Characteristically, for any organisation to succeed it should have strong foundation of organisational culture to stand out and grow as per the vision envisaged by the founder members. Management gurus have given different theories of organisational culture. However, Alvesson (2002) states that the individuality of the organisation is the core aspect of organisational culture. This case study attempts to analyse the varied dynamics associated with organisational structure and culture with reference to the instance of Flight Centre. Further, it focuses on the problem areas associated with the environmental changes with special emphasis to tourism and flight industry. An attempt is made to scrutinize in detail the problem areas and lastly to provide recommendations to accomplish harmonious outcomes to the issues.
Understanding the culture and structure of the Flight Centre
The management body of the organisation has major accountability of creating and maintaining the organisational features that motivate and recognise the collective efforts. Here the organisational culture plays a vital function. As Mawhinney (1992, 29-34) explains, it is the predominant behaviour of the members of an organisation external to conscious attentiveness. It is analysed by the strength, weaknesses, experiences, training and other aspects related to the employee. It is validated through the values, routines, rituals, stories, power structures and hierarchy. Further there exist different subcultures which are the result of acquired knowledge, illumination and way of life, values, behaviours and customs of employees in an organization. It is in organisational culture where the fundamental principles and ideals of the organisation are rooted, including organisational aims (Schabracq 2007, 9-11; Bruce and Harber 2005, 3).
Flight Centre travel agencies headquartered in Brisbane has over 800 shops in six countries. It continues to hold its strong position has one of the Australia's fastest growing companies with growth measured at over 20% compound per year for the past decade. Given the size of the organisation in terms of number of employees, geographic scope and number of stores, the ability to collect, manage and report data and to coordinate it further is a mammoth task which is not possible to maintain without a strong foundation of internal organisation.
The highlight of the organizational culture of Flight Centre is that it believes in working in small groups and keeps it to minimum. It considers that to be effective, units needed to be small and dynamic. (Johnson E., 2001; Blake D.,2001) Whereas this has been very effectively engraved in the culture of Flight Centre, with its staff been the priority and in its core. Further, it operates with only a few staff in stores with no special emphasis on economies of scale or centralised bureaucratic control.
The organisational structure as a crucial place in determining the hierarchy of an organisation.(Pleshko, 2007) Subsequently, the Flight Centre has a flat structure with maximum three stages from bottom to the top of the ladder which is represented in figure 1. Interestingly, it also has provisions for increase in numbers to be accommodated without facing major issues.
Figure 1: Organisational structure of Flight Centre
Further, Graham Turner, Managing Director, believes in decentralised management structure, so each management head is responsible for the hiring, firing, and decision-making of their own department or team. (Graham Turner, http://www.dynamicbusiness.com.au/entrepreneur-profile/graham-turner-how-flight-centre-soared.htm)
Unfortunately, the management theories adopted by organsiations have not given enough attention to organization culture. The power once harnessed to competitive advantage, the power of culture makes it hard for others to catch up, at least in the short term. Being a part of the organization means that an individual is a part of the entire organizational setup; it helps in understanding the main features of an organization and also describes that to what extent a certain firm is different than the others (Pater 2005, 44).
On visiting its offices in Brisbane and talking to the staffers, it is revealed that FC believes in an egalitarian culture where there are no special privileges unless they apply to everyone, there are no individual offices or secretaries, and even the boss himself only has the one phone. Given today's rapid rate of organizational change, and the changing needs of people, it is important for those "in command" charge" to re-evaluate and modify their styles regularly. This is the only way they can make the adaptations necessary to continue to be effective". (Maddux 1996,54)
Communication is one of the ways of managing cultural diversity (Wilson & Waagen 2003). The company goes to great lengths to foster communication between staff and develop a community of feeling. 'Buzz nights' are held once a month as well as other less formal get-togethers.
The other highlighting features of FCs organisation culture is depicted below in figure 2. (Dunford R. & Palmer I., 2002)
The figure shows explains that good pay scale, public recognition, effective teamwork and freedom of taking decision are woven commendably in the organisation culture.
Furthermore, on visiting its various offices across Brisbane, the uniformity in the interior design of the offices strikes a perfect coordination which helps to create a lasting impression in the mind of the visitors. The red colour is effectively used to stimulate the senses and describes the management's serious efforts to put the artefacts, physical structures and symbols at right place. The uniform of the employees is smart and convenient. From a consumer's point of view, uniforms provide a semiotic link to the main brand and must reflect its values. The perfect uniform needs to be a marriage of corporate identity and practicality. The design considerations for staff uniforms are the same as those involved in rolling out an identity to any part of an organisation. (Wilkerson.B.,2009) The slogan 'unbeatable' reflects the profound confidence of the organisation in its strong foundation.
Analysing the problems with industry changes as a result of environmental elements
Observing the organizational culture is something which is vital for all the people who are a part of the organizational setup, the reason being that if the individuals working in the organization do not think in a similar manner then it is quite difficult to attain the organizational targets, and what organizational culture does is, it makes all the people work for similar objectives (Pendlebury 1998, 32).
The travel agency business is undergoing dramatic changes. In management terminology these are major forces dominating the change. The major threat to Flight Centre comes from direct distribution. With the advancement of technology consumes can very easily use the online systems to book their tickets directly with the airlines. The travelers is saving on the commission and so is finding this mode reasonable.( Gareth Brown, Sept.,2009). Furthermore with the emergence of online booking services for flights and accommodation, customer's time is saved in analyzing multiple websites. These substitutes, for instance, Expedia, are powerful and work on low commission making the competition tougher.
Pursuing this further, it is more likely anticipated that a new business model that doesn't constitute giving substantial commissions to travel agents may be evolved. This may lead to continuing loss of travel agents' share in the total market.
Apart from the technology the consumers are becoming increasing aware and sophisticated. In the world where all purchasing is preferred online, in case of FC it is very difficult to book even a simple flight on the company's website. Its customers are highly frustrated forced to transfer their booking with other agencies.(Graeth Brown, 2009)
The fee cutting highlights a trend that will keep working against Flight Centre. Because of a high technology spend, a greater percentage of the expenses of both internet middlemen and direct distribution are fixed in nature. As travel spending grows, the competition between online providers is likely to intensify rather than show up in rapidly rising net profit margins. (Gareth Brown, 2009)
The other major changes which will negatively impact Flight Centre are summarized below in figure 3.
Other important aspect analysed in the organisation culture. By feature of the authority of their positions, leaders have substantial autonomy to decide how their organizations will be run, and can thus be projected to perform a major role in persuading the principles of an organization. (Taormina, R. J. 2008)
The philosophies of Flight Centre states that, 'We believe in each profit centre operating as an empowered small business but operating with a strict set of agreed systems.' (Palmer I. & Dunford R., 2002)
Consequently, the staff members and the outlets in which they are work, are seen repealing against empowerment on one pole and operating according to company's systems on the other pole.(Palmer I. & Dunford R., 2002)
Socio-cultural changes have tremendous impact on business. Those who know how to anticipate and control these differences can develop prosperous, mutually gainful, and satisfying business relationships.( Graham, John L., Lam & N. Mark, 2003). With Brisbane getting widely multicultural and people coming from various cultures and background, it is vital to understand these forces and incorporate effectively in the operations. Subsequently, the customers are well aware of the market forces and can bargain substantial deal directly with the airlines. (Gareth Brown, 2009)
This is done through awareness creation to employees about diverse principles of peers. Cultivating is another way whereby employees acknowledges, supports and encourages their colleague employee success (Schein 2004).
Recommendations:
After scrutinising the various environmental changes likely to affect the travel agency and understanding the organisation culture of Flight Centre, following suggestions can help in better administration. Proper planning, controlling, organizing and implementing of the organization's policies assist a lot in managing a diverse work place (Mor-Barak 2005). The Management of FC needs to rethink of its organization culture and implement possible changes. One of the method is using Organizational Culture Assessment Instrument (OCAI). It is the most popular tool which has been used in thousands organizations worldwide in diverse sectors (Igo and Skitmore 2005).
The OCAI is designed to help identify the recent organization's culture and that personnel think should be developed to match the future internal and external demands to be faced by the organization in five years (Quinn and Cameron 2005).
In FC the staffs are trained to work in small groups only limiting their socialisation with big teams within the same organisation. Filstad (2004, 396) views organizational socialization as the practice by which an individual renovates himself from an outsider to a full member by attaining the social awareness and abilities to undertake a new organizational role. The drive of orientation is to equip employees to execute their jobs successfully, acquire knowledge about the business and begin work related interactions. However it is crucial to note that it should not lead to over-socialization, for it means that new recruits have been so closely molded to fit into their existing area that it leaves no scope for amendment or innovation to meet the changing role of organizational motives. (Helena D. Cooper-Thomas, Neil Anderson, 2006)
Further emphasis can be given to on the job training. It contributes on the acquired knowledge sub culture in an organization (Clegg 2005). It improves productivity in terms of output and may result in better deliverances of customer satisfaction. However the proper cultural training needs to be designed keeping employees in mind for the training needs differ as the organization changes. Individuals are unlikely to be identically affected by cultural training. (Fowler, M.R., 2009). Conversely, the changes should not be implemented by intimidating. Coercion is not an appreciated way of introducing a change in the organization as this increases the level of dissatisfaction amongst the employees, other mentioned techniques can be employed by keeping various organizational factors under consideration (Dessler 2007, 64).
Conclusion:
The unique organisation culture is the base of success story of Flight Centre. As Kirby A. & Jones K., (2004), states, the company bases much of its success on an 'anthropological business model that sees the staff divided into 'families', 'villages' and 'tribes', the theory being that primitive social units are still an inherent part of the human psyche today." The strong belief is engraved by Graham Turner (2010) explaining that top management is only as good as the people working around them. He firmly believes in giving them the autonomy to make decisions and learn from them. (leaders.slq.qld.gov.au/hof/2010_inductees/turner)
However it needs to work on the environmental changes affecting the global travel agency business and come out with a workable model to cope up with the emerging challenges in this sector.
