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MASTER'S DISSERTATION
Moscow 2015
1
To Alekseenko V.B.,
Head of Engineering Business and
Industrial Management Department
From: Murshed Helal
Group: IBM-204
APPLICATION
I kindly request you to approve as my Master's Dissertation scientific supervisor
Ivanova Tatiana Barisovna
Date:
_______________________
Signature
Master's Dissertation
ASSIGNMENT
Student: Murshed Helal
1. Topic of the dissertation: CORPORATE CULTURE AND COMPANY
EFFECTIVENESS: BIMAN BANGLADESH AIRLINES
2. Delivery date of the finished dissertation: __May 2015
3. Bench-mark data: Statistical data
4. Table of Contents CORPORATE CULTURE AND COMPANY
EFFECTIVENESS: BIMAN BANGLADESH AIRLINES
1) Introduction
2) Chapter 1. Theoretical approaches to corporate culture
3) Chapter 2. Corporate culture of Biman Bangladesh Airlines
4) Chapter 3. Technologies of creating an effective corporate culture
5) Conclusions
6) Appendix
7) Bibliography
9) Scientific supervisor
Parts
Introduction
Scientific
supervisor (SS)
Ivanova T.B.
Chapter 1.
Ivanova T.B.
Chapter 2.
Ivanova T.B.
Chapter 3.
Ivanova T.B.
SS signature
Students
signature
Calendar Plan
NN Stages of the Master Dissertation
1.
Presentation Deadline
for every stage
05.01.2015
3.
15.02.2015
4.
12.03.2015
5.
30.03.2015
6.
7.
12.04.2015
03.04.2015
2.
08.02.2015
07.04.2015
08.04.2015
10.05.2015
14.05.2015
Student: __________________
Scientific supervisor__________________________________
Head of the Engineering Business and
Management Department ___________________________________
MASTER'S THESIS
BY
Moscow 2015
7
Table of Contents
Introduction
.....................................................
10
................................
13
15
18
...........................
23
26
35
36
38
...............................................
........................................... 41
................................ 53
57
8
.................................... 66
Conclusions
...................................................... 69
Appendix
....................................................... 70
Bibliography
............................................... 76
DECLARATION
...................................................
79
Introduction
Corporate culture refers to the beliefs and values that have existed in an organization
for a long time, and to the beliefs of the staff and the foreseen value of their work that
will influence their attitudes and behavior. Corporate culture is rooted in an
organization's goals, strategies, structure, and approaches to labor, customers,
investors, and the greater community. Administrators usually adjust their leadership
behavior to accomplish the mission of the organization, and this could influence the
employees' job satisfaction. The knowledge of corporate culture has increasingly
received attention in many field of study. Traditionally, implications of corporate
culture can be understood through a qualitative approach since it believed that
characteristics of corporate culture are complex and difficult to measure as a concept.
As an executive, identifying, understanding and the influencing the organizational
culture can ensure corporate agility and success. As a potential employee, catching a
glimpse of the true culture of an organization will help one decide if the company is a
place where one can contribute and flourish. In, both cases misunderstanding culture
can lead to disaster.
The purpose of this paper is to analyze the corporate culture of Biman Bangladesh
Airlines and to suggest the technologies of making it effective. In this study, it is to
understand organization's vision, values, norms, symbols, assumptions, passengers
feedback etc. We also pay special attention to peculiarities of cross-cultural
communication between different ethnic groups gathered in multinational companies.
The analysis will play a significant role to understand the drawbacks of company and
apply effective strategies to minimize the bottleneck and modernize the company to
maximize the market volume and profit.
Methods and methodology applied in this paper can be used by top managers and HRdepartments of multinational companies in their aspiration to bring fresh air to the
companys environment making it effective and attractive for the personnel and newcomers. The material suggested can be also used in academic sphere.
Relevance of the topic
Due to globalization and global economic affaire the world has been turned into a
global village. People around the world today are moving throughout the world either
for commerce and industrial, tourism and employment or for education and research
purposes. Due to the aforementioned factors, airline industry around the globe is
10
growing and developing rapidly. For survival and forward movement in this ever
competitive global business arena, customers satisfaction through quality of products
and service is very significant factor for impressive market share and profitability. To
pave the way for very many effective and efficient strategies and methods are applied
within the business. Effective corporate culture is one of the most effective and
influential business strategies whose proper implementation accelerates organizational
effectiveness and staff's capabilities to turn the company modern, dynamic and
profitable.
Practical importance of the research
Application of the effective corporate culture on Biman Bangladesh Airlines will
modernize and profitable the sector and promote & diversify the economic activities:
Dynamic, diversify & modernize the Biman Bangladesh Airlines;
Promote organizational effectiveness & standard of service
Save, comfortable and reliable service
Achieve customers' confidence & increase market share
Increased public & private investment;
Increase competitive advantage and staffs capability
The aim of the research
To create and propose an effective & utmost corporate culture for Biman Bangladesh
Airlines
Tasks
- To assay theoretical and methodological approaches of airlines;
To anatomize the key issues affecting the effectiveness of Biman Bangladesh Airlines
To analyze the economic, organizational & service oriented approaches of Biman
Bangladesh Airlines
To identify and advocate key policy instruments (organizational changes, regulatory
measures and economic incentive).
11
12
- Mode of life:
- Land fertility and water;
- Longitude of socio-economic formations;
- Religion, etc.
The research into the above mentioned and other factors even let this group help the
American government to cope with Japan at the end of the 2nd World War turning
this country into the American friend and alien. Unfortunately the scientific activity of
this group is not much open as its members worked for secret American institutions
but their contribution to the research of national mentality of different ethnics is
priceless.
In the 3d quarter of the XX century there appeared numerous definitions of corporate
culture, formulated by different scientists. Then it was G. Hofstadter in the middle of
70th that made a serious analytical work for IBM and its branches in different
countries of the world where the company came across the lack of understating in
cross-cultural communication.
Hofstadter offered his own methodology of research which became well-spread over
the world, paying attention to national features of business behavior.
All of them have their share in the definition of corporate culture: - Organizational or
corporate culture is the pattern of values, norms, beliefs, attitudes and assumptions
that may not have been articulated but shape the ways in which people in
organizations behave and things get done. Though this definition uses corporate
culture as a synonym to organizational culture as the way the personnel and
management are to work together, there is a certain difference between these two
notions. The notion corporate culture is wider as it adds the necessity for every
member of the company to feel protected by the management.
Culture is an abstract concept applied across multiple academic and social fields with
changing contextual meanings. The rapid increase in attention paid to the subject
garnered fundamental disagreements about what culture is and how it should be
studied. Not only is culture difficult to definitively describe, but organizations and
their leaders are in constant pursuit of a good or right or functionally effective
culture. Most can agree that it exists and that its effects are important. Edgar Schein
(2004) concurs that attempts to define culture are not only numerous but vary
14
dramatically, leaving different ideas about what exactly it is. For example, the
Merriam Webster (2011) dictionary presents ten different interpretations of culture
ranging from developing the intellectual and moral faculties to an acquaintance with
and taste in fine arts to the act or process of cultivating living material in a prepared
nutrient. Despite these differences, most authors concur that the concept of
organizational culture refers to the shared values, underlying assumptions, and
behavioral expectations that govern decision making (Schein, 1985; Barney, 1986;
Alvesson, 1990; Hofstede, 1998; Christensen, 2006; Senge, 2006; Kissack &
Callahan, 2009; Rainey, 2009; Cameron & Quinn, 2011). In other words, culture
creates social order, continuity, and a collective identity that generates commitment to
rules about how we do things and how to get the job done within organizations
(Cameron & Quinn, 2011).
The culture of an organization refers to the unique conguration of norms, values,
beliefs and ways of behaving that characterize the manner in which groups and
individuals combine to get things done. This definition is particularly important to a
foreign company activity in a unusual national reality when national personal could
try to insert their own vision of labor activity.
Though these definitions reflect the most important features of organizational culture,
they are not full. More extended definitions were given by American scientist E.
Schein: A pattern of basic assumptions invented, discovered or developed by a
given group as it learns to cope with the problems of external adaptation and internal
integration that has worked well enough to be considered valid and, therefore, to be
taught to new members as the correct way to perceive, think and feel in relation to
these problems.
Russian scientist V. Kozlov considers that corporate culture is: a complex of
suggestions accepted by all members of organization without any evidence; setting
common frameworks of behavior, accepted by the most part of staff. Organizational
culture shows itself in philosophy and ideology of management, value orientations,
beliefs, expectations and norms of behavior. Organizational culture presents the
cumulative characteristic of organization, ways of activity evaluation, and presence of
specific terms that are understood by all employees within a company The most
important aspect of this definition consists in recognition of the cumulative effect of
the corporate culture.
15
IDV
20
PDI
80
MAS
55
UAI
60
LTO
40
IDV-Individualism
PDI- Power Distance Index
MAS- Masculinity
UAI-Uncertainty Avoidance Index
LTO- Long-Term Orientation
16
place and which needs no further justification. As a Bangladeshi, I can say that it is
not very difficult to notice inequality between people in government, in organization
even within the families.
Hofstede define masculinity as pertains to societies in which social gender roles are
clearly distinct i.e., men are supposed to be assertive, tough, and focus on material
success whereas women are supposed to be more modest, tender, and concerned with
the quality of life, femininity pertains to societies in which social gender roles overlap
i.e., both men and women are supposed to be modest, tender and concerned with the
quality of life.
Bangladesh scores 55 on this dimension and can be considered a a masculine society.
In masculine countries people live in order to work, managers are expected to be
decisive and assertive, the emphasis is on equity, competition and performance and
conflicts are resolved by fighting them out.
The Uncertainty avoidance scores are much higher for Bangladesh.
A standard score in Long term orientation shows that Bangladesh is one the way of its
development.
1.3 The Denison Organizational Culture Survey (DOCS)
Professor Denison for 15 years was researching the impact of corporate culture on
companys economic effectiveness. On data, gathered from 1000 companies he
created a survey, consisting of 4 key elements: Adaptability, Mission, Involvement
and Consistency.
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Adaptability
Are we listening to the marketplace?
High-performing organizations perceive and respond to the environment,
customers; they are apt to restructure and re-institutionalize behaviors and processes
to adapt to the outer environment.
Creating Change
High-performing organizations welcome new ideas and willing to try new
approaches to doing things, see the necessity of creating constant change as way of
doing business.
Customer Focus
19
Employees recognize the need to serve both internal & external customers and
continually seek new and improved ways to meet customer expectations.
Organizational Learning
Thoughtful risk taking is encouraged. Organizational learning means we gain
knowledge from successes and failures. Our first reaction to reasonable mistakes is
not Who is to blame?, but rather What can we learn?
Mission
Do we know where we are going?
High performing organizations have a mission that tells employees why they
are doing the work they do, and how the work they do each day contributes to the
why.
Strategic Direction & Intent
Strategic direction & intent typically refers to the multiyear strategies high
priorities established to operationalize the vision.
Goals & Objectives
Goals & objectives are the shortterm, specific goals established that help every
employee see how his/her daily activities connect to the vision & the strategy.
Vision
Vision is the ultimate reason you are in business your purpose what you are
ultimately trying to achieve.
Involvement
Are our people aligned and engaged?
Highly involved organizations create a sense of ownership and responsibility.
Out of this sense of ownership grows a greater commitment to the organization and an
increased capacity for autonomy.
Empowerment
20
They clarify those areas where employees can make decisions, have input, or
those areas that are beyond an employees scope of responsibility. This promotes
informed empowerment.
Team Orientation
Teamwork is encouraged so that creative ideas are captured and employees
support one another in accomplishing work goals.
Capability Development
Capability development is practiced in a variety of ways, including training,
coaching, and giving employees exposure to new roles and responsibilities.
Consistency
Does our system create leverage?
Consistency provides a central source of integration, coordination and control,
and helps organizations develop a set of systems that create an internal system of
governance based on consensual support.
Core Values
High-performing organizations have a clear set of core values that help
employees and leaders make consistent decisions and behave in a consistent manner.
Agreement
By engaging in dialogue and getting multiple perspectives on the table people
can reach agreement when difficult issues and problems arise.
Coordination & Integration
Employees understand how the work that they do impacts others and how
other's work impacts them. They make sure that work is coordinated and integrated to
serve the organization as a whole.
Involvement and adaptability reflects flexibility and inclination to changes.
Consistency and mission defines the opportunity to stability and controllability.
Consistency and mission mostly influence the financial indexes as ROA (return
on assets), ROI (total return on investment) and ROS (return on sales). If the rates of
21
consistency and mission are between 3 and 4, it means that ROA, ROI and ROS are
high and operating force of company is big.
Involvement and consistency which altogether constitute internal focus, have
its impact on quality, personnels satisfaction and ROI. Rates from 3 to 4 also reflect
the high level of quality, small percent of defects, right distribution of resources and
higher level of personnel satisfaction.
Involvement and adaptability reflect product and innovations development. If
the rates of these indexes are from 3 to 4, the level of innovativeness and creativity in
production and services is rather high, reaction to changing conditions is fast.
Adaptability and mission (external focus) influence on incomes increase in
sales and market share.
The Denison Organizational Culture Survey completely reflects the connection
between corporate culture and economic effectiveness of the company. It covers the
main aspects of companys business activity: Return on Sales, Return on Investment,
quality of goods, employees satisfaction, level of creativity and innovations,
flexibility, strategies and missions, team-orientation, delegation, corporate education
etc. This model we may use in our diagnostics.
In conclusion, we should say that corporate culture is a serious tool for improving the
effectiveness of any organization. We should not forget that effective corporate
culture absorbs peculiarities of national mentality and national culture. To have
positive business results, corporate culture is to be designed properly, because in case
it develops spontaneously it will never bring any profit, on the contrary it would slow
down the development of the company.
As it was suggested by E. Schein, corporate culture is developed at three levels:
Surface rituals and ceremonies, psychological climate, dress-code, myths and
legends, etc.;
Undersurface values, trusts, strategies and philosophy;
Deep national culture, mentality, peculiarities of perception.
22
likely to skimp on the quality of their services. Even if the board anticipates this
problem, it is hard to design the proper incentive contracts. How can a firm sustain a
reputation of impeccable service? A solution is to raise impeccable service to the level
of a value that needs to be respected at all times, not a goal that is traded off against
other goals. The advantage of elevating this principle to the level of value is threefold.
First, by advertising it as a companys value a firm is more likely to attract 6 and
retain people who share this value or -- at the very minimum have a lower cost to
live and operate by this value. Second, by promoting top customer service as a value
it makes it clear to the employees that the company accepts no compromises on this
front: it is a commitment not to engage in economic calculations. In this way, for
example, an employee will not trade off the customer satisfaction with a larger profit.
Finally, promoting top customer service as a value facilitates its establishment as a
norm inside the firm. The enforcement of social norms differs in several ways with
respect to the enforcement of legal norms. To be enforceable, legal contingencies
need to be verifiable in court. By contrast, it is sufficient that a contingency be
observable for a social norm to be enforceable. An employee with a negative attitude
towards customers can hardly be sanctioned in court, but he can easily be shunned by
colleagues. Precisely because the judgment and the punishment are administered by
the community, not by a court of law, social norms should be very coarse, so that the
detection of a violation is relatively easy. Last but not least, for a social norm to be
enforced it must be shared by most people in a community. In particular, in a firm it
must be shared and followed by who is at the top. This is really a case of lead by
example. Social norms have typically less enforcement power than legal norms. A
violation of a legal norm can lead to harsh punishments, such as incarceration and (in
some countries) even to death. The violation of a social norm leads to lesser
consequences, such as ostracism from the community. In spite of this limited
punishment, social norms can help ameliorate moral hazard problems inside
organizations. Moral hazard in organizations is twofold. There is a moral hazard at the
top: top managers are tempted to renege their commitment to reward firm specific
investments made by the employees (Shleifer and Summers, 1991). There is also a
moral hazard inside the organization: employees want to save on effort because they
do not fully internalize the benefits this effort brings to the organization. This lack of
internalization is partly due to the inability to measure the employees marginal
productivity and, thus, to reward them appropriately through contracts.
24
25
Biman Bangladesh Airlines has significantly improved its position as it nears the
finishing line in its long overdue fleet renewal programme. But the carrier continues
to face several challenges and will need network and strategic adjustments if it is to
complete a turnaround. Biman is one of Asias smallest flag carriers, operating only
12 aircrafts on a network of 22 destinations, including 18 international and three
within Bangladesh. Its fleet currently consists of four 777-300ERs, two 777-200ERs,
two 737-800s, two A310s and two newly added Bombardier Dash 8 Q400.
Table 1: Aircrafts in Biman Bangladesh Airlines fleet
Aircraft
In Serviece
Total
12
Airbus A310-300
2
Airbus A310-300ET
0
Boeing 737-800
2
Boeing 747-200B
0
Boeing 777-200ER
2
Boeing 777-300ER
4
Boeing 787-8
0
Bombardier Dash 8
2
Source: CAPA Fleet Database
In Storage
2
0
1
0
1
0
0
0
0
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27s joined the fleet, enabling Biman to operate domestic services and an international
service to Calcutta. Two of the F-27s were acquired from India and two from the
Netherlands. One DC-6 was also leased for two months.The service to London
continued with the chartered aircraft.
1973
Bangkok became Biman's third international destination and in the domestic sector
Thakurgaon was included in the network. Four more F-27s joined the fleet of Biman.
Two of these gifts from Australia and the other two were purchased from the Fokker
Company. A leased Boeing 707-320C joined Biman's fleet to operate its DhakaLondon services. The airline also purchased another Boeing 707-320C.
1974
Dubai and Kathmandu became Biman's fourth and fifth international destinations. In
the domestic sector services were extended to Cox's Bazar. In the international sector,
services were extended to Yangon, Abu Dhabi, Karachi and Mumbai in 1976. The
second Boeing 707-320C, joined the fleet.
1977
Singapore became another part of Biman's international network. Biman acquired its
third Boeing 707-320C from Trans Air of Canada. Biman was made a corporation
under the title- Bangladesh Biman Corporation. Jeddah, Doha and Amsterdam
became part of Biman's expanding network in the international sector in 1978. Two
more Boeing 707-320C aircraft were acquired, one of them from Japan.
1979
The year turned out to be the year of route expansion. In the international sector,
services were extended to Kuala Lumpur, Athens, Muscat and Tripoli. Syedpur
became a part of the domestic network in the following year. Tokyo and Dahran were
brought within the fold of Biman's network in the following year. An off-line office in
Jakarta was also opened. Another Boeing 707-320C joined Biman's fleet in 1980.
1981
The airline started operations to Rome and Kuwait, but suspended its Tokyo
operation. Biman received one Being 707-320C as a gift from Kuwait and purchased
two F-28s from the Fokker Company.
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1983
The airline entered a new era with the acquisition of three used wide-bodied DC-1030s from Singapore Airlines. Baghdad was made on-line. Biman extended its
international services to Paris and to Rajshahi in the domestic sector in 1984.
1986
Bahrain was brought within Biman's network. One of the Boeing 707-320Cs was
phased out. Services to Frankfurt were extended in the following year.
1988
Riyadh was brought within the network in place of Dahran. Services to Baghdad were
suspended. One more Boeing 707-320C was phased out.
1989
The airline entered the select club of one million passengers. Services to Sharjah were
opened and the suspended service to Baghdad resumed. A new DC-10-30, purchased
from McDonnell Douglas, joined the fleet and the remaining Boeing 707-320C was
phased out. The airline also encompassed modern technology with the commissioning
of a Computerized Reservation System. The Flight Catering Centre at Hazrat
Shahjalal Interantional Airport was commissioned which enabled Biman not only to
upgrade its own in-flight services with high quality food, but also to earn additional
revenues by other airlines. The Ground Training School was merged with the
Apprentice Training School and moved to modern complex at Hazrat Shahjalal
International Airport.
1990
Two ATP aircraft joined the fleet for domestic routes and the F-27s were phased out
in the same year.
1992
New Delhi and Nagoya were included in Biman's international network and
operations to Sharjah were suspended. The $ 30m Hangar Complex at Hazrat
Shahjalal International Airport was commissioned.
30
1993
For the first time Biman crossed the Atlantic with services to New York. Hong Kong
was also included in the network but operations to Nagoya were suspended. Two DC10-30s were taken on lease.
1994
A Computerized Departure Control was commissioned. Biman commenced services
to Brussels and suspended its operation to Amsterdam in 1995.
1996
The two new Airbus A-310 were purchased from Airbus Industries. One DC-10-30
and one A 310-300 aircraft were taken on lease for three years in 1999.
2000
Another DC 10-30 and one A 310-300 aircraft were taken on lease for three years.
Two B 737-300s aircraft were taken on lease for one year in 2003. The leased B 737300 was released in April 2004. Further two F28 aircraft were purchased in May
2004.
2006
Biman commenced services to Manchester on 08 April 2006. Biman suspended its
operation to New York, Brussels, Paris, Frankfurt, Mumbai, Narita and Yangon for
operational reasons.
2007
Bangladesh Biman Corporation turned into a Public Limited Company. E-ticket and
BSP were introduced.
2008
The airline went into an agreement with Boeing Aircraft Company for acquisition of
10 new generation aircraft of 4 Boeing 777-300ER, 2 Boeing 737-800 and 4 Boeing
787 the biggest ever deal in the history of Biman as well as the country. One Boeing
747-300 was taken on lease on ACMI basis for 12 months. Two more 737-800s
joined the fleet in November.
31
2010
One lease-hold Boeing 777-200ER joined the fleet. Two Boeing 737-800s were taken
on lease for 5 years. The aircraft will remain in the fleet till January 2015. The airline
took delivery of one Airbus 310-300 on lease for 3 years.
2011
The first 02 of 04 Boeing 777-300ERs joined the fleet in October and November,
2011 and thus replacing the ageing DC10-30s, the long time backbone of Biman fleet.
2014
The 3rd Boeing 777-300ER joined the fleet on 5th February and the 4th is joining in
the second week of February. Now the airline has a new backbone comprising of
Boeing 777-300ERs, the new work horses of Biman, named as the Palki, the Arun
Aalo, the Aakash Pradeep and the Raanga Pravat.
During the four decades of Bimans existence, many types of commercial airliners
have adorned the fleet- ranging from the early leader, the venerable DC 3 to the
modern Peoples Preference, the Boeing 777. As stated earlier, the airline had
placed a firm order for the fifth generation Dreamliner to complement its fleet. Fuel
efficient Dreamliner is a new wonder of the skies.
Biman can look back with pride to many occasions where it made memorable
contributions to the nation and the travelling public. When the floods of 1988
engulfed the whole country Biman operated an air bridge providing the country's only
link with the outside world. As the flood waters moved up, even on to the run way at
HSIA, the skill and dedication of Biman's pilots kept the air bridge operational.
Biman Becomes Part of History:
On February 20, 2014, Biman operated the historical final-flight of worlds last
passenger DC10-30 on Dhaka Birmingham route and thus recording its name in the
annals of world aviation history.
32
The air transport is required high professional in work to ensure safety, exactly and
fast which are outstanding advantages of traveling passenger by air. Service quality
then becomes significantly important factor to achieve genuine and sustainable
passengers.
All the airports in Bangladesh are operated under the Civil Aviation Authority of
Bangladesh (CAAB), an autonomous body. CAAB is responsible for airports,
runways and air traffic control, taxiways, terminal buildings, warehouse, control
tower, operation and administrative buildings, air navigation and radio
communication system. There are three international and six domestic airports in
Bangladesh. Table 1 & 2 provides the list of Domestic airports & International in
Bangladesh with their locations.
Table 2: Domestic Airports
Location
Rajshahi
ICAO
VGRJ
Barisal
VGBR
Cox's Bazar
VGCB
Jessore
VGJR
Saidpur
VGSD
Source: Biman Bangladesh Airlines
IATA
RJH
BZL
CXB
JSR
SPD
Airport
Shah Makdhum
Airport
Barisal Airport
Cox's Bazar Airport
Jessore Airport
Saidpur Airport
ICAO
VGZR
IATA
DAC
Chittagong
VGEG
CGP
Sylhet
VGSY
ZYL
Airport
Hazrat Shah Jalal
International
Airport
Shah Amanat
International
Airport
Osmani
International
Airport
33
Excellent and reliable customer service is one of the greatest aspects for an airport and
airlines in todays competitive environment. There are many factors that can help an
airport to build its customer base and customer service can be a determining factor in
the success of an entire operation.
34
CE0
Director
market &
sales
Director
Custom
Service
Gm Dist. Sales
Gm sales promotion
Director
Admin
Gm sales
Country Dist.
Manager
Director
Finace
Director
e store &
eng.
Gm marketing
Director
project &
planning
Director
flight
operator
Gm cargo
Dy GM Marketing
Manager Export
Manager Reservation
Manager counter
Dy GM Sales
Manager Agency
Interline
Manager Import
Manager Market
Research
Manager
Communication
From the structure, We can say that Biman Bangladesh Airlines has a very strong
corporative structure. There are several multifunctional teams who are responsible in
35
Internal Strengths
factors
Government backing
fourth generation aircraft in
Biman's fleet
Biggest limited company in
Bangladesh
Strong Brand Recognition
Weaknesses
Corruption
Poor salary range
Careless management
More than 20 percent of the
operational capacity of the planes
remain unutilized
Delays(flight
schedules/administrative procedure)
Adding routes without proper
market study
36
limited destinations
Less innovation
Inattentive Cabin crews
Unreliable service
doesnt have enough source of
entertainment inflight
Less advertisements ( in TVs/Social
links/ Public places)
Absence of competitive spirits
Shortage of information in Biman
database
External Opportunities
factors
1.Can influence the
outstanding hub which it has
created in Bangladesh
2.Brand-new fleet to improve
customer confidence
3.More international
destinations to leverage on its
high charge brand image
4.To making people feel
curious, company can plan
and develop marketing
strategies in its growth areas
where it can attract new
customers. They have a
enormous opportunity to
Threats
A lot of competitors
Should go for low cost flights.
Price of ticket increased because of the
price increasing in oil
Fuel cost raised
Aviation regulation and government
policy
Accidents, luggage robberies affect
customers confident
Political instability in Bangladesh
One of the worlds worst airlines by
37
businessinsider
Low rating in SKYTRAX
World's 2-Star Airline
flawed handling of airports
From the SWOT analysis, we can see that the Airline is struggling with many
problems, which are possible to solve easily. One of the main weaknesses is
corruption, many of the high official of the organization are involved with it. The
government and the authority of the Airline should take steps to remove corruption
from the organization because many other weaknesses are there which are happening
because of corruptions.
2.2.2 PESTLE analysis
PESTLE analysis is in effect an audit of an organizations environmental influences
with the purpose of using this information to guide strategic decision-making. The
assumption is that if the organization is able to audit its current environment and
assess potential changes, it will be better placed than its competitors to respond to
changes.
To help make decisions and to plan for future events, organizations need to
understand the wider meso-economic and macro-economic environments in which
they operate. (The meso-economic environment is the one in which we operate and
have limited influence or impact, the macro-environment includes all factors that
influence an organization but are out of its direct control). An organization on its own
cannot affect these factors, nor can these factors directly affect the profitability of an
organization. But by understanding these environments, it is possible to take the
advantage to maximize the opportunities and minimize the threats to the organization.
Conducting a strategic analysis entails scanning these economic environments to
detect and understand the broad, long term trends.
38
A PESTLE analysis is a useful tool for understanding the big picture of the
environment in which an organization is operating. Specifically a PESTLE analysis is
a useful tool for understanding risks associated with market (the need for a product or
service) growth or decline, and as such the position, potential and direction for an
individual business or organization.
A PESTLE analysis is often used as a generic 'orientation' tool, finding out where an
organization or product is in the context of what is happening outside that will at
some point affect what is happening inside an organization. The six elements form a
framework for reviewing a situation, and can also be used to review a strategy or
position, direction of a company, a marketing proposition, or idea.
PESTLE
factors
Remarks
Political unrest in Bangladesh
Political
Economic
Social
40
41
42
In Bangladesh Google and Yahoo are the most popular search engines. Strong search
engine marketing strategies will take the national carrier of Bangladesh more closer to
its customers which will bring a fruitful result for the airline.
c. Social Media Marketing
In the current modern societies, Social Media channels are commonly used in order to
connect people together throughout the world using the Internet. Whether it is through
social networks, forums, blogs or media sharing websites, people can now have a
conversation online, also called interactive dialogue, with anybody and on any
subject, permitting them to share their experiences and valuable information. The use
of social media sites as part of a companys marketing strategy has increased
significantly in the past couple of years. Looking on a business perspective, it goes
without saying that Social Media Marketing has offered a large variety of new
opportunities for companies to promote their brand, products and services.
One of the biggest advantages that advertising through Social Media can offer
marketers is the ability to specifically target customers based on a variety of different
factors. Social Media sites are storing all kinds of data on their users, such as age,
gender, geographical location, interests, and many other pieces of information.
Consequently, these data can be used to reach the companys target audience.
Therefore, marketers can deliver marketing messages directly to the people who are
the most likely to notice them and click on them.
Biman Bangladesh Airlines, the national flag carrier of Bangladesh loses crores of
taka every year, by reducing corruption, improving its services and getting active in
social web sites can reduce the loss, even can turn into a profitable sector by gaining
customers faiths. Besides, it will also help the airline to plan the routes properly by
getting direct feedback from the passengers. If we compare the social media activities
of Biman Bangladesh Airlines with the other productive airlines like Emirates Airline,
Finnair, Aeroflot Airlines we will easily find the differences. For example in
Facebook,
43
Activities
Emirates Airline
Finnair
Aeroflot Airlines
Biman Bangladesh Airlines should emphasis on its social media marketing strategies
to get closer to passengers, provide more information and answer the customers
questions as early as possible. By doing this; the national flag carrier can get more
customers satisfaction and can set up a strong bond with them. If we look at the
productive airlines, we will see, they are sharing very effective posts every day. Even,
they are not hesitating to apologize for any kind of technical problems on their pages.
Sam Walton, founder of Walmart said If you have questions, go to the store. Your
customers have the answers. And I think by having social media marketing strategy,
company can receive customers feedback and take the decision how meet customers
needs.
A journalist of Russia Segodniya and lecturer of New Media and E-journalism said
The use of social media in the airline industry has become a rapidly increasing trend.
Airlines are using the social media as a platform for brand development and product
marketing, improving customer service and improving passenger experience e.g.
through updating and responding to customers feedback. But unfortunately
44
Bangladesh Biman still don't have a Social Media strategy which is very much needed
for not only to improve company's positive image but also for advertising and
promotion sales attention.
With millions of users, Social Media Sites makes a convenient target base for people
who are trying to market products or services to people online. Actually, Social Media
Marketing has become a very effective way to drive targeted traffic to companies
website or blogs. The authority of Biman Bangladesh Airlines should set social media
marketing Strategies to promote the company, to get direct feedback of passengers
and to take the company into a profitable sector as well.
d. Web marketing
To accelerate online marketing the airline must create an ecommerce website which
will be full of necessary information and 24/7 format services. An instant chat box
should be created in the website to ensure 24/7 online customers service. Better online
services to the customers will ensure more satisfied old customers and will help to
prospective new customer.
e. Email marketing
Email marketing is directly marketing a commercial message to a group of people
using email. In its broadest sense, every email sent to a potential or current customer
could be considered email marketing. It usually involves using email to send ads,
request business, or solicit sales or donations, and is meant to build loyalty, trust, or
brand awareness. Email marketing can be done to either sold lists or a current
customer database. Broadly, the term is usually used to refer to sending email
messages with the purpose of enhancing the relationship of a merchant with its
current or previous customers, to encourage customer loyalty and repeat business,
acquiring new customers or convincing current customers to purchase something
immediately, and adding advertisements to email messages sent by other companies
to their customers.
45
46
Strategy
Sales
Customer
Relationship
Management
Customer Service
Social Media
Technical support
Marketing
47
48
49
CSR
coporate
behaviour
ethics
law
50
Changing business
environment
Changing customers
and needs
Intensified competition
Although the need for more innovation is widely recognized, there is no commonly
accepted view of what innovation means in a business context. Many employees think
of it primarily as radically new products delivered by R and D departments;
51
Business must look ahead, not behind. It's not just the big companies that need to do
this. Every business must innovate to compete. They must create new products and
services for new markets. They must be creative, and come up with new ideas that
never would have been thought of before.
Innovation Management is about more than just planning new products, services,
brand extensions, or technology inventions. Its about imagining, mobilizing, and
competing in new ways.
A Study of European Business School, DLR and PricewaterhouseCoopers shows the
most important success factors for innovation are customer orientation, creative staff
and corporate culture.
Being innovative does not mean inventing; innovation can mean changing your
business model and adapting to changes in your environment to deliver better
products or services. Successful innovation should be an in-built part of your business
strategy and the strategic vision, where you create an environment and lead in
innovative thinking and creative problem solving.
In my opinion, innovation is also required to be competitive today and tomorrow. In a
broader sense, innovation is important to the advancement of the society around the
world. New and innovative products can increase the standard of living and provide
people with the opportunities to improve their lives.
52
FRQ
PAX
REV
(BDT IN CRORE)
1839.00
2057.41
2230.06
2349.56
2194.93
2639.91
2341.49
2453.55
2771.42
3243.89
3384.32
27505.54
JUL02 JUN03
13562
1424802
JUL03 JUN04
14276
1543491
JUL04 JUN05
15388
1537421
JUL05 JUN06
14263
1398556
JUL06 JUN07
11319
1200895
JUL07 JUN08
8460
1375615
JUL08 JUN09
8494
1397664
JUL09 JUN10
8012
1425205
JUL10 JUN11
9037
1602001
JUL11 JUN12
9126
1765922
JUL12 JUN13
6762
1578188
TOTAL
118699
16249760
Source: Mohammad Shah Newaz ,Director, Marketing & Sales, Biman Bangladesh Airlines
53
56
57
Gender
Bangladeshi Foreigner
Male
Female
Total
70
10
80
Age
26
31-40
27
41-50
18
9
Total
80
Occupation Engineer 20
Doctor
16
Service 10
holder
Teacher 15
Student 15
Others
4
Total
80
Total
Bangladeshi Foreigner
%
%
Total
%
15
5
20
4
13
2
1
20
10
4
0
85
15
100
30
40
20
10
100
30
20
10
70
10
80
26
27
18
9
80
20
16
10
15
5
20
4
13
2
1
20
10
4
0
85
15
100
30
40
20
10
100
30
20
10
5
0
1
20
20
15
5
100
15
15
4
80
5
0
1
20
20
15
5
100
Excellent
%
Very
good %
Good
%
Satisfactory
%
Not
satisfactory
%
Total
%
Services in
cabin
Foods on
board
Qualifications
of cabin crews
Entertainments
in the flight
Services in
Dhaka airport
15
50
30
100
10
25
40
20
100
10
15
30
45
100
25
40
30
100
10
15
30
35
10
100
58
Often
%
35
Sometimes
%
20
Never
%
45
Total
%
100
20
65
100
Enough
%
40
Not enough
%
35
Very less
%
25
Total
%
100
45
25
30
100
Problems with
15
your luggage in the
airport
Table 4: Information in the airport
Answers
Questions
Information
displays in the
airport
Useful information
and contents in the
airport
Enough
%
35
Not enough
%
20
Very less
%
45
Total
%
100
10
30
60
100
59
Very
expensive %
5
Expensive
%
25
Reasonable
%
35
Cheap
%
35
From the survey we can say that, to bring Biman Bangladesh Airlines into a profitable
sector following steps should be taken
a) Policy Level
1. Biman should have a vision and mission statement
2. To ensure accountability, the Board of Directors needs to be reformed. The
responsibilities of the members of the Board should be specified.
3. Experts on commercial airline and aviation industry must be included as members
in the Board of Directors.
4. Biman should abide by the current business methodologies as used in world top
airline to make it successful and profitable.
5. The Annual Report should be made public. This report must include financial
statements.
6. The Airline should not be exploited in the name of national interest. It should not
operate unprofitable flights
7. Bimans existing procurement rules should be appropriately amended so that
Biman can take its own business decisions
8. Recruitment, transfer, and promotion on political consideration must be avoided
9. The promotion system of Biman should make on the basis of both seniority and
performance in lieu of conventionally seniority basis
10. Increase the range of employees salaries to motivate the employees
11. By introducing an effective corporate culture can create a good working
atmosphere
60
Marketing
1. Productive advertisements on newspapers/TV/radio/billboards/electronic
screens in public places
2. Participate in different international exhibitions
3. Sponsor international events (mostly sports events)
4. More active in social media marketing
5. Create an e-commerce website providing necessary information ( Instant chat
box need to add in the website to answer customers questions quickly)
6. Create applications for mobile devices such as ios, android
7. More attention in online marketing
8. E-mail marketing
Moreover, corruption in different sectors of the airline is playing vital role that is
making it difficult for the organization to break away from loss making ways.
Incidents of corruption are evident in purchase and leasing of aircraft, store and
purchase of spare parts, in the tender process and in ticketing and reconfirmation.
Corruption must be totally removed from the organization to bring back the airline's
old glory. People who are doing corruption or involved with corruption (inside or
outside the airline) must get punishment according to the law.
62
Its very important the Airline to start an innovative effective corporate culture to
reduce losses and to take into a profitable sector. They should focus on its corporate
culture and innovative marketing before focusing on modern equipment.
Strong motivation based on job satisfaction; direct link between employees personal
goals and companys interests; social status improvement; material motivation;
Fast reaction, flexibility and adaption to changes;
63
64
65
Strategy
Structure, Capacity
& Capability
Leadership
Employee
Engagement
Passenger
Eperiences
Organizational
Performance
Figure 1: Right Managements Organizational Effectiveness Framework
To reach company effectiveness, it is very important to have a great leader who can
lead the company to the success. Employee engagement and customers experiences
are highly required to achieve success for a company. The airline should develop its
all strategies so that the employees can feel satisfied working in this company and to
gain customers faiths.
67
Great Leadership
Supportive
Infrustructure
Biman
Bangladesh
Airlines
Innovative
Management
Motivated employees
68
Conclusions
Every organization from small businesses to large corporations has a culture. The
culture refers to the values and attitudes of employees in the business or organization.
The beliefs, ideologies, principles and values of an organization form its culture. The
culture of the workplace controls the way employees behave amongst themselves as
well as with people outside the organization. Corporate culture is important because it
can make or break the organization. An effective corporate culture values each
employee in the organization regardless of his job duties, which results in employees
working as a team to meet the companys and their own personal needs. Effective
corporate culture improves the performance of a business in a number of areas.
Nowadays effective corporate culture is considered to be one of the main keys to
business success. It is especially interesting to analyze multinational companies
corporate culture where different and even opposite ethnic customs, traditions and
behaviors are merged for the sake of its economics effectiveness.
In modern business corporate culture is playing a vital role to achieve company's
expected goals. Biman Bangladesh Airlines has been operating for more than 44 years
now. There have been lots of ups and downs for this Bangladeshi Airline but it has
continued to operate despite all the hurdles and it will be safe to say that they are
holding a healthy position at the moment. The Airline started off really small with
only a single plane to park in their hanger. Today, they have 12 planes and are
pushing to add more to their locker. The airline has the huge opportunities to expand
its business. Companies with losses can't survive long days in the modern competitive
business. So, the top managers of the airline must think about to create an effective
corporate culture so that the company can get back it's old reputation and business
further. Only adding new aircrafts to fleet won't be able to bring the airline into the
profitable sector, if it does not recruit professional personnel in the required fields.
''And you all know very well, what will happen if its shut down. Everyone will be out
of work. We want you to work properly so that Biman can be a profitable
organization''
said Bangladesh Prime Minister Sheikh Hasina while she was
attending an opening ceremony of fourth generation aircraft Boeing 777.
69
Appendix A
Comparisons of activities between some airlines in Facebook
Name of Airlines
Activities
Emirates Airline
Finnair
Aeroflot Airlines
70
Appendix B
71
Appendix C
72
Appendix D
Table: PASSANGER, FREQUENCY & REVENUE (JUL02 JUN13) [1]
PERIOD
FRQ
PAX
JUL02 JUN03
JUL03 JUN04
JUL04 JUN05
JUL05 JUN06
JUL06 JUN07
JUL07 JUN08
JUL08 JUN09
JUL09 JUN10
JUL10 JUN11
JUL11 JUN12
JUL12 JUN13
TOTAL
13562
14276
15388
14263
11319
8460
8494
8012
9037
9126
6762
118699
1424802
1543491
1537421
1398556
1200895
1375615
1397664
1425205
1602001
1765922
1578188
16249760
REV
(BDT IN CRORE)
1839.00
2057.41
2230.06
2349.56
2194.93
2639.91
2341.49
2453.55
2771.42
3243.89
3384.32
27505.54
73
Appendix D
Questionnaires about passengers remarks of Biman Bangladesh Airlines
Name : -
Gender:-
Nationality:-
Age:-
Location:-
7) Is there enough information displays for passengers in the Hazarat Shah Jalal
International airport?
74
75
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76
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News Papers
1. http://www.dhakatribune.com/bangladesh/2014/nov/01/biman-add-routeswithout-proper-study
2. http://www.dhakatribune.com/business/2014/feb/08/new-boeing-777-arrivesjoin-biman-fleet
3. http://www.thedailystar.net/new-boeing-aircraft-joins-biman-fleet-17556
4. http://www.thedailystar.net/tags/Hazrat%20Shahjalal%20International%20Airp
ort
5. http://www.dhakatribune.com/bangladesh/2013/nov/02/probe-body-findsinvolvement-18-biman-officials-gold-smuggling
6. http://www.prothomalo.com/bangladesh/article/375043/%E0%A6%AC%E0%A6%BF%E0%A6%
AE%E0%A6%BE%E0%A6%A8%E0%A7%87%E0%A6%B0%E0%A6%95%E0%A6%AF%E0%A6%BC%E0%A7%87%E0%A6%95%E0
%A6%9C%E0%A6%A8%E0%A6%AA%E0%A6%A6%E0%A6%B8%E0%A7%8D%E0%A6%A5%E0%A6%95%E0%A6%B0%E0%A7%8D%E0%A6%AE%E0%A6%95%E0
%A6%B0%E0%A7%8D%E0%A6%A4%E0%A6%BE%E0%A6%86%E0%A6%9F%E0%A6%95
7. http://www.dhakatribune.com/op-ed/2013/jul/20/biman-must-avoid-crashlanding
8. http://www.thedailystar.net/biman-sitting-idle-with-large-planes-35180
9. http://news.priyo.com/org/biman-bangladesh-airlines?page=1
10.http://www.dhakaherald.com/news/business/biman-seeks-bb-fund-for-predelivery-payment/
11.http://www.banglanews24.com/beta/fullnews/bn/341602.html
77
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de=BG
3. http://www.biman-airlines.com/
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12.http://www.fzt.hawhamburg.de/pers/Scholz/dglr/hh/text_2010_06_24_EngineDesign.pdf
13.http://www.ch-aviation.com/portal/news/27304-biman-bangladesh-postponesnew-york-flights-to-august
14.http://www.risingbd.com/english/detailsnews.php?news=Country-used-astransit-for-gold,-currencies&nssl=0fcee95cc7b4f2067da8ba1e330de18e
15.http://www.businessinsider.com/worst-airlines-to-fly-economy-2013-5?op=1
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ml
17.http://www.ti-bangladesh.org/beta3/index.php/en/
78
DECLARATION
I, Helal Murshed hereby declare that this work submitted as a dissertation for a
Masters degree in the Peoples Friendship University of Russia is the findings of my
own and that no previous submission for a Masters degree has been made in this
university or elsewhere in parts or whole. The work of others which served as a useful
source of information has been acknowledged by references to the authors.
Date
Helal Murshed
(Masters Student)
..
Date
Prof.T.B.Ivanova
(Supervisor)
.
Date.
V.B.Alekseenko
(Head of Department)
79