Chapter 1 UTA AATA AU 19

of activity best suited to the external environment in which the organisation is operating.
Consideration must be given to developing an organisational climate in which people work
willingly and eectively.
According to Gratton, for example:
When people are engaged and committed they are more likely to behave in the interests of
the company and they have less need to be controlled and measured. In essence, engaged
people can be trusted to behave in the interests of the company, in part because they per-
ceived their interests to be the same as, or aligned with, the interests of the company.39
The style of management adopted can be seen as a function of the manager’s attitudes towards
people and assumptions about human nature and behaviour (discussed in Chapter 10).

Critical review and reection

Performance of people at work is determined predominantly by the idiosyncratic behaviour of individuals and
a complex combination of social factors and unofficial working methods. n reality, managers have only limited
influence.
What is YOUR opinion? How would YOU describe the situation in YOUR own university or organisation?

Management and organisational behaviour in action case study

Fred. Olsen Cruise Lines

An increasingly signicant sector of the hospitality and leisure industry is that of cruise ships. The number of holi-
daymakers choosing a holiday at sea continues to rise, with a record 1.7 million UK holidaymakers taking an ocean
cruise in 2014.
n an ever-growing and continually evolving cruise industry, the delivery of a memorable personal service expe-
rience is particularly signicant as an integral part of organisational eectiveness. oods and services alone are no
longer enough and, in addition to providing a consistently high-quality product, cruise companies need to dieren-
tiate themselves by an emotional engagement with customers and the highest levels of customer service.40
Fred. lsen Cruise ines is one of the only family-run cruise lines in the world, with sailing experience going back
over 160 years. Fred. lsen has stylish, contemporary ships built ‘on a human scale’, with capacities between 800 and
1,350 guests, departing from ten regional UK ports. The ships are large enough to provide the facilities desired by guests,
but small enough to enable a close exploration of a wide range of exciting destinations. mphasis is on a comfortable,
friendly atmosphere, with a ‘country house hotel’ feel, delivered ‘with a smile’, by caring and attentive crew. uests are
welcomed as individuals in a relaxed, familiar ambience. Among a number of recent accolades, Fred. lsen Cruise ines
was awarded the prestigious Which? ‘ecommended Provider’ status in the inuential consumer body’s rst-ever cruise
survey and the coveted ‘old Trusted Merchant Accreditation’ by independent review site Feefo for 2014 and 2015.
uccessful cruise management is a combination of travel agency, hotel and leisure activities, on-board entertain-
ment and organised tours. t entails a complex and involved series of processes, both at sea and in dierent ports
of call, and is unlike that experienced in hardly any other business organisation. ome particular factors to consider
include, for example:
● continual heavy guest occupancy and usage, with rapid turnover, mass entry and exit;
● ‘people logistics’ – attending to the complex transportation needs of guests pre- and post-cruise, and logistics of
a broad variety of shore excursions in dierent locations;
● wide range of on-board activities and events throughout the day and evening;
● highest standards of safety and maintenance, logistics and tender operations;
● relationships with head oce, technical department, port authorities, pilots, etc;
➔
20 part 1 T AATA TT

● expectations of high-quality cuisine, design and mix of menus, special dietary requirements;
● crew from a diverse range of cultures and backgrounds, with long periods away from home and families;
● health and hygiene, with large numbers of guests and crew in continual close contact;
● crew resource deployment and rotation planning, with unavailability of additional agency or temporary sta,
as with land-based organisations, and need for exible working practices in response to the demands of the
business;
● accommodating annual leave requirements, ights for some members of the crew, and managing opportunities
for time on shore;
● changeover of crew at the end of contracts – maintaining continuity within the business.

Cruising is associated with a high level of service delivery, and based on preconceived expectations passengers can be
very demanding. Passenger satisfaction is dependent to a very large extent on day-to-day contact with – and care and
attention from – members of the crew. Crew members work long hours, in often difficult and demanding conditions,
and are away from their homes, and in many cases young families, for up to nine months. Management’s concern and
support for the welfare of its crew are of prime importance. At the same time, the nature of cruising demands attention
to a safe and secure environment, for both passengers and crew. This demands a management structure with clear
lines of authority, directed leadership and good order. trong discipline must be maintained at all times.
Fred. lsen prides itself on providing exceptional service by anticipating, meeting and exceeding its guests’
expectations when they are on board its ships. espite the continually evolving and highly competitive nature of the
industry, Fred. lsen attracts a high level of ‘repeat guests’ – that is, loyal customers who have cruised with the com-
pany at least once before. n a typical Fred. lsen cruise, more than half of the guests are repeat customers, which
is one of the highest return rates of any major cruise line. A particularly noticeable feature of passenger feedback is
the extremely favourable and complimentary comments regarding the level of attention from courteous and always
smiling crew members.
ratuities to crew members are an accepted custom throughout the cruise industry. Tips are a recognised feature
of the reward system for good performance. t is up to passengers to opt out of payment or vary the amount. The
high number of Fred. lsen crew members returning to complete further contracts (varying between six and nine
months), and who have been engaged over many years with the company, is testament to both crew and passenger
levels of satisfaction.
Source: Thanks to Rachael Jackson, Fred. Olsen Cruise Lines, www.fredolsencruises.com

asks
1. xplain particular features of organisational behaviour raised by this case study.
2. What do you think are the most important factors that explain the high level of repeat guests on Fred. lsen
cruise ships?
3. The company has a particular attraction for discerning, traditional guests. What additional considerations do you
think this creates for both crew and management?
4. iscuss specic ways in which this case draws attention to the importance of the people–organisation relationship.

Globalisation and the international context

One major challenge facing managers today arises from what many commentators have iden-
tied as an increasingly international or global business environment. In broad terms, globali-
sation refers to organisations integrating, operating and competing in a worldwide economy.
The organisations’ activities are more independent across the world, rather than conned
nationally. The following factors are frequently cited as potential explanatory factors underly-
ing this trend:
● improvements in international information and communication facilities leading to an
increased consciousness of dierences in workplace attitudes and behaviour in other societies;
 CHAPTER 1 UNDERSTANDING ORGANISATIONAL BEHAVIOUR 29

9 Do you prefer to t studies around leisure time or enjoy leisure more if you have studied rst?
10 What is the single most important feature of eective studying?

Discussion
● How do your responses compare with those of your colleagues? Do any of the responses surprise you?
● To what extent do you believe the responses are a true indication of work ethic? What do you see as the
characteristic traits of a person with a healthy work ethic?
● How far do you agree with the contention that ‘we are employed for our skills but valued for our attitudes’?

Case study
Virgin Atlantic and Ryanair

Source: Franka Bruns/AP/Press Association Images Source: Michael Stephens/PA Archive/Press Association Images
Michael O’Leary (left) and Richard Branson (right) have both created very successful airline companies, but their
organisational cultures and values are very dierent from each other.

This case examines two organisations that have many competes with the likes of Flybe and EasyJet in the short-
similarities as well as a number of signicant dierences. haul market. Both Branson, who was born in 1950, and
The essential technology and systems behind each O’Leary, who is ten years younger, are individuals with
organisation may be very similar, but the nature and strong and distinctive personalities, who have a relentless
style of management and its consequent impact on the appetite for media presence and who make extensive use
way people working in these organisations think, feel of themselves in their frequent marketing communica-
and behave has created very dierent organisational tions. They are readily engaged in advertising stunts, often
cultures. So what are the similarities, and what are the appear on the news media in relation to stories about the
dierences? industry, and their faces and personalities are powerfully
The most obvious similarity is that both Virgin Atlan- associated with their companies.
tic and Ryanair operate in the UK passenger air transport
industry. Virgin’s air transport business was founded by Charting different courses
Richard Branson in 198458 and Michael O’Leary took over There are, however, some major dierences. Firstly, they
as chief executive at Ryanair, a small Irish airline, in 1985.59 dier in their choice of markets. Virgin’s air transport
Both started life in competition with major national ag- business originated in the long-haul, mainly transatlan-
carrier airlines (British Airways and Aer Lingus respectively) tic market, which might be highly protable but is also
and grew to be major challengers to these established extremely competitive. As the business grew, oshoots
companies. As they grew, their scale of operations brought were founded as independent companies – for instance,
them into competition with a much larger number and Virgin Australia and the ambitious project for the
range of airlines operating from the UK: Branson’s Vir- world’s rst spaceline, Virgin Galactic,60 which remains
gin Atlantic competes with some major intercontinental live despite the loss of the rst vehicle, Enterprise, in
companies such as American Airlines and Qantas; O’Leary November 2014. Ryanair started as a short-haul carrier
➔
30 part 1 T AATA TT

and has remained so, focusing on uropean destinations has certainly had his conicts with ritish Airways, nota-
from a small number of airports in the UK and ire. ts bly over the ‘dirty tricks’ aair of the early 1990s, but is
competitive positioning is also very dierent. yanair is not likely to challenge governments. irgin tries hard to
well known as ‘The ow Cost Airline’; the rst thing that build customer loyalty and gain repeat business through
hits you in its publicity material is the price61 and this brand-related service values; yanair’s repeat business
is very clearly the core of its business strategy. The ‘no (and for some customers the yanair experience is one
frills’ approach means just that; even the in-ight food that inspires the thought ‘never again’) is on price, not
is limited to sandwiches and costs extra. irgin, by con- loyalty to the brand. These dierences have a signicant
trast, attracts passengers by oering a superior experi- eect on the nature of employment relations and the
ence and is rmly positioned at the quality end of the psychological contract between the two companies and
market. Publicity material emphasises style and comfort their employees.
but with a touch of humour,62 and there is a range of
in-ight extras which, even at the economy end of the Working for ichard and Michael
price range, includes a full meal and drinks service and a The brand image and the treatment of customers by
range of entertainment including e-books. each company have a bearing on the nature of organi-
As was noted, both men love publicity stunts and sational relationship with sta, and vice versa. Aspects
often use humour in their public communications. ran- of organisational behaviour therefore show through in a
son is usually smiling and in poses that indicate fun and variety of interconnected ways to create consistent and
a desire to show close links with his sta and popular- very dierent cultures.
ity with employees, customers and the public in general. At irgin Atlantic, cabin crew are there to be help-
’eary is much more likely to be acerbic, critical and ful and welcoming; they are important projectors of
uses what might euphemistically be called ‘colourful’ lan- the brand image and their job is partly to encourage
guage in his public statements. e seems to care little the all-important customer loyalty that generates con-
about public opinion of him as an individual, and has tinuing prot. The importance of sta as carriers of
been in trouble with the Advertising tandards Authori- company values is clearly reected in the recruitment
ties in the UK and ire on more than one occasion. The material and other statements about the nature of
appointment of Kenny Jacobs to head the company’s work at irgin Atlantic.
rst television advertising campaign in 2013, however,
Virgin Atlantic brings together all manner of people
set yanair on a slightly dierent course. While still high-
in all manner of roles, all playing a crucial role in
lighting its low prices, the new (and cheaply shot) adver-
the smooth running of a very complex operation. But
tising campaign heralded the introduction of allocated
whoever you are and wherever you join us, you’ll never
seating, an additional carry-on bag and a slicker booking
stop thinking of our customers and what we can do for
website. These moves, along with the cancellation of its
them. From frontline cabin crew to IT analysts, everyone
annual ‘girlie’ calendar, suggested the company was aim-
here plays a role in delivering the Virgin brand. That
ing for a family market; and the continued rise in prots
means using initiative, taking responsibility for your
during 201463 showed that being ‘nice’ could indeed pay
actions and being ready to support those around you at
o.64
all times. Similarly, you’ll play your part in maintaining
The brand values are also very dierent. irgin, as a
the friendly, unconventional professionalism that
collection of businesses, does everything from running
makes Virgin Atlantic such a unique place of work.67
trains to selling wine via mobile phones and nancial
services. All these enterprises are linked by the single The recruitment process is lengthy and includes a group
powerful central image of the founder and the charac- interview that acts as a lter for further tests before job
teristic red livery. yanair does one thing and one thing oers are made. Training programmes for cabin crew
only, but in doing so sets an almost buccaneering tone, and other sta are run from a dedicated training centre,
readily taking on authorities such as the ritish Airports and there is a wide range of benets for full-time sta
Authority over its charging practices (characteristically including seven free ights a year, private pensions and
direct, ’eary observed that ‘people have to pay £10 for medical schemes and discounted goods and services
the privilege of getting on and o this rain-sodden and across the irgin group.
weather-beaten island’)65 and uropean Union bureau- At yanair, the cabin crew start by working for a sup-
crats, for instance in a spectacularly damning account plier organisation called Crewlink. You can discover if
of U competition policy in a speech at the U’s own you qualify to apply for a job by answering a series of ten
nnovation Convention on 6 ecember 2011.66 ranson online questions. uccessful applicants for cabin crew
 Chapter 1 UTA AATA AU 31

posts are trained at Crewlink’s ahn centre in ermany, levels and to give crew longer rest breaks in the destina-
and are expected to pay an upfront charge of €2,349 for tion locations between ights. The nature of customer
the six-week course; or it can be oset against the ini- relations, by contrast, might be more demanding at ir-
tial year’s salary at a total cost of €2,949. n either case, gin than at yanair; sta and customers are together for
accommodation during the course is a further €700. longer and the brand image must be maintained.
uccessful graduates get a three-year contract with Complaints and horror stories can be found about
Crewlink to work on yanair ights on a shift work basis work at both organisations; however, yanair is sub-
and are not expected to have to make overnight stops ject to a more systematic and organised campaign of
at its destinations. Post-tax starting salary is said to be criticism for its employment practices by trade union
‘competitive’, with experienced supervisory sta able to organisations. n past years the nternational Transport
earn up to €30,000 pa. ta must be exible in terms of Workers’ Federation ran a major campaign on its web-
their work location across the thirty plus uropean cen- site, the purpose of which was to pressurise the manage-
tres, and Crewlink does not guarantee work if individuals ment at yanair into accepting the role of trade unions
specify a preferred work location.68 in representing the workforce – to no avail.
y comparison with long haul, a short-haul operation oth organisations have been successful. yanair
involves very tight turnaround times and yanair aims continues to turn in signicant prots in a sector that
for twenty minutes. ew aircraft have been commis- is prone to disruption and is holding its own during
sioned with non-reclining seats that do not have maga- recession.69 irgin, unusually, suered annual losses in
zine pockets (the required passenger safety instructions 2012 and 2013, partly because of increased fuel costs,
are xed to seat backs), facilitating cleaning and cutting but has embarked on a two-year recovery programme
time on the ground. This creates a very dierent pace and seems on course to return to protability in 2015.70
and set of pressures on the workforce compared with ut the cultures and values that get them o the ground
those at irgin, which is likely to have higher stang could hardly be more dierent.

asks
1 ome writers, such as Morgan, use metaphors to help us understand the nature of organisational
behaviour. dentify one of Morgan’s metaphors that you think might be applied appropriately to irgin and
one to yanair, and then develop two of your own, one for each organisation. ow would you explain your
choices?
2 Critically evaluate both organisations in terms of either social exchange theory or the notion of the
psychological contract given in the chapter.
3 dentify the different demands that might be made of managers to achieve organisational effectiveness
in each business (you could use Figure 1.6 as a framework). What are the implications for the role and
development of managers in each case?
4 yanair has recently considered entering the transatlantic market, and irgin set up ‘ittle ed’, which
operates short-haul domestic flights in the UK. What might be the implication of these changes for the
management of cabin staff in each company?

Notes and references

1. ‘MANAGEMENT 2020: Leadership to unlock long-term 3. Vecchio, R. P. Organizational Behavior: Core Concepts,
growth’, The Commission on the future of management sixth edition, Dryden Press (2005).
and leadership, CMI, July 2014, p. 14. 4. See, for example, Billsberry, J. ‘There’s Nothing So
2. ‘Introduction to Module 6, Organisational Behaviour’, Practical as a Good Theory: How Can Theory Help
Financial Times Mastering Management, FT Pitman Managers Become More Effective?’, in Billsberry, J. (ed.)
Publishing (1997), p. 216. The Effective Manager: Perspectives and Illustrations,