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

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

Critical review and reection

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

Management and organisational behaviour in action case study

Fred. Olsen Cruise Lines

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

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

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

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

Globalisation and the international context

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

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

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

Case study
Virgin Atlantic and Ryanair

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

This case examines two organisations that have many
similarities as well as a number of signicant dierences.
The essential technology and systems behind each
organisation may be very similar, but the nature and
style of management and its consequent impact on the
way people working in these organisations think, feel
and behave has created very dierent organisational
cultures. So what are the similarities, and what are the
dierences?
The most obvious similarity is that both Virgin Atlan-
tic and Ryanair operate in the UK passenger air transport
industry. Virgin’s air transport business was founded by
Richard Branson in 198458 and Michael O’Leary took over
as chief executive at Ryanair, a small Irish airline, in 1985.59
Both started life in competition with major national ag-
carrier airlines (British Airways and Aer Lingus respectively)
and grew to be major challengers to these established
companies. As they grew, their scale of operations brought
them into competition with a much larger number and
range of airlines operating from the UK: Branson’s Vir-
gin Atlantic competes with some major intercontinental
companies such as American Airlines and Qantas; O’Leary
competes with the likes of Flybe and EasyJet in the short-
haul market. Both Branson, who was born in 1950, and
O’Leary, who is ten years younger, are individuals with
strong and distinctive personalities, who have a relentless
appetite for media presence and who make extensive use
of themselves in their frequent marketing communica-
tions. They are readily engaged in advertising stunts, often
appear on the news media in relation to stories about the
industry, and their faces and personalities are powerfully
associated with their companies.
Charting different courses
There are, however, some major dierences. Firstly, they
dier in their choice of markets. Virgin’s air transport
business originated in the long-haul, mainly transatlan-
tic market, which might be highly protable but is also
extremely competitive. As the business grew, oshoots
were founded as independent companies – for instance,
Virgin Australia and the ambitious project for the
world’s rst spaceline, Virgin Galactic,60 which remains
live despite the loss of the rst vehicle, Enterprise, in
November 2014. Ryanair started as a short-haul carrier
➔
30 part 1 T AATA TT
and has remained so, focusing on uropean destinations
from a small number of airports in the UK and ire. ts
competitive positioning is also very dierent. yanair is
well known as ‘The ow Cost Airline’; the rst thing that
hits you in its publicity material is the price61 and this
is very clearly the core of its business strategy. The ‘no
frills’ approach means just that; even the in-ight food
is limited to sandwiches and costs extra. irgin, by con-
trast, attracts passengers by oering a superior experi-
ence and is rmly positioned at the quality end of the
market. Publicity material emphasises style and comfort
but with a touch of humour,62 and there is a range of
in-ight extras which, even at the economy end of the
price range, includes a full meal and drinks service and a
range of entertainment including e-books.
As was noted, both men love publicity stunts and
often use humour in their public communications. ran-
son is usually smiling and in poses that indicate fun and
a desire to show close links with his sta and popular-
ity with employees, customers and the public in general.
’eary is much more likely to be acerbic, critical and
uses what might euphemistically be called ‘colourful’ lan-
guage in his public statements. e seems to care little
about public opinion of him as an individual, and has
been in trouble with the Advertising tandards Authori-
ties in the UK and ire on more than one occasion. The
appointment of Kenny Jacobs to head the company’s
rst television advertising campaign in 2013, however,
set yanair on a slightly dierent course. While still high-
lighting its low prices, the new (and cheaply shot) adver-
tising campaign heralded the introduction of allocated
seating, an additional carry-on bag and a slicker booking
website. These moves, along with the cancellation of its
annual ‘girlie’ calendar, suggested the company was aim-
ing for a family market; and the continued rise in prots
during 201463 showed that being ‘nice’ could indeed pay
o.64
The brand values are also very dierent. irgin, as a
collection of businesses, does everything from running
trains to selling wine via mobile phones and nancial
services. All these enterprises are linked by the single
powerful central image of the founder and the charac-
teristic red livery. yanair does one thing and one thing
only, but in doing so sets an almost buccaneering tone,
readily taking on authorities such as the ritish Airports
Authority over its charging practices (characteristically
direct, ’eary observed that ‘people have to pay £10 for
the privilege of getting on and o this rain-sodden and
weather-beaten island’)65 and uropean Union bureau-
crats, for instance in a spectacularly damning account
of U competition policy in a speech at the U’s own
nnovation Convention on 6 ecember 2011.66 ranson
has certainly had his conicts with ritish Airways, nota-
bly over the ‘dirty tricks’ aair of the early 1990s, but is
not likely to challenge governments. irgin tries hard to
build customer loyalty and gain repeat business through
brand-related service values; yanair’s repeat business
(and for some customers the yanair experience is one
that inspires the thought ‘never again’) is on price, not
loyalty to the brand. These dierences have a signicant
eect on the nature of employment relations and the
psychological contract between the two companies and
their employees.
Working for ichard and Michael
The brand image and the treatment of customers by
each company have a bearing on the nature of organi-
sational relationship with sta, and vice versa. Aspects
of organisational behaviour therefore show through in a
variety of interconnected ways to create consistent and
very dierent cultures.
At irgin Atlantic, cabin crew are there to be help-
ful and welcoming; they are important projectors of
the brand image and their job is partly to encourage
the all-important customer loyalty that generates con-
tinuing prot. The importance of sta as carriers of
company values is clearly reected in the recruitment
material and other statements about the nature of
work at irgin Atlantic.
Virgin Atlantic brings together all manner of people
in all manner of roles, all playing a crucial role in
the smooth running of a very complex operation. But
whoever you are and wherever you join us, you’ll never
stop thinking of our customers and what we can do for
them. From frontline cabin crew to IT analysts, everyone
here plays a role in delivering the Virgin brand. That
means using initiative, taking responsibility for your
actions and being ready to support those around you at
all times. Similarly, you’ll play your part in maintaining
the friendly, unconventional professionalism that
makes Virgin Atlantic such a unique place of work.67
The recruitment process is lengthy and includes a group
interview that acts as a lter for further tests before job
oers are made. Training programmes for cabin crew
and other sta are run from a dedicated training centre,
and there is a wide range of benets for full-time sta
including seven free ights a year, private pensions and
medical schemes and discounted goods and services
across the irgin group.
At yanair, the cabin crew start by working for a sup-
plier organisation called Crewlink. You can discover if
you qualify to apply for a job by answering a series of ten
online questions. uccessful applicants for cabin crew
 Chapter 1 UTA AATA AU 31

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

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

Notes and references

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