beliefs are not easy to modify (Cameron and Green, 2004).

The weak culture of Ryanair arises from the behaviour of the top management and it must be slowly changed to reach a strong one, where the employees are motivated and loyal, communication is frequent and the entire organization is aligned towards the achievement of its goal to be the best low-cost airline.

5.0       CONCLUSIONS

Ryanair has a dominant position in the low-cost airline industry, however the company is facing many issues which could lead to loose in attractiveness in the future either as employer for whom is seeking for a job or as air transport provider for the customers.

Although the Irish airline has the highest net profit among the low-cost carriers in Europe (CAPA, 2013), it is unlikely to keep obtaining good results in the future whether it does not change this organisational approach.

Autocratic management, lack of motivation and stress, turnover staff and weak culture were analysed through the application of different models and recommendations were provided in order to improve Ryanair’s current organisational situation.

With regard to some ethical considerations, in this study it has not been utilised any parameter to judge the Ryanair’s management and such company has been analysed with the only objective to understand the behavioural dynamics within the organisation.

ATTACHMENT

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