SlideShare une entreprise Scribd logo
1  sur  16
BUSINESS MANAGEMENT FETAC MINOR Level 6
AIS Code: 6N4310
THE BUSINESS ENVIRONEMENT
Introduction
Company’s organizational type is important regarding laws and regulations in Ireland, as it
nonetheless identifies a company, but also limits its boundaries. This study won’t cover all
aspects or all organization types but only three of them: the Private Limited Company (Ltd),
The Public Limited Company (PLC) and a Voluntary Organization.
Dunnes Stores Limited (Ltd), Ryanair (PLC), and Threshold will represent each type for this
study which underlines the organization type, the purpose, mission, vision, objectives and
finally the structures.
Also, SWOT and a PESTEL tools will be carried out for Ryanair in order to allow a short
analysis and to finally discuss Lewin’s model.
Organisation Type
Dunnes Stores Ryanair Treshold
TYPE private limited company
(LTD)
Public Limited
Company (PLC)
Philanthropic,
Charitable trust
PURPOSE Sale grocery and makes a
maximum of margin on
daily products
Make profit with
Transportation of
passengers and selling
third party products
Non-profitable
organisation
fight the segregation in
getting a viable housing
MISSION Provide good quality food
at best prices
Ultra-Low Cost Carrier
(ULCC)
Help to resolve housing
issue
VISION Sale more goods and
expend stores nationwide
and worldwide
Make money and
create new routes
worldwide
make Ireland an
“affordable, accessible
and flexible housing”
OBJECTIVE battle for the leadership
in Ireland’s retail sector
Battle to be the (ULCC)
number 1 in Europe
Seek for “peace,
harmony and solidarity”
Purposes/Missions/Visions/Objectives
Each of the company chosen for this study has different ways of running business:
Yasmina Rayeh Management Assignment 1
BUSINESS MANAGEMENT FETAC MINOR Level 6
AIS Code: 6N4310
Dunnes Stores, a family business, holds about 155 stores across Europe, 66 from them are
registered in Ireland1
. Because of their limited liability, the shareholders (mainly family
members) are only liable to lose their share. Dunnes battle for the leadership in Ireland’s
retail sector and has “committed to providing quality food at great prices”2
with the
slogan “Better Value3
. However, under Margaret Heffernan's leadership, the company has
grown as a mid-market retailer and in the future it is expected that they extend their
brand worldwide.
Ryanair (also a family Company) created since 1985 the very first private Ultra-Low Cost
Carrier (ULCC) and since then try to compete other airlines companies in Europe.
By his own admission, the Ryanair CEO O’Leary, had no great vision for Ryanair other than
to make money. Therefore its website sales flight tickets, but also targets customers with
third parties’ products online (car hire, insurance, hotel…)4
.
The general purpose and philosophy of threshold is to “fight the segregation in getting a
viable housing and avoid homelessness amongst the population of the Republic of
Ireland”. The vision of its creator, Father Donal O'Mahony, is to play an important role in
the housing policy and help the institution to make Ireland an “affordable, accessible and
flexible housing” that “can lay the foundations for peace, harmony and solidarity”5
.
1
http://www.dunnesstores.com/our-story/content/fcp-content, retrieved the 09/12/2013
2
ibidem
3
Company Profile, Information, Business Description, History, Background Information on Dunnes Stores Ltd.
http://www.referenceforbusiness.com/history2/41/Dunnes-Stores-Ltd.html, retrieved the 09/12/2013
4
See Ryanair.com page on Appendix 4
5
http://www.threshold.ie/about/foundersmessage.html , retrieved the 09/12/2013
Yasmina Rayeh Management Assignment 1
BUSINESS MANAGEMENT FETAC MINOR Level 6
AIS Code: 6N4310
Structures
Group structures are often used to hide levels of profits in business6
. Of course, so it can
tell about how money is dealt with but it is primarily useful to clearly define
responsibilities, levels of authority and allows a flawless communication channels and
workflow to enable the staff to fully understand how the organisation needs to fulfil its
objectives.
Dunnes Stores has a geographical structure: every shop is registered separately as a
different Ltd7
in CRO with different tax numbers8
. Every shop has a decentralised span of
power but report to the main head office. Controlled by Ben Dunne's for a long time as a
family business, his daughter brought recently in a number of executives from outside the
family in order to “simplify the company's operational structure”9
.
Ryanair started also as a family business with wide span of control. The present CEO
personifies the company and seems to have “plenipotentiary” functions. However, as all
PLCs, Ryanair is tied to the board of Directors and collegial decisions. The Chairman of the
Board and Director is David Bonderman and Director and Chief Executive Officer is Michael
O'Leary10
. Ryanair has “a long chain of command” from top to bottom as all tall organization
with a centralized structure that allow the strategy to be implemented at the Board level.
It is a departmentalisation structure: firstly, the ULLC business is based on a geographical
structure as the company serves many countries. Secondly, Ryanair business and income are
generated on its website by selling different kind of products: 20% of its $503 revenue has
come from sources outside of airline tickets11
. Finally, its HQ hosts all the airline's operations
by departments (commercial, customer service, finance, IT, legal and marketing).
6
http://www.boards.ie/vbulletin/showthread.php?t=2055490732 retrieved the 09/12/2013
7
CRO GAZETTE, FRIDAY, 19th November 2004.
8
http://www.cro.ie/search/CompanySearch.aspx, retrieved the 09/12/2013
9
http://www.referenceforbusiness.com/history2/41/Dunnes-Stores-Ltd.html#ixzz2mzecBXvM, retrieved the
09/12/2013
10
http://www.ryanair.com/ie/investor/board-of-directors, retrieved the 09/12/2013
11
Ryanair Money Saving Scheme - Paper written by Joseph Zeidler – Appendix 5
Yasmina Rayeh Management Assignment 1
BUSINESS MANAGEMENT FETAC MINOR Level 6
AIS Code: 6N4310
Threshold is also governed by a voluntary Board of Directors. The Executive Director is Bob
Jordan and as a small organisation with a strong culture, workers take responsibilities when
performing their duty as they are problem solver12
. However by opposition to Ryanair it is a
decentralised flat structure organisation.
PESTEL
Political: The European airline industry cannot develop strategies independently of a range
of political decision, national, or on EU-level. Since the deregulation in the late 1970s, most
airlines have been using a revenue maximizing technique called yield management (YM).
By creating in 1985 the very first private Ultra-Low Cost Carrier (ULCC) in Europe, The
Ryan Family took the opportunity to compete with National Airlines companies and Ryanair
is today considered as the Europe's first and largest low fares airline.
This industry has always been and still remains under political influence: finance Minister
Michael Noonan has recently announced an axe for 2014 on the 3€ air Travel tax introduced
in 2009 and levied on passengers departing from Irish airports. Therefore, Ryanair is
planning to review its fares and services13
.
Economical: The airline industry is very dependent on the world economy: the main
financial risk factors are oil prices, foreign exchange and interest rate fluctuations.
Independently, at a national level, the labour costs is more challenging for Ryanair. The
flexible labour rules in Ireland has helped Ryanair in reducing its labour costs14
and the
company outsources the staff through agencies (Crewlink or Dalmac).
Social: The ULCC deregulation was a revolution that has allowed lower and middle class
income groups to travel more. Since the European Community has accepted new members,
the traffic has dramatically increased and has helped Ryanair to open new routes with the
new countries; Immigration in Ireland during the “Tiger year” and now is a demonstration
of this evolution.
12
www.treshold.ie, retrieved the 09/12/2013
13
http://www.independent.ie/business/budget/ryanair-may-expand-services-after-axing-of-travel-tax-
29662123.html, retrieved the 09/12/2013
14
Siobhán Creaton: Ryanair – How a Small Irish Airline Conquered Europe, Aurum Press Ltd, 2004
Yasmina Rayeh Management Assignment 1
BUSINESS MANAGEMENT FETAC MINOR Level 6
AIS Code: 6N4310
Technological: Ryanair was able to adapt its website to new technologies and new devices
with new product as its banking system online; in the other hand, videoconferencing
(integration of Skype with Lync) limit the need for face-to-face meetings, and therefore
business travel.
Environmental: The Carbon emission levels and the Noise Pollution are the main issues
Ryanair has to face.
Legal: Ryanair is subject European regulations and Laws, national laws and court
decisions. Lately, the European Competition Commission had asked Ryanair to sell most of
its shares in Aer Lingus.
At an upper level, the EC Regulation 261/200415
made airlines company liable for
cancelation whatever the circumstances, and to “pay for meals and accommodation for
passengers on delayed and cancelled flights”.
To comply, Ryanair has added a charge €2 to its flights tickets. Consequently to any liability
(Airport & Government charges, Aviation Insurance levy, PRM (Passenger with Reduced
Mobility levy) and EU 261 Levy)16
, the customer is levied.
SWOT Table
Strengths:
• Well-known for being a low cost
company covering Europe countries
• Large route Network
• Strong Business partners
• Finance to be able to renew its Float
• New product generator as bank system
Weaknesses:
• Reputation for breaching National and
European laws
• Be able to differentiate their products from
third party companies
• Bad customer service: low cost doesn’t mean
necessarily “paying less” as there are hidden
costs.
• Routes to secondary airports (as Paris-
Beauvais) too far from some capitals.
15
http://ec.europa.eu/transport/themes/passengers/air/doc/neb/questions_answers.pdf_reg_2004_261.pdf
And Community Regulation 261/2004 sets a “long delay” to 4 hours after planned time of departure.
16
Ryanair’s Business Model 2011, A peek into the airline’s recipe for success, September 2011, pp6-7.
Yasmina Rayeh Management Assignment 1
BUSINESS MANAGEMENT FETAC MINOR Level 6
AIS Code: 6N4310
Opportunities:
• Consolidation of the business as the
market is still dominated by ULCC
companies
• Regular customers
• New laws as the abrogation of the Irish
airport taxes in the beginning of 2014
• Diversification in third party products
• Route Expansion with new destinations
Threats:
• Hidden costs
• Bad publicity as criticism for its poor
treatment of disabled passengers
• Bad customer service with no direct lines or
we address.
• Passengers rights
• Economic threat with raise in oil price
• EU regulation and restriction
Yasmina Rayeh Management Assignment 1
BUSINESS MANAGEMENT FETAC MINOR Level 6
AIS Code: 6N4310
SWOT analyse
Ryanair is a strong business in Europe that has overcome issues implementing leverage on
passenger’s fares. Customers are often regulars and know that they get a minimum of service
for a low fare. Being profitable even during the recession, the company has increased its
float and has work around European and national laws by remodelling its fare. Ryanair
won’t change its Low Price Policy intrinsic to its successful business17
.
However, some weaknesses and threats can undermine the business. Ryanair has repeatedly
come under heavy criticism: its customer service is pointed out as non-existent and hidden
fare encourage passengers to look for other options. New legal (EU and national)
obligations have been introduced regarding the customer rights. Compliance to these new
constraint might downturn Ryanair’s business.
In the future, Ryanair is asked to fully comply with the laws, e.g. it will provide an email
address on its website to its customers. This might generate a new expense in order to hire
the service desk staff and therefore a new cost for customers that might choose another
company with better care services. Furthermore, with the new technologies, using
videoconferencing become a replacement for travelling but is it a real threat for a Low cost
Company?
17
GLOBAL AVIATION GROUP 2013, Airline Disclosures Handbook Financial reporting and management trends
in the global aviation industry, KPMG, p16-17
Yasmina Rayeh Management Assignment 1
BUSINESS MANAGEMENT FETAC MINOR Level 6
AIS Code: 6N4310
Lewin’s model
With the span of power at the top of the hierarchy personified by Michael O’Leary, it is
barely possible to implement the Lewin’s or Kotter’s models.
All modification will challenge the beliefs, values, attitudes, and behaviours of the company.
Ryanair’s culture is based on the assumption that “if a customer pays next to nothing for a
ticket they should expect nothing18
”. As we know, the yield management (YM) technique is
the method Ryanair, as most airlines are using to maximize its revenue. This method involves
a pricing strategy with early discount in order to fill capacity, while a certain portion of
seats are ``held back'' for the full-fare paying corporate market.
However, because of worrying customer satisfaction feedbacks and bad publicity a new
model might be needed.
Therefore if the Lewin’s model in order to make the management amenable to change is
implemented, then these field should be considered: Communication, Management, and
Staff.
• Communication between the staff on board and the top level of the hierarchy need to be
enhanced.
• O’Leary should delegate responsibilities.
• Train, challenge the staff to be more customer oriented.
Solidify this strategy by introducing Service Level Agreement and bonuses reflecting
customer satisfaction.
Conclusion
Often seen as the cheapest airlines company in Europe, bad publicity and low customer
service might downturn the business. If Ryanair want to stay the leader in this Industry, some
changes relative to its drastic customer service policy might overcome these negative press.
But is the upper management ready to change?
18
Ryanair Caught Napping neilmichael.wordpress.com Feb 13th, 2006
Yasmina Rayeh Management Assignment 1
BUSINESS MANAGEMENT FETAC MINOR Level 6
AIS Code: 6N4310
APPENDIX 1
The O.E.C.D. Principles of Corporate Governance
Separation between the ownership and those who have the control, not only a separation
between management and shareholders may have structural and organizational impacts on these
types as “Controlling shareholders, which may be individuals, family holdings, bloc alliances, or
other corporations acting through a holding company or cross shareholdings, can significantly
influence corporate behavior
19
.
The O.E.C.D. Principles of Corporate Governance acknowledges in its preamble that “the Corporate
Governance framework is a “part of larger economic context” that depends on the macroeconomic
policies but also on legal, regulatory, and institutional environment
20
. This preamble also
enhances the impact and the role of businesses on the environmental and societal interest of the
communities as a part of the business duty.
APPENDIX 2
Main difference between PLC and Ltd and Philanthropic
organisation
A private limited company (LTD) is different from the Public Limited Company (PLC) because it is
limited by shares (usually 1-4 shareholders and up to a maximum of ninety-nine
21
) and in the
example of Dunnes stores who uses an unlimited holding company, the public can’t see what the
subsidiary accounts contain
22
.
By opposition,
A PLC is strictly regulated as it is listed on the stock exchange and can offer unlimited
shareholders. PLC securities can be bought and sold to/by anyone
23
. Therefore PLC as Ryanair is
19
OECD PRINCIPLES OF CORPORATE GOVERNANCE – p12, 2004
20
ibidem
21
http://www.companiesireland.com/dunnes-stores-naas-limited-4gsu/ retrieved the 09/12/2013
22
http://www.boards.ie/vbulletin/showthread.php?t=2055490732 retrieved the 09/12/2013
23
http://www.companyformations.ie/company-formations/company-types/ retrieved the 09/12/2013
Yasmina Rayeh Management Assignment 1
BUSINESS MANAGEMENT FETAC MINOR Level 6
AIS Code: 6N4310
required by law to provide a full annual financial report that provides investors with legitimate
information about the true worth of its stock (shares)
24
.
The majority of philanthropic organizations like Threshold Ltd. Company, founded in 1978,
establish as a charitable trust or a company are limited by guarantee and not having a share
capital. Trust or Company laws govern charitable trusts, depending on the legal forms it is based
on. Also unpaid officers (trustees or directors) that may or may not be recruit staff oversee the
account
25
.
As per their liability, the three types are acknowledgeable for offering limited Liability (by
opposition to the sole trader). But they can’t use the money they receive as they want. They are
bond to the laws.
However, the main difference between them is financial and is based on their obligation towards
taxation. The Irish corporation tax regime characterizes income into two streams, with all trading
income taxable at 12.5% and all non-trading income taxable at 25%. However Non-Profitable
organizations are not on the same regime. The role of the Revenue Commissioners is crucial in the
eligibility for tax relief and for allowing a CHY number from the revenue
26
.
As described in the tax section of the Revenue guide, the Revenue Commissioners are responsible
for deciding whether charitable organisations are eligible for tax relief. If organisations are
eligible for relief, they receive a CHY number from the Revenue (Section 848A of the Taxes
Consolidation Act, 1997 provides elements in order to apply for a tax relief by the Revenue
Commissioners for a period of not less than 2 years)
27
. Threshold has the following charity
number: CHY6279.
In the case of the PLC or the LTD, if the business is very profitable, the advantage lays when the
owner can make himself redundant and receive a tax free lump sum and where the amount that
can be paid into a pension scheme is not subject to any limit.
24
http://www.businessdictionary.com/definition/public-limited-company.html#ixzz2mxyfQZLb
25
http://www.philanthropy.ie/case-studies/legal-information/ retrieved the 09/12/2013
26
Doing Business in Ireland, Matheson, p18, 2012
27
CHY 1 February 2013, APPLYING FOR RELIEF FROM TAX ON THE INCOME AND PROPERTY
OF CHARITIES RESIDENT IN THE STATE, p2, 2013.
Yasmina Rayeh Management Assignment 1
BUSINESS MANAGEMENT FETAC MINOR Level 6
AIS Code: 6N4310
Moreover, it is mandatory for a PLC to open with a minimum issued capital of €38,092.14 of which
€9,523.03 (25%) must be paid up. This is paid up when a trading certificate is applied for and
under the Companies (Amendment) Act, 1983 the company cannot start trading or exercise any
borrowing powers until this has been done
28
.
28
Op cit. http://www.companyformations.ie/company-formations/company-types/, retrieved the 09/12/2013
Yasmina Rayeh Management Assignment 1
BUSINESS MANAGEMENT FETAC MINOR Level 6
AIS Code: 6N4310
APPENDIX 3
In Ireland, There are different types of Companies. All of them need to be registered with
the Companies Registration Office, CRO. The purposes of the company is set out in a
document called “The Memorandum of Association”.
This memorandum specifies “the company’s name, the objects of the company, whether
liability of the members is limited or unlimited and if it is limited whether by guarantee or
share capital. If there is a shared capital the names of the first shareholders (known as
subscribers) and shares subscribed by them must be stated. Duty and obligations are
inherent to the Director of each company29
. Annual Return Form, accounting and
reporting responsibilities has to be delivered every year to CRO and other governmental
bodies30
.
29
Responsibilities of Directors in Ireland Questions answered, Mary Fulton, Partner. Deloitte & Touche, pp7-8,
2007.
30
http://www.companyformations.ie/company-formations/company-types/ retrieved the 09/12/2013
Yasmina Rayeh Management Assignment 1
BUSINESS MANAGEMENT FETAC MINOR Level 6
AIS Code: 6N4310
APPENDIX 4
RYANAIR
Screenshot of Ryanair website
Yasmina Rayeh Management Assignment 1
BUSINESS MANAGEMENT FETAC MINOR Level 6
AIS Code: 6N4310
APPENDIX 5
News Report regarding employment conditions, corporate and
environmental ethics, sponsorship…
Ryanair Money Saving Scheme - Paper written by Joseph Zeidler
Ryanair, founded in 1985, is an Irish airline known as the “low cost” airline. The
company currently has a fleet size of 298 Boeing 737-800’s. With all these aircrafts, the
company employs 8,500 individuals as pilots, flight attendants, and counter workers. In
2004, Google named Ryanair as the most popular airline. As the company grew, people
started to select this airline over many others. The current owner of Ryanair is Michael
O’Leary, who has been at the helm of the company since 1994. Throughout Mr. O’Leary’s
tenure as CEO, he has constantly been criticized by the public for having such an abrasive
management style. This company started in 1985, with a staff of 25 people. Then, a year later
in 1986, the company serviced two turbo prop BAE748 aircrafts, flying roughly 82,000
passengers. Then, after much success in the first four years, in 1990 the company lost $20
million dollars. Fast forward to 2011, and the company had 75.8 million passengers board
their planes over the course of the year and revenue of $4.2 billion. After the company
growing exponentially, they have decided to make extremely cheap airfare rates, but the
controversy started when they started charging passengers for reasons they should not have.
Ryanair has created many charges that have caused controversy. This company has a
revenue of $503 million. Inside that number, over 20% of their revenue has come from
sources outside of airline tickets. The reason this company is bringing in more than 20% of
their revenue is due to many different rates. Ryanair currently charges $208 for a name
change on your boarding pass, a boarding pass fee of $40, excessive luggage fee of $28 per
kilo, credit card use fee of 2% of the total amount, a reserved seat fee of $13, a checked
musical instrument fee of $83, and if you want a bottle of water on this airlines aircraft that
will cost you $3.50.
This company charges many different fees and they are currently causing controversy
with customers due to what is going on inside the cabin of the plane. On a Ryanair aircraft
they have non-reclining seats, no seat back pockets, their flotation devices are in the
overhead compartment, they have “standing room only” flights, and passengers must load
their own bags onto the plane. Other ways this company is bringing in such a large profit is
due to removing two toilets to get one extra seat on their planes; therefore they only have 1
bathroom on board. To use this bathroom, it will cost you $1.
The stakeholders of this controversy are the customers of this company. The
customers are the ones who are affected by all of these absurd charges. If the company
decides to keep charging their customers these rates, the customer will continue to be the
stakeholder in this controversy. Many customers have written complaints about the company
and the fees that they have charged. The employees of Ryanair are also a part of the
stakeholders group. Employees are forced to charge these customers, which may be awkward
at times, such as charging a customer for being overweight. The female employees of this
company must also participate in their yearly calendar photo shoot.
Michael Friedman describes Individualism as a company maximizing their total profits. In
this case, Ryanair is using Individualism because they are worrying about anything except
Yasmina Rayeh Management Assignment 1
BUSINESS MANAGEMENT FETAC MINOR Level 6
AIS Code: 6N4310
for profit. Due to Ryanair trying to maximize profits, the company is acting ethically upon
this theory. Ryanair is charging customers absurd charges, such as charges to use the
bathroom and for being overweight, and is getting away with this. Rather than focusing on
customer satisfaction, this company is only worried about one thing; profit. This company
does not worry about all of the bad publicity that they receive from certain websites or from
media, they just want to maximize their profit and want to make the most money possible.
This company has seen their fair shares of negative feedback but this has yet to affect their
profits over the past five years. Therefore, they are only focusing on themselves, rather than
their customers. This company has seen an increase in revenue and profit after charging
their customers for these charges.
The Utilitarianism theory states that a company should maximize happiness in
yourself and others. Happiness or pleasure is the only things of intrinsic value. The reason
behind this is that happiness is valuable; there is no difference morally speaking between
ones happiness. In this controversy, Utilitarianism is not used. Happiness is a common theme
in this theory, but for Ryanair, the happiness level for their customers is very low, due to all
of the charges they are inflicted upon. Happiness is something that should go both ways,
giving it and receiving it. For Ryanair, they are currently receiving happiness, due to
receiving such large profits from these fees that they are inflicting upon the customers. As far
as giving happiness, this company is doing nothing to create their customers to be happy,
besides one area. This area is low airfare for all of the customers that fly through Ryanair.
The customers are not happy with the fees they are paying and this can be seen in customer
reviews of this company, and a website such as http://www.ihateryanair.org/. These customer
complaints show that they are not happy Ryanair and therefore this company is not
compelling with Utilitarianism.
The basic principles of Kantianism consist of four ideas. The first basic principle is to
act rationally. This means that one should not act inconsistently in their own actions or
consider themselves exempt from rules. The second principle is that one should allow and
help people to make rational decisions. The third basic principle is to respect people, their
autonomy, and individual needs and differences. The last basic principle of the four is that
one should be motivated by good will, and seeks to do what is right because it is right.
For Ryanair, they are simply going against the four basic principles of Kantianism.
This company is not acting rationally, because the company, they themselves, feel that what
they are doing is correct, but ethically, what they are doing is extremely bad. The second
basic principle is also not being used in this company. Ryanair is not allowing their flight
attendants and pilots to do what is right, instead they are having them charge customers to
use the bathroom and pay for water. The next principle that this company is not practicing is
respecting people. This company is demoralizing individuals due to charging them for being
overweight and having “standing room only” flights. This company is also not following the
fourth basic principle, which is to be motivated by good will and seeking to do what is right.
This company is simply only about their revenue and not worrying about what they need to
do right.
The last theory that will be covered is the virtue theory. This theory consists of four
major characteristics that are covered; courage, honesty, temperance and self-control, and
justice and fairness. Ryanair currently does not cooperate with these characteristics due to
the items that this company makes their customers pay for. For Courage, this company has
the courage to have extremely low airfare rates, but at the same time, they also have the
courage to charge individuals for absurd things. Honesty is the one thing that this company
has going for them, as far as the virtue theory goes. This company knows that they want to
charge extremely low rates and they state the charges that they will charge you clearly on
their website. As far as temperance goes, this company does not think they are doing
Yasmina Rayeh Management Assignment 1
BUSINESS MANAGEMENT FETAC MINOR Level 6
AIS Code: 6N4310
anything wrong and therefore they think that they should not change their way of operating
this company. Justice and fairness is another area that this company is not corresponding
with these characteristics. Fairness and justice revolves around fair practices. One example
of not using fairness and justice is reducing their aircrafts bathrooms from three to one, just
to add six seats. This is not fair to customers due to being on a plane for 1-3 hours and only
having 1 bathroom for 125+ people. As one can see, the virtue theory does not exist inside
this company.
The first thing that this company must do, in order to change their ways, is that they
must get on better terms with their customers. Customers are the main reasons as to how far
a company will go, in terms of profit, revenue and future/returning customers. The first way
to get on better terms would to be to raise the price of the airfare tickets, but then decrease
and if possible eliminate the hidden/unnecessary fees. For example, having an overweight fee
may not be the best way to go about charging fees to customers. This company has many
fees, which may complicate customers, and if they minimize these costs, the amount of
passengers will increase significantly.
The next way to get on better terms with the customers would be for Ryanair to treat
customers with more respect. This is where the toilet situation comes into play. Adding six
more seats and eliminating two bathrooms may keep the prices lower for passengers, but it
may not be necessary with all the bad publicity with only having one bathroom but
minimizing costs by only $3 a seat. By treating customers more humanely and with respect,
this will want their customers to come back to Ryanair and to refer their friends to this
company.
The final piece that this company may want to put in place is to listen to their
customers. Instead of thinking that what they are doing is right, use the resources available
and see where the customers complaints are and react to them. Any company is going to
have some sort of feedback about your business and if the company looks into common areas
of concern and fixes those areas, this company will be much more ethically appreciated.
Works Cited
"Cheap Flights." - Book Cheap Flights to Europe with Ryanair. N.p., n.d. Web. 20 Apr.
2013. <http://www.ryanair.com/en>.
Leung, Jane. "Ryanair's 5 'cheapest' Money-saving Schemes." CNN. Cable News
Network, 01 Jan. 1970. Web. 20 Apr. 2013.
<http://www.cnn.com/2011/10/17/travel/ryanair-money-saving-schemes>.
"Ryanair Holdings, RY4B:ISE Company Performance." Ryanair Holdings, RY4B:ISE
Company Performance - FT.com. FT.com, n.d. Web. 20 Apr. 2013.
<http://markets.ft.com/research/Markets/Tearsheets/Financials?s=RY4B:ISE>.
"Ryanair Passenger Reviews and Ryanair Customer Trip Reports." Ryanair Customer
Reviews. N.p., n.d. Web. 20 Apr. 2013. <http://www.airlinequality.com/Forum/ryan.htm>.
Yasmina Rayeh Management Assignment 1

Contenu connexe

Tendances

Easy jet alex and jordy
Easy jet alex and jordyEasy jet alex and jordy
Easy jet alex and jordy
Marcus McGowan
 
Doing Business in Ireland Guide
Doing Business in Ireland GuideDoing Business in Ireland Guide
Doing Business in Ireland Guide
Robert O'Shea
 
Doing Business in Ireland Guide
Doing Business in Ireland GuideDoing Business in Ireland Guide
Doing Business in Ireland Guide
Judith Cryan
 
Virgin atlantic
Virgin atlanticVirgin atlantic
Virgin atlantic
Harsh Shah
 
1 british airways, stakeholder analysis, petya laleva
1 british airways, stakeholder analysis, petya laleva1 british airways, stakeholder analysis, petya laleva
1 british airways, stakeholder analysis, petya laleva
Petya Laleva
 
Borbely ryanair-case-study
Borbely ryanair-case-studyBorbely ryanair-case-study
Borbely ryanair-case-study
uniansite
 
Ryanair SWOT - Professional Communications Final Project
Ryanair SWOT - Professional Communications Final ProjectRyanair SWOT - Professional Communications Final Project
Ryanair SWOT - Professional Communications Final Project
Claudiel Tejeda
 

Tendances (20)

Doing business in ireland
Doing business in irelandDoing business in ireland
Doing business in ireland
 
Easy jet alex and jordy
Easy jet alex and jordyEasy jet alex and jordy
Easy jet alex and jordy
 
Aer lingus
Aer lingusAer lingus
Aer lingus
 
Double irish arrangement with Dutch sandwich
Double irish arrangement with Dutch sandwichDouble irish arrangement with Dutch sandwich
Double irish arrangement with Dutch sandwich
 
Doing Business in Ireland Guide
Doing Business in Ireland GuideDoing Business in Ireland Guide
Doing Business in Ireland Guide
 
proposal for British Airways
proposal for British Airwaysproposal for British Airways
proposal for British Airways
 
Doing Business in Ireland Guide
Doing Business in Ireland GuideDoing Business in Ireland Guide
Doing Business in Ireland Guide
 
Virgin atlantic
Virgin atlanticVirgin atlantic
Virgin atlantic
 
1 british airways, stakeholder analysis, petya laleva
1 british airways, stakeholder analysis, petya laleva1 british airways, stakeholder analysis, petya laleva
1 british airways, stakeholder analysis, petya laleva
 
Patrick Bruen Venture Capital in Ireland
Patrick Bruen Venture Capital in IrelandPatrick Bruen Venture Capital in Ireland
Patrick Bruen Venture Capital in Ireland
 
Borbely ryanair-case-study
Borbely ryanair-case-studyBorbely ryanair-case-study
Borbely ryanair-case-study
 
Idataxbrochure2013final 130508035913-phpapp01
Idataxbrochure2013final 130508035913-phpapp01Idataxbrochure2013final 130508035913-phpapp01
Idataxbrochure2013final 130508035913-phpapp01
 
Chambers Global Practice Guides: Insurance 2018
Chambers Global Practice Guides: Insurance 2018Chambers Global Practice Guides: Insurance 2018
Chambers Global Practice Guides: Insurance 2018
 
The Foreign Investment Regulation Review, Sixth Edition
The Foreign Investment Regulation Review, Sixth EditionThe Foreign Investment Regulation Review, Sixth Edition
The Foreign Investment Regulation Review, Sixth Edition
 
PE Insight/ Out #14
PE Insight/ Out #14PE Insight/ Out #14
PE Insight/ Out #14
 
Aer Lingus
Aer LingusAer Lingus
Aer Lingus
 
FERMA opposes the Environmental Liability Directive Fund
FERMA opposes the Environmental Liability Directive FundFERMA opposes the Environmental Liability Directive Fund
FERMA opposes the Environmental Liability Directive Fund
 
IFLR Mifid II Report 2017, Ireland
IFLR Mifid II Report 2017, Ireland IFLR Mifid II Report 2017, Ireland
IFLR Mifid II Report 2017, Ireland
 
Why we're proud of our Isle of Man location
Why we're proud of our Isle of Man locationWhy we're proud of our Isle of Man location
Why we're proud of our Isle of Man location
 
Ryanair SWOT - Professional Communications Final Project
Ryanair SWOT - Professional Communications Final ProjectRyanair SWOT - Professional Communications Final Project
Ryanair SWOT - Professional Communications Final Project
 

Similaire à Business environment | case study: Company Type in Ireland - Yasmina Rayeh

Doing Business in Ireland Guide
Doing Business in Ireland GuideDoing Business in Ireland Guide
Doing Business in Ireland Guide
Richard Margetson
 
Grant Thornton-Why invest in Ireland
Grant Thornton-Why invest in IrelandGrant Thornton-Why invest in Ireland
Grant Thornton-Why invest in Ireland
Edel Carter
 
Ireland The Leading Aircraft Finance
Ireland The Leading Aircraft FinanceIreland The Leading Aircraft Finance
Ireland The Leading Aircraft Finance
Richard Margetson
 

Similaire à Business environment | case study: Company Type in Ireland - Yasmina Rayeh (9)

Doing Business in Ireland Guide
Doing Business in Ireland GuideDoing Business in Ireland Guide
Doing Business in Ireland Guide
 
Doing Business in Ireland Guide
Doing Business in Ireland GuideDoing Business in Ireland Guide
Doing Business in Ireland Guide
 
Kmart Aquisition
Kmart AquisitionKmart Aquisition
Kmart Aquisition
 
Doing Business in the UK, Northern Ireland and the Republic of Ireland
Doing Business in the UK, Northern Ireland and the Republic of IrelandDoing Business in the UK, Northern Ireland and the Republic of Ireland
Doing Business in the UK, Northern Ireland and the Republic of Ireland
 
Strategic Analysis of Ryan Air
Strategic Analysis of Ryan AirStrategic Analysis of Ryan Air
Strategic Analysis of Ryan Air
 
Grant Thornton-Why invest in Ireland
Grant Thornton-Why invest in IrelandGrant Thornton-Why invest in Ireland
Grant Thornton-Why invest in Ireland
 
Ryanair - Strategy and Value Creation 2014
Ryanair - Strategy and Value Creation 2014Ryanair - Strategy and Value Creation 2014
Ryanair - Strategy and Value Creation 2014
 
Ireland The Leading Aircraft Finance
Ireland The Leading Aircraft FinanceIreland The Leading Aircraft Finance
Ireland The Leading Aircraft Finance
 
Ireland economy overview
Ireland economy overviewIreland economy overview
Ireland economy overview
 

Plus de Yasmina Rayeh

Plus de Yasmina Rayeh (10)

Roles and objectives in performance management - Supervisory Skills -Yasmina ...
Roles and objectives in performance management - Supervisory Skills -Yasmina ...Roles and objectives in performance management - Supervisory Skills -Yasmina ...
Roles and objectives in performance management - Supervisory Skills -Yasmina ...
 
Supervisory skills
Supervisory skillsSupervisory skills
Supervisory skills
 
Information and communication systems
Information and communication systemsInformation and communication systems
Information and communication systems
 
AIS Code: 6N3325 Training Needs Identification and Design Training Needs A...
AIS Code: 6N3325  Training Needs  Identification and Design  Training Needs A...AIS Code: 6N3325  Training Needs  Identification and Design  Training Needs A...
AIS Code: 6N3325 Training Needs Identification and Design Training Needs A...
 
Change management - HRM - Conflict resolution - Case Study: Renault
Change management  - HRM - Conflict resolution - Case Study: RenaultChange management  - HRM - Conflict resolution - Case Study: Renault
Change management - HRM - Conflict resolution - Case Study: Renault
 
Louis vuitton MARKETING MANAGEMENT PROCESS
Louis vuitton MARKETING MANAGEMENT PROCESSLouis vuitton MARKETING MANAGEMENT PROCESS
Louis vuitton MARKETING MANAGEMENT PROCESS
 
Business management 1 A
Business management 1 A Business management 1 A
Business management 1 A
 
Business management - Yasmina Rayeh
Business management - Yasmina RayehBusiness management - Yasmina Rayeh
Business management - Yasmina Rayeh
 
BUSINESS MANAGEMENT 6N4310 - 2 - 2014
BUSINESS MANAGEMENT 6N4310 - 2 - 2014BUSINESS MANAGEMENT 6N4310 - 2 - 2014
BUSINESS MANAGEMENT 6N4310 - 2 - 2014
 
Louis vuitton - strategic process management
Louis vuitton - strategic process managementLouis vuitton - strategic process management
Louis vuitton - strategic process management
 

Dernier

(( wa 0851/7541/5434 )) Jual Obat Aborsi Di Surabaya - Cytotec Misoprostol 20...
(( wa 0851/7541/5434 )) Jual Obat Aborsi Di Surabaya - Cytotec Misoprostol 20...(( wa 0851/7541/5434 )) Jual Obat Aborsi Di Surabaya - Cytotec Misoprostol 20...
(( wa 0851/7541/5434 )) Jual Obat Aborsi Di Surabaya - Cytotec Misoprostol 20...
Spesiialis Kandungan BPOM
 
Presentation4 (2) survey responses clearly labelled
Presentation4 (2) survey responses clearly labelledPresentation4 (2) survey responses clearly labelled
Presentation4 (2) survey responses clearly labelled
CaitlinCummins3
 
ابو ظبي اعلان | - سايتوتك في الامارات حبوب الاجهاض للبيع ف حبوب الإجهاض ... ا...
ابو ظبي اعلان | - سايتوتك في الامارات حبوب الاجهاض للبيع ف حبوب الإجهاض ... ا...ابو ظبي اعلان | - سايتوتك في الامارات حبوب الاجهاض للبيع ف حبوب الإجهاض ... ا...
ابو ظبي اعلان | - سايتوتك في الامارات حبوب الاجهاض للبيع ف حبوب الإجهاض ... ا...
brennadilys816
 
What is paper chromatography, principal, procedure,types, diagram, advantages...
What is paper chromatography, principal, procedure,types, diagram, advantages...What is paper chromatography, principal, procedure,types, diagram, advantages...
What is paper chromatography, principal, procedure,types, diagram, advantages...
srcw2322l101
 
Apotik Jual Obat Aborsi asli Mataram, Wa : 085180626899 - Penjual obat Cytote...
Apotik Jual Obat Aborsi asli Mataram, Wa : 085180626899 - Penjual obat Cytote...Apotik Jual Obat Aborsi asli Mataram, Wa : 085180626899 - Penjual obat Cytote...
Apotik Jual Obat Aborsi asli Mataram, Wa : 085180626899 - Penjual obat Cytote...
jual Obat Aborsi Bandung, Wa : 085180626899 Apotik jual Obat Cytotec Di Bandung
 

Dernier (20)

Creative Ideas for Interactive Team Presentations
Creative Ideas for Interactive Team PresentationsCreative Ideas for Interactive Team Presentations
Creative Ideas for Interactive Team Presentations
 
(( wa 0851/7541/5434 )) Jual Obat Aborsi Di Surabaya - Cytotec Misoprostol 20...
(( wa 0851/7541/5434 )) Jual Obat Aborsi Di Surabaya - Cytotec Misoprostol 20...(( wa 0851/7541/5434 )) Jual Obat Aborsi Di Surabaya - Cytotec Misoprostol 20...
(( wa 0851/7541/5434 )) Jual Obat Aborsi Di Surabaya - Cytotec Misoprostol 20...
 
Copyright: What Creators and Users of Art Need to Know
Copyright: What Creators and Users of Art Need to KnowCopyright: What Creators and Users of Art Need to Know
Copyright: What Creators and Users of Art Need to Know
 
بروفايل شركة ميار الخليج للاستشارات الهندسية.pdf
بروفايل شركة ميار الخليج للاستشارات الهندسية.pdfبروفايل شركة ميار الخليج للاستشارات الهندسية.pdf
بروفايل شركة ميار الخليج للاستشارات الهندسية.pdf
 
Elevate Your Online Presence with SEO Services
Elevate Your Online Presence with SEO ServicesElevate Your Online Presence with SEO Services
Elevate Your Online Presence with SEO Services
 
hyundai capital 2023 consolidated financial statements
hyundai capital 2023 consolidated financial statementshyundai capital 2023 consolidated financial statements
hyundai capital 2023 consolidated financial statements
 
Presentation4 (2) survey responses clearly labelled
Presentation4 (2) survey responses clearly labelledPresentation4 (2) survey responses clearly labelled
Presentation4 (2) survey responses clearly labelled
 
ابو ظبي اعلان | - سايتوتك في الامارات حبوب الاجهاض للبيع ف حبوب الإجهاض ... ا...
ابو ظبي اعلان | - سايتوتك في الامارات حبوب الاجهاض للبيع ف حبوب الإجهاض ... ا...ابو ظبي اعلان | - سايتوتك في الامارات حبوب الاجهاض للبيع ف حبوب الإجهاض ... ا...
ابو ظبي اعلان | - سايتوتك في الامارات حبوب الاجهاض للبيع ف حبوب الإجهاض ... ا...
 
How to refresh to be fit for the future world
How to refresh to be fit for the future worldHow to refresh to be fit for the future world
How to refresh to be fit for the future world
 
How Do Venture Capitalists Make Decisions?
How Do Venture Capitalists Make Decisions?How Do Venture Capitalists Make Decisions?
How Do Venture Capitalists Make Decisions?
 
5 Brilliant Ways To Buy Verified Payoneer Accounts In 2024
5 Brilliant Ways To Buy Verified Payoneer Accounts In 20245 Brilliant Ways To Buy Verified Payoneer Accounts In 2024
5 Brilliant Ways To Buy Verified Payoneer Accounts In 2024
 
What is paper chromatography, principal, procedure,types, diagram, advantages...
What is paper chromatography, principal, procedure,types, diagram, advantages...What is paper chromatography, principal, procedure,types, diagram, advantages...
What is paper chromatography, principal, procedure,types, diagram, advantages...
 
Raising Seed Capital by Steve Schlafman at RRE Ventures
Raising Seed Capital by Steve Schlafman at RRE VenturesRaising Seed Capital by Steve Schlafman at RRE Ventures
Raising Seed Capital by Steve Schlafman at RRE Ventures
 
Toyota Kata Coaching for Agile Teams & Transformations
Toyota Kata Coaching for Agile Teams & TransformationsToyota Kata Coaching for Agile Teams & Transformations
Toyota Kata Coaching for Agile Teams & Transformations
 
Blinkit: Revolutionizing the On-Demand Grocery Delivery Service.pptx
Blinkit: Revolutionizing the On-Demand Grocery Delivery Service.pptxBlinkit: Revolutionizing the On-Demand Grocery Delivery Service.pptx
Blinkit: Revolutionizing the On-Demand Grocery Delivery Service.pptx
 
Apotik Jual Obat Aborsi asli Mataram, Wa : 085180626899 - Penjual obat Cytote...
Apotik Jual Obat Aborsi asli Mataram, Wa : 085180626899 - Penjual obat Cytote...Apotik Jual Obat Aborsi asli Mataram, Wa : 085180626899 - Penjual obat Cytote...
Apotik Jual Obat Aborsi asli Mataram, Wa : 085180626899 - Penjual obat Cytote...
 
Innomantra Viewpoint - Building Moonshots : May-Jun 2024.pdf
Innomantra Viewpoint - Building Moonshots : May-Jun 2024.pdfInnomantra Viewpoint - Building Moonshots : May-Jun 2024.pdf
Innomantra Viewpoint - Building Moonshots : May-Jun 2024.pdf
 
Stages of Startup Funding - An Explainer
Stages of Startup Funding - An ExplainerStages of Startup Funding - An Explainer
Stages of Startup Funding - An Explainer
 
(推特)Twitter账号批发(自助购买网址🎉top233.com🎉)
(推特)Twitter账号批发(自助购买网址🎉top233.com🎉)(推特)Twitter账号批发(自助购买网址🎉top233.com🎉)
(推特)Twitter账号批发(自助购买网址🎉top233.com🎉)
 
NFS- Operations Presentation - Recurrent
NFS- Operations Presentation - RecurrentNFS- Operations Presentation - Recurrent
NFS- Operations Presentation - Recurrent
 

Business environment | case study: Company Type in Ireland - Yasmina Rayeh

  • 1. BUSINESS MANAGEMENT FETAC MINOR Level 6 AIS Code: 6N4310 THE BUSINESS ENVIRONEMENT Introduction Company’s organizational type is important regarding laws and regulations in Ireland, as it nonetheless identifies a company, but also limits its boundaries. This study won’t cover all aspects or all organization types but only three of them: the Private Limited Company (Ltd), The Public Limited Company (PLC) and a Voluntary Organization. Dunnes Stores Limited (Ltd), Ryanair (PLC), and Threshold will represent each type for this study which underlines the organization type, the purpose, mission, vision, objectives and finally the structures. Also, SWOT and a PESTEL tools will be carried out for Ryanair in order to allow a short analysis and to finally discuss Lewin’s model. Organisation Type Dunnes Stores Ryanair Treshold TYPE private limited company (LTD) Public Limited Company (PLC) Philanthropic, Charitable trust PURPOSE Sale grocery and makes a maximum of margin on daily products Make profit with Transportation of passengers and selling third party products Non-profitable organisation fight the segregation in getting a viable housing MISSION Provide good quality food at best prices Ultra-Low Cost Carrier (ULCC) Help to resolve housing issue VISION Sale more goods and expend stores nationwide and worldwide Make money and create new routes worldwide make Ireland an “affordable, accessible and flexible housing” OBJECTIVE battle for the leadership in Ireland’s retail sector Battle to be the (ULCC) number 1 in Europe Seek for “peace, harmony and solidarity” Purposes/Missions/Visions/Objectives Each of the company chosen for this study has different ways of running business: Yasmina Rayeh Management Assignment 1
  • 2. BUSINESS MANAGEMENT FETAC MINOR Level 6 AIS Code: 6N4310 Dunnes Stores, a family business, holds about 155 stores across Europe, 66 from them are registered in Ireland1 . Because of their limited liability, the shareholders (mainly family members) are only liable to lose their share. Dunnes battle for the leadership in Ireland’s retail sector and has “committed to providing quality food at great prices”2 with the slogan “Better Value3 . However, under Margaret Heffernan's leadership, the company has grown as a mid-market retailer and in the future it is expected that they extend their brand worldwide. Ryanair (also a family Company) created since 1985 the very first private Ultra-Low Cost Carrier (ULCC) and since then try to compete other airlines companies in Europe. By his own admission, the Ryanair CEO O’Leary, had no great vision for Ryanair other than to make money. Therefore its website sales flight tickets, but also targets customers with third parties’ products online (car hire, insurance, hotel…)4 . The general purpose and philosophy of threshold is to “fight the segregation in getting a viable housing and avoid homelessness amongst the population of the Republic of Ireland”. The vision of its creator, Father Donal O'Mahony, is to play an important role in the housing policy and help the institution to make Ireland an “affordable, accessible and flexible housing” that “can lay the foundations for peace, harmony and solidarity”5 . 1 http://www.dunnesstores.com/our-story/content/fcp-content, retrieved the 09/12/2013 2 ibidem 3 Company Profile, Information, Business Description, History, Background Information on Dunnes Stores Ltd. http://www.referenceforbusiness.com/history2/41/Dunnes-Stores-Ltd.html, retrieved the 09/12/2013 4 See Ryanair.com page on Appendix 4 5 http://www.threshold.ie/about/foundersmessage.html , retrieved the 09/12/2013 Yasmina Rayeh Management Assignment 1
  • 3. BUSINESS MANAGEMENT FETAC MINOR Level 6 AIS Code: 6N4310 Structures Group structures are often used to hide levels of profits in business6 . Of course, so it can tell about how money is dealt with but it is primarily useful to clearly define responsibilities, levels of authority and allows a flawless communication channels and workflow to enable the staff to fully understand how the organisation needs to fulfil its objectives. Dunnes Stores has a geographical structure: every shop is registered separately as a different Ltd7 in CRO with different tax numbers8 . Every shop has a decentralised span of power but report to the main head office. Controlled by Ben Dunne's for a long time as a family business, his daughter brought recently in a number of executives from outside the family in order to “simplify the company's operational structure”9 . Ryanair started also as a family business with wide span of control. The present CEO personifies the company and seems to have “plenipotentiary” functions. However, as all PLCs, Ryanair is tied to the board of Directors and collegial decisions. The Chairman of the Board and Director is David Bonderman and Director and Chief Executive Officer is Michael O'Leary10 . Ryanair has “a long chain of command” from top to bottom as all tall organization with a centralized structure that allow the strategy to be implemented at the Board level. It is a departmentalisation structure: firstly, the ULLC business is based on a geographical structure as the company serves many countries. Secondly, Ryanair business and income are generated on its website by selling different kind of products: 20% of its $503 revenue has come from sources outside of airline tickets11 . Finally, its HQ hosts all the airline's operations by departments (commercial, customer service, finance, IT, legal and marketing). 6 http://www.boards.ie/vbulletin/showthread.php?t=2055490732 retrieved the 09/12/2013 7 CRO GAZETTE, FRIDAY, 19th November 2004. 8 http://www.cro.ie/search/CompanySearch.aspx, retrieved the 09/12/2013 9 http://www.referenceforbusiness.com/history2/41/Dunnes-Stores-Ltd.html#ixzz2mzecBXvM, retrieved the 09/12/2013 10 http://www.ryanair.com/ie/investor/board-of-directors, retrieved the 09/12/2013 11 Ryanair Money Saving Scheme - Paper written by Joseph Zeidler – Appendix 5 Yasmina Rayeh Management Assignment 1
  • 4. BUSINESS MANAGEMENT FETAC MINOR Level 6 AIS Code: 6N4310 Threshold is also governed by a voluntary Board of Directors. The Executive Director is Bob Jordan and as a small organisation with a strong culture, workers take responsibilities when performing their duty as they are problem solver12 . However by opposition to Ryanair it is a decentralised flat structure organisation. PESTEL Political: The European airline industry cannot develop strategies independently of a range of political decision, national, or on EU-level. Since the deregulation in the late 1970s, most airlines have been using a revenue maximizing technique called yield management (YM). By creating in 1985 the very first private Ultra-Low Cost Carrier (ULCC) in Europe, The Ryan Family took the opportunity to compete with National Airlines companies and Ryanair is today considered as the Europe's first and largest low fares airline. This industry has always been and still remains under political influence: finance Minister Michael Noonan has recently announced an axe for 2014 on the 3€ air Travel tax introduced in 2009 and levied on passengers departing from Irish airports. Therefore, Ryanair is planning to review its fares and services13 . Economical: The airline industry is very dependent on the world economy: the main financial risk factors are oil prices, foreign exchange and interest rate fluctuations. Independently, at a national level, the labour costs is more challenging for Ryanair. The flexible labour rules in Ireland has helped Ryanair in reducing its labour costs14 and the company outsources the staff through agencies (Crewlink or Dalmac). Social: The ULCC deregulation was a revolution that has allowed lower and middle class income groups to travel more. Since the European Community has accepted new members, the traffic has dramatically increased and has helped Ryanair to open new routes with the new countries; Immigration in Ireland during the “Tiger year” and now is a demonstration of this evolution. 12 www.treshold.ie, retrieved the 09/12/2013 13 http://www.independent.ie/business/budget/ryanair-may-expand-services-after-axing-of-travel-tax- 29662123.html, retrieved the 09/12/2013 14 Siobhán Creaton: Ryanair – How a Small Irish Airline Conquered Europe, Aurum Press Ltd, 2004 Yasmina Rayeh Management Assignment 1
  • 5. BUSINESS MANAGEMENT FETAC MINOR Level 6 AIS Code: 6N4310 Technological: Ryanair was able to adapt its website to new technologies and new devices with new product as its banking system online; in the other hand, videoconferencing (integration of Skype with Lync) limit the need for face-to-face meetings, and therefore business travel. Environmental: The Carbon emission levels and the Noise Pollution are the main issues Ryanair has to face. Legal: Ryanair is subject European regulations and Laws, national laws and court decisions. Lately, the European Competition Commission had asked Ryanair to sell most of its shares in Aer Lingus. At an upper level, the EC Regulation 261/200415 made airlines company liable for cancelation whatever the circumstances, and to “pay for meals and accommodation for passengers on delayed and cancelled flights”. To comply, Ryanair has added a charge €2 to its flights tickets. Consequently to any liability (Airport & Government charges, Aviation Insurance levy, PRM (Passenger with Reduced Mobility levy) and EU 261 Levy)16 , the customer is levied. SWOT Table Strengths: • Well-known for being a low cost company covering Europe countries • Large route Network • Strong Business partners • Finance to be able to renew its Float • New product generator as bank system Weaknesses: • Reputation for breaching National and European laws • Be able to differentiate their products from third party companies • Bad customer service: low cost doesn’t mean necessarily “paying less” as there are hidden costs. • Routes to secondary airports (as Paris- Beauvais) too far from some capitals. 15 http://ec.europa.eu/transport/themes/passengers/air/doc/neb/questions_answers.pdf_reg_2004_261.pdf And Community Regulation 261/2004 sets a “long delay” to 4 hours after planned time of departure. 16 Ryanair’s Business Model 2011, A peek into the airline’s recipe for success, September 2011, pp6-7. Yasmina Rayeh Management Assignment 1
  • 6. BUSINESS MANAGEMENT FETAC MINOR Level 6 AIS Code: 6N4310 Opportunities: • Consolidation of the business as the market is still dominated by ULCC companies • Regular customers • New laws as the abrogation of the Irish airport taxes in the beginning of 2014 • Diversification in third party products • Route Expansion with new destinations Threats: • Hidden costs • Bad publicity as criticism for its poor treatment of disabled passengers • Bad customer service with no direct lines or we address. • Passengers rights • Economic threat with raise in oil price • EU regulation and restriction Yasmina Rayeh Management Assignment 1
  • 7. BUSINESS MANAGEMENT FETAC MINOR Level 6 AIS Code: 6N4310 SWOT analyse Ryanair is a strong business in Europe that has overcome issues implementing leverage on passenger’s fares. Customers are often regulars and know that they get a minimum of service for a low fare. Being profitable even during the recession, the company has increased its float and has work around European and national laws by remodelling its fare. Ryanair won’t change its Low Price Policy intrinsic to its successful business17 . However, some weaknesses and threats can undermine the business. Ryanair has repeatedly come under heavy criticism: its customer service is pointed out as non-existent and hidden fare encourage passengers to look for other options. New legal (EU and national) obligations have been introduced regarding the customer rights. Compliance to these new constraint might downturn Ryanair’s business. In the future, Ryanair is asked to fully comply with the laws, e.g. it will provide an email address on its website to its customers. This might generate a new expense in order to hire the service desk staff and therefore a new cost for customers that might choose another company with better care services. Furthermore, with the new technologies, using videoconferencing become a replacement for travelling but is it a real threat for a Low cost Company? 17 GLOBAL AVIATION GROUP 2013, Airline Disclosures Handbook Financial reporting and management trends in the global aviation industry, KPMG, p16-17 Yasmina Rayeh Management Assignment 1
  • 8. BUSINESS MANAGEMENT FETAC MINOR Level 6 AIS Code: 6N4310 Lewin’s model With the span of power at the top of the hierarchy personified by Michael O’Leary, it is barely possible to implement the Lewin’s or Kotter’s models. All modification will challenge the beliefs, values, attitudes, and behaviours of the company. Ryanair’s culture is based on the assumption that “if a customer pays next to nothing for a ticket they should expect nothing18 ”. As we know, the yield management (YM) technique is the method Ryanair, as most airlines are using to maximize its revenue. This method involves a pricing strategy with early discount in order to fill capacity, while a certain portion of seats are ``held back'' for the full-fare paying corporate market. However, because of worrying customer satisfaction feedbacks and bad publicity a new model might be needed. Therefore if the Lewin’s model in order to make the management amenable to change is implemented, then these field should be considered: Communication, Management, and Staff. • Communication between the staff on board and the top level of the hierarchy need to be enhanced. • O’Leary should delegate responsibilities. • Train, challenge the staff to be more customer oriented. Solidify this strategy by introducing Service Level Agreement and bonuses reflecting customer satisfaction. Conclusion Often seen as the cheapest airlines company in Europe, bad publicity and low customer service might downturn the business. If Ryanair want to stay the leader in this Industry, some changes relative to its drastic customer service policy might overcome these negative press. But is the upper management ready to change? 18 Ryanair Caught Napping neilmichael.wordpress.com Feb 13th, 2006 Yasmina Rayeh Management Assignment 1
  • 9. BUSINESS MANAGEMENT FETAC MINOR Level 6 AIS Code: 6N4310 APPENDIX 1 The O.E.C.D. Principles of Corporate Governance Separation between the ownership and those who have the control, not only a separation between management and shareholders may have structural and organizational impacts on these types as “Controlling shareholders, which may be individuals, family holdings, bloc alliances, or other corporations acting through a holding company or cross shareholdings, can significantly influence corporate behavior 19 . The O.E.C.D. Principles of Corporate Governance acknowledges in its preamble that “the Corporate Governance framework is a “part of larger economic context” that depends on the macroeconomic policies but also on legal, regulatory, and institutional environment 20 . This preamble also enhances the impact and the role of businesses on the environmental and societal interest of the communities as a part of the business duty. APPENDIX 2 Main difference between PLC and Ltd and Philanthropic organisation A private limited company (LTD) is different from the Public Limited Company (PLC) because it is limited by shares (usually 1-4 shareholders and up to a maximum of ninety-nine 21 ) and in the example of Dunnes stores who uses an unlimited holding company, the public can’t see what the subsidiary accounts contain 22 . By opposition, A PLC is strictly regulated as it is listed on the stock exchange and can offer unlimited shareholders. PLC securities can be bought and sold to/by anyone 23 . Therefore PLC as Ryanair is 19 OECD PRINCIPLES OF CORPORATE GOVERNANCE – p12, 2004 20 ibidem 21 http://www.companiesireland.com/dunnes-stores-naas-limited-4gsu/ retrieved the 09/12/2013 22 http://www.boards.ie/vbulletin/showthread.php?t=2055490732 retrieved the 09/12/2013 23 http://www.companyformations.ie/company-formations/company-types/ retrieved the 09/12/2013 Yasmina Rayeh Management Assignment 1
  • 10. BUSINESS MANAGEMENT FETAC MINOR Level 6 AIS Code: 6N4310 required by law to provide a full annual financial report that provides investors with legitimate information about the true worth of its stock (shares) 24 . The majority of philanthropic organizations like Threshold Ltd. Company, founded in 1978, establish as a charitable trust or a company are limited by guarantee and not having a share capital. Trust or Company laws govern charitable trusts, depending on the legal forms it is based on. Also unpaid officers (trustees or directors) that may or may not be recruit staff oversee the account 25 . As per their liability, the three types are acknowledgeable for offering limited Liability (by opposition to the sole trader). But they can’t use the money they receive as they want. They are bond to the laws. However, the main difference between them is financial and is based on their obligation towards taxation. The Irish corporation tax regime characterizes income into two streams, with all trading income taxable at 12.5% and all non-trading income taxable at 25%. However Non-Profitable organizations are not on the same regime. The role of the Revenue Commissioners is crucial in the eligibility for tax relief and for allowing a CHY number from the revenue 26 . As described in the tax section of the Revenue guide, the Revenue Commissioners are responsible for deciding whether charitable organisations are eligible for tax relief. If organisations are eligible for relief, they receive a CHY number from the Revenue (Section 848A of the Taxes Consolidation Act, 1997 provides elements in order to apply for a tax relief by the Revenue Commissioners for a period of not less than 2 years) 27 . Threshold has the following charity number: CHY6279. In the case of the PLC or the LTD, if the business is very profitable, the advantage lays when the owner can make himself redundant and receive a tax free lump sum and where the amount that can be paid into a pension scheme is not subject to any limit. 24 http://www.businessdictionary.com/definition/public-limited-company.html#ixzz2mxyfQZLb 25 http://www.philanthropy.ie/case-studies/legal-information/ retrieved the 09/12/2013 26 Doing Business in Ireland, Matheson, p18, 2012 27 CHY 1 February 2013, APPLYING FOR RELIEF FROM TAX ON THE INCOME AND PROPERTY OF CHARITIES RESIDENT IN THE STATE, p2, 2013. Yasmina Rayeh Management Assignment 1
  • 11. BUSINESS MANAGEMENT FETAC MINOR Level 6 AIS Code: 6N4310 Moreover, it is mandatory for a PLC to open with a minimum issued capital of €38,092.14 of which €9,523.03 (25%) must be paid up. This is paid up when a trading certificate is applied for and under the Companies (Amendment) Act, 1983 the company cannot start trading or exercise any borrowing powers until this has been done 28 . 28 Op cit. http://www.companyformations.ie/company-formations/company-types/, retrieved the 09/12/2013 Yasmina Rayeh Management Assignment 1
  • 12. BUSINESS MANAGEMENT FETAC MINOR Level 6 AIS Code: 6N4310 APPENDIX 3 In Ireland, There are different types of Companies. All of them need to be registered with the Companies Registration Office, CRO. The purposes of the company is set out in a document called “The Memorandum of Association”. This memorandum specifies “the company’s name, the objects of the company, whether liability of the members is limited or unlimited and if it is limited whether by guarantee or share capital. If there is a shared capital the names of the first shareholders (known as subscribers) and shares subscribed by them must be stated. Duty and obligations are inherent to the Director of each company29 . Annual Return Form, accounting and reporting responsibilities has to be delivered every year to CRO and other governmental bodies30 . 29 Responsibilities of Directors in Ireland Questions answered, Mary Fulton, Partner. Deloitte & Touche, pp7-8, 2007. 30 http://www.companyformations.ie/company-formations/company-types/ retrieved the 09/12/2013 Yasmina Rayeh Management Assignment 1
  • 13. BUSINESS MANAGEMENT FETAC MINOR Level 6 AIS Code: 6N4310 APPENDIX 4 RYANAIR Screenshot of Ryanair website Yasmina Rayeh Management Assignment 1
  • 14. BUSINESS MANAGEMENT FETAC MINOR Level 6 AIS Code: 6N4310 APPENDIX 5 News Report regarding employment conditions, corporate and environmental ethics, sponsorship… Ryanair Money Saving Scheme - Paper written by Joseph Zeidler Ryanair, founded in 1985, is an Irish airline known as the “low cost” airline. The company currently has a fleet size of 298 Boeing 737-800’s. With all these aircrafts, the company employs 8,500 individuals as pilots, flight attendants, and counter workers. In 2004, Google named Ryanair as the most popular airline. As the company grew, people started to select this airline over many others. The current owner of Ryanair is Michael O’Leary, who has been at the helm of the company since 1994. Throughout Mr. O’Leary’s tenure as CEO, he has constantly been criticized by the public for having such an abrasive management style. This company started in 1985, with a staff of 25 people. Then, a year later in 1986, the company serviced two turbo prop BAE748 aircrafts, flying roughly 82,000 passengers. Then, after much success in the first four years, in 1990 the company lost $20 million dollars. Fast forward to 2011, and the company had 75.8 million passengers board their planes over the course of the year and revenue of $4.2 billion. After the company growing exponentially, they have decided to make extremely cheap airfare rates, but the controversy started when they started charging passengers for reasons they should not have. Ryanair has created many charges that have caused controversy. This company has a revenue of $503 million. Inside that number, over 20% of their revenue has come from sources outside of airline tickets. The reason this company is bringing in more than 20% of their revenue is due to many different rates. Ryanair currently charges $208 for a name change on your boarding pass, a boarding pass fee of $40, excessive luggage fee of $28 per kilo, credit card use fee of 2% of the total amount, a reserved seat fee of $13, a checked musical instrument fee of $83, and if you want a bottle of water on this airlines aircraft that will cost you $3.50. This company charges many different fees and they are currently causing controversy with customers due to what is going on inside the cabin of the plane. On a Ryanair aircraft they have non-reclining seats, no seat back pockets, their flotation devices are in the overhead compartment, they have “standing room only” flights, and passengers must load their own bags onto the plane. Other ways this company is bringing in such a large profit is due to removing two toilets to get one extra seat on their planes; therefore they only have 1 bathroom on board. To use this bathroom, it will cost you $1. The stakeholders of this controversy are the customers of this company. The customers are the ones who are affected by all of these absurd charges. If the company decides to keep charging their customers these rates, the customer will continue to be the stakeholder in this controversy. Many customers have written complaints about the company and the fees that they have charged. The employees of Ryanair are also a part of the stakeholders group. Employees are forced to charge these customers, which may be awkward at times, such as charging a customer for being overweight. The female employees of this company must also participate in their yearly calendar photo shoot. Michael Friedman describes Individualism as a company maximizing their total profits. In this case, Ryanair is using Individualism because they are worrying about anything except Yasmina Rayeh Management Assignment 1
  • 15. BUSINESS MANAGEMENT FETAC MINOR Level 6 AIS Code: 6N4310 for profit. Due to Ryanair trying to maximize profits, the company is acting ethically upon this theory. Ryanair is charging customers absurd charges, such as charges to use the bathroom and for being overweight, and is getting away with this. Rather than focusing on customer satisfaction, this company is only worried about one thing; profit. This company does not worry about all of the bad publicity that they receive from certain websites or from media, they just want to maximize their profit and want to make the most money possible. This company has seen their fair shares of negative feedback but this has yet to affect their profits over the past five years. Therefore, they are only focusing on themselves, rather than their customers. This company has seen an increase in revenue and profit after charging their customers for these charges. The Utilitarianism theory states that a company should maximize happiness in yourself and others. Happiness or pleasure is the only things of intrinsic value. The reason behind this is that happiness is valuable; there is no difference morally speaking between ones happiness. In this controversy, Utilitarianism is not used. Happiness is a common theme in this theory, but for Ryanair, the happiness level for their customers is very low, due to all of the charges they are inflicted upon. Happiness is something that should go both ways, giving it and receiving it. For Ryanair, they are currently receiving happiness, due to receiving such large profits from these fees that they are inflicting upon the customers. As far as giving happiness, this company is doing nothing to create their customers to be happy, besides one area. This area is low airfare for all of the customers that fly through Ryanair. The customers are not happy with the fees they are paying and this can be seen in customer reviews of this company, and a website such as http://www.ihateryanair.org/. These customer complaints show that they are not happy Ryanair and therefore this company is not compelling with Utilitarianism. The basic principles of Kantianism consist of four ideas. The first basic principle is to act rationally. This means that one should not act inconsistently in their own actions or consider themselves exempt from rules. The second principle is that one should allow and help people to make rational decisions. The third basic principle is to respect people, their autonomy, and individual needs and differences. The last basic principle of the four is that one should be motivated by good will, and seeks to do what is right because it is right. For Ryanair, they are simply going against the four basic principles of Kantianism. This company is not acting rationally, because the company, they themselves, feel that what they are doing is correct, but ethically, what they are doing is extremely bad. The second basic principle is also not being used in this company. Ryanair is not allowing their flight attendants and pilots to do what is right, instead they are having them charge customers to use the bathroom and pay for water. The next principle that this company is not practicing is respecting people. This company is demoralizing individuals due to charging them for being overweight and having “standing room only” flights. This company is also not following the fourth basic principle, which is to be motivated by good will and seeking to do what is right. This company is simply only about their revenue and not worrying about what they need to do right. The last theory that will be covered is the virtue theory. This theory consists of four major characteristics that are covered; courage, honesty, temperance and self-control, and justice and fairness. Ryanair currently does not cooperate with these characteristics due to the items that this company makes their customers pay for. For Courage, this company has the courage to have extremely low airfare rates, but at the same time, they also have the courage to charge individuals for absurd things. Honesty is the one thing that this company has going for them, as far as the virtue theory goes. This company knows that they want to charge extremely low rates and they state the charges that they will charge you clearly on their website. As far as temperance goes, this company does not think they are doing Yasmina Rayeh Management Assignment 1
  • 16. BUSINESS MANAGEMENT FETAC MINOR Level 6 AIS Code: 6N4310 anything wrong and therefore they think that they should not change their way of operating this company. Justice and fairness is another area that this company is not corresponding with these characteristics. Fairness and justice revolves around fair practices. One example of not using fairness and justice is reducing their aircrafts bathrooms from three to one, just to add six seats. This is not fair to customers due to being on a plane for 1-3 hours and only having 1 bathroom for 125+ people. As one can see, the virtue theory does not exist inside this company. The first thing that this company must do, in order to change their ways, is that they must get on better terms with their customers. Customers are the main reasons as to how far a company will go, in terms of profit, revenue and future/returning customers. The first way to get on better terms would to be to raise the price of the airfare tickets, but then decrease and if possible eliminate the hidden/unnecessary fees. For example, having an overweight fee may not be the best way to go about charging fees to customers. This company has many fees, which may complicate customers, and if they minimize these costs, the amount of passengers will increase significantly. The next way to get on better terms with the customers would be for Ryanair to treat customers with more respect. This is where the toilet situation comes into play. Adding six more seats and eliminating two bathrooms may keep the prices lower for passengers, but it may not be necessary with all the bad publicity with only having one bathroom but minimizing costs by only $3 a seat. By treating customers more humanely and with respect, this will want their customers to come back to Ryanair and to refer their friends to this company. The final piece that this company may want to put in place is to listen to their customers. Instead of thinking that what they are doing is right, use the resources available and see where the customers complaints are and react to them. Any company is going to have some sort of feedback about your business and if the company looks into common areas of concern and fixes those areas, this company will be much more ethically appreciated. Works Cited "Cheap Flights." - Book Cheap Flights to Europe with Ryanair. N.p., n.d. Web. 20 Apr. 2013. <http://www.ryanair.com/en>. Leung, Jane. "Ryanair's 5 'cheapest' Money-saving Schemes." CNN. Cable News Network, 01 Jan. 1970. Web. 20 Apr. 2013. <http://www.cnn.com/2011/10/17/travel/ryanair-money-saving-schemes>. "Ryanair Holdings, RY4B:ISE Company Performance." Ryanair Holdings, RY4B:ISE Company Performance - FT.com. FT.com, n.d. Web. 20 Apr. 2013. <http://markets.ft.com/research/Markets/Tearsheets/Financials?s=RY4B:ISE>. "Ryanair Passenger Reviews and Ryanair Customer Trip Reports." Ryanair Customer Reviews. N.p., n.d. Web. 20 Apr. 2013. <http://www.airlinequality.com/Forum/ryan.htm>. Yasmina Rayeh Management Assignment 1