SCCG5243 COMMUNICATION AND GLOBAL WORKING ENVIRONMENT

CASE STUDY: SINGAPORE AIRLINES

CONTINUING SERVICE IMPROVEMENT

Presented by:

SORHAIZI BINTI OMAR (817215)

Manager’s Role In Communicating Organizational Values

Managerial communication is a type of communication used by managers as the most influential members of each organization to personally convey various messages to both internal stakeholders (the board, executive managers, owners and employees) and external stakeholders (customers, suppliers, the state, trade unions, competitors, local community and the public).

By conveying various messages, (communicating with employees and customers as well as with all other stakeholders) managers actually promote concrete organizational values that are imprinted on the organization’s activities as a whole.

To ensure they are successful in conveying that message, managers need to enhance their communication skills and accept open, cooperative communications, some benefits of which are (Rivers, 2005, in Bahtijarević- Šiber et al., 2008; 99):

a) completing a broader scope of work in a more satisfying way;

b) increasing the level of mutual understanding and respect;

c) increased impact on employees;

d) better problem-solving and conflict management;

e) closer and more intimate relationships with others, and

f) a healthier life altogether.

Communicating Organizational Values to Employees

It is suggested that organizational values should be written down in an appropriate way as a value statement, vision statement, mission statement, code of ethics, or another type of statement and/or organizational document.

Everything that is written down with regards to organizational values, whether in concise or more extensive form, has to be visible in the overall human resources management policy. In that respect, it needs to be highlighted that the role of continuous education/training programs should not be limited to increasing the awareness of organizational values but, even more importantly, should be aimed at practicing their implementation (Begley and Boyd, 2000).

The Model of Communicating Organizational Values to Employees

The model was introduced by Chong (2007; 206). He analysed this issue on the example of Singapore Airlines (SIA), a company which used various ways to communicate its six core values to the employees: pursuit of excellence, safety, customer first, concern for staff, as well as integrity and teamwork. In particular, these values were communicated:

1. upon an employee’s arrival to the organization;

2. during targeted training for employees;

3. in all important organizational events and gatherings, and

4. via standard communication tools, such as electronic mail.

van Vuuren et al., 2007 - The way in which managers communicate with employees has a huge impact on the employees’ commitment to the organization itself. That impact can be either direct or indirect.

It is assumed that only those employees that are committed to the organization they work in can eventually aspire to realizing organizational goals, which implies promoting organizational values as well.

The final goal of managerial communication to employees should be increasing their organizational commitment, that is, the extent to which the employees identify themselves with a particular organization and its goals, and wish to remain members of that organization (Blau and Boal, 1987; 290).

Model of direct and indirect impact of managerial communication on organizational commitment (developed by the authors after de van Vuuren et al., 2007)

INTRODUCTION• Strongest brand in Asia, leader in service, competitive airlines company.

• Profitability with $69 million profits in 1983 to $1596 million in 2004/2005. Indirectly contributed to Singapore rapid economic development.

• Employees of all level are rewarded and are recognized by management for their excellent performance and contribution at workplace.

• Key factor behind the success: Service improvement, marketing research, training and development of employees, management strategy, consistent quality maintenance, continuous competitors’ market research.

• Problems, challenges and factors of the increasingly competitive marketplace: Demanding customers with high expectations and competitive pressures including technology innovations, labor issues, cosmopolitan culture of young Singaporean, and terrorism.

Expansion and StrategiesThey varying needs and demands of the airline market and the consumers are the driving factors to incessantly move towards progression (Hitt et al., 2003).

1970s and 1980s

• Marketing strategy: Focused on customer needs by providing exceptional in-flight service.

• A strong product oriented strategy: A value strategy that define as product leadership (Treacy and Wiersema, 1993).

• ‘Product of traveling’ improvement: Better in-flight entertainment, upgrading ground service, seats and space on board improvement.

• The development of Changi Airport as air traffic hub has boosted up SIA growth.

1990s • Sets out new standard in air travel with KrisFlyer Frequent Fly Programme. An in-

flight entertainment system for all classes travel (First, Business and Economy).

• ‘Star Alliance’ - Expansion of the airline’s international route network.

2000s • Singapore Airlines launched a comprehensive suite of new generation cabin products

comprising the world’s widest First and Business Class full-flat seat products, a new Economy Class seat.

Outcome

- SIA ranked 2nd by Fortune magazine in the airline category of its World Most Admired Companies survey, in Fortune magazine, 2004.

- By the year 2000, the profit has surged up to $1 billion with total revenue of $5.2 billion.

Definitions• Rintama’ ki and colleagues, 2007 - The customers are always the one who

identify what is valuable and what is not.

• Vargo and Lusch, 2004 - Companies like SIA are limited in creating value propositions deliberately aimed at sustaining customers in their value-creating consumption activities.

• Kim et al., 2002 - Consumers may choose particular products/brands not only because these products provide the functional or performance benefits expected, but also because products can be used to express consumers’ personality, social status or affiliation (symbolic purposes) or to fulfill their internal psychological needs.

• Guiltinan, et al., 1997 - Satisfied customers are more likely to be repeat (and even become loyal) customers.

Conceptual Approach• Flight attendants give a warm welcome to customers and remembering their

names.

• Serve a welcome drink, provide good lunch, exotic desserts, super fine wine, non alcoholic drinks etc.

• Providing toys for kids, offering help to look after the small passengers

• Passengers are allowed to do phone calls on flight.

• Passengers get to use the in-flight facilities such as faxing documents, Dolby digital surround headsets, individual facility of watching videos, food order via Book-to-cook, etc.

• Business passengers can access share market information as well as do transaction on board.

Process Models• SIA have a strong management with innovative ideas and strategies

• Planned to achieve goal with 3 pillars: i) strategy of superior in-flight service, ii) the most modern fleet, iii) outstanding ground service.

• Encourage the low group resources to come up with ideas and share it with their units and organization. Its also allows and delegates authority to the lowest possible level.

• Newby & McManus, 2000 - excellent quality of customer service is based upon not just the knowledge and skills of the individual but also upon the way that the organization as a whole, from top management downwards, pulls in the same direction and presents a clear, positive message to customers.

• Policy of management mobility – rotation managers and directors every 3 to 5 years. SIA encouraged multidivisional task forces.

• Continually reinforced and monitored its service emphasis with ongoing training initiative.

SIA Corporate Culture

Process Models• Frequent Fly Passenger Program (FFP)– regular flyers use to get points and

redeem (after certain points) to get one free fly.

• Introduced 2 loyalty programs – i) Premium passengers preference, ii) complaints and compliments management.

• Ground Service Program (OSG) – focused on improving reservations, ticketing and general airport services (baggage handling, speed and friendliness check in, efficiency of seat assignment, professionalism in handling delays.

• Emphasis on the core principle of SIA: ‘Show you care’, ‘Dare to care’ and be service entrepreneur.

• Transforming Customer Service (TCS) training and motivation to each and every unit members – cabin crew, engineering, flight operations and sales support.

• SIA in-house service performance index survey: studied and improved year by year.

Process Models• Staff action will be awarded for their good ideas, actions and contributions.

• Managing Director’s award is given to the front line employees for their excellent performance.

• Health of wealth award amount $3000 is given to encourage staff to look after their health.

• Annually deputy director’s award given to employees for their exceptionally well decisions taken at the time of critical situations and better customer services.

• OSG feedback Q&A sessions are carried out to solve the problems launched by the passengers. First 20 successful employees with correct answers will get $1000 from the SIA management.

Internal Pressures The labour shortage in Singapore

• Difficult for the airline to recruit the home grown attendants who had been in its marketing tool.

• Maintaining SIA’s brand, the ‘Singapore Girl’ icon. The Young Turks

• Lack of dedication and service spirit amongst Singapore youngsters. Demanding customers

• Strengthen front line operation to anticipate customers need especially the First class and Business class customers.

• Flexibility with 2 approaches: i) Underlining the importance of safety, standard and consistency, ii) staff’s own judgement and consideration.

SIA S.W.O.T Analysis

Strengths

• Premium product and brand

• Youngest fleet of aircraft of airline industry

• Known for its supreme customer service and hospitality

• Profitable every year since it has operated

Weaknesses

• Unbalanced portfolio

• Ticketing price to travel from Singapore Airlines

• Relying on international traffic

Opportunities

• Exclusive training programs for cabin and flight crew

• Premium economy product boost competitiveness

• Increase revenue by increasing number of destination

• Changi Airport’s transfer limitations

Threats

• Rising fuel cost

• Rising labour cost

• Rival hubs are gaining strength

Recommendation• Singapore Airlines’ Winning Strategy

• Singapore Airlines: Recommendation to Management

• Singapore Airlines: Sustainable advantage through their dual strategy

• Singapore Airlines: Flying High

• Singapore Airlines: Building a culture of service excellence

• Singapore Airlines: Managing Human Resources for Cost-effective Service Excellence

• Singapore Airlines: Developing a competitive edge

Conclusion• The model of communicating organizational values to employees analysed by

Chong (2007), showed that the SIA organization used various ways to communicate its 6 core values to the employees. In the end, SIA managed to built a strong position in the airlines business, being one of the best known service and brand in the industry.

• With solid management base and strategic planning behind its success and consistent growth, many airlines around the world use SIA as the benchmark. 

• SIA may remained as the most profitable flag carrier in South East Asia with strong balance sheet while some key competitors in the region are now looking to restructure and recapitalise. But SIA still has to work harder to maintain the existing position along with the continuous improvement of the processes.

References• Sikavica, P., Bahtijarević-Šiber, F. and Pološki Vokić, N. (2008) Temelji menadžmenta, Zagreb:

Školska knjiga

• Begley, T. M. and Boyd, D. P. (2000). Articulating Corporate Values through Human Resource Policies, Business Horizons, 43 (4), pp. 8-12 7.

• Blau, G. J.; Boal, K. B. (1987). Conceptualizing How Job Involvement and Organizational Commitment Affect Turnover and Absenteeism, Academy of Management Review, 12

(2), pp. 288-300.

• Chong, M. (2007). The Role of Internal Communication and Training in Infusing Corporate Values and Delivering Brand Promise: Singapore Airlines' Experience, Corporate Reputation Review, 10 (3), pp. 201-212.

• van Vuuren, M., de Jong, M. D. T.; Seydel, E. (2007) Direct and Indirect Effects of Supervisor Communication on Organizational Commitment, Corporate Communications: An International Journal, 12 (2), pp. 116-128.

• Hitt, M. A., Ireland, R. D., and Hoskisson, R. E. (2003). Strategic Management Competitiveness and Globalization, 5th ed., South-Western. Singapore.

• Michael Treacy & Fred Wiersema. (1993). “Customer Intimacy and Other Value Disciplines” in The Discipline of Market Leaders. Harvard Business Review.

• Newby, T. & McManus. S., (2002). The Customer Service Pocketbook. http://www.liquidizer.demonco.uk

• Kim, J. Forsythe, S. Gu. Q, and Moon, S. J. (2002). “Cross-culture consumer values, needs and purchase behaviour”. Journal of Consumer Marketing. Vol.19, No. 6, pp. 481-502.

• Rintama’ki T., Kuusela, H., and Mitronen, L. (2007). “Identifying competitive customer value propositions in retailing”. Managing Service Quality, Vol.17. No. 6, pp. 621-623.

• Vargo, S. L., and Lusch, R. F. (2004). Evolving to a new dominant logic for marketing. Journal of Marketing. Vol. 68, No. 1, pp. 1-17.

• www.ronkaufman.com/articles/articles.sia.html (web source: “How Does Singapore Airlines Fly so High?”).

• www.centreforaviation.com

Thank You for Your Kind Attention