The Practice of Leadership investigation and questionnaire

The Practice of Leadership investigation and questionnaire The research we have discussed has described transactional leader. What is the difference between transactional and transformational leaders? (4) 1. Transactional leaders are leaders who ___________________________________________________________________________________________________________________________________________________________________________ 2. Transformational leaders are leaders who ___________________________________________________________________________________________________________________________________________________________________________ 3. Transformational leadership is built on top of transactional leadership. You cannot have transformational without transactional leadership. 4. The evidence supporting the advantage of transformational leadership over the transactional is tremendously impressive. 5. A Table Comparing Transactional and Transformational Leadership: Transactional Transformational Visionary vs Charismatic Leadership Visionary leadership is described as with the ability to create and articulate a realistic, credible, attractive vision of the future for an organisation or organisational unit that grows out of and improves on the present. 1. If the vision is properly selected and implemented, it can be so energising that it incites individuals to use their skills, talents and resources to make it happen. 2. The key properties of a vision are that it has inspirational possibilities that are value centred, are realisable, have better imagery and are well spoken. 3. What skills do visionary leaders have? (3) a. ___________________________________________________ ___________________________________________________ b. ___________________________________________________ ___________________________________________________ c. ___________________________________________________ ___________________________________________________ Charismatic leadership theory is an extension of attribution theory and suggests that followers make attributions of heroic or extraordinary leadership abilities when they observe certain behaviours. A charismatic leadership style can appear similar to a transformational leadership style, in that the leader injects huge doses of enthusiasm into his or her team, and is very energetic in driving others forward. However, charismatic leaders can tend to believe more in themselves than in their teams. Eight personal characteristics of charismatic leaders have been identified. (8) ___________________________________________________ ___________________________________________________ ___________________________________________________ ___________________________________________________ ___________________________________________________ ___________________________________________________ ___________________________________________________ ___________________________________________________ 2. An increasing amount of research shows impressive correlations between charismatic leadership and high performance and satisfaction among followers. 3. Most experts think that individuals can be trained to exhibit charismatic behaviours. 4. Charismatic leadership may not always be needed to achieve high levels of employee performance. It may be most appropriate when an employees job has a lot of ideological content. Quiz: Charismatic and Transformational Leadership 1. Charismatic leadership is best understood by examining: a. leader characteristics b. leader and subordinate characteristics c. leader and situational characteristics d. leader, subordinate, and situational characteristics 2. Which statement about transformational and charismatic leadership is most accurate? a. both types of leadership involve the same underlying processes b. both type of leadership are effective in any situation c. charismatic leaders are less common in business organizations d. charismatic leaders are more effective in business organizations Team leadership As the usage of work teams grows, the role of team leader becomes increasingly important. 1. The challenge for most managers is learning how to become an effective team leader. 2. Effective team leaders have mastered the difficult balancing act of knowing when to leave their teams alone and when to get involved. 3. How does an effective leader build and support teams? (5) a.________________________________________________________ _________________________________________________________ b.________________________________________________________ _________________________________________________________ c.________________________________________________________ _________________________________________________________ 4. There are two priorities for a team leader. (2) a. ___________________________________________________ ______________________________________________________________________________________________________ b. ___________________________________________________ ______________________________________________________________________________________________________ 5. These priorities can be broken down into four specific leadership roles. a. ________________________________________________ b. ________________________________________________ c. ________________________________________________ d. ________________________________________________ (4) Quiz: Leadership in Teams and Decision Groups 1. Which of the following is not a primary determinant of performance for a functional team? a. how long the current leader has been in that position b. trust and cooperation among the team members c. the organization and coordination of activities d. member agreement about objectives and strategies 2. The primary responsibility of the leader of a decision group is to: a. suggest good ideas for solving the problem b. ensure that everybody has equal influence c. encourage group members to reach an agreement quickly d. structure the discussion in a systematic manner 3. Which leader action is most likely to improve a group decision? a. ask judgmental questions to stimulate more creative solutions b. separate solution generation from solution evaluation c. determine who was responsible for causing the problem d. insist that the person who suggests a solution must defend it 4. Which of the following is not recommended for leaders of decision groups? a. focus the group discussion on the best two solutions b. encourage members to look for integrative solutions c. describe the problem without implying the cause or solution d. allow ample time for systematic evaluation of ideas LEADERSHIP ISSUES IN THE TWENTY-FIRST CENTURY. Leaders and Power: Leadership power refers to: _____________________________________________________________________________________________________________________________________________________________________________________________ What is the difference between power and authority? (2) ____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________ Kelman (1958) proposed three different types of influence processes: 1.______________________________________________________________ 2.______________________________________________________________ 3.______________________________________________________________ French and Raven (1959) identified five sources or bases of power. Explain them. (10) 1. Legitimate power ___________________________________________________________________________________________________________________________________________________________________________ 2. Coercive power ___________________________________________________________________________________________________________________________________________________________________________ 3. Reward power ___________________________________________________________________________________________________________________________________________________________________________ 4. Expert power ___________________________________________________________________________________________________________________________________________________________________________ 5. Referent power ___________________________________________________________________________________________________________________________________________________________________________ Yukl and Falbe (1991) add two more types of power: 1. Information Power ___________________________________________________________________________________________________________________________________________________________________________ 2. Ecological Power ____________________________________________________________________________________________________________________________________________________________________________________________________________________________________ Most effective leaders rely on several different bases of power. Power can be personal (referent and expert) or position (legitimate, reward, coercive, information, ecological). How is power acquired or lost? a. Social Exchange Theory _____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________ b. Strategic Contingencies Theory _____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________ Quiz: Power and Influence 1. What kind of power is dependent upon friendship and trust? a. affiliation power b. dyadic power c. referent power d. expert power 2. Which influence process is most likely to result in continued commitment to a task objective regardless of the managers subsequent actions? a. instrumental compliance b. personal identification c. compliance with authority d. internalization 3. Which two kinds of power have been found to be related most strongly to leader effectiveness in motivating subordinates? a. expert and referent power b. reward and referent power c. expert and legitimate power d. reward and expert power 4. Control over information is likely to give a manager power over: a. subordinates b. subordinates and peers c. peers and superiors d. peers, superiors, and subordinates 5. Which is not a recommended way to increase ones expert power? a. show others how to solve problems for themselves b. avoid making rash or careless statements c. act confident and decisive in a crisis d develop exclusive sources of technical information 6. The most likely outcome for an influence attempt based on legitimate power is: a. passive resistance b. compliance c. active resistance d. commitment Leading through Empowerment: Another modern leadership issue is leading through empowerment. Managers are increasingly leading by empowering their employees. 1. The increased use of empowerment is being driven by two forces. (2) a. _________________________________________________________ ______________________________________________________________________________________________________________________________ b. _________________________________________________________ ______________________________________________________________________________________________________________________________ 2. Empowerment should not be considered a universal solution to problems. Instead, it should be used where a workforce has the knowledge, skills, and experience to do jobs competently and where employees seek independence and possess an internal source of control. 3. The following conditions should be met for empowerment to be introduced (Cautions): ___________________________________________________________________________________________________________________________________________________________________________ ___________________________________________________________________________________________________________________________________________________________________________ ___________________________________________________________________________________________________________________________________________________________________________ ___________________________________________________________________________________________________________________________________________________________________________ Quiz: Leading through empowerment 1. Leading through empowerment increases _______________ of the workers: a. control b. maturity c. independence d. decision-making maturity 2. What is the most likely benefit from using participation in decision making? a. the decision will be made more quickly b. the quality of the decision will be better c. there will be more decision acceptance by participants d. there will be greater agreement among the participants Developing Trust: Another important modern issue for leaders is creating a culture of trust and credibility. 1. Credibility is __________________________________________________________________________________________________________________ 2. Trust is __________________________________________________________________________________________________________________ 3. Research has identified five dimensions that make up the concept of trust. Explain them. (5) a. Integrity ______________________________________________________________________________________________________ b. Competence ______________________________________________________________________________________________________ c. Consistency ______________________________________________________________________________________________________ d. Loyalty ______________________________________________________________________________________________________ e. Openness ______________________________________________________________________________________________________ 4. Given the fact that many organisations have moved to self-managed work teams, trust is extremely important because many of the traditional control mechanisms have been removed. 5. How should leaders build trust? Give eight suggestions. (8) a. ________________________________________________ b. ________________________________________________ c. ________________________________________________ d. ________________________________________________ e. ________________________________________________ f. ________________________________________________ g. ________________________________________________ h. ________________________________________________ Providing Moral, Ethical and Legal Leadership. Providing moral leadership involves addressing the means that a leader uses in achieving goals. It involves the content of the goals as well. Transformational leaders encouraging moral values when they try to change the attitudes and behaviours of followers. Unethical versus ethical leaders and the use of charisma. Recent corporate financial scandals have given rise to research that considers the ethical implications in leadership. The importance of ethical behaviour when it comes to trust. Abuse of power as leaders, especially illegal activities. Heroic Leadership. In the last few years there have been questions raised about the integrity of business leaders and there are signs of doubt entering into the publics perceptions of business. Polls in the US show that just 16 per cent of Americans trust business executives. US CEO makes 411 times the average worker. CEO salaries in Australia and New Zealand have not been as huge as in the US, but have in the same upward direction. Further resentment when rewards are given to CEOs even when the companys performance declines. Failure of the heroic leader has resulted from arrogance and greed. CEOs role as organisational leader needs to change. CEOs need to get back to the basics of what it means to be a leader. Such as: Give people a reason to come to work. Help employees to develop a passion for their work, a commitment to their colleagues and sense of responsibility to the organisations customers. Be loyal to the organisations people. Spend time with people who do the real work of the organisation. Todays CEO needs to be candid about what business practices are acceptable and proper. They should be prepared to take decisive action when something wrong is discovered. Becoming an effective leader. Organisations are in need of effective leaders. Cross-cultural leadership. Do leadership styles vary with national culture? National culture is certainly an important situational variable in determining which leadership style will be most effective because of how followers will respond. Name 7 universal elements of effective leadership. (7) _________________________ _________________________ _________________________ _________________________ _________________________ _________________________ _________________________ Gender differences and leadership. The next modern leadership issue we want to discuss is gender and leadership. This topic is one that still creates controversy! What, if any, differences exist between male and female leaders and what implications would these differences have? 1. The evidence generally has found that males and females do tend to use different leadership styles. This is not sexist, just reality. (3) a. Women tend to adopt a more ____________________style and a less ________________________________style than men do. b. Women are more likely to encourage participation, share power and information, and attempt to enhance followers self-worth. c. Men are more likely to use a directive, command-and-control style. d. Men rely on the formal authority of their position for their influence base. e. Men use___________________________________ leadership, handing out rewards for good work and punishment for bad. 2. Is different better? Consider the following statement: The best managers (leaders) listen, motivate, and provide support to their people. They inspire and influence rather than control. Generally speaking, women seem to do these things better than men. Do you agree? _____ 3. However, gender does not mean destiny. Which leadership style is effective depends on the situation. Gender simply provides a behavioural tendency in leadership style. 4. Glass ceiling: An unofficial, invisible barrier that prevents women and minorities from advancing in the businesses. In economics, this term refers to situations where the advancement of a qualified person within the hierarchy of an organization is stopped at a lower level because of some form of discrimination, most commonly sexism or racism, but sometimes, glass ceiling describes the limited advancement of the deaf, blind, disabled, and aged. Quiz: Gender and Cross-cultural Leadership 1. Which statement is most accurate according to the research on gender and leadership? a. men are more effective than women as leaders in organizations b. women are more effective than men as leaders in organizations c. men and women have an equal opportunity to be effective leaders d. men and women do not differ in their effectiveness as leaders 2. Which is least likely to be a reason for the glass ceiling in large organizations like business? a. differences in leadership behavior displayed by men and women b. implicit theories about the attributes required for effective leadership c. popular stereotypes about the skills and traits of men and women d. less encouragement and developmental opportunities for women Leader training Organisations around the globe spend billions of dollars, yen and Euros on leadership training and development. Some people do not have what it takes to be a leader. Evidence indicates that leadership training is more likely to be successful with individuals who are high self-monitors. Also individuals with higher levels of a trait called motivation to lead are more receptive to leadership development opportunities. Skills that can be taught are implementation skills in relation to effective visions, trust building, mentoring and situational analysis. Online leadership Write down the three main challenges of online leadership: __________________________________ __________________________________ __________________________________ Leadership Role-Play: Handling Confrontation (Mon): In groups (min. 3 max 4 people) think of a scenario in which a manager has to deal with employees about a problem in a workplace interview. Prepare a written script that you will hand a copy to your instructor when you do it. Appoint one person as the reporter, one person as the manager, and the rest as employees. The reporter sets the picture for us and the others act out the scenario in about 5 minutes. Then the reporter puts up a slide to summarize the leader-follower dynamics illustrated in the role-play, as reflected by the theory that we have learnt in the workbook. The class will then discuss this summary and analyze it further, drawing effective conclusions from the theory that we have learnt. Three important questions to ask: What kind of leadership style did the manager use? What is his relationship like with the follower/s? What do you think will be the outcome of the confrontation?

Background of American Airlines

American Airlines is the world's largest airline. American, American Eagle and the AmericanConnection ® airlines serve 250 cities in over 40 countries with more than 4,000 daily flights. The combined network fleet numbers more than 1,000 aircraft. American's award-winning Web site, AA. com, provides users with easy access to check and book fares, plus personalized news, information and travel offers.American Airlines is a founding member of the oneworld ® Alliance, which brings together some of the best and biggest names in the airline business, enabling them to offer their customers more services and benefits than any airline can provide on its own. Together, its members serve more than 600 destinations in over 135 countries and territories. American Airlines, Inc. and American Eagle Airlines, Inc. are subsidiaries of AMR Corporation.Based on People’s Daily online dated Tuesday, April 10, 2001, American Airlines became the world's largest air carrier and grounded a venera ble competitor after acquiring the assets of bankrupt Trans World Airlines. Based on SKYTRAX which operates the Star Rating system for the world airline industry, having introduced the programme in 2000, American Airlines is a 3-Star Airline. Star Grading awarded to airlines supplying a fair quality performance that conforms to an industry â€Å"average† – when assessing all areas of competitive ranking.3 Star ranking signifies a satisfactory standard of core Product across most travel categories – but may reflect less consistent standards of Staff Service / Product delivery either Onboard or in the Airport environments. Vision, Mission, Goals and Values of the Company Vision: Customer Commitment American Airlines is in business to provide safe, dependable, and friendly air transportation to our customers, along with numerous related services. We are dedicated to making every flight you take with us something special. Mission and Goals:At American Airlines, we: †¢ Evaluate products and services on their merits, giving fair and impartial consideration to all suppliers †¢ Award contracts based on the highest quality and best delivery combined with the most competitive cost to the corporation †¢ Review constantly the performance of our suppliers and contractors to enhance their ability to provide products and services that exceed industry standards †¢ Assure inclusion of minority and women-owned companies in procurement and construction opportunities across American Airlines. VALUES :The Company is committed to maintaining the highest standards of business ethics and complying with both the letter and the spirit of the law in everything that we do and in every country in which we do business. Doing so will also maintain the hard-earned respect that we have established over the years with our customers. Consequently, employees are prohibited from participating in or condoning illegal or unethical activity. Remember that ill egal acts by employees can cost the company millions of dollars in fines, and the penalties for corporations convicted of federal crimes are severe.And employees who violate the company’s ethical standards will be subject to disciplinary action up to and including termination. To ensure compliance with this company policy, we have adopted these Standards of Business Conduct for all employees. These Standards also apply to all agents, consultants, contractors, and others when they are representing or acting for the company. We expect our vendors and suppliers to be guided by these principles. We have developed a Business Ethics & Compliance Program to educate you about the laws that affect our business and to provide the necessary channels to seek advice and report possible misconduct.(www. aa. com) Quality Goods and Services Marketed in the Global Economy American Airlines sources the best quality products and services to provide to our customers. Aside from their flight, car , hotel, vacation package and cruise reservations, they also have the following services and products: -Net SAAver and Special Offers -Fare Sales -Special Offers (Bonus Miles and Percentage and Great Savings) – RSS Service Really Simple Syndication is a technology for sharing and distributing the latest web content such as fares, news, and offers.It's an easy way to receive up-to-date information without having to search the Internet. -Last Minute Packages Bookings -Email Subscription Service – AAdvatage Service The AAdvantage ® program is American's travel awards program. It was the original travel awards program, established more than 20 years ago, and today is the world's largest program. -Admiral Club Membership There are some people that are impossible to shop for and for them, there's the Admirals Club ® membership or the Admirals Club One-Day Pass. It's thoughtful, inspired, and a gift that they will not only use, but enjoy as well.-Offer Gift Card -Trip Ins urance Offer Purchasing a flight shouldn't trigger undue stress. When customers purchase Trip Insurance through Access America, they can receive a refund for the pre-paid, non-refundable portion of they travel costs should your trip be cancelled or interrupted for a covered reason. – The AmericanAirlines Credit Card (no annual fee) -TrAAvel Perks ® program which is a travel club with some fantastic member benefits. —- Business ExtrAA program which offers more variety, more choice and more flexibility than any other airline incentive program for businesses.-Corporate Booking American Airlines is leading the way in providing practical, cost-efficient solutions for managing corporate travel booking with CorporateAAccess. comSM. They have designed a functional, easy-to-use online booking product at the request of many corporate customers, one that brings the best of business travel planning together in one web site. – The AmericanAirlines AAirpass program protects the customers against fare changes and helps them manage their travel by providing prepaid unrestricted air travel at a fixed rate – all while they enjoy VIP privileges and benefits.With this, they can travel anytime, even at a moment's notice, to any of the more than 250 worldwide destinations served by American Airlines, American Eagle ®, and AmericanConnection ®, including the U. S. , Canada, Europe, Japan, the Caribbean, Central and South America, and Mexico. -Incentive Programs AmericanAirlines Incentive Travel ® products support all of their promotional objectives from acquiring new customers to instilling consumer loyalty to rewarding employee performance. Destinations and Routes of American AirlinesAmerican Airlines fly in 10 major destinations including Africa, Asia, Australia/ New Zealand, Carribean, Central America, Europe, Eurasia, Middle East, North and South America. Its worldwide destinations include Dallas/ Forth Worth, India-Delhi, Ireland- Dublin and Shannon, Japan-Tokyo, Norfolk- Virgina and Shanghai, China. Shares Of AMR Common Stock Based on the Corporate Press Release, AMR Corporation allows 4. 5 percent Senior Convertible Notes due 2024 have become convertible into shares of AMR common stock.As provided in the indenture under which the Notes were issued, the Notes have become convertible because the sale price of AMR’s common stock for at least 20 trading days in a period of 30 consecutive trading days ending on the last trading day of the calendar quarter ended Dec. 31, 2006, was greater than 120 percent of the conversion price per share of AMR common stock. The Notes are convertible into common stock at the conversion rate specified in, and otherwise in accordance with the terms of, the Notes and the indenture under which the Notes were issued, and they will remain convertible for so long as they are outstanding.Financial Profitability of the Company for the Past Three Years According to AP Associate Press, AMR Cor poration reported that they loss $387 Million in the fourth quarter of 2004, or $2. 40 per share. This compares to last year's fourth quarter loss of $111 million, or $0. 70 per share. For the year, AMR posted a net loss of $761 million, compared to 2003's loss of $1. 2 billion. Fourth quarter 2004 special items totaled a net gain of $86 million, or $0. 54 per share, and primarily included a $146 million gain on the sale of American's interest in Orbitz, $42 million in severance charges, and $21 million in aircraft charges.Despite its profit loss, I can still affirm to the fact that the company is financially profitable. According to AP Associate Press dated July 19, 2006, American Airlines’ profit rise sharply. It ahs been further reported that a sharply higher profit for the second quarter, helped by full airplanes and higher fares at the start of the peak summer travel season. AMR said it earned $291 million, or $1. 14 per share, in the three months ended June 30, up from $58 million, or 30 cents a share, a year ago. Revenue rose 12. 5 percent to $5. 98 billion from $5.31 billion a year ago and slightly higher than the $5. 93 billion that analysts had expected. AMR increased its cash and short-term investments to more than $5. 1 billion, excluding restricted balances. The buildup is a legacy of the company’s brush with bankruptcy in 2003. The above facts by AP Associate Press only proved the financial profitability of the company. Hedging Technique and Stategic Plans The company used a â€Å"classic† sort of hedge. It is also known in the industry as a â€Å"pairs trade† due to the trading on a pair of related securities.American Airlines oneworld is a hedging strategy wherein they made partnership with the seven of the world's leading airlines – Aer Lingus (through March 31, 2007), British Airways, Cathay Pacific Airways, Finnair, Iberia, LAN1 and Qantas Airways. The investors of American Airlines become more sophisticate d of using various models. These strategies protect the company in currency fluctuation and it look for a spread between market value and theoretical or â€Å"true† value, and attempt to extract profits when the values converge.AA has also a Customer Service Plan which is one of their strategic moves. This Customer Service Plan addresses a number of the service goals they have defined. This plan includes lowest fare availability, baggage delivery, baggage liability, guaranteed fares, ticket refunds, accommodation of customers with special needs, essential customer needs during extraordinary delays, etc. They are constantly reevaluating their customer service goals, and they intend to update this Customer Service Plan when appropriate.Every customer is important to American Airlines and American Eagle. The customer’s safety, comfort, and convenience are their most important concerns. Human Resource Management American Airlines supports the communities they serve through out the world, bringing people together and providing opportunities for economic improvement†¦making American a good neighbor. They are committed to diversity. With diversity comes opportunities for success which are good for their employees, their customers, communities, and ultimately their business.They also do more than state our commitment to diversity. Their commitment is displayed in numerous ways and frequently sets the standard for other companies. Human Resource Management and Employee Resource Groups are an important part of AMR's efforts to foster an inclusive work environment. Through their Human Resource Management and Employee Resource Groups, they have created opportunities for employees to have a voice in business, support each other and share their unique perspectives, cultures and experiences with employees.Issues of Employees Regarding Their Compensation: Based on USA Today dated June 22, 2004, officers of American Airlines, along with union leaders and empl oyees from all work groups rallied against the company regarding pension reform. The company, on behalf of its 80,000 employees and together with its unions, also placed a full-page ad in USA Today. The ad thanks Congress for doing their part to support pension reform legislation that â€Å"makes funding employee pensions more affordable and more flexible — without the transfer of these obligations to the government.† Citing a reduction of $4 billion in annual operating costs through operational and efficiency improvements and changes to wages, benefits and work rules, the ad also underscores that American Airlines, its employees and its unions have made sacrifices and are â€Å"working together† to do their part to ensure a profitable company in order to improve shareholder returns, build financial stability and â€Å"help maintain our defined benefit pension plans. † Commitment Towards DiversityAmerican Airlines proudly support and encourage employee in volvement in any of their Employee Resource Groups such as African-American Employee Resource Group, Asian Cultural Association, Caribbean Employees, Christian Resource Group, Employees with Disabilities, Gay, Lesbian, Transgender and Bisexual Employees, Indian Employees, Jewish Resource Group, Latin Employee Resource Group, Muslim Resource Group, Native American Employee Resource Group, Women in AAviation, Work and Family Balance, 40 Plus/Senior Employees.They value a just and fair treatment of their employees in overseas or wherever parts of the world. Plans for Expansion Based on Corporate Press Release dated March 30, 2007, AMR Corp. , the parent company of American Airlines, Inc. , provides an update on actions taken in the first quarter of 2007 as part of its ongoing efforts to strengthen its balance sheet and build a stronger financial foundation.AMR said that American Airlines has paid in full the $285 million principal balance of its senior secured revolving credit facility , which had been fully drawn since its establishment in December 2004. AMR’s $444 million term loan facility remains outstanding. The Company said that the revolving credit facility may be redrawn, subject to certain conditions, and repaid from time to time depending on various factors, such as economic and industry conditions and the Company’s financial condition. AMR anticipates ending the first quarter of 2007 with approximately $5.8 billion in cash and short-term investments, including a restricted balance of nearly $500 million, compared to a cash and short-term investment balance of $4. 8 billion, including a restricted balance of $510 million, in the first quarter of 2006. AMR also said that it expects to complete by mid-April the refinancing of $350 million in municipal bonds that originally were issued in 1990 to help fund the development of American’s Alliance Maintenance and Engineering Base in Fort Worth, Texas .The closing of the transaction is subj ect to certain government approvals. The refinanced bonds, to be issued by AllianceAirport Authority, Inc. , will have a blended interest rate of 5. 46 percent, down from a rate of 7. 5 percent in the current bonds, and a final maturity of Dec. 1, 2029. AMR estimates that by paying down the revolving credit facility balance, prepaying the aircraft debt and refinancing the maintenance facility bonds, as described above, it will eliminate approximately $15 million of its annual net interest expense.Other examples of AMR’s balance sheet improvement include: †¢ AMR has raised more than $1. 1 billion through three equity issuances in the past 17 months, including the sale of 13 million new shares in January that raised approximately $500 million. †¢ AMR reduced its total debt, which includes the principal amount of airport facility tax-exempt bonds and the present value of aircraft operating lease obligations, to $18.4 billion at the end of the fourth quarter of 2006, co mpared to $20. 1 billion a year earlier. The Company expects to end the first quarter of 2007 with total debt of approximately $17. 6 billion. †¢ AMR reduced its net debt, which is defined as total debt less unrestricted cash and short-term investments, from $16. 3 billion at the end of 2005 to $13. 6 billion at the end of 2006. The Company expects to end the first quarter of 2007 with net debt of approximately $12. 3 billion.

Operation Management in McDonalds in Malaysia - Free Essay Example

Sample details Pages: 10 Words: 2891 Downloads: 1 Date added: 2017/06/26 Category Management Essay Type Research paper Did you like this example? 1.0 Operation Management 3 This report focuses on the subject of Operation Management where the McDonaldà ¢Ã¢â€š ¬Ã¢â€ž ¢s Corporation in Malaysia will be used as the real-life example to illustrate and explain the distinct mechanics and elements present within Operation Management. To obtain the data and information necessary to accomplish this report, the non-participant observation method was utilized by the author to gather primary data while secondary data was mostly sourced through online sources. This report will comprise of two main sections, where the first being focused on understanding McDonaldà ¢Ã¢â€š ¬Ã¢â€ž ¢s current operational standards and activities so as to identify any potential operational improvements for smoother and quicker procedure for food preparation as well as to provide a better service experience. On the other hand, the latter is concerned with establishing and understanding the roles and responsibilities held by the manager in the selected branch of McDonaldà ¢Ã¢â€š ¬Ã¢â€ž ¢s as well as to analyze and diagnose any challenges that are currently being faced so as to propose a suitable solution for matter at hand. The findings of this report provide an insight into the operation management and the standard operational activities carried out within McDonaldà ¢Ã¢â€š ¬Ã¢â€ž ¢s Malaysia. Besides that, steps which can be taken to improve upon the current operational standards of McDonaldà ¢Ã¢â€š ¬Ã¢â€ž ¢s to ensure a smooth were discussed along with providing solutions and recommendations for the overcoming the challenges that were identified. As seen in the case of McDonaldà ¢Ã¢â€š ¬Ã¢â€ž ¢s, proper operation management is crucial in ensuring the success of any organization in effectively carrying out its standard operational activities as well as ensuring the activities are done efficiently to reduce and eliminate wastages of resources and time, which ultimately would then further bolster the organ izationà ¢Ã¢â€š ¬Ã¢â€ž ¢s profitability and boost its overall competiveness. Table of Contents Order: Title: Page No: 1.0 Operation Management 3 2.0The McDonaldà ¢Ã¢â€š ¬Ã¢â€ž ¢s Corporation in Malaysia 3 4 2.1Worldà ¢Ã¢â€š ¬Ã¢â€ž ¢s Leading Quick-Service Restaurant Brand 4 2.2 The Operations Function of McDonalds 4 2.3 The Speedee Service System 4 5 2.4 à ¢Ã¢â€š ¬Ã…“Just-in-Timeà ¢Ã¢â€š ¬Ã‚  and the Modern McDonaldà ¢Ã¢â€š ¬Ã¢â€ž ¢s 5 6 2.5 Recommendation for Improvement 6 7 3.0 Operation Managers 7 3.1 Roles and Responsibilities of Operation Managers 7 8 3.2 Overcoming Operational Issues as a Manager 8 9 4.0 Conclusion 9 5.0 References 10 11 1.0 Introduction Operation Management can be defined as the administration of business activities that are concerned with the conversions of inputs (resources such as labor and raw materials) into outputs (good and services) in achieving the highest level of efficiency to maximize the profitability of the organization (Kamauff, 2010). Hence in a nutshell, Operation Management is the managerial activity that is concerned with streamlining the activities involved in the production of an organizationà ¢Ã¢â€š ¬Ã¢â€ž ¢s goods and services to enhance the overall efficiency of the organization through the use of effective planning, sourcing and management of inventory and production. The roots of Operation Management can be traced back to Frederick Taylorà ¢Ã¢â€š ¬Ã¢â€ž ¢s theory of scientific management in the early 1910s, where the subject of Operation Management has since grown to incorporate other elements such as the Six Sigma, Toyotaà ¢Ã¢â€š ¬Ã¢â€ž ¢s Lean Manufacturing and the Kanban (JIT) production systems (Shim and Siegel, 1999). In this report, the McDonalds Corporation will be used as a real-life example to illustrate the principals and elements present within the subject of Operation Management. The McDonaldà ¢Ã¢â€š ¬Ã¢â€ž ¢s outlets selected fo r this report would be the one located at Jalan Mustapha Al-Bakry in town and the branch at Persiaran Kuala Kangsar respectively, where the author used the non-participant observation approach to obtain the necessary information to accomplish this report. The outlet located in town was chosen as this is the oldest branch of McDonaldà ¢Ã¢â€š ¬Ã¢â€ž ¢s in Ipoh while the other branch is selected to identify any potential variations in its operational patterns between the two. 2.0 The McDonaldà ¢Ã¢â€š ¬Ã¢â€ž ¢s Corporation in Malaysia The McDonaldà ¢Ã¢â€š ¬Ã¢â€ž ¢s Corporation is one of if not the most famous hamburger and fast food chains across the globe, with more than 35,000 outlets across 119 countries. According to its official website, McDonaldà ¢Ã¢â€š ¬Ã¢â€ž ¢s first began its humble existence as a hamburger/barbeque drive-in restaurant operated by the two McDonald brothers in California in the early 1940s, and it wasnà ¢Ã¢â€š ¬Ã¢â€ž ¢t until 1955 when Ray Kroc partne red with the brothers and established the McDonaldà ¢Ã¢â€š ¬Ã¢â€ž ¢s Corporation as the modern franchising business. In 1982 McDonaldà ¢Ã¢â€š ¬Ã¢â€ž ¢s opened its first branch in Malaysia at Jalan Bukit Bintang, and currently has a total of 250 branches throughout the country which serves an average of 13 million customers on a monthly basis. The success of the McDonaldà ¢Ã¢â€š ¬Ã¢â€ž ¢s Corporation can be attributed to several factors, where one of the main factors involved would be its highly efficient Operation Management function and systems as well as the constant improvements in its operations. 2.1 Worldà ¢Ã¢â€š ¬Ã¢â€ž ¢s Leading Quick-Service Restaurant Brand As with any fast-food restaurant, McDonaldà ¢Ã¢â€š ¬Ã¢â€ž ¢s specializes on providing Low Cost, High Volume, High Speed products with a strong focus on providing its customers with efficient and responsive services. Hence to differentiate itself from competitors such as KFC, Wendyà ¢Ã¢â€š ¬Ã¢â€ž ¢s and Burger King, McDonaldà ¢Ã¢â€š ¬Ã¢â€ž ¢s aims to be the worldà ¢Ã¢â€š ¬Ã¢â€ž ¢s leading quick-service restaurant. In order for McDonaldà ¢Ã¢â€š ¬Ã¢â€ž ¢s to achieve its goals, it would need to have to structure and manage its operations in a specific manner which will be analyzed in the following sections. 2.2 The Operations Function of McDonaldà ¢Ã¢â€š ¬Ã¢â€ž ¢s The term Operation Management is normally associated with the activity of managing an organizationà ¢Ã¢â€š ¬Ã¢â€ž ¢s resources that is used to produce and deliver its good and services, while the term Operation Function is more specific in the sense that it signifies the specific part of overseeing and controlling the activities producing the organizationà ¢Ã¢â€š ¬Ã¢â€ž ¢s goods and services (Collins, 2008). To ensure a complete understanding of McDonaldà ¢Ã¢â€š ¬Ã¢â€ž ¢s Operation Functions, the early Speedee System and its modernized à ¢Ã¢â€š ¬Ã…“JITà ¢Ã¢â€š ¬Ã‚  system will be explained and analyzed in the fol lowing paragraph. 2.3 McDonaldà ¢Ã¢â€š ¬Ã¢â€ž ¢s à ¢Ã¢â€š ¬Ã…“Speedee Service Systemà ¢Ã¢â€š ¬Ã‚  The origin of McDonaldà ¢Ã¢â€š ¬Ã¢â€ž ¢s operation management function can be traced back to its à ¢Ã¢â€š ¬Ã…“Speedee Service Systemà ¢Ã¢â€š ¬Ã‚  which was built for the sole emphasis of speed, volume and lowering costs that was incorporated into McDonaldà ¢Ã¢â€š ¬Ã¢â€ž ¢s in 1948 (Highwayhost.org, 2015). Prior to the introduction of the Speedee Service System, McDonaldà ¢Ã¢â€š ¬Ã¢â€ž ¢s operational pattern was similar to other dine-in and drive-ins that employed a host of carhops and waitresses as well as hiring skilled short-order cooks. The operational costs involved such as wages as well as the need to constantly replace the short-order cooks which were in huge demand at that time lead to the McDonalds brothers to come up with the Speedee Service System. The Speedee Service System reconfigured the entire procedure of food preparation and changed it to somethin g which is similar to that of an assembly line, where one employee would specialize in cooking the burger patties while another prepares the French fries, thus eliminating the bottle-neck that was previously faced when a single chef is required to prepare both items (Schlosser, 2001). In addition to that, the Speedee System eliminated the need for waitresses and car-hops and introducing the Customer Self-Service system which further reduces McDonaldà ¢Ã¢â€š ¬Ã¢â€ž ¢s operational costs, thus increasing its efficiency and lowered the prices of its products, ultimately increasing the number of customers. In its essence, the Speedee Service System revolutionized the restaurant businesses were done and became the precursor for the modern operation management function that is being practiced in McDonaldà ¢Ã¢â€š ¬Ã¢â€ž ¢s today. 2.4 à ¢Ã¢â€š ¬Ã…“Just in Timeà ¢Ã¢â€š ¬Ã‚  and the Modern McDonaldà ¢Ã¢â€š ¬Ã¢â€ž ¢s As with the Speedee Service System, the modern McDonaldà ¢Ã¢â€ š ¬Ã¢â€ž ¢s daily operations function emphasizes on the need for efficient workflow processes to minimize the occurances of delays, bottlenecks and unnecessary procedures which will impede its performance. To effectively do so, McDonaldà ¢Ã¢â€š ¬Ã¢â€ž ¢s focuses on managing its food preparation processes to account for every second, as service time is the single most crucial factor for customer satisfaction within the fast-food industry (Dentch, 2009). True to its motto of Fast Service and Fast Food, the modern McDonaldà ¢Ã¢â€š ¬Ã¢â€ž ¢s system functions in the manner where a customer places an order and pays at the counter, and then the order will be prepared by other staffs within a short time frame. As McDonaldà ¢Ã¢â€š ¬Ã¢â€ž ¢s targeted service time is to be not more than 90 seconds, its operation functions and process workflow is structured in a manner where there is minimal bottlenecks; there are dedicated staffs who handle specific roles such as one employee who cooks t he burger patties, another who applies the sauce and seasoning to the burger buns and another who will then finally prepare the finished burger and package into its box and then serve it to the customer (Wilson, 2015). The other food items such as it French fries, soft drinks and deserts will have their own specialized workstations/departments where these items can be prepared independently, hence cutting down on waiting time. With such systems in place, McDonaldà ¢Ã¢â€š ¬Ã¢â€ž ¢s is able to effectively serve its customers on a timely basis and incorporating a just-in-time (JIT) approach to its food preparation process, it ensures that the food remains fresh and unnecessary wastage or spoilage of food is avoided ultimately. As explained in the book Making Fast Food, McDonaldà ¢Ã¢â€š ¬Ã¢â€ž ¢s operations functions that incorporates the just-in-time (JIT) system and multi-function workers has granted McDonaldà ¢Ã¢â€š ¬Ã¢â€ž ¢s an effective means of mass producing its foods in a way that is not only uniformed and consistent across all its branches but also guarantees a quick and efficient service experience to its customers (Reiter, 1991). 2.5 Recommendations for Improvement Based on the authorà ¢Ã¢â€š ¬Ã¢â€ž ¢s observation, the standard operational standards of the McDonaldà ¢Ã¢â€š ¬Ã¢â€ž ¢s branches located at Jalan Mustapha Al-Bakry can be furthered improved by eliminating the bottlenecks effect present in the area of its service time. A bottleneck effect can be explained as the specific part or stage of a process where the capacity is at its lowest, which could be due to factors such as a long processing time which then acts as the weakest link in the entire process (Terwiesch, 2014). In the case of that particular McDonaldà ¢Ã¢â€š ¬Ã¢â€ž ¢s, the main bottleneck being faced would be its point of service during peak hours as there ratio of counters to the total number of customers in queue is out of balanced. For example, it is not uncommon t o see more than ten customers lining up behind a single queue and many a times multiple customers who have already paid for their food can be seen hanging around while still waiting for specific items such as their French fries to be prepared. To an extent this bottleneck can be somewhat minimized by the presence of a dedicated drive-thru counter which radically cuts down the length of queue when comparing the McDonaldà ¢Ã¢â€š ¬Ã¢â€ž ¢s at Jln Kuala Kangsar to the older branch in town that doesnà ¢Ã¢â€š ¬Ã¢â€ž ¢t offer the drive-thru service. The comparison was made by the author by benchmarking the total time taken for both branches to serve a customer as well as how long it takes for the queue to clear during peak hours. Other than to incorporate a drive-thru into its operations, the McDonaldà ¢Ã¢â€š ¬Ã¢â€ž ¢s in town will be able to eliminate its bottleneck by increasing the number of point of sales (counters) so that more customers can be served at the same time. The only downside of this would be the possibility of the extra counters becoming redundant when there isnà ¢Ã¢â€š ¬Ã¢â€ž ¢t enough customers at hand. As for faster food preparation, hiring additional staffs would be a critical step in reducing the total customer waiting time as based on the authorà ¢Ã¢â€š ¬Ã¢â€ž ¢s observation, the major contributor to customer waiting time would be slowdowns caused by insufficient staff in preparing certain food items. For example, at times there is only a single staff that has to juggle between frying the French fries and manning the counter which then creates a bottleneck in the entire process when he or she is unable to finish preparing the fries when the rest of the customerà ¢Ã¢â€š ¬Ã¢â€ž ¢s set meal is ready. 3.0 Operation Managers As with Operation Management and Operations Function, the Operation Managers play a critical role in ensuring the effectiveness the of an organizationà ¢Ã¢â€š ¬Ã¢â€ž ¢s operation as these managers are responsi ble for the management of the organizationà ¢Ã¢â€š ¬Ã¢â€ž ¢s resources that is part of the Operations Functions. 3.1 Roles and Responsibility of Operation Manager Within each branch of McDonaldà ¢Ã¢â€š ¬Ã¢â€ž ¢s there will be at least two managers; a general manager/restaurant manager and an assistant manager where each will their own roles and responsibilities which will be discussed below. The general manager/restaurant manager plays the all important role of controlling and overseeing the restaurantà ¢Ã¢â€š ¬Ã¢â€ž ¢s daily operations and ensuring that the outlet and all its activities are running as smoothly as possible. In addition to that, the general manager is also in charge of other aspects such as controlling the profitability and sales as well as optimizing the management of the restaurant, human resources and team management in their respective stores (McDonaldà ¢Ã¢â€š ¬Ã¢â€ž ¢s Malta, 2015). On the other hand, an assistant managerà ¢Ã¢â€š ¬Ã¢â€ž ¢s role would be to assist the general manager in his or her management tasks and plays the important role of filling in for the general manager and running the restaurant should the general manager be absent. The specific role of assistant managers would be to supervise the training and recruitment efforts as well as to ensure that the quality levels and safety level is up to standards as well as to carry out sales forecasts and to analyze operational standards and results. In addition to the general manager and the assistant manager, larger branches would have a dedicated shift manager who is tasked with ensuring that everything is in order during their shift and to keep track of the outletà ¢Ã¢â€š ¬Ã¢â€ž ¢s inventory levels and maintenance of equipment (McDonaldà ¢Ã¢â€š ¬Ã¢â€ž ¢s Malta, 2015). Diagram: Sourced from McDonaldà ¢Ã¢â€š ¬Ã¢â€ž ¢s Malta (2015) 3.2 Overcoming Operational Issues as a Manager As discussed in the previous section, the issues that are being faced in the selected McDonaldà ¢Ã¢â€š ¬Ã¢â€ž ¢s can be overcome through effective operational planning of the manager. To prevent problems such as insufficient or inadequate number of staff during peak hours, the manager should consider hiring additional number of staffs to cope with the increase in number of customers during the its peak hours. As the crowd usually tends to gather from 12pm to 3pm in the afternoon and from 6pm to 9pm, the manager can effectively schedule and arrange for an extra staff or two to come in to work at these times to work on a shift basis. With the sufficient number of staff, the operations of McDonaldà ¢Ã¢â€š ¬Ã¢â€ž ¢s will be efficient and the bottlenecks that were mentioned in the previous section can be effectively eliminated. A long term solution to the problem would be to restructure the working schedule of the employees where there will be more employee working during peak hours. 4.0 Conclusion In a nutshell, Operation management safeguards the succe ss of an organization by effectively overseeing and controlling the standard operational activities to ensure that these activities are done in an efficient manner to reduce and eliminate wastages of resources and time, which ultimately would then further bolster the organizationà ¢Ã¢â€š ¬Ã¢â€ž ¢s profitability and boost its overall competiveness. As seen in the report, Operation Management plays a vital role in ensuring the long term and sustainable success of any organization, where the usage of the example of McDonaldà ¢Ã¢â€š ¬Ã¢â€ž ¢s proves itself to be a testament to the effectiveness of proper operation management and operations functions and its impact on the organization. Hence it can be said that without any form of proper operation management, McDonaldà ¢Ã¢â€š ¬Ã¢â€ž ¢s would have been a far cry from the global fast-food giant that it is today. 5.0 References Aboutmcdonalds.com, (2015).History of McDonaldà ¢Ã¢â€š ¬Ã¢â€ž ¢s :: AboutMcDonalds.com. [online] Availab le at: https://www.aboutmcdonalds.com/mcd/our_company/mcdonalds-history.html [Accessed 2 Jun. 2015]. Collins, K. (2008).Exploring business. Upper Saddle River, NJ: Pearson/Prentice Hall. Dentch, C. (2009).McDonaldà ¢Ã¢â€š ¬Ã¢â€ž ¢s Speeds Orders by Seconds to Keep Customers (Update3) Bloomberg. [online] Bloomberg.com. Available at: https://www.bloomberg.com/apps/news?pid=newsarchivesid=aGL2uS5ybOyk [Accessed 3 Jun. 2015]. Highwayhost.org, (2015).Mcdonalds Self-Service System: page 1 of 7. [online] Available at: https://www.highwayhost.org/Mcdonalds/mcdonalds1.html [Accessed 2 Jun. 2015]. Kamauff, J. (2010).Managers guide to operations management. New York: McGraw-Hill. McDonalds Malta, (2015).A Closer Look to Each Role | McDonalds Malta. [online] Available at: https://mcdonalds.com.mt/employment/a-closer-look-at-each-profession [Accessed 1 Jun. 2015]. Mcdonalds.com, (2015).Our People :: McDonalds.com. [online] Available at: https://www.mcdonalds.com/us/en/careers /our_people.html [Accessed 2 Jun. 2015]. Mcdonalds.com.my, (2015).Im lovin it! McDonalds ® Malaysia | History. [online] Available at: https://www.mcdonalds.com.my/about_us/corporate_info/history.aspx [Accessed 3 Jun. 2015]. Reiter, E. (1991).Making fast food. Montreal [Que.]: McGill-Queens University Press. Schlosser, E. (2001).Fast food nation. Boston: Houghton Mifflin. Shim, J. and Siegel, J. (1999).Operations management. Hauppauge, NY: Barrons Educational Series. Slack, N., Chambers, S. and Johnston, R. (2010).Operations management. Harlow, England: Financial Times Prentice Hall. Terwiesch, C. (2014).Operations Management Basics: Capacity, bottleneck, process capacity, flow rate and utilization. [online] Scn.sap.com. Available at: https://scn.sap.com/community/uac/learning-center/blog/2014/08/28/operations-management-basics-capacity-bottleneck-process-capacity-flow-rate-and-utilization [Accessed 1 Jun. 2015]. Understanding Operations Management. (2011) . 1st ed. [ebook] Saylor.Org. Available at: https://www.saylor.org/site/wp-content/uploads/2013/04/BUS300-1.1_Understanding-Operations-Management.pdf [Accessed 1 Jun. 2015]. Wilson, T. (2015).Mass-produced Food HowStuffWorks. [online] HowStuffWorks. Available at: https://science.howstuffworks.com/innovation/edible-innovations/fast-food1.htm [Accessed 2 Jun. 2015]. Workflow101s Blog, (2009).McDonalds and Workflow: Every second counts. [online] Available at: https://workflow101.wordpress.com/2009/12/14/mcdonalds-and-workflow-every-second-counts/ [Accessed 3 Jun. 2015]. 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The First Days Of The War On Drugs - 1547 Words

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