管理學留學assignment參考：Performance Management At Ryanair

 

 

Table of Contents

1. Introduction: 3

2. Performance Management in Ryanair: 4

2.1. Background of the organisation: 4

2.2. The Need for Investigation: 4

2.3. The stakeholders of the organisation: 4

2.4. Strategic Performance Management in Ryanair: 5

2.5. Evidence of Balanced Scorecard at Ryanair: 6

3. Ryanair Activities and Environment: 6

3.1. Appropriateness of Balanced Scorecard Approach for Ryanair: 8

4. Managing Performance to Improve Decision making: 8

4.1. What Type of Strategy Does Ryanair has been Adopts? 8

4.2. How Does Ryanair formulate its Strategies? 9

4.3. Performance Objectives used by the Organisation: 9

4.4. Decision making through Performance Management: 10

4.5. Critical evaluation of the balanced scorecards at Ryanair: 10

4.6. Identification of Improvements: #p#分頁標題#e#11

5. Conclusion: 11

5.1. Recommendation for Identification of Improvements: 11

5.2. Implementation Plan for Recommendation: 12

6. References: 13

篇目

1。簡介：3

2。瑞安：4績效管理

2.1。該組織的背景：4

2.2。極品調查：4

2.3。該組織的利益相關者：4

2.4。瑞安戰略績效管理：5

2.5。瑞安：6平衡計分卡的證據

3。瑞安航空活動和環境：6

3.1。瑞安：8平衡計分卡的方法是否恰當

4。績效管理改善決策：8

4.1。什么類型的戰略瑞安是否已經被采用？ 8

4.2。瑞安如何制定戰略呢？ 9

4.3。組織所使用的績效目標：9

4.4。通過績效管理的決策：10

4.5。關鍵評價平衡計分卡瑞安：10

4.6。識別的改進：11

5。結論：11

5.1。識別改進的建議：11

5.2。實施計劃建議：12

6。參考文獻：13

 

1. Introduction:

Chambell (2007) once said that "if you don't know where you're going, ' you're probably end up somewhere else". This in turn shows the significance of the performance management within a business enterprise (Abran and Buglione, 2003). Organisations used the strategic performance management tools to achieve their strategic goals. Furthermore, the analysis, in most of the cases reveals different activities that did not add value which could be eliminated ultimately leading to better quality with fewer resources (Akkermans and Oorschot, 2005). In addition, the performance management tools are used to track the progress and evaluate the change that has been taking place within the organisation. In most of the cases, the ultimate goal of performance management is to align the organisational strategies with the changing market dynamics, through the continuous improvement process and accountability within a business enterprise (Banker et al., 2004). Thus, on the head the performance management ensures the desired the communication, while on the other hand the performance management system is a control tool that help the organisation in better focusing on its long-term goals. chambell（2007）曾經說過，“如果你不知道你要去的地方，你可能會在其他的地方。這反過來說明績效管理的意義企業內（2003 Abran和buglione，）。組織的戰略績效管理工具來實現其戰略目標。此外，分析，在大多數的情況下，揭示了不同的活動，不加值可以消除最終導致更好的質量和更少的資源（阿克曼斯和Oorschot，2005）。此外，績效管理工具是用來跟蹤和評估進展的變化已在組織內的地方。在大多數情況下，績效管理的最終目標是將組織的戰略與市場變化的動態，通過持續改進的過程和責任的企業中（銀行家等人。，2004）。因此，頭上的績效管理，保證通信，而在另一方面，績效管理系統是一個控制的工具，幫助組織更好地專注于它的長期目標。#p#分頁標題#e#

 

This report has been organised to elaborate the strategic performance measurement tools that Ryanair Airlines has been using for the accomplishment of its long-term goals. The report will first present some background information regarding the organisation and stress the significance of performance management tools for the organisation that why the organisation is required to use the strategic performance measurement tools. The report will then elaborate the strategic performance management tool used by the organisation and how the tool has helped the organisation in capturing better value within its competitive environmental dynamics. The report will then investigate that how Ryanair could improve its decision making with respect to performance management within the organisation that could lead towards better accomplishment of its long-term goals. This part will be mainly considering the existing performance management tool that Ryanair has been used and how the system has been effectively serving the organisation's needs for effective performance management. On the basis of discussions in these different parts, the last part of the report presents recommendations to the management of Ryanair for the implementation of better performance management tools within the organisation. 

 

2. Performance Management in Ryanair:

2.1. Background of the organisation: 

Ryanair is a family-owned airline, which is considered as the leading low-cost airline in the European market (Ryanair, 2011). The firm that started its business in 1985 is considered the first airline in the European market that implemented the Southwest Airline business model of low fare and no-frill (Box and Byus, 2007). Although, the competition in the market has been increasing and different market players are using the reorganisation and restructuring decisions along with the inorganic growth strategies to restore their profitability, nevertheless the Ryanair as a result of its unique business model has been enjoying consistent growth and performance in the market (Dunn, 2012). This is because the low cost, no-frill market has been working for the organisation and the organisation, while the firm has been adding different features which in turn have been strengthening the firm's overall low cost advantage. For example, Ryanair has introduced the web-based self-service passenger ticketing which in turn has reduced the margins that the firm was paying to its ticketing agent (EuroMonitor, 2012). The point-to-point network that the firm has been using has enabled the organisation to ensure reliable and speedy services (Dunn, 2012). 

 

2.2. The Need for Investigation:

Ryanair has been using a unique business model that has been helping the organisation in ensuring its overall cost leadership in the market (Abran and Buglione, 2003). However, there is a need whether the long-term strategies that the organisation has been formulating is effectively leading to the desired performance or not. The firm thus needs an effective performance management at a strategic level which could enable the management of the organisation (De-Wit and Meyer, 2009). The use of performance management could ensure the smooth accomplishment of firm's long-term goals. This investigation has been carried out with the objective that how the performance measurement tools that has been helping Ryanair in ensuring its efficiency leading to the better accomplishment of its long-term goals. #p#分頁標題#e#

 

2.3. The stakeholders of the organisation:

The firm has been using the stakeholders' model which is evident from the mission who states the major long-term objectives and strategic intent of the business enterprise (EuroMonitor, 2012). The mission statement of the firm which states that "Ryanair’s objective is to firmly establish itself as Europe’s leading low-fares scheduled passenger airline through continued improvements and expanded offerings of its low-fare service. Ryanair aims to offer low fares that generate increased passenger traffic while maintaining a continuous focus on cost-containment and operating efficiencies" (Ryanair, 2011). The organisation is thus committed to ensuring the topmost industry standards through better operational performance. The different stakeholders of the firm include employees, customers, contractors and suppliers, ticketing agencies, society, government, and the shareholders of the firm. These different parties are interested in the performance of the organisation as the interests of these different groups and that of Ryanair are mutually dependent. The better accomplishment of the performance goals of the organisation may thus translate into the better accomplishment of the different stakeholder objectives (Stewart, 2012). 

 

2.4. Strategic Performance Management in Ryanair:

The strategic performance management has been gaining significance as it helped to drive actions, provide a framework to drive decision making within an organisation, and provide a close-loop control (Gumbus, 2005). Historically, organisations relied on the financial accounting and managerial accounting measures where the actual performances are compared with the standards devised by the management during the start of the period (Kaplan and Norton, 2000). However, such measures have been losing its significance, particularly considering the fact that the environment in which business enterprises operates is now much more dynamics where rapid adjustments has to be made in the strategies and the associated standards, which is not possible using the accounting standards (Kaplan and Norton, 2001). 

 

Furthermore, the better accomplishment of organisational goals depends on how best the organisation ensured the desired core competencies and dynamic capabilities that could lead towards a competitive advantage for the organisation operating in a particular industry (Kaplan and Norton, 2004). The balanced scorecard approach has been thus developed to meet such challenges (Kaplan and Norton, 2005). The balanced scorecard approach has been defined as "a strategic planning and management system used to align business activities to the vision statement of an organisation". The system that was developed by Kaplan and Norton (1991) use four Key Performance Indicators (KPIs) to evaluate how best the firm is performing. The unique aspect of the balanced scorecard approach is that it emphasizes non-financial measures to accomplish the financial objectives and overall vision and mission of the organisation (Lebas, 1195). #p#分頁標題#e#

 

2.5. Evidence of Balanced Scorecard at Ryanair:

The careful analysis of the organisation may reveal that the organisation has been using the approach for the better accomplishment of its long-term goals. For example, the firm has been using an organisational learning process that leads to means and ways to ensure its low cost advantage. As a result the recent measures that the firm has introduced include rationalisation of air fleets leading to lesser repair and maintenance expenses, the introduction of web-based self-service passenger ticketing, point-to-point network, short-haul services, and the utilisation of secondary airports instead of the main airports that decreases the operational cost of the organisation (Roslyun, 2012). These different measures that the organisation has been using has been resulting in better customer satisfaction on the one hand, while on the other hand, has been boosting the firm overall low cost advantage in the industry leading to better accomplishment of Ryanair's goals. The customer satisfaction has been mainly ensured because of ensuring the quality, dependability, flexibility, speed, and the low cost objectives (Reals, 2011). On the other hand, the better financial performance leading to better stakeholders' value is ensured through the different cost cutting measures that translate into greater operational profitability for the business enterprise (Pitlfiled, 2007). 

 

3. Ryanair Activities and Environment:

The firm has been serving its national and international customers belonging to Europe who relies on Ryanair for quality air-travel with the lowest fares (EuroMonitor, 2012). Although, the firm provides no-frill services, nevertheless the organisation is regarded as one of the most dependable firm in the industry leading to better customer satisfaction (Stewart, 2012) As the European air travel industry has been passing through a transformation stage, which in turn has been resulting in large scale reorganisation and restructuring to ensure the profitability and smooth business performance. Due to the unique business model that Ryanair has been used, the firm has been ensuring the desired customer satisfaction along with the profitability (EuroMonitor, 2012). The customer satisfaction and the profitability objective are accomplished through high-frequency flights and point-to-point services, which in turn has been boosting the firm's revenue in the industry. (Stewart, 2012)  

 

Furthermore, instead of using the main airports, the organisation has been relying on secondary airports which also lead to greater economies (Box and Byus, 2007). As a result of these different steps, the organisation has been ensuring the desired customer satisfaction, better accomplishment of its profitability goals, ensure the desired satisfaction of its customers and other stakeholders, and add sustainability to the business performance by ensuring learning and getting new skills. Thus, the strategic performance measures that the organisation has been using in the form of balanced scorecard (Marr and Schiuma, 2003). This is evident from Figure 1 that graphically depicts the four aspects of the balanced scorecards. #p#分頁標題#e#

 

Figure 1: Balanced Scorecard (Source: Kaplan and Norton, 1992)

The tool has been helping the management of Ryanair in creating an environment where change management is eased, commitment is ensured through the communication of the strategies and objectives, improvement is made in the performance through bridging of gaps that are identified through balanced scorecard performance management, and continuous improvement is ensured by redefining initiatives according to the changing market dynamics (Slack, Chambers and Johnston, 2008). This has been depicted in Figure 2 that how the firm has been using the performance management tool for the accomplishment of the strategic objectives of the firm:

 

Figure 2: Balanced Scorecard Process (Source: Kaplan and Norton, 2004)

3.1. Appropriateness of Balanced Scorecard Approach for Ryanair:

The performance management tool that the firm has been relying is appropriate for the organisation considering the fact that the organisation is operating in a much vibrant environment (Marr and Schiuma, 2003). The balanced scorecard approach has enabled the organisation to adjust its different KPIs according to the environmental trends (Banker et al., 2004). Furthermore, while addressing the ineffectiveness of the organisation, the decision makers may consider the contextual factors that have been involved in the ineffective accomplishment of the goals, if any. 

 

4. Managing Performance to Improve Decision making:

4.1. What Type of Strategy Does Ryanair has been Adopts?

The major strategic intent of the firm is to ensure operational efficiency that in turn leads to the ability of the firm to provide low-cost fares to its target market (Stewart, 2012). Thus, the major strategy that the firm has adopted could be termed as the overall low cost advantage. Considering the rising petroleum prices which are usually the largest cost within the operation cost of the firm, which could not be reduced, the firm has been working on an alternative solution to the problem. The firm has been using its creative cost cutting techniques that ultimately enable the firm to ensure its low cost leadership in the air travel industry (Roslyun, 2012). Different steps that the organisation has thus taken include high frequency flights, no frills, point-to-point network, web-based self service ticketing, no prior seat assignment, short-haul flight, and the use of secondary airports instead of the main airports (Pitlfiled, 2007). 

 

4.2. How Does Ryanair formulates its Strategies?

The firm has the planning committee that interact with different members of the organisation in the formulation of the firm's long-term goals (Stewart, 2012). The committee has representation from all the key departments of the firm, thus the inputs and suggestion of all the different persons working within Ryanair are included. Before, the formulation of strategies, the firm give chance to different members of the firm to present their idea regarding the strategic postures, and how their suggested strategies could help the organisation in the better accomplishment of firm's long-term goals. If an individual has a new idea regarding the value creation and delivery process within the organisation could convince the top management of the firm, such strategies are adopted (Banker et al., 2004). However, the final measure is always how the intended strategy contributes to the better accomplishment of the firm's mission and vision (Slack and Lewis, 2002). #p#分頁標題#e#

 

4.3. Performance Objectives used by the Organisation: 

As the firm has been using the balanced scorecard system for measuring its strategic performance, the performance objectives that the firm has been using include the financial objectives, customer satisfaction objectives, internal process improvement objective, and learning and growth objectives (Stewart, 2012). The customer objective that Ryanair has been seeking includes boosting the firm's satisfaction by ensuring the quality, dependability, and cost, flexibility, and speed objectives. The satisfaction is found out through the process of gap analysis which in turn serves as a potential strategy within the organisation (Marr and Schiuma, 2003). For example, if the customer satisfaction has decreased due to lesser dependability, the firm may chalk out objectives for the next period whereby it could work for the enhancing the dependability by ensuring on time flights, and luggage handling (Box and Byus, 2007). The financial objectives of the firm is to grow the revenue stream of the firm, decrease the cost per passenger through adoption of further cost cutting measures etc. The internal objectives of the firm include the turnaround time, the number of flights that were on schedule, the extent to which the firm's ensured the luggage delivery (Dunn, 2012). The learning and development goals of the firm are new programmes launched by the firm for enhancing the learning, the employee turnover and absenteeism, and technology investment. The firm has been accomplishing the major milestones that the firm chalked out during the planning phase, which is evident from the rising market share and profitability enjoyed by the organisation (Pitlfiled, 2007). 

 

4.4. Decision making through Performance Management:

The unique feature of the performance management system at Ryanair is that the performance management system within the organisation is used to communicate the decision made by the top management of the organisation to the rest of the firm (Box and Byus, 2007). The decision making within Ryanair has been decentralised as the firm has been encouraging creativity and innovation, nevertheless the broader guidelines for chalking out the decisions are provided by the management of the firm (Banker et al., 2004). In most of the cases, the balanced scorecard is the means through which such broader guidelines are provided to the lower level management and employees working in the organisation (Gumbus, 2005). 

 

4.5. Critical evaluation of the balanced scorecards at Ryanair: 

Ryanair has been accomplishing different advantages by using the balanced scorecards. This includes a focus on the vision and mission of the firm where the strategy of the firm is aligned with the environment to better realise the vision of the organisation (Kaplan and Norton, 2004). Furthermore, the balanced scorecard is multidimensional and the management get a chance to focus on different aspects of the firm for further improvement (Kaplan and Norton, 2000). In addition, the measure helps in the identification of gaps that exist between the current performance and the ideal performance and the major reasons for the underlying gap (Kaplan and Norton, 2005). Moreover, the balanced scorecard approach has been also serving the communication and control objectives of the organisation. However, the balanced scorecard as a means of managing performance suffered from different weaknesses which include difficulties in measurements, lack of benchmarking, time consuming, and lack of understanding at the lower level of organisation (Slack, Chambers and Johnston, 2008). #p#分頁標題#e#

 

4.6. Identification of Improvements:

The organisation should make concentric effort to overcome the different weaknesses of the balanced scorecard as a performance management tool. This will include overcoming the different weaknesses which may require using other tools and method in combination with the balanced scorecard (Akkermans and Oorschot, 2005). Example of this include a selection of tangible performance indicators for the measurement, combining the balanced scorecard with the customer response tools like market research that could serve as a benchmark, and combining other financial tools like financial statement analysis as part of the balanced scorecard approach. Furthermore, better result could be accomplished from the tool, if it has been combined with other tools like strategy map. 

 

5. Conclusion:

Ryanair has been actively heading towards the accomplishment of its mission statement as the organisation has been consistently decreasing it's per unit cost that translates into a better market share for the organisation. The balanced scorecard approach that Ryanair has been relying upon has helped the organisation in chalking out an effective strategy that how the firm could enhance its margin, how the firm could ensure the desired customer satisfaction, how the organisation could ensure its sustainable business performance, and the leadership and employees within the organisation should be prepared today to face the challenges of tomorrow. 

 

5.1. Recommendation for Identification of Improvements:

As the existing approach that Ryanair has been using suffered from different weaknesses, it is vital that the firm should modify the system to better meet the firm's long-term requirements. For this the strategy that the firm has implemented should be combined with the strategy map. The strategy map could better align the firm strategy with the environmental challenges that the firm has been confronting, thus ensuing better long-term performance. 

 

5.2. Implementation Plan for Recommendation: 

The combined approach where the organisation should use the balanced scorecard along with the strategy map should be devised by the professional. For the development of the tool, Ryanair should get the services of a professional consultant who will carefully review the firm existing strategy, balanced scorecard, and the environment in which it is operating and devise a combined approach that could enhance the future performance of the business enterprise. 

 

6. References:#p#分頁標題#e#

Abran, A., and Buglione, L. (2003) 'A Multidimensional Performance Model for Consolidating Balanced Scorecard', Advanced Engineering Software, vol. 43, pp. 339-349.

Akkermans, H.A. and Oorschot, K.E. (2005) 'Relevance Assume: A Case Study of the Balanced Scorecard Development using System Dynamics', Journal of Operational Research Society, vol. 56, no. 2, pp. 931-971.

Banker, R., Chang, S., Jankairman, C. and Konstan, C. (2004) 'A Balanced Scorecard Analysis of Performance Metrics', European Journal of Operational Research, vol. 154, no. 2, pp. 423-436.

Box, T.M. and Byus, K. (2007) 'Ryanair: Succesful Low Leadership', Journal of the International Academy for Case Studies, vol. 13, no. 4, pp. 71-7.

Chambell, D.P. (2007) Finding Career, Getting Life, New York: Soren Books.

De-Wit, B. and Meyer, R. (2009) Strategy Process: content and Context: An International Perspective, London: Thomson Learning.

Dunn, G. (2012) 'Ryanair Still Waiting to Cash in', Airline Business, vol. 28, no. 12, pp. 12-23.

EuroMonitor (2012) 'Ryanair Holding PLC SWOT Analysis', 2012, vol. November, pp. 1-9.

Gumbus, A. (2005) 'Introducing the Balanced Scorecard: Creating Metrics to Measure Performance', Journal of management Education, vol. 29, no. 4, pp. 617-630.

Kaplan, R. and Norton, D. (2000) 'Having Trouble with Your Strategy? Then Map it', Harvard Business Review, vol. 200, Sept-Oct, pp. 166-176.

Kaplan, R. and Norton, D. (2001) 'Transforming the Balanced Scorecard from Performance Measurement to Strategic Management ', Accounting Horizons, vol. 15, no. 1, pp. 87-104.

Kaplan, R. and Norton, D. (2004) 'how Strategy Maps Frame an Organisation's Objectives ', Financial Executives, vol. 20, no. 2, pp. 40-45.

Kaplan, R. and Norton, D. (2005) 'How to Implement a new strategy without disturbing your Organisation ', Harvard Business Review, vol. 83, no. 10, pp. 72-80.

Lebas, M. (1195) 'Performance Measurement and Performance Management', international Journal of Production Economics, vol. 41, no. 1/3, pp. 23-25.

Marr, B. and Schema, G. (2003) 'Business performance Management: Past, Present and Future', Management Decision, vol. 41, no. 8, pp. 680-687.

Pitlfiled, D.E. (2007) 'Ryanair's Impact on Airline Market Share from the London Area Airports: A Time Series Analysis', Journal of Transport Economic and Policy, vol. 41, no. 1, pp. 75-92.

Reals, K. (2011) 'Ryanair Comes to Town', Airline Business, vol. 27, no. 1, pp. 28-31.

Roslyun, D. (2012) 'O'Leary's Law is Part of the Ryanair Deal', Mail on Sunday, vol. 12, no. 2, pp. 78-80.

Ryanair (2011) Annual Report, London: Ryanair.

Slack, N., Chambers, S. and Johnston, R. (2008) Operation Management, Harlow: Prentice Hall/ Financial Times.#p#分頁標題#e#

Slack, N. and Lewis, M.A. (2002) Operations Strategy, London: Financial Times/Prentice Hall.

Stewart, M. (2012) 'Ryanair: The World's Leading Low Cost Airline', Journal of Production Strategies, vol. 12, no. 1, pp. 1-21.