mnm57_reflective

8/7/2019 MNM57_Reflective

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Students Reflective Journal

Student name: Yu-Nean Lin ( Justin )Student number: 10839833Subject: MNM57 The organisation in its environment

Case 1:

Description of the eventI used to work for China Airlines in my country Taiwan. China Airlineswas created 60 years ago by the government during 2nd World War. Theoriginal mission was to support the army by transportation. Therefore, itsbackground is very much related to the government and the army as well.This is the reason why the organisational structure is between autocraticand bureaucratic structure, and here begins the story.

It might sound stupid, but it is the reality that, employees are frequentlyasked to solve unrealistic problems. The term unrealistic may meanimpossible (because it completely disobey the logic), cruel (complicatedthings to be done within a very short time), inefficient (unnecessary tasksto be done with lots of effort but very few in return) or stupid (combine allthese above descriptions together). Normally, the only reason you have todeal with the case is just because the HQ asked.

For example, one of my team mate was asked to provide cost controlsystem based on a newer technical framework within 3 months. Though

we have the original code, however, code has to be rewritten completelyand the logic is so complicated that it even takes several weeks tounderstand the whole process of the system operation. As a result, hespent a lot of time and had to stay at office many times. Moreover, as todo computer programming, provision and blue-print should be made inorder to construct a fundamental structure, so that its easier to maintainand extend the functions. But he wasnt given enough time to do so.

Its interesting that, in some historical companies, there are somehistorical problems that were left from the older generation employees.And these are one of the most difficult problems, because you cantchange the fact!

For example, our organisational structure looks like a mess. Due tohistorical background, some units (note that its not group, its unit)were temporarily set up, and disappeared whenever its not neededanymore. Problem is, the hierarchic structure would have been changed.The rule is not logically set up, but depends on the HQs. As time goes, thestructure becomes strange and hard to handle, and its hard to maintainthe website information as well, since the organisation structure hasbecome illogical.

Insight / Self awareness


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It doesnt make you feel comfortable, especially when you cant see iftheres any need to do things urgently or, when you are asked to solveproblems which contradicts to the logic. Actually it is a common problemfor many Asian companies. Theres hardly any negotiation betweenemployees and HQ. The only way we can do is to report to our direct

leader, but mostly it doesnt work.

Analysis of the eventFacing this situation, we do not have many choices. The only thing forsure is to complete the given mission or task within limited time. We areusually forced to find out temporary solutions rather than permanentsolutions. I mean, programming actually requires plan and blue-print toestablish the fundamental base, which makes it easier to change or to addnew functions. But we are not able to do so under historical restrictions /time pressure and authority.

Evaluation of the eventCentralisation is definitely an effective way to manage or control thebusiness, but its highly dependent on the manager/HQs ability to handlethe whole situation. If managers are to lead in an effective and rationalway, the performance could be highly expected. If not, its another story.

It is quite difficult to change the climate, or precisely speaking, to changethe HQs mind. This is the key reason why we usually find out temporarysolutions to problems. The outcome doesnt seem satisfying, but at least

we completed the task and the boss is happy about that. Though we needto make much more efforts to deal with the incoming tasks.

Plan / Action PointsTo sum up, one of the key factors to solve all the above problem iscommunication. Regarding to the organisation structure mess, we shoulddiscuss this matter with Human Resource department to form up a logicalstructure so that its easier for us to present it on our website. However, itseems that nobody wants to take the responsibility. Without negotiation,the problem comes to the dead end. And thats how it goes.

Responsibility is another important factor to our organisations problemsas well. Under our culture, employees are expected to make less mistakesrather than to produces more. Therefore, people fear change, since itleads to a high probability to make mistake. Even if the change succeeds,they cant expect to receive more rewards. So why do people want tochange if they must bear the risk but do not get enough in return?

As mentioned above, the knowledge of organisation behaviour that welearned does not quite fit our companys situation. I really hope that oneday the HQs would have the chance to hear employees voice.


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Case 2:

Description of the eventIts always a critical topic when we are talking about oil price in airlinecompanies. In average, the oil price is basically 25% ~ 40% of an airline

companys total cost, depending on its size and focused market. Low-costcarriers are expected to have higher fuel cost percentage since it reducesother costs by transferring to the real user. However, even if we talkabout traditional carriers, it is one of the most important cost that we cannot ignore. For example, in British Airways 2010 annual report, the fuelcost is approximately 29% of its total cost.

This is the main reason why, when the oil price fluctuates, airlines arelikely to buy derivative financial products (e.g. oil price options) toprevent the ongoing oil price that may cause huge damage to its financialstructure. Down below is a trend picture that shows how oil price

fluctuates from 1947.

However, it is astonishing that China Airlines made a huge loss which was22 billion New Taiwan Dollars (equal to 440 million pounds approximately)in 2008. It largely impacted the financial situation on 2008.

Insight / Self awarenessIt couldnt be more obvious that, option itself is a trap as well! As we cansee from the picture, oil price climbed sharply from 2003 and hit the peakon 2007, and suddenly dropped dramatically from then. Which means, ifyou are afraid of the climbing oil price and buy too many call options on2006 or 2007, you are about to recognise huge losses afterwards.

Furthermore, this event reminds me of the business cycle that we havelearned from the economic sessions, though they are not at the sameposition. But it could be argued that the oil price can be used as a tool to


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influence the business cycle. Oil price was very stable before 1973.However, as the proceeding industrialisation goes, oil is much morerelated to the normal lives of people, and sadly become a target of thespeculators.

Analysis of the eventTheres actually not much to analyse the event. Speculations always exist,what you can do is to gamble on how much insurance you should buy. Butthe picture and the story tells us how external factors affect the oil price,and how the oil price impacts the company.

Evaluation of the eventWe do not have enough information to know if, in China Airlines, thecause of the huge financial losses should blame the financial department

or the headquarters. But it is argued that responsibility should be given tothe specific department, but not decided by headquarters.

Plan / Action PointsOil price has been a hot issue for all the business, not only the airlinecompanies. As to sort the problem out, the trend of the oil price should becarefully analysed. For example, the most significant 2 peaks was reachedon 1980 and 2009, which is about 30 years. The interval may give a goodreference for the timing that we should be aware of the fluctuation.

Furthermore, political force is always an impact factor that influences theoil price. Iraq war may be a good example that explains why the oil pricekept going from 2006 to 2007. But as the experience shows, thespeculation of oil price may not stop.

Next, there are many airline alliances in the world. Are the airlinecompanies to cooperate and develop the substitute energy for their ownuse? This might be a good choice to consider. Imagine that if the oil pricego up 10%, it causes 2% ~ 4% of the rise of total cost. Assume that thecompanys sales is 100m, and the total cost is 92m, the profitability is8%. But if the total cost increased by 4%, which is 95.68m, theprofitability becomes 4.32%, which is nearly half of the originalprofitability. See how it would impact the profitability? It gives a goodreason to develop substitute energy.


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Reference:http://www.china-airlines.com/en/about/about_ar.htmhttp://www.wtrg.com/prices.htm
http://www.china-airlines.com/en/about/about_ar.htmhttp://www.wtrg.com/prices.htmhttp://www.china-airlines.com/en/about/about_ar.htmhttp://www.wtrg.com/prices.htm

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