Ryanair case study

06/04/2009
Ryanair case study

Executive Summary

The purpose of this case study was to evaluate the performance, management
functions and future perspectives for Ryanair, which strive to become the leader in
the budget airline industry in Europe.
Looking at the case study it is evaluated that Ryanair performance is based on
focusing the low cost sector specially focusing the budget influenced business and
recreation travellers. The organisation has attained success in the low cost market
with increasing organisational problems in decision making, planning, customer
service, ethics and corporate social responsibility.
The analysis from SWOT indicates the problem of organisational culture need to be
fixed in order to achieve future growth objectives; the organisational culture of
shared values will have a direct impact on their decision making, controlling functions,
customer service and create value for the organisation. So it is recommended that
Ryanair leadership should create an open and integrated departmental
organisational culture to create value for the organisation and differentiate form the
other budget airliners. This differentiation strategy of empowering people will create
the competitive advantage for the organisation, which cannot be imitated and the
organisation will have a clear path for its growth ambitions.

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Table of contents
Executive Summary........................................................................................................... 2

Table of contents .................................................................................................................. 3

Situational Analysis ............................................................................................................... 4

Rayanair Performance....................................................................................................... 4

1. Environmental and stakeholder analysis ........................................................................... 5

1.1 Regulatory ................................................................................................................... 5

1.2 Economical.................................................................................................................. 5

1.3 Social .......................................................................................................................... 5

1.4 Technological .............................................................................................................. 5

1.5 Competitors ................................................................................................................. 6

1.6 Ryanair Culture............................................................................................................ 7

1.7 Ethics and CSR ........................................................................................................... 8

1.8 Customers ................................................................................................................. 10

2. Decision making at Ryanair............................................................................................. 10

2.1 Intuition influence on decisions .................................................................................. 11

2.2 Biases and errors ...................................................................................................... 12

2.3 Decision making style ................................................................................................ 12

3. Planning at Ryanair......................................................................................................... 13

3.1 Traditional goal setting............................................................................................... 14

4. Ryanair’s cost focus ........................................................................................................ 15

5. Ryanair’s Value Chain..................................................................................................... 16

6. SWOT Analysis ............................................................................................................... 16

7. Critical Set of Issues ....................................................................................................... 17

7.1 Critical Issues Weightage .......................................................................................... 19

8. Problem definition ........................................................................................................... 19

9. Culture of shared organisational values .......................................................................... 20

9.1 Advantages of shaping the shared organisational culture .......................................... 21

10. Recommendations ........................................................................................................ 24

References: ........................................................................................................................ 26

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Ryanair case study

Situational Analysis
The airline industry throughout the world and specially in Europe was facing hard
time prior to the incidence of 9/11 with declining passenger growth rates and
overcapacity was putting pressure on yields and margins. But afterwards budget
airlines continued growth and profits as compared to increasing deficits of the
mainstream airlines. European budget airline is considered very small having only
7% of the EU market as compared to 25% in the US, while European market is
having great potential for growth due to expanding EU borders and more population
as compared to the US.
Ryanair had a usual new company turbulent start with losses of IR£20m within next
five years. Then Rayanair shifted their strategy on the model of southwest airlines i.e.
became the no frills or budget airline & The Rayan family appointed new
management team headed by Michael O’ Leary. It was huge success and the
company floated their shares in international stock markets in few years.
Rayanair objective is to maintain its position as European leader in low fare airlines
operating frequent point-to-point short haul flights focusing on budget conscious
leisure and business travellers (O’ Higgins 2004).
Rayanair Performance
Ryanair persistent growth and profitability for many years and its strong position in
comparison to struggling full service airlines put Rayan in bargaining position for
procurement of airplanes, maintenance, staff & airport services. Despite increase in
their operating expenses Ryanair kept on growing its profits. And their Passenger
volume increased by 42% in 2003 decreasing the fare by 6%.
In 2003 Rayanair acquired Buzz airline, a budget subsidiary of KLM based at
Stansed, acquiring Buzz and the Stansed airport’s slot became the competitive
advantage on that location.
Ryanair’s cost reduction strategy mainly focuses on
• Fleet commonality (keeping most of the airplanes alike e.g. Boeing 737)
• Outsourcing the services (maintenance, catering, baggage handling)
• Airport charges (preferring low airport charges locations or gaining subsidy,
avoiding main city locations)
• Staff cost (contractual basis, earning more due to more frequent flights)
• Marketing costs (using website bookings, reducing travel agent commission)

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1. Environmental and stakeholder analysis

1.1 Regulatory
Ryanair manipulated their strong position gaining illegal favours from some airports
resulting in regulatory fines by the EU commission; the company has also been fined
for their services to the disabled passengers. The EU and courts have also fined
Ryanair on many occasions due to illegal favour of airport subsidies from some
airport locations and other issues like their refusal to provide wheelchair to disabled
passengers. The EU and Irish legislators has criticised Ryanair for its employment
practises and not allowing trade union in the organisation (O’ Higgins 2004).
1.2 Economical
Ryanair has been doing their business and maintaining expenses, revenues mainly
in euro which provided stability due to increasing number of euro pact countries and
air traffic control charges to be paid in euro with the exception of some UK£ and US$
transactions. Increment in landing charges in the UK, Ireland and abolishing duty
free sales in the EU had been blow to the airline resulting in lost revenues to the
company and commission on in-flight sales for the staff (O’ Higgins 2004).
1.3 Social
Ryanair’s reluctance to provide services to disabled or older passengers has
resulted in court ruling and fines against them. In response to the court rulings
Ryanair increased the fare on all passengers and also started lobbing airports and
airlines (which provide free wheelchair services) not to provide free disabled services
(O’ Higgins 2004)
1.4 Technological
Rayanair has a combination of aircraft fleet with old, second hand and relatively
newer airplanes with an average age of 10 years. Due to its strong & growing
position after 1998 Ryanair has been able to make deals with Boeing on their own
bargaining conditions. Ryanair has preferred owning the airplanes rather than lease
because it saves lots of amounts in terms of depreciation costs and putting pressure
on the balance sheet.
Rayanair has set up the company’s website providing online booking facility, which
provides 95% of the total Rayanair bookings and saving staff, agents commission
costs (O’ Higgins 2004).

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1.5 Competitors
Rayanair approach toward competition has been very aggressive and in most of the
instances it has outpaced the competitors by reducing the prices further or by
increasing the number of flights on those routes. It seems that sometimes it became
the matter of personal ego for the Ryanair CEO. Ryanair has focused mainly on the
routes, which has more budget competition rather than adopting more sustainable
routes with low players in the area. Most of the budget airlines including Ryanair are
using Stansted Hub and there is intense competition among the operators.
Mainstream airline has not let themselves to be left behind, in response these
companies started their own no frills charter services and airlines like Lufthansa, BA,
Scandinavian airlines have reacted by introducing fare cuts on short routes, flying
larger aircraft with one passenger class, reducing in-flight service, internet bookings
and weekend offers. Mainstream airlines also intend to follow the budget airline
model to be executed on international routes.
EasyJet operating on main airports with strong financial position as other budget
airlines, more aircrafts 74, with age of 5yr, 84% load factor, 39 destinations, with
better recommendation to a friend (O’ Higgins 2004).

fig. 1.5

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1.6 Ryanair Culture

The organisational culture at the Ryanair seems to be decayed and gone below the
decaying process, while looking at the case study and evaluating on the seven
dimensions of culture it is assumed that their
• The outcome orientation at the Ryanair is very high which is resulting in poor
customer service; the focus is on no matter how you get the results but the
achievement of the results. This is creating stress at the work place focusing
more on the outcome rather than the quality of work.
• People orientation at the Ryanair is either very low or negligible because more
focus is given to the turnaround and the outcomes, due to these practises the
organisation has been criticised by the EU for their employment practises.
The organisation does not seem to take account of the people in taking any
decisions.
• There is no concept of team environment in the organisation and it seems to
be individuals oriented culture and that might be due to the leadership actions
whose behaviours send strong signal to the employees for their professional
behaviour towards others.
• The Ryanair culture gives the signal of status quo, due to their consistent
same behaviours and their decisions, which emphasize that they have high
stability factor in their culture.
• Innovation and risk taking is very low in their culture and people are not
appreciated for risk taking and making decisions on their own in this scenario
because there is the only one person who is making the risky decisions and
putting everyone at the stake.
• Attention to the detail is very low and employees are not performing according
to the standards they should exhibit and give attention to the details of their
work.

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fig. 1.6

1.7 Ethics and CSR

The carrier has been under high criticism by the regulatory authorities, independent
watchdogs, customers and media about their behaviour towards the stakeholders.
The airline has refused to cooperate with international watchdogs or regulatory
authorities whose terms and conditions do not suit them. Ryanair has also rejected
to take the responsibility of lost luggage while putting the responsibility on the airport
services. Ryanair advertising activities has also been criticised while the company
kept on making money from these ads e.g. painting the airplane like a beer glass.
The company also gave some misleading ads as mentioning the main city location
while actually operating from an off-city location (O’ Higgins 2004).

Ryanair and Budget airline industry as a whole has also become a warning signal for
the green concerns due to their frequent landing and take offs in short times and not
showing any responsibility to take measures for carbon footprints, which forced EU
commission to put a charge on landing and take offs. In response to EU concerns
Rayanair formed a lobby with small companies to influence the EU but left alone
because the mainstream airlines did not want to participate in that lobby and
regarded it as Rayanair’s own agenda.

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As the corporate social responsibility is closely related to creating value for the
organisation and the classical view of CSR proves in saying that managers or
organisations are only to make profits (Robbins et al 2008). Does the decisions
made by the Ryanair have anything to do with the customers, social aspects or just
focusing on the profits? Due to the current turbulent economic conditions where the
customers are moving from drift to thrift and saving money, does this allow Ryanair
to rip off the customer’s money for everything? The simple example of Ryanair’s
social responsibility can be seen in the fig below. This means if a passenger is dying
and need oxygen then he/she has to pay for it or die and in emergency landing the
customer must pay to save his/her life.
The CEO actions send strong signal to the employees about their attitudes and
behaviour towards customers, colleagues and competitors resulting in not caring
about anyone and anything.

fig. 1.7, Source: Ryanair website 2009

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1.8 Customers
Ryanair has self acclaimed to be No. 1 in customer service i.e. in punctuality, fewest
cancellation or fewest complaints but the independent comparisons showed flip
results. Rayanair was ranked the worst airline on multiple scales of customer service
compared to Go, Buzz, Virgin Atlantic Aer Lingus and others. In addition Ryanair has
a very high number of customer complaints increasing on yearly basis as compared
to other budget and full service airlines. In view of the independent comparison it
seems that Ryanair does not even follow some steps mentioned in their own
“Passenger Charter”. Ryanair setup a company with the name of Ryanair Direct at
Dublin in order to facilitate the customers for selection of their reservations and extra
services provided by the company (O’ Higgins 2004).
Evaluating the carrier’s customer service seems to be the bus service in Pakistan
where it is normal that if a passenger is not satisfied with the journey the bus driver
might ask the passenger to get off from the bus without a refund. The pathetic
customer service of Rayanair is very similar to flying buses in the sky.

2. Decision making at Ryanair

Ryanair CEO announced in 2003 that they will shift from no frills airline to no-fare
airline with the prediction that by the year 2009 half of our passengers will be flying
free while on the other hand the company introduced cost cutting and revenue
generation modification to compensate the falls in the yields.
Ryanair’s CEO has dominated the decision making in the company and he seems to
be present on every front rather than allowing the concerned organisational
departments.
Due the arrogant behaviour and actions Mr. O’Leary has been classified as having
five attributes of unwanted executives i.e. ignoring change, wrong vision, getting too
close, arrogant attitudes and old formulae by Prof. Sydney Finklestein (O’ Higgins
2004). In pursuit of his ambitions of giving the passenger the free seat and charging
the passenger for everything else e.g. charging 1₤ for using the toilet has been seen
as an insane decision by the company.
Bounded Rationality the case does not give any evidence of rational
decision making rather the Ryanair has operated under the assumption of bounded
rationality because all the decisions seems to be individual based and satisficing

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e.g. when a London court fined Rayanair for their disabled passenger services,
Ryanair CEO immediately increased fare on all flights irrespective of locations.
There is also an evidence of escalation of commitment to the previous sayings or
objectives set by the CEO e.g. After making this media announcement the carrier
has clung on to that decision and even not adjusting their objectives in the current
financial crisis period. The other factors which has influenced decision making at
Ryanair are mentioned below.

2.1 Intuition influence on decisions

The decision making in the Rayanair has been influenced by intuition as shown in
the illustration below.

fig. 2.1

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2.2 Biases and errors

fig. 2.2
Besides all the other biases the two biases mentioned are more evident than others
The anchoring trap After the 9/11 event when the mainstream carriers were
struggling for survival and budget airlines were making money so as the Ryanair.
The past success in that era has invaded into the decisions of the Ryanair by not
understanding the current volatile and unpredictable environment. Ryanair decisions
has been biased by the past success and giving too much weightage to that period.
The status quo trap the decision making in the Ryanair has also been biased to the
status quo trap i.e. the company or the leadership does not seems to change their
business decisions according to the situation in the unpredictable & volatile
economic scenario. It is clear that sometimes the egocentric actions and behaviour
of the CEO has come under criticism by the regulatory authorities, media,
competitors and general public and resulting in fines by the authorities but the
Rayanair CEO doesn’t seem to bother anything or give importance to customers,
rules, regulations or competitors and continue to peruse to his agenda.

2.3 Decision making style

The decision making style at the Rayanair has been somewhat mixture of multiple
factors, mostly influenced by intuition and dominant behaviour by their leadership,
but if we look in the following four dimensions this shows that

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• Somewhat directive, related to focus on the short term rather than in terms of
ambiguity.
• Little bit conceptual, in the sense of finding the creative ways of finding the
problems but not looking at the broad number of alternatives.
If the decision making at the Rayanair case study is evaluated then it can be
somewhat as illustrated in the fig. 2.3

fig. 2.3, Source: Robbins et al 2006

3. Planning at Ryanair

The goal of the Rayanair is to “maintain its position as Europe’s leading low fare
airline” (O’ Higgins 2004). As the quality of planning and its appropriate
implementation can contribute significantly to the organisational high performance
but it seems that due to pressure from the macro-environmental factors Ryanair has
been doing some informal planning and making adjustments in their formal planning.
But the organisation has stuck to their objective of gaining and marinating the cost
leadership.
The organisation has also mentioned its stated goals about their customers in their
customer charter irrespective of that the customer charter is followed or not but they
definitely have the stated goals to achieve.

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3.1 Traditional goal setting

The goal setting from the case seems very close to the traditional top to bottom
approached, while there is no evident goal settings by the divisions or there might be
some but when it is getting to the operational area and individual employees it is
definitely loosing clarity. That seems to be the main reason for all the departments
not on a single wavelength specially the customer services and cabin crew clearly
indicates that are working on individual basis without any team objectives or striving
to create value for the organisation. Because individuals don’t have the clear
objectives they are more focused on their individual commission on the flights or just
trying to make more hours in order to make earnings.
This kind of goal setting is influenced by the dominance of the CEO at the
organisation for being the largest shareholder in the company and dominated the
most decisions since he joined the organisation. Although the cards has been in the
favour of the Ryanair and the organisation kept on growing but the leadership of the
organisation should realise the current market situations where things might not be
smooth as Mr. O’Leary thinks to favour his personal hostile ambitions towards the
customers and the competitors. The organisation has to create an environment
where every individual in the work force understands own objectives as well as the
organisational objectives and this can only be done creating the organisational
culture of shared values.

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fig. 3.1

4. Ryanair’s cost focus

fig. 4.0

Ryanair has adopted the cost focus strategy, gaining a low competitive advantage in
the low cost area while they are aspiring to gain competitive advantage through
overall cost leadership in the broad competitive scope keeping the costs low and
giving a free seat to the customer and gaining profits through ancillary services.
Ryanair has been avoiding the place where there is intense competition with the
mainstream airlines at the main locations, and focusing on locations where they will
face less competition or where they can overcome the competitors through reduction
in the price or increasing the number of flights.

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5. Ryanair’s Value Chain

Table: 5.0

Besides many controversial decisions and steps by the organisation, the company
has been able to create the large market share in the Europe and specially
dominating the UK-Ireland market. The Ryanair value for the organisation is created
by some very initiatives in the operations. Outsourcing of maintenance and other
services, commonality of the airplane fleet, sales of ancillary services and online
bookings have created the difference between Ryanair and other budget carriers. As
these measures have created the competitive advantage for the company but this
advantage can be imitated so it won’t last long. The other budget carriers like
EasyJet having more resources, locations and routes can become challenging for
the organisation in the future.

6. SWOT Analysis
Strengths Weaknesses
• Persistent growth • Illegal airport subsidies
• Fewer overbookings • Opacity in regulatory dealing procedures
• Fewer cancellations • Multiple Fines by regulatory authorities
• Punctuality • Poor or decayed organisational culture
• 37% of UK-Ireland market • CEO making all the decisions
• Frequent departures & turnaround • Bounded rationale & intuitive Decision
• Point to point flights making
• Low fares/cost leadership • Escalation of commitment to previous
• Bargaining position for procurement of decisions
airplanes • Top to bottom traditional goal setting

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• Commonality in the aircrafts • No SMART objectives

• Ownership of airplanes (low depreciation • CEO most disliked person by the
cost) regulatory authorities and competitors
• Fuel risk management (hedge 70-90% of • Poor corporate image mainly due to the
fuel forecast) CEO
• Acquisition of Buzz • Worst customer service compared to
• Dealing mostly in Euro other carriers
• Outsourcing services • Disabled customers service
• High seat occupancy, Load factor • High customer complaints
• Sales of ancillary services • No luggage handling
• Regional airport which offer lower • Remote airport locations
landing & handling charges • High maintenance cost of old airplanes
• High cost of airplane ownership
• Misleading ads to customers
• Poor employment practises
• Head to head & offensive competition
• No respect for competitors or customers
Opportunities Threats
• Main airport locations • EU airport regulations
• New regional bases • EU overbooking & cancellation
• Time flexibility (choice of flights) compensation
• Decision making (entrepreneurial to • EU regulations for climate protection
corporate) charge
• Customer service • Disabled customers regulations
• In flight services • Price wars
• Comply to regulatory authorities • Free seats giveaways announced by the
• Corporate image CEO
• Business passengers • Pilots forming union
• Continental Europe • Pilots demand for change remuneration
• Empowerment employees & trust in the • Ryan family selling shares
employees • CEO largest shareholder
• Fostering Innovations and suggestions by • New entrants in UK-Ireland mkt.
management direct interaction with the • Increased landing charges in UK &
employees Ireland
• Low cost service which is desirous & • Regulatory pressure about trade unions
favoured by customers • Charter airline by main airlines & new
• Change of CEO can change corporate entrants & low fare subsidiaries of
image mainstream airlines
• Strategies by mainstream airlines (fares
cuts, reduced service, internet booking)
• EasyJet operating on main airports with
strong financial position as other budget
airlines, more aircrafts and destinations
Table: 6.0

7. Critical Set of Issues

1. Create the organisational culture of shared values where employees are

willing and enjoy to work. Empower employees to do their job, support and
encourage them in their decisions. When employees are empowered and
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respected at the work place, they feel as part of the organisation and their
decision are appreciated, then they will work whole heartedly at the work
place irrespective of the department resulting in improved customer service,
less complaints and improved organisational performance. The better
customer service will result in creating better image for the organisation
providing low cost and desirous service.

2. Enhance organisational Decision making and planning process, the

organisation should provide clear objectives and specific plans to peruse
rather than directional plans or media announcement based objectives in
order to avoid future risks of heuristic and intuitive decision making. As
leaders play a key role in building organisational image. It is the leaders
whose actions and behaviours send strong signal to the employees to react in
the same way as the leaders do.

3. Improve Customer service, as many new & mainstream airlines are entering
the low cost arena to get share in budget market. By providing better services
and attract Business customers that prefer to fly from main airport locations,
can fly through Rayanair if receiving better customer service.

4. Ryanair should be more socially responsible by addressing the demands of

the stakeholders, as corporate social responsibility is very important for
growth of the business, as there is proven direct link with the organisational
performance and its responsibility in social issues. Building the sense in the
organisation being socially responsible will improve corporate image to create
value for the organisational.

5. Comply to regulatory authorities, EU commission requirements to avoid major

financial losses

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7.1 Critical Issues Weightage

Issue Weight

1. Shared Culture 10

2. Decision Making 8

3. Customer Service 6

4. Corporate Social Responsibility 6

5. Regulatory Compliance 4

8. Problem definition

Although Ryanair has got set of problematic issues but in view of the previously
mentioned external and internal environmental pressures, their decision making and
value creating areas, it can be derived that the organisation has become a
combination of individuals, which are not collaborating together in order to create the
value for the company. The Ryanair can only achieve its growth ambitions or their
objective to “maintain its position as Europe’s leading low fare airline” (case) if a
culture of shared values at the work place is created where employees are involved
in the process of decision making or at least they have the clear understanding of the
organisational objectives rather than receiving from the hierarchy without any
understanding of the objectives. As Ryanair ‘s focus has been mainly on the low cost
but they don’t have distinct competitive advantage, which can differentiate them from
the other carriers. The only difference and competitive advantage can be made by
the people, which can only be achieved through shared organisational culture.
The other problems in the critical set of issues like decision making, customer
service and corporate social are directly proportional and connected to creating the
shared culture. As the fig 8.0 elaborates that the shared organisation values has
direct impact on the organisational decision making, employee behaviour, its
marketing approaches and building team work environment in the company.

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fig. 8.0, Source: Robbins et al 2006

9. Culture of shared organisational values

The importance of shared culture and empowering of employees has been

highlighted by Brett Godfrey of Virgin Blue who emphasises on the importance of
empowering and supporting employees to do their job and make decisions, which
encourages the innovative thinking that can become the competitive advantage for
the organisation. This philosophy at the organisation not only provides changes but
also the best innovations within the organisation (Moore 2005). As this has been the
price sensitive segment so the competitive advantage created by the people cannot
be copied by other organisation, when employees are empowered and love to be at
their jobs resulting in high morale of the employees. It has been proven in many
cases that high morale also results in high customer service, customer satisfaction
and creates value for the organisation. If the customers are satisfied then no matter it
is the price sensitive market or premium price market the organisation always wins.
Moreover in case of the satisfied customers the sensitivity of the price will become
the secondary thing for the customers as compared to the employee’s attitude
towards customers. As it has been proven that the shared culture has a direct impact
on employee performance as shown in the table below.
Personal and High High quality High Low
work internal work satisfaction absenteeism
outcomes motivation performance with the work and turnover

Table: 9.0 Source: Robbins et al 2006

The evidence and role of shared organisational culture in its performance also has
been substantiated by the example of continental airlines in the US, which was
worse performing airliner in the US near to bankruptcy. The only thing that flipped
the image and performance of the organisation was creating the culture of shared
values through some good innovative solutions made by its leadership (Brenneman
1998). Good organisational leadership is the only key to create the culture and it is

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their responsibility to relate the people from different departments rather working in
silos and keeping in touch within the organisation (Moore 2005).

9.1 Advantages of shaping the shared organisational culture

• Build better communication channels within the organisation. The

communication within the organisation is a vital element in shaping the shared
organisational culture. The open culture can only be achieved if all the
departments in the organisation are inter-related. An example of inter-
departmental communication channel is highlighted in the fig below. The inter-
departmental open communication will remove the silos within the
departments and enable the mangers to set SMART objectives

fig.9.1

• Facilitate the mangers to set clear and SMART objectives. Objectives will
be understandable down the hierarchy, the sharing of information within the
departments on a flatter scale will enable the employees to coordinate and
understand where the organisation is striving to go. As the case shows that
the objectives presently set are not clear and do not provide clear destination
in a specific period which is not only hampering the organisational
performance, customer satisfaction rather hatred by the regulatory authorities,
competitors and customers.
• Improve the planning process at the Ryanair. The traditional top to bottom
planning can be improved, when the employees are involved in the
organisational decisions, the approaches top to bottom and bottom-up can
both be used in order to create an environment of equal understanding of
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objectives at all levels. Everyone in the organisation will strive and contribute
to achieve those objectives.
• Facilitate effective control functions. Empower employees, shared and
open door culture will create an environment of feedback mechanism for the
entire departments, which will enable the organisation to re-evaluate its
procedures and processes in order to provide better services. The shared
culture at the organisation will enable the departments to use feedback, feed
forward and concurrent controls at the time when required because the flow of
the information within the departments will facilitate this function. As planning
is directly related to the control systems so Ryanair control functions will help
the organisation for better planning in the future and measure their current
performance.

fig. 9.2 Source: Robbins et al 2006

Integrated departments within the organisation will facilitate Ryanair to

measure their performances not only at the departmental; organisational but
also at the individual levels. This integrated culture will enforce individual’s
sense of responsibility and understand Ryanair objectives clearly.

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fig. 9.3

• Enhance customer satisfaction, customer loyalty and increase market

share. The belief of the organisation that people can create the difference and
make sure that everyone believes it will create a working environment where
the customers will get the best.
• The competitive advantage as there is intense pressure on the Ryanair in
the competitive arena with many competitors entering the market; the shared
organisational culture with empowered people will provide the distinct edge
over the other entrants. In contrast to the current meagre advantage of cost is
not going to last long, if the organisation intends to attain long term
competitive advantage then it has to change its organisational culture.

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fig. 9.4

10. Recommendations

As the set of critical issues highlight the importance of several factors to be

addressed at the Ryanair in order to achieve their growth and maintain cost
leadership. But the most evident problem in the organisation is their culture. If fixed it
will create an environment in the organisation. The employee behaviour towards
customers, peers and managers will create the difference within the organisation and
in the market. Employees can only contribute in shaping the culture if the leadership
has got the intention to do that and employees will learn about culture as shown in
fig. 10.0.

fig. 10.0 Source: Robbins et al 2006

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As mentioned earlier the role of leadership in shaping the organisation and from the
example of continental airlines it quite evident that the leadership at Ryanair should
immediately adopt boundaryless environment in the organisation in order to correct
their consistent social, ethical, decision making, planning and customer service
problems. Ryanair has mainly profited from the financial crisis period due to the
customers cost saving strategy but as the financial crisis diminishes in future their
cost leadership strategy cannot provide them significant edge over the competitors.
So it is highly recommended that Ryanair should create a difference by adopting the
strategies mentioned earlier as this is the only option they can adopt without putting
too much financial investments. By adopting the changes Ryanair future position can
be forecasted in the fig. 10.2

fig. 10.2

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References:

Brenneman, G. 1998, Right away and all at once. How we saved Continental,
Harvard Business Review, September-October, pp. 162-164,166,168,170,172-
174,176,178-179.

Dundas, K. & Davey, T. 2009, Foundations of Management study guide. Southern

cross University, Australia.

O’ Higgins, E, 2004, Case Study Ryanair, University College Dublin.

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