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MINISTRY OF EDUCATION OF THE RUSSIAN FEDERATION
PEOPLES FRIENDSHIP UNIVERSITY OF RUSSIA
FACULTY OF ENGINEERING
Engineering Business and Industrial Management Department
Stream: Management
Specialization: Innovation in Business Creation and
Management
MASTER'S DISSERTATION
CORPORATE CULTURE AND COMPANY EFFECTIVENESS: BIMAN
BANGLADESH AIRLINES
Student: Murshed Helal
Email: [email protected]
Country: Bangladesh
Scientific supervisor: Ivanova T.B.
Chairman, Professor:
Alekseenko V.B.
Moscow 2015
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To Alekseenko V.B.,
Head of Engineering Business and
Industrial Management Department
From: Murshed Helal
Group: IBM-204
APPLICATION
I kindly request you to approve as my Master's Dissertation
scientific supervisor
Ivanova Tatiana Barisovna
The Topic of the Master Dissertation: CORPORATE CULTURE AND
COMPANY
EFFECTIVENESS: BIMAN BANGLADESH AIRLINES
Date:
_______________________
Signature
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Calculation and Explicatory Report for the Master's
Dissertation
Student: Murshed Helal
Faculty: Engineering
Engineering Business and Industrial Management Department
Specialty: 080200
Topic of the Master Dissertation
CORPORATE CULTURE AND COMPANY EFFECTIVENESS: BIMAN
BANGLADESH AIRLINES
Student: Murshed Helal ( Email : [email protected])
Scientific supervisor:
PhD, Professor: Ivanova. T. B
Allow the Master dissertation
to be defended at the State Examination Commission
Chairman of Engineering Business and Industrial Management
Department
Professor: Alekseenko V.B.
Date____________________
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PEOPLES FRIENDSHIP UNIVERSITY OF RUSSIA
FACULTY OF ENGINEERING
Engineering Business and Industrial Management Department
Specialty: 080200 Management
Group: IBM -204
Master's Dissertation
ASSIGNMENT
Student: Murshed Helal
1. Topic of the dissertation: CORPORATE CULTURE AND COMPANY
EFFECTIVENESS: BIMAN BANGLADESH AIRLINES
2. Delivery date of the finished dissertation: __May 2015
3. Bench-mark data: Statistical data
4. Table of Contents CORPORATE CULTURE AND COMPANY
EFFECTIVENESS: BIMAN BANGLADESH AIRLINES
1) Introduction
2) Chapter 1. Theoretical approaches to corporate culture
3) Chapter 2. Corporate culture of Biman Bangladesh Airlines
4) Chapter 3. Technologies of creating an effective corporate
culture
5) Conclusions
6) Appendix
7) Bibliography
Date and signature
_______________________
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9) Scientific supervisor
Parts Scientific
supervisor (SS)
SS signature Students
signature
Introduction Ivanova T.B.
Chapter 1. Ivanova T.B.
Chapter 2. Ivanova T.B.
Chapter 3. Ivanova T.B.
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Calendar Plan
NN
Stages of the Master Dissertation Presentation Deadline
for every stage
1. Literature search, literature review,
bibliography compiling
05.01.2015
2. Compiling Master Dissertation Plan and its
confirmation by the scientific supervisor
08.02.2015
3. Presentation of the Introduction
15.02.2015
4. Part 1 presentation of the whole material
12.03.2015
5. Systematization and analysis of the empirical data
30.03.2015
6. Collection of additional data 12.04.2015
7. Analysis of the information obtained
03.04.2015
8. Scientific supervisors approval of the conclusions
07.04.2015
9. Provision of corrections, alterations and
recommendations
08.04.2015
10. Speech writing 10.05.2015
11. Acknowledgments (external and internal) 14.05.2015
12. Thesis and pre-defense reviews presentation to the
Department
Student: __________________
Scientific supervisor__________________________________
Head of the Engineering Business and
Management Department ___________________________________
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PEOPLES FRIENDSHIP UNIVERSITY OF RUSSIA
FACULTY OF ENGINEERING
ENGINEERING BUSINESS AND INDUSTRIAL MANAGEMENT
DEPARTMENT
CORPORATE CULTURE AND COMPANY EFFECTIVENESS: BIMAN
BANGLADESH AIRLINES
MASTER'S THESIS
BY
MURSHED HELAL ( Email: [email protected])
080200-MANAGEMENT
Moscow 2015
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CORPORATE CULTURE AND COMPANY EFFECTIVENESS: BIMAN
BANGLADESH AIRLINES
Table of Contents
Introduction
..................................................... 10
CHAPTER 1: Theoretical approaches to corporate culture
1.1 Definition of Corporate Culture
................................ 13
1.2 Hofstedes cultural dimensions of Bangladesh
...................... 15
1.3 The Denison Organizational Culture Survey (DOCS) ..........
18
1.4 Importance of effective corporate culture
........................... 23
CHAPTER 2: Corporate culture of Biman Bangladesh Airlines
2.1.1 Biman Bangladesh Airlines General information ............
26
2.1.2 Biman Bangladesh Airlines Corporate structure
................ 35
2.2.1 SWOT analysis of Biman Bangladesh Airlines
................ 36
2.2.2 PESTLE analysis
............................................... 38
2.3.1 Online Marketing Strategies
........................................... 41
2.3.2 Customers Relationship Management ( CRM)
...................... 46
2.3.3 Corporate Social Responsibility (CSR)
................................ 48
2.3.4 Innovation in Biman Bangladesh Airlines
.............................. 51
2.2.4 The importance of Market Research
................................ 53
2.3.5 Human Resource Management (HRM)
............................... 55
2.4 Analysis of passenger evaluation
............................. 57
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CHAPTER 3: Technologies of creating an effective corporate
culture
3.1 How to create an Innovative Corporate Culture
....................... 63
3.2 How to reach company effectiveness
.................................... 66
Conclusions
...................................................... 69
Appendix .......................................................
70
Bibliography ...............................................
76
DECLARATION ...................................................
79
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Introduction
Corporate culture refers to the beliefs and values that have
existed in an organization
for a long time, and to the beliefs of the staff and the
foreseen value of their work that
will influence their attitudes and behavior. Corporate culture
is rooted in an
organization's goals, strategies, structure, and approaches to
labor, customers,
investors, and the greater community. Administrators usually
adjust their leadership
behavior to accomplish the mission of the organization, and this
could influence the
employees' job satisfaction. The knowledge of corporate culture
has increasingly
received attention in many field of study. Traditionally,
implications of corporate
culture can be understood through a qualitative approach since
it believed that
characteristics of corporate culture are complex and difficult
to measure as a concept.
As an executive, identifying, understanding and the influencing
the organizational
culture can ensure corporate agility and success. As a potential
employee, catching a
glimpse of the true culture of an organization will help one
decide if the company is a
place where one can contribute and flourish. In, both cases
misunderstanding culture
can lead to disaster.
The purpose of this paper is to analyze the corporate culture of
Biman Bangladesh
Airlines and to suggest the technologies of making it effective.
In this study, it is to
understand organization's vision, values, norms, symbols,
assumptions, passengers
feedback etc. We also pay special attention to peculiarities of
cross-cultural
communication between different ethnic groups gathered in
multinational companies.
The analysis will play a significant role to understand the
drawbacks of company and
apply effective strategies to minimize the bottleneck and
modernize the company to
maximize the market volume and profit.
Methods and methodology applied in this paper can be used by top
managers and HR-
departments of multinational companies in their aspiration to
bring fresh air to the
companys environment making it effective and attractive for the
personnel and new-
comers. The material suggested can be also used in academic
sphere.
Relevance of the topic
Due to globalization and global economic affaire the world has
been turned into a
global village. People around the world today are moving
throughout the world either
for commerce and industrial, tourism and employment or for
education and research
purposes. Due to the aforementioned factors, airline industry
around the globe is
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growing and developing rapidly. For survival and forward
movement in this ever
competitive global business arena, customers satisfaction
through quality of products
and service is very significant factor for impressive market
share and profitability. To
pave the way for very many effective and efficient strategies
and methods are applied
within the business. Effective corporate culture is one of the
most effective and
influential business strategies whose proper implementation
accelerates organizational
effectiveness and staff's capabilities to turn the company
modern, dynamic and
profitable.
Practical importance of the research
Application of the effective corporate culture on Biman
Bangladesh Airlines will
modernize and profitable the sector and promote & diversify
the economic activities:
Dynamic, diversify & modernize the Biman Bangladesh
Airlines;
Promote organizational effectiveness & standard of
service
Save, comfortable and reliable service
Achieve customers' confidence & increase market share
Increased public & private investment;
Increase competitive advantage and staffs capability
The aim of the research
To create and propose an effective & utmost corporate
culture for Biman Bangladesh
Airlines
Tasks
- To assay theoretical and methodological approaches of
airlines;
To anatomize the key issues affecting the effectiveness of Biman
Bangladesh Airlines
To analyze the economic, organizational & service oriented
approaches of Biman
Bangladesh Airlines
To identify and advocate key policy instruments (organizational
changes, regulatory
measures and economic incentive).
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To analyze the experience of other modern airlines.
To propose an effective & innovative approach to Biman
Bangladesh Airlines.
Object of the research
Economic activity of Biman Bangladesh Airlines: implementation
and exercise of
innovative corporate culture may serve as a tool of
effectiveness, modernization and
dynamism o
Subject of the research
Corporate culture of the company
Research hypothesis
Proper implementation of effective & innovative corporate
culture would turn the
Biman Bangladesh Airlines into modern, dynamic and profitable
sectors from
ineffective, obsolete and lose sector
Methodology of Accumulating Data for the Research
Three types of procedures were persuaded to accumulate the
data;
Primary data collection
Secondary data collection &
Final data collection
Methods of research: Competitive analysis, SWAT analysis, PEST
Analysis & 5C
analysis, questionnaires.
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Chapter 1: Theoretical approaches to corporate culture
1.1 Definition of Corporate Culture
For Bangladeshi business environment the term corporate culture
is relative new in
spite of the fact that in Western countries proper research and
application of this
concept began in 80-th. The notion corporate culture came to
substitute the well-
known notion of organizational culture or organizational
behavior. Organizational
culture and organizational behavior are factors which have
strong impact on
companys effectiveness as they create motivational environment
for productive
activity with minimum expenses. The question about how to
increase productivity has
been occupying constantly minds of researchers in different
countries.
The appearance of term corporate culture was also connected with
a new approach
to the main means of production. Human resources sprung to the
first place as the
main productive power. New methods were required for management
and
development of human resources, especially in the spheres based
on knowledge and
intellectual capacity. Why? Our brains are able to create
miracles: discoveries,
innovation, and novelty. Very often the creator is not even
conscious of the
importance of his invention. He doesnt even know the real value
of his results so it is
easy to take advantage of his ignorance to make profit of it. It
is imposable to give
him the equal remuneration. Creating an innovative environment
which is reached by
corporate culture as an inner sphere of any company the owner
can get unlimited
profit through uniting all employees for fulfilling the mission
and strategies of the
organization. In other words, innovative corporate culture was
found to be the most
effective instrument among the management tools that help to
create a favorable
atmosphere for increasing companys effectiveness and improving
its market
positions.
The first attempts of corporate culture and national mentality
research were made by
Western scientists in 1930th. It was a group of American
archeologists headed by
Margareta Mid who offered new and effective instruments to
manage people through
the knowledge of their national culture which was generated
under the influence of
numerous factors:
- Geographic position of the nation or ethnic group;
- Climate;
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- Mode of life:
- Land fertility and water;
- Longitude of socio-economic formations;
- Religion, etc.
The research into the above mentioned and other factors even let
this group help the
American government to cope with Japan at the end of the 2nd
World War turning
this country into the American friend and alien. Unfortunately
the scientific activity of
this group is not much open as its members worked for secret
American institutions
but their contribution to the research of national mentality of
different ethnics is
priceless.
In the 3d quarter of the XX century there appeared numerous
definitions of corporate
culture, formulated by different scientists. Then it was G.
Hofstadter in the middle of
70th that made a serious analytical work for IBM and its
branches in different
countries of the world where the company came across the lack of
understating in
cross-cultural communication.
Hofstadter offered his own methodology of research which became
well-spread over
the world, paying attention to national features of business
behavior.
All of them have their share in the definition of corporate
culture: - Organizational or
corporate culture is the pattern of values, norms, beliefs,
attitudes and assumptions
that may not have been articulated but shape the ways in which
people in
organizations behave and things get done. Though this definition
uses corporate
culture as a synonym to organizational culture as the way the
personnel and
management are to work together, there is a certain difference
between these two
notions. The notion corporate culture is wider as it adds the
necessity for every
member of the company to feel protected by the management.
Culture is an abstract concept applied across multiple academic
and social fields with
changing contextual meanings. The rapid increase in attention
paid to the subject
garnered fundamental disagreements about what culture is and how
it should be
studied. Not only is culture difficult to definitively describe,
but organizations and
their leaders are in constant pursuit of a good or right or
functionally effective
culture. Most can agree that it exists and that its effects are
important. Edgar Schein
(2004) concurs that attempts to define culture are not only
numerous but vary
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dramatically, leaving different ideas about what exactly it is.
For example, the
Merriam Webster (2011) dictionary presents ten different
interpretations of culture
ranging from developing the intellectual and moral faculties to
an acquaintance with
and taste in fine arts to the act or process of cultivating
living material in a prepared
nutrient. Despite these differences, most authors concur that
the concept of
organizational culture refers to the shared values, underlying
assumptions, and
behavioral expectations that govern decision making (Schein,
1985; Barney, 1986;
Alvesson, 1990; Hofstede, 1998; Christensen, 2006; Senge, 2006;
Kissack &
Callahan, 2009; Rainey, 2009; Cameron & Quinn, 2011). In
other words, culture
creates social order, continuity, and a collective identity that
generates commitment to
rules about how we do things and how to get the job done within
organizations
(Cameron & Quinn, 2011).
The culture of an organization refers to the unique conguration
of norms, values,
beliefs and ways of behaving that characterize the manner in
which groups and
individuals combine to get things done. This definition is
particularly important to a
foreign company activity in a unusual national reality when
national personal could
try to insert their own vision of labor activity.
Though these definitions reflect the most important features of
organizational culture,
they are not full. More extended definitions were given by
American scientist E.
Schein: A pattern of basic assumptions invented, discovered or
developed by a
given group as it learns to cope with the problems of external
adaptation and internal
integration that has worked well enough to be considered valid
and, therefore, to be
taught to new members as the correct way to perceive, think and
feel in relation to
these problems.
Russian scientist V. Kozlov considers that corporate culture is:
a complex of
suggestions accepted by all members of organization without any
evidence; setting
common frameworks of behavior, accepted by the most part of
staff. Organizational
culture shows itself in philosophy and ideology of management,
value orientations,
beliefs, expectations and norms of behavior. Organizational
culture presents the
cumulative characteristic of organization, ways of activity
evaluation, and presence of
specific terms that are understood by all employees within a
company The most
important aspect of this definition consists in recognition of
the cumulative effect of
the corporate culture.
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1.2 Hofstedes cultural dimensions of Bangladesh
The Hofstede Model distinguished cultures according to five and
this model provided
scales from 0 to 100 each dimension, and each country has a
position on each scale or
index, relative to other countries. These five dimensions were
empirically verifiable,
and each country could be positioned somewhere between the
poles.
Hofstede empirically found four dimensions of culture in
research across more than
50 countries. The dimensions are: power distance, collectivism
versus individualism,
masculinity versus femininity and uncertainty avoidance.
Bangladesh was not within
his first survey IBM studies. Hofstede later adds a new
dimension, long- versus short
term orientation, based on the student sample of 23 countries
around 1985 (2).
Bangladesh was included in this new survey. In Hofstede's first
survey many other
Asian countries like India and Pakistan were included. Since
Pakistan and India are
the countries nearer to Bangladesh and Bangladesh was a part of
Pakistan until 1971
and as these countries have the same nature of history since the
British rule and
having the same socio-economic, political and cultural
features.
The Hofstede Model distinguished cultures according to five and
this model provided
scales from 0 to 100 each dimension, and each country has a
position on each scale or
index, relative to other countries. These five dimensions were
empirically verifiable,
and each country could be positioned somewhere between the
poles.
Table 1: Scores of 5D Hofstedes Cultural Dimensions
Country IDV PDI MAS UAI LTO
Bangladesh 20 80 55 60 40
IDV-Individualism
PDI- Power Distance Index
MAS- Masculinity
UAI-Uncertainty Avoidance Index
LTO- Long-Term Orientation
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Chart 1: 5D Hofstedes Cultural Dimensions of Bangladesh
From the chart above we can compare five cultural factors of
Russia, Bangladesh.
Individualism versus collectivism is one of the important
aspects of culture's
unstated assumptions'. The assumption that we bound together
into tight groups of
interdependent individuals is fundamental to collectivism.
Hofstede describe
Collectivist as the vast majority of people in our world live in
societies in which the
interest of the group prevails over the interest of the
individual and Individualist as a
minority of people in our world live in societies in which the
interests of the
individual prevail over the interest of group (4). His
Individualism Index (IDV) score
measures the level of individualism and collectivism in a
particular culture. Countries
scored low in the IDV are characterized as collectivist.
Scoring 20 of 100 we can say Bangladesh is a less
individualistic country.
Bangladeshi people have very close ties their extended family
person, within which is
unquestioning loyalty. Major decisions of life for example
education and marriage are
dictated from within this group, and family protection will
continue in exchange for
absolute allegiance.
Power distance is defined as the extent to which the less
powerful members of
institutions and organizations within a country expect and
accept that power is
distributed unequally'. Most of the Asian countries under the
survey of Hofstede are
found having large power distance. Bangladesh scores high on
this dimension (score
of 80) which means that people accept a hierarchical order in
which everybody has a
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place and which needs no further justification. As a
Bangladeshi, I can say that it is
not very difficult to notice inequality between people in
government, in organization
even within the families.
Hofstede define masculinity as pertains to societies in which
social gender roles are
clearly distinct i.e., men are supposed to be assertive, tough,
and focus on material
success whereas women are supposed to be more modest, tender,
and concerned with
the quality of life, femininity pertains to societies in which
social gender roles overlap
i.e., both men and women are supposed to be modest, tender and
concerned with the
quality of life.
Bangladesh scores 55 on this dimension and can be considered a a
masculine society.
In masculine countries people live in order to work, managers
are expected to be
decisive and assertive, the emphasis is on equity, competition
and performance and
conflicts are resolved by fighting them out.
The Uncertainty avoidance scores are much higher for
Bangladesh.
A standard score in Long term orientation shows that Bangladesh
is one the way of its
development.
1.3 The Denison Organizational Culture Survey (DOCS)
Professor Denison for 15 years was researching the impact of
corporate culture on
companys economic effectiveness. On data, gathered from 1000
companies he
created a survey, consisting of 4 key elements: Adaptability,
Mission, Involvement
and Consistency.
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Figure 1: The Denison Organizational Culture Survey
Adaptability
Are we listening to the marketplace?
High-performing organizations perceive and respond to the
environment,
customers; they are apt to restructure and re-institutionalize
behaviors and processes
to adapt to the outer environment.
Creating Change
High-performing organizations welcome new ideas and willing to
try new
approaches to doing things, see the necessity of creating
constant change as way of
doing business.
Customer Focus
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Employees recognize the need to serve both internal &
external customers and
continually seek new and improved ways to meet customer
expectations.
Organizational Learning
Thoughtful risk taking is encouraged. Organizational learning
means we gain
knowledge from successes and failures. Our first reaction to
reasonable mistakes is
not Who is to blame?, but rather What can we learn?
Mission
Do we know where we are going?
High performing organizations have a mission that tells
employees why they
are doing the work they do, and how the work they do each day
contributes to the
why.
Strategic Direction & Intent
Strategic direction & intent typically refers to the
multiyear strategies high
priorities established to operationalize the vision.
Goals & Objectives
Goals & objectives are the shortterm, specific goals
established that help every
employee see how his/her daily activities connect to the vision
& the strategy.
Vision
Vision is the ultimate reason you are in business your purpose
what you are
ultimately trying to achieve.
Involvement
Are our people aligned and engaged?
Highly involved organizations create a sense of ownership and
responsibility.
Out of this sense of ownership grows a greater commitment to the
organization and an
increased capacity for autonomy.
Empowerment
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They clarify those areas where employees can make decisions,
have input, or
those areas that are beyond an employees scope of
responsibility. This promotes
informed empowerment.
Team Orientation
Teamwork is encouraged so that creative ideas are captured and
employees
support one another in accomplishing work goals.
Capability Development
Capability development is practiced in a variety of ways,
including training,
coaching, and giving employees exposure to new roles and
responsibilities.
Consistency
Does our system create leverage?
Consistency provides a central source of integration,
coordination and control,
and helps organizations develop a set of systems that create an
internal system of
governance based on consensual support.
Core Values
High-performing organizations have a clear set of core values
that help
employees and leaders make consistent decisions and behave in a
consistent manner.
Agreement
By engaging in dialogue and getting multiple perspectives on the
table people
can reach agreement when difficult issues and problems
arise.
Coordination & Integration
Employees understand how the work that they do impacts others
and how
other's work impacts them. They make sure that work is
coordinated and integrated to
serve the organization as a whole.
Involvement and adaptability reflects flexibility and
inclination to changes.
Consistency and mission defines the opportunity to stability and
controllability.
Consistency and mission mostly influence the financial indexes
as ROA (return
on assets), ROI (total return on investment) and ROS (return on
sales). If the rates of
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consistency and mission are between 3 and 4, it means that ROA,
ROI and ROS are
high and operating force of company is big.
Involvement and consistency which altogether constitute internal
focus, have
its impact on quality, personnels satisfaction and ROI. Rates
from 3 to 4 also reflect
the high level of quality, small percent of defects, right
distribution of resources and
higher level of personnel satisfaction.
Involvement and adaptability reflect product and innovations
development. If
the rates of these indexes are from 3 to 4, the level of
innovativeness and creativity in
production and services is rather high, reaction to changing
conditions is fast.
Adaptability and mission (external focus) influence on incomes
increase in
sales and market share.
The Denison Organizational Culture Survey completely reflects
the connection
between corporate culture and economic effectiveness of the
company. It covers the
main aspects of companys business activity: Return on Sales,
Return on Investment,
quality of goods, employees satisfaction, level of creativity
and innovations,
flexibility, strategies and missions, team-orientation,
delegation, corporate education
etc. This model we may use in our diagnostics.
In conclusion, we should say that corporate culture is a serious
tool for improving the
effectiveness of any organization. We should not forget that
effective corporate
culture absorbs peculiarities of national mentality and national
culture. To have
positive business results, corporate culture is to be designed
properly, because in case
it develops spontaneously it will never bring any profit, on the
contrary it would slow
down the development of the company.
As it was suggested by E. Schein, corporate culture is developed
at three levels:
Surface rituals and ceremonies, psychological climate,
dress-code, myths and
legends, etc.;
Undersurface values, trusts, strategies and philosophy;
Deep national culture, mentality, peculiarities of
perception.
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According to the theories and methodologies suggested by
different scientists,
effective corporate culture is to have the following features:
high level of employees
background, strong motivation, fair compensation, innovative
environment, staff
professional promotion, social protection, flexibility, friendly
atmosphere, etc.
The effectiveness of any organization is defined by its economic
(profit, productivity,
environmental compatibility) and social effectiveness
(satisfaction of staff, stability,
good team-work, etc.). The influence of corporate culture on the
company
effectiveness is analyzed by different methods and
strategies.
1.4 Importance of effective corporate culture
Corporate culture unites owners, management and personnel to
reach the unique aims
for corporate wellbeing. This unification is the strongest
motivation factor. Corporate
culture helps to strengthen the labor discipline as it sets up
precise, concrete and exact
labor and ethic frameworks, and forms behavior stereotypes,
which are passed to the
company new-comers.
Corporate culture of the transnational company absorbs national
cultures and submits
national mentality, creating a new vision of personal and labor
relations. Corporations
are interested in constant employees vocational professional
training and education
and HR rotation from region to another. It makes personnel stop
identifying
themselves with their own country and its national interests,
considering them to be
part and parcel of the multinational corporation.
To study the potential effect of culture, we need to be clear on
why this culture might
matter. Both in OReilly (1989) and Kreps (1990), culture is
considered relevant
because employees will face choices that cannot be properly
regulated ex ante. Think
about a firm with a reputation for impeccable customer-care.
Both managers and
employees are tempted to save on the effort necessary to provide
the best care.
Offering the best effort is costly and the probability of being
detected is minimal,
especially if the shirking is only partial: it is hard to prove
that the care was only
slightly subpar. Furthermore, the negative consequences of a
reduced reputation will
not be felt right away. One bad episode can hardly destroy a
long-standing reputation
of excellence. Hence, without the proper motivation, managers
and employees are
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24
likely to skimp on the quality of their services. Even if the
board anticipates this
problem, it is hard to design the proper incentive contracts.
How can a firm sustain a
reputation of impeccable service? A solution is to raise
impeccable service to the level
of a value that needs to be respected at all times, not a goal
that is traded off against
other goals. The advantage of elevating this principle to the
level of value is threefold.
First, by advertising it as a companys value a firm is more
likely to attract 6 and
retain people who share this value or -- at the very minimum
have a lower cost to
live and operate by this value. Second, by promoting top
customer service as a value
it makes it clear to the employees that the company accepts no
compromises on this
front: it is a commitment not to engage in economic
calculations. In this way, for
example, an employee will not trade off the customer
satisfaction with a larger profit.
Finally, promoting top customer service as a value facilitates
its establishment as a
norm inside the firm. The enforcement of social norms differs in
several ways with
respect to the enforcement of legal norms. To be enforceable,
legal contingencies
need to be verifiable in court. By contrast, it is sufficient
that a contingency be
observable for a social norm to be enforceable. An employee with
a negative attitude
towards customers can hardly be sanctioned in court, but he can
easily be shunned by
colleagues. Precisely because the judgment and the punishment
are administered by
the community, not by a court of law, social norms should be
very coarse, so that the
detection of a violation is relatively easy. Last but not least,
for a social norm to be
enforced it must be shared by most people in a community. In
particular, in a firm it
must be shared and followed by who is at the top. This is really
a case of lead by
example. Social norms have typically less enforcement power than
legal norms. A
violation of a legal norm can lead to harsh punishments, such as
incarceration and (in
some countries) even to death. The violation of a social norm
leads to lesser
consequences, such as ostracism from the community. In spite of
this limited
punishment, social norms can help ameliorate moral hazard
problems inside
organizations. Moral hazard in organizations is twofold. There
is a moral hazard at the
top: top managers are tempted to renege their commitment to
reward firm specific
investments made by the employees (Shleifer and Summers, 1991).
There is also a
moral hazard inside the organization: employees want to save on
effort because they
do not fully internalize the benefits this effort brings to the
organization. This lack of
internalization is partly due to the inability to measure the
employees marginal
productivity and, thus, to reward them appropriately through
contracts.
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25
In a wider sense of the word corporate culture is a culture of
transnational or
multinational companies having their head offices in US or some
of the Western
countries. Its branches exist in regions with completely
different corporate culture. To
make these companies be effective there is a necessity to set up
solid foundation on
which the relations between owners, management staff and
personnel, with different
national mentality and culture are to develop in correspondence
with the general
mission of the organization and its aims.
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26
CHAPTER 2: Corporate Culture of Biman Bangladesh Airlines
2.1.1 Biman Bangladesh Airlines General information
Biman Bangladesh Airlines Ltd. The national flag carrier of
Bangladesh has started its
journey from scratch virtually with no aircraft, no ancillaries.
It came into operation
immediately after the war of independence. Despite many odds on
its journey towards
a long and challenging way to progress, Biman has been able to
establish its
reputation as an airline of welcome smile and an ocean of
hospitality.
Created in February 1972, Biman enjoyed an internal monopoly in
the aviation
industry of Bangladesh until 1996. In the decades following its
founding, the airline
expanded its fleet and destinations but it was adversely
affected by corruption and
mismanagement. Biman operated flights to 18 international
destinations. The airline
was wholly owned and managed by the government of Bangladesh
until 23 July 2007,
when it was transformed into the country's largest public
limited company by the
Caretaker Government of Bangladesh. Since becoming a public
limited company in
2007, the airline has reduced staff and begun to modernize its
fleet. The airline has
made a deal with Boeing for ten new aircraft along with options
for ten more. Biman
Bangladesh Airlines is certified as safe to fly in Europe by the
European Aviation
Safety Agency and it also successfully passed the IATA
Operational Safety Audit and
since then, the airline has resumed flights to some of its
previous destinations in Asia
and Europe.
In order to modernize Biman fleet with new generation aircraft,
Biman signed two
agreements with Boeing in April and May 2008 for purchasing new
generation 4 X
777-300ER, 4 X 787-8 and 2 X 737-800 aircraft. Three 777-300ER
aircraft joined
Biman fleet in October/November 2011 and February 2014. The 4th
777-300ER is
being delivered on 21 March 2014. Besides, two 737-800s and four
new 787-8s are
scheduled to be delivered by Boeing in November/December 2015
and 2019-2020.
Currently Biman is operating 02 domestic and 18 international
destinations.
Biman signed an agreement with Egypt Air Holding Company for dry
lease of two
777-200ER aircraft, which were added to the fleet as of March
2014. Biman is in a
bid to operate more domestic destinations, as such procuring two
Turbo-Prop aircraft.
Biman has already phased out vintage F28 and DC10-30 aircraft
from its fleet as a
part of fleet modernization. The airline operates its own
ancillary and maintenance
facilities at Hazrat Shahjalal International Airport.
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27
Biman Bangladesh Airlines has significantly improved its
position as it nears the
finishing line in its long overdue fleet renewal programme. But
the carrier continues
to face several challenges and will need network and strategic
adjustments if it is to
complete a turnaround. Biman is one of Asias smallest flag
carriers, operating only
12 aircrafts on a network of 22 destinations, including 18
international and three
within Bangladesh. Its fleet currently consists of four
777-300ERs, two 777-200ERs,
two 737-800s, two A310s and two newly added Bombardier Dash 8
Q400.
Table 1: Aircrafts in Biman Bangladesh Airlines fleet
Aircraft In Serviece In Storage
Total 12 2
Airbus A310-300 2 0
Airbus A310-300ET 0 1
Boeing 737-800 2 0
Boeing 747-200B 0 1
Boeing 777-200ER 2 0
Boeing 777-300ER 4 0
Boeing 787-8 0 0
Bombardier Dash 8 2 0
Source: CAPA Fleet Database
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28
Figure 1: Biman fleet Configurations
The journey began with a DC-3 aircraft-an air force plane gifted
to the new airline by
the government. But the joy was short-lived. Before any service
could begin, the
aircraft crashed while on a training, flight. Biman was finally
air borne on March 7,
1972 with flights to Chittagong and Sylhet and on March 9 to
Jessore. Thus the
domestic operation of Biman began. Since then there has been no
looking back.
Indeed, it was the international operation of the airline which
started first. On 4th
March, three days before start of domestic operation, the first
flight of Biman's
international operation landed in Dhaka from London with 179
passengers on board.
The aircraft used in the flight was a chartered one from British
Caledonian.
It was not an auspicious beginning for a new airline of a war
devastated country like
Bangladesh. In the list of priorities for the resource hungry
country, the position of an
airline had to be far down the line. The highlights of Bimans 42
years will actually
not depict the agonies that the airline had to undergo, but will
give an idea how the
airline is surviving by charting a not so glamorous course like
many of the
competition.
1972
Biman began its international operations with flights to London
and Calcutta and its
domestic operations with flights to Chittagong, Sylhet, Jessore
and Ishwardi. Four F-
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29
27s joined the fleet, enabling Biman to operate domestic
services and an international
service to Calcutta. Two of the F-27s were acquired from India
and two from the
Netherlands. One DC-6 was also leased for two months.The service
to London
continued with the chartered aircraft.
1973
Bangkok became Biman's third international destination and in
the domestic sector
Thakurgaon was included in the network. Four more F-27s joined
the fleet of Biman.
Two of these gifts from Australia and the other two were
purchased from the Fokker
Company. A leased Boeing 707-320C joined Biman's fleet to
operate its Dhaka-
London services. The airline also purchased another Boeing
707-320C.
1974
Dubai and Kathmandu became Biman's fourth and fifth
international destinations. In
the domestic sector services were extended to Cox's Bazar. In
the international sector,
services were extended to Yangon, Abu Dhabi, Karachi and Mumbai
in 1976. The
second Boeing 707-320C, joined the fleet.
1977
Singapore became another part of Biman's international network.
Biman acquired its
third Boeing 707-320C from Trans Air of Canada. Biman was made a
corporation
under the title- Bangladesh Biman Corporation. Jeddah, Doha and
Amsterdam
became part of Biman's expanding network in the international
sector in 1978. Two
more Boeing 707-320C aircraft were acquired, one of them from
Japan.
1979
The year turned out to be the year of route expansion. In the
international sector,
services were extended to Kuala Lumpur, Athens, Muscat and
Tripoli. Syedpur
became a part of the domestic network in the following year.
Tokyo and Dahran were
brought within the fold of Biman's network in the following
year. An off-line office in
Jakarta was also opened. Another Boeing 707-320C joined Biman's
fleet in 1980.
1981
The airline started operations to Rome and Kuwait, but suspended
its Tokyo
operation. Biman received one Being 707-320C as a gift from
Kuwait and purchased
two F-28s from the Fokker Company.
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30
1983
The airline entered a new era with the acquisition of three used
wide-bodied DC-10-
30s from Singapore Airlines. Baghdad was made on-line. Biman
extended its
international services to Paris and to Rajshahi in the domestic
sector in 1984.
1986
Bahrain was brought within Biman's network. One of the Boeing
707-320Cs was
phased out. Services to Frankfurt were extended in the following
year.
1988
Riyadh was brought within the network in place of Dahran.
Services to Baghdad were
suspended. One more Boeing 707-320C was phased out.
1989
The airline entered the select club of one million passengers.
Services to Sharjah were
opened and the suspended service to Baghdad resumed. A new
DC-10-30, purchased
from McDonnell Douglas, joined the fleet and the remaining
Boeing 707-320C was
phased out. The airline also encompassed modern technology with
the commissioning
of a Computerized Reservation System. The Flight Catering Centre
at Hazrat
Shahjalal Interantional Airport was commissioned which enabled
Biman not only to
upgrade its own in-flight services with high quality food, but
also to earn additional
revenues by other airlines. The Ground Training School was
merged with the
Apprentice Training School and moved to modern complex at Hazrat
Shahjalal
International Airport.
1990
Two ATP aircraft joined the fleet for domestic routes and the
F-27s were phased out
in the same year.
1992
New Delhi and Nagoya were included in Biman's international
network and
operations to Sharjah were suspended. The $ 30m Hangar Complex
at Hazrat
Shahjalal International Airport was commissioned.
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31
1993
For the first time Biman crossed the Atlantic with services to
New York. Hong Kong
was also included in the network but operations to Nagoya were
suspended. Two DC-
10-30s were taken on lease.
1994
A Computerized Departure Control was commissioned. Biman
commenced services
to Brussels and suspended its operation to Amsterdam in
1995.
1996
The two new Airbus A-310 were purchased from Airbus Industries.
One DC-10-30
and one A 310-300 aircraft were taken on lease for three years
in 1999.
2000
Another DC 10-30 and one A 310-300 aircraft were taken on lease
for three years.
Two B 737-300s aircraft were taken on lease for one year in
2003. The leased B 737-
300 was released in April 2004. Further two F28 aircraft were
purchased in May
2004.
2006
Biman commenced services to Manchester on 08 April 2006. Biman
suspended its
operation to New York, Brussels, Paris, Frankfurt, Mumbai,
Narita and Yangon for
operational reasons.
2007
Bangladesh Biman Corporation turned into a Public Limited
Company. E-ticket and
BSP were introduced.
2008
The airline went into an agreement with Boeing Aircraft Company
for acquisition of
10 new generation aircraft of 4 Boeing 777-300ER, 2 Boeing
737-800 and 4 Boeing
787 the biggest ever deal in the history of Biman as well as the
country. One Boeing
747-300 was taken on lease on ACMI basis for 12 months. Two more
737-800s
joined the fleet in November.
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32
2010
One lease-hold Boeing 777-200ER joined the fleet. Two Boeing
737-800s were taken
on lease for 5 years. The aircraft will remain in the fleet till
January 2015. The airline
took delivery of one Airbus 310-300 on lease for 3 years.
2011
The first 02 of 04 Boeing 777-300ERs joined the fleet in October
and November,
2011 and thus replacing the ageing DC10-30s, the long time
backbone of Biman fleet.
2014
The 3rd Boeing 777-300ER joined the fleet on 5th February and
the 4th is joining in
the second week of February. Now the airline has a new backbone
comprising of
Boeing 777-300ERs, the new work horses of Biman, named as the
Palki, the Arun
Aalo, the Aakash Pradeep and the Raanga Pravat.
During the four decades of Bimans existence, many types of
commercial airliners
have adorned the fleet- ranging from the early leader, the
venerable DC 3 to the
modern Peoples Preference, the Boeing 777. As stated earlier,
the airline had
placed a firm order for the fifth generation Dreamliner to
complement its fleet. Fuel
efficient Dreamliner is a new wonder of the skies.
Biman can look back with pride to many occasions where it made
memorable
contributions to the nation and the travelling public. When the
floods of 1988
engulfed the whole country Biman operated an air bridge
providing the country's only
link with the outside world. As the flood waters moved up, even
on to the run way at
HSIA, the skill and dedication of Biman's pilots kept the air
bridge operational.
Biman Becomes Part of History:
On February 20, 2014, Biman operated the historical final-flight
of worlds last
passenger DC10-30 on Dhaka Birmingham route and thus recording
its name in the
annals of world aviation history.
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33
The air transport is required high professional in work to
ensure safety, exactly and
fast which are outstanding advantages of traveling passenger by
air. Service quality
then becomes significantly important factor to achieve genuine
and sustainable
passengers.
All the airports in Bangladesh are operated under the Civil
Aviation Authority of
Bangladesh (CAAB), an autonomous body. CAAB is responsible for
airports,
runways and air traffic control, taxiways, terminal buildings,
warehouse, control
tower, operation and administrative buildings, air navigation
and radio
communication system. There are three international and six
domestic airports in
Bangladesh. Table 1 & 2 provides the list of Domestic
airports & International in
Bangladesh with their locations.
Table 2: Domestic Airports
Location ICAO IATA Airport
Rajshahi VGRJ RJH Shah Makdhum
Airport
Barisal VGBR BZL Barisal Airport
Cox's Bazar VGCB CXB Cox's Bazar Airport
Jessore VGJR JSR Jessore Airport
Saidpur VGSD SPD Saidpur Airport
Source: Biman Bangladesh Airlines
There is another domestic airport under construction in
Bagerhat
Table 3: International Airports
Location ICAO IATA Airport
Dhaka VGZR DAC Hazrat Shah Jalal
International
Airport
Chittagong VGEG CGP Shah Amanat
International
Airport
Sylhet VGSY ZYL Osmani
International
Airport
Source: Biman Bangladesh Airlines
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34
Excellent and reliable customer service is one of the greatest
aspects for an airport and
airlines in todays competitive environment. There are many
factors that can help an
airport to build its customer base and customer service can be a
determining factor in
the success of an entire operation.
Vision and Mission of Biman Bangladesh Airlines
Vision:
To protect Biman Bangladesh Airlines ltd. in the aviation market
as a world-class
airlines
Mission:
To provide safe, Reliable, Efficient and Economical air
transport services and to
satisfy customers exceptions while earning sustainable profit
and continuing to be a
caring employer.
Goal:
To provide and develop Safe, Efficient, Adequate, Economical and
properly
coordinated air transport services, internal as well as
international.
Name and logo:
Biman Bangladesh Airlines
White stork flying across the red sun
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35
2.1.2 Biman Bangladesh Airlines Corporate Structure
From the structure, We can say that Biman Bangladesh Airlines
has a very strong
corporative structure. There are several multifunctional teams
who are responsible in
CE0
Director
market &
sales
Director
Custom
Service
Director
Admin
Director
Finace
Director
e store &
eng.
Director
project &
planning
Director
flight
operator
Gm Dist. Sales Gm sales Gm marketing Gm cargo
Gm sales promotion
Manager counter
Country Dist.
Manager
Dy GM Sales
Manager Pax &
Cargo Sales
Manager Agency
Interline
Dy GM Marketing
Manager Reservation
Manager Market
Research
Manager Tariff &
IATA Affair
Manager
Communication
Manager Export
Manager Import
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36
different sectors. It is an effective corporate structure in
modern competitive business
to achieve expected goals. The modern business strategies are
changing because of
new technologies and competitors' polices. To keep the customers
closer the Airline
can also change its strategy like recruit more employees in the
customers' managing
sector. In modern business online marketing is playing a vital
role. Biman Bangladesh
Air should put more attention in online marketing. The airline
can recruit personnel in
this sector like Online marketing manager, Social media
moderator.
2.2.1 SWOT analysis of Biman Bangladesh Airlines
A SWOT analysis leads the company to identify the positives and
negatives inside the
companys organization (Strengths and Weakness) and outside of
it, in the external
environment (opportunities and Threats). Developing a full
alertness of the
companys situation can help with both strategic planning and
decision-making. The
role of SWOT analysis is to take the information from the
environmental analysis and
separate it into internal issues (strengths and weaknesses) and
external issues
(opportunities and threats).SWOT analysis is done for a company,
to find out its
overall Strengths, Weaknesses, Threats and opportunities leading
to gauging the
competitive potential of the company.
Internal
factors
Strengths Weaknesses
Government backing
fourth generation aircraft in
Biman's fleet
Biggest limited company in
Bangladesh
Strong Brand Recognition
Corruption
Poor salary range
Careless management
More than 20 percent of the
operational capacity of the planes
remain unutilized
Delays(flight
schedules/administrative procedure)
Adding routes without proper
market study
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37
limited destinations
Less innovation
Inattentive Cabin crews
Unreliable service
doesnt have enough source of
entertainment inflight
Less advertisements ( in TVs/Social
links/ Public places)
Absence of competitive spirits
Shortage of information in Biman
database
External
factors
Opportunities Threats
1.Can influence the
outstanding hub which it has
created in Bangladesh
2.Brand-new fleet to improve
customer confidence
3.More international
destinations to leverage on its
high charge brand image
4.To making people feel
curious, company can plan
and develop marketing
strategies in its growth areas
where it can attract new
customers. They have a
enormous opportunity to
A lot of competitors
Should go for low cost flights.
Price of ticket increased because of the
price increasing in oil
Fuel cost raised
Aviation regulation and government
policy
Accidents, luggage robberies affect
customers confident
Political instability in Bangladesh
One of the worlds worst airlines by
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38
increase its market base by
expanding across Middle
East, India and China.
5. Offer the most inclusive
and scrupulous training
program to staffs to ensure
brand experience and
suitability
businessinsider
Low rating in SKYTRAX
World's 2-Star Airline
flawed handling of airports
From the SWOT analysis, we can see that the Airline is
struggling with many
problems, which are possible to solve easily. One of the main
weaknesses is
corruption, many of the high official of the organization are
involved with it. The
government and the authority of the Airline should take steps to
remove corruption
from the organization because many other weaknesses are there
which are happening
because of corruptions.
2.2.2 PESTLE analysis
PESTLE analysis is in effect an audit of an organizations
environmental influences
with the purpose of using this information to guide strategic
decision-making. The
assumption is that if the organization is able to audit its
current environment and
assess potential changes, it will be better placed than its
competitors to respond to
changes.
To help make decisions and to plan for future events,
organizations need to
understand the wider meso-economic and macro-economic
environments in which
they operate. (The meso-economic environment is the one in which
we operate and
have limited influence or impact, the macro-environment includes
all factors that
influence an organization but are out of its direct control). An
organization on its own
cannot affect these factors, nor can these factors directly
affect the profitability of an
organization. But by understanding these environments, it is
possible to take the
advantage to maximize the opportunities and minimize the threats
to the organization.
Conducting a strategic analysis entails scanning these economic
environments to
detect and understand the broad, long term trends.
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39
A PESTLE analysis is a useful tool for understanding the big
picture of the
environment in which an organization is operating. Specifically
a PESTLE analysis is
a useful tool for understanding risks associated with market
(the need for a product or
service) growth or decline, and as such the position, potential
and direction for an
individual business or organization.
A PESTLE analysis is often used as a generic 'orientation' tool,
finding out where an
organization or product is in the context of what is happening
outside that will at
some point affect what is happening inside an organization. The
six elements form a
framework for reviewing a situation, and can also be used to
review a strategy or
position, direction of a company, a marketing proposition, or
idea.
PESTLE
factors
Remarks
Political
Political unrest in Bangladesh
There is not enough political goodwill to increase the
airport
capacity or modernize it
Economic Biman signed a contract with US aircraft manufacturer,
the Boeing
Company, to purchase eight aircraft at a cost of Tk 8,728 crore
in
2008. Of them, four aircrafts are Boeing-777-300ER model and
remaining four Boeing-787-8 model.( dhakaherald, 9 November
,2013)
Apart from procuring the eight Boeings, Biman later ordered
for
another two Boeing-737-800 aircraft. Biman took a syndicated
loan
at 4.57 per cent interest from nine local banks. ( dhakaherald,
9
November ,2013)
3. The new CFM56-7 engine for the Next-Generation Boeing 737
and Boeing Business Jet offers customers dramatically lower
operating costs while maintaining industry-leading
performance,
reliability, and operability. A reduction of 1 percent in fuel
burn can
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40
mean an annual savings of up to $15,000 per aircraft (GE
Aviation,
june 1997)
Biman lost Tk210 crore in FY 2013-14. During FY 2012-13,
Bimans losses stood at Tk191.6 crore. It was Tk594.2 crore in
FY
2011-12 (dhakatribune, 1 november 2014)
Social Achieved 65% timely flights by adding Boeing 777-300ER to
its
fleet (Dhaka tribune, 14 February 2014)
Many Passengers require high quality services on board
flights
Asias 9th worst airport ( Prothom Alo, 31 October 2014)
Technological
Boeing 777-300ER is 19% lighter than its closest competitor,
greatly reducing fuel requirement: (Dhaka tribune, 14
February
2014)
Biman Bangladesh Airlines Training Center (BATC) has been
training its ground, flight service and technical personnel (
Biman
Bangladesh Airlines website)
The technologically advanced will use 20% percent less fuel,
provide Biman Bangladesh airlines up to 45 more cargo
revenue
capacity (prnewswire, 22 April 2013)
The CFM56-7's advanced technology, which includes three-
dimensional aero design, a high efficiency wide chord fan,
advanced electronic engine control and active clearance
control
systems, will provide significant cost benefits.
Legal
1.Approving of flight routings
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41
Environmental
rolls-royce trent 892 engine design for environment
Reductions in airport noise
Reduce CO2 emissions
Reduce NOx emissions
( HAW Hamburg, 24 June 2010)
2.3.1 Online Marketing Strategies
Online marketing is the fastest growing and most exciting branch
of marketing today.
As the world becomes ever more connected, keeping up with
developments and
trends is vital for marketers trying to reach new audiences who
are more discerning,
fragmented and cynical than ever. Technology and software are
changing at such a
high rate that it seems almost impossible to keep up with
trends. Products and services
are evolving and adapting to the online sphere. Online marketing
has boomed in
recent years, most companies have used it mainly for advertising
or promoting
corporate images. Online marketing can be many types, such
as:
a. Advertisement in online b. Search engine optimization c.
Social media marketing d. Web Marketing e. E-mail marketing
a. Advertisement in online
Online advertising plays a vital role achieve the expected goals
in modern business.
Nowadays online advertisement has become popular to the
companies because its cheaper and effective than the traditional
methods of advertisement.
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42
Figure:1 Online advertisement of Biman Bangladesh Airlines
Biman Bangladesh Airlines was not very active in online earlier.
The airline has
started its online marketing. Recently a online banner
advertisement (Figure: 1) of the
airline has seen in many leading online news portals of
Bangladesh. Probably this was
the first advertisement of the national carrier. It proves the
top management of the
airline has understood the importance of online marketing. The
online advertisement
of Biman Bangladesh Airlines should be increased to promote its
brand and to get
prospective customers.
b. Search Engine Optimization
Search engine optimization is a methodology of strategies,
techniques and tactics used
to increase the amount of visitors to a website by obtaining a
high-ranking placement
in the search results page of a search engine (SERP) --
including Google, Bing,
Yahoo, Yandex and other search engines.
Building a solid SEO strategy consists primarily of selecting
relevant keywords and
providing valuable content related to those keywords. In the
past, SEO was driven by
factors like keyword placement, keywords density, and even how
many times a
keyword was used to link to that page.
But the search engines quickly discovered that keywords could be
easily manipulated.
A page that had nothing to do with a keyword could be ranked in
top three, just by
optimizing the page. Today, this means that sites who rely
solely on keywords are
often ignored by the search engines.
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43
In Bangladesh Google and Yahoo are the most popular search
engines. Strong search
engine marketing strategies will take the national carrier of
Bangladesh more closer to
its customers which will bring a fruitful result for the
airline.
c. Social Media Marketing
In the current modern societies, Social Media channels are
commonly used in order to
connect people together throughout the world using the Internet.
Whether it is through
social networks, forums, blogs or media sharing websites, people
can now have a
conversation online, also called interactive dialogue, with
anybody and on any
subject, permitting them to share their experiences and valuable
information. The use
of social media sites as part of a companys marketing strategy
has increased
significantly in the past couple of years. Looking on a business
perspective, it goes
without saying that Social Media Marketing has offered a large
variety of new
opportunities for companies to promote their brand, products and
services.
One of the biggest advantages that advertising through Social
Media can offer
marketers is the ability to specifically target customers based
on a variety of different
factors. Social Media sites are storing all kinds of data on
their users, such as age,
gender, geographical location, interests, and many other pieces
of information.
Consequently, these data can be used to reach the companys
target audience.
Therefore, marketers can deliver marketing messages directly to
the people who are
the most likely to notice them and click on them.
Biman Bangladesh Airlines, the national flag carrier of
Bangladesh loses crores of
taka every year, by reducing corruption, improving its services
and getting active in
social web sites can reduce the loss, even can turn into a
profitable sector by gaining
customers faiths. Besides, it will also help the airline to plan
the routes properly by
getting direct feedback from the passengers. If we compare the
social media activities
of Biman Bangladesh Airlines with the other productive airlines
like Emirates Airline,
Finnair, Aeroflot Airlines we will easily find the differences.
For example in
Facebook,
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44
Table 1: Comparisons of activities between some airlines in
Facebook
Name of Airlines Activities
Emirates Airline Having at least 1 post in a day( huge
responses from the passengers) ,
Available in on-line every day from
8am to 8pm (GST) to answer questions
Finnair Having a very productive post in every
2 days, advertising through Facebook
page, answering the customers
questions
Aeroflot Airlines Having an effective post in every 3
hours. Answering passengers questions
as quickly as possible
Biman Bangladesh Airlines Only a post in 3 or 4 months. Not
really
productive posts.
Biman Bangladesh Airlines should emphasis on its social media
marketing strategies
to get closer to passengers, provide more information and answer
the customers
questions as early as possible. By doing this; the national flag
carrier can get more
customers satisfaction and can set up a strong bond with them.
If we look at the
productive airlines, we will see, they are sharing very
effective posts every day. Even,
they are not hesitating to apologize for any kind of technical
problems on their pages.
Sam Walton, founder of Walmart said If you have questions, go to
the store. Your
customers have the answers. And I think by having social media
marketing strategy,
company can receive customers feedback and take the decision how
meet customers
needs.
A journalist of Russia Segodniya and lecturer of New Media and
E-journalism said
The use of social media in the airline industry has become a
rapidly increasing trend.
Airlines are using the social media as a platform for brand
development and product
marketing, improving customer service and improving passenger
experience e.g.
through updating and responding to customers feedback. But
unfortunately
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45
Bangladesh Biman still don't have a Social Media strategy which
is very much needed
for not only to improve company's positive image but also for
advertising and
promotion sales attention.
With millions of users, Social Media Sites makes a convenient
target base for people
who are trying to market products or services to people online.
Actually, Social Media
Marketing has become a very effective way to drive targeted
traffic to companies
website or blogs. The authority of Biman Bangladesh Airlines
should set social media
marketing Strategies to promote the company, to get direct
feedback of passengers
and to take the company into a profitable sector as well.
d. Web marketing
To accelerate online marketing the airline must create an
ecommerce website which
will be full of necessary information and 24/7 format services.
An instant chat box
should be created in the website to ensure 24/7 online customers
service. Better online
services to the customers will ensure more satisfied old
customers and will help to
prospective new customer.
e. Email marketing
Email marketing is directly marketing a commercial message to a
group of people
using email. In its broadest sense, every email sent to a
potential or current customer
could be considered email marketing. It usually involves using
email to send ads,
request business, or solicit sales or donations, and is meant to
build loyalty, trust, or
brand awareness. Email marketing can be done to either sold
lists or a current
customer database. Broadly, the term is usually used to refer to
sending email
messages with the purpose of enhancing the relationship of a
merchant with its
current or previous customers, to encourage customer loyalty and
repeat business,
acquiring new customers or convincing current customers to
purchase something
immediately, and adding advertisements to email messages sent by
other companies
to their customers.
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46
Figure 2: Email marketing of airBaltic
Email marketing is helping small and big companies to gain more
customers in this
globalized world. Many reputed airline companies (Figure: 2)
using Email marketing
to reach their goals. Email marketing can bring a positive
result for Biman
Bangladesh Airlines also. The top management of the airline
should be more concern
about it.
2.3.2 Customers Relationship Management ( CRM)
Customer relationship management (CRM) is a combination of
people, processes and
technology that seeks to understand a companys customers. It is
an integrated
approach to managing relationships by focusing on customer
retention and
relationship development. Customer relationship management is a
comprehensive
approach that promises to maximize relationships with all
customers, including
Internet or CRM e-customers, distribution channel members, and
suppliers.
Customer relationship management (CRM) can help organizations
manage customer
interactions more effectively to maintain competitiveness in the
present economy.
Managing a successful CRM implementation requires an integrated
and balanced
approach to technology, process, and people. CRM involves using
technology to
gather the intelligence organizations need to provide improved
support and services to
the customers. In other words, CRM is also about what the
organizations do with that
information to better meet the needs of their existing customers
and identify new
customers, resulting in higher profits for organizations.
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47
Figure: Customer Relationship Management
There are only three ways to increase the profitability of a
customer base; acquire
more customers, optimize the value of existing customers, or
retain the right
customers longer. As the economic climate continues to become
more competitive,
the fight over customers intensifies. Of the three choices
above, acquiring new
customers is the most expensive. Research shows that acquiring a
new customer costs
5 to 10 times more than retaining an existing one. Studies also
show that loyal
customers will buy more over their lifetime and are willing to
pay a premium for
doing business with someone they like and trust. Therefore,
while organizations will
clearly continue looking for new customers, once acquired, they
now know that it is
worth a significant investment to keep them. CRM is a way to do
that.
In the airline industry, data analysis and data mining are a
prerequisite to push
customer relationship management (CRM) ahead. Knowledge about
data mining
methods, marketing strategies and airline business processes has
to be combined to
successfully implement CRM. Data mining is very useful to
support CRM in the
airline industry. In an initial phase of CRM, customer segments
based on individual
patterns are found that it describes groups of customers with
distinct needs and value.
The segmentation results are very useful for marketing concerns
and for improving
customer services. For instance, the derived strategic segments
can be used to derive
some high-level business strategies and to perform tactical
marketing actions,
respectively.
Customer
Relationship
Management Customer Service
Strategy
Sales Social Media
Technical support
Marketing
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For Biman Bangladesh Airlines, It is very important to develop
its Customers
Relationship Management strategies to acquire more new
prospective customers and
to obtain existing customers. Th CRM strategies will help the
airline to get more
customers faith.
2.3.3 Corporate Social Responsibility (CSR)
Corporations around the world are struggling with a new role,
which is to meet the
needs of the present generation without compromising the ability
of the next
generations to meet their own needs. Organizations are being
called upon to take
responsibility for the ways their operations impact societies
and the natural
environment. They are also being asked to apply sustainability
principles to the ways
in which they conduct their business. Sustainability refers to
an organizations
activities, typically considered voluntary, that demonstrate the
inclusion of social and
environmental concerns in business operations and in
interactions with stakeholders
(van Marrewijk & Verre, 2003).
Corporate Social Responsibility is a concept which has become
dominant in business
reporting. Every corporation has a policy concerning CSR and
produces a report
detailing its activity. The broadest definition between of
corporate social responsility
is concerned with what is or should be- relationship between
global corporations,
governments of countries and individual citizens. More locally
the definition is
concerned with the relationship between a corporate and the
local society in which
itresides operates.
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49
Figure: The Social Contract
Most people intially think that they know what is CSR and how to
behave
reponsiblyand everyone claims to be able recognise socially or
irresponsible
behaviour without necessarily being able to define it. So there
is general agrrement
that CSR is about a company's concern for such things as
community involment,
socially responsible products and processes, concern for the
environment and socially
responsible employee relations. According to the European
commission CSR is about
undertaking volutary activity which demonstrates a concern of
stakeholders.
Corporate Behaviour is very important for company success both
financially and
concerning the relationship between corporate and business
interest. In other words
corparate behaviour is based on all these components and
involvse laws, ethics and
coporate social responsibilites. Corporate behaviour has effects
not only on
stakeholders but also on the entire economy.When a corporation
acts ethically and
socially responsibly in its bussiness decision and strategic
planning then that
corporation will be more sutainable.
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Figure: Components of Corporate behaviour
Organizations have developed a variety of strategies for dealing
with this intersection
of societal needs, the natural environment, and corresponding
business imperatives.
Ryanair is Europe's largest law fare airline. Ryanair's steady
growth is being achieved
inthe most enviromentally friendsly and sustainable way by
investing in the largest
aircraft and technologies (which have reduced fuel burn and CO2
emissions by 45%
over 9 years). Ryanair is currently the industry leader in terms
of environment
efficiency and it is constatly working further improving
performance.
Biman Bangladesh Airlines should set a progressive CSR
strategies to come more
closer customers or promote its brand .
CSR is becoming a leading principle of top management and of
entrepreneurs. The
quality of relationships that a company has with its employees
and other key
stakeholderssuch as customers, investors, suppliers, public and
governmental
officials, activists, and communitiesis crucial to its success,
as is its ability to
respond to competitive conditions and corporate social
responsibility (CSR). These
major transformations require national and global companies to
approach their
business in terms of sustainable development, and both
individual and organizational
leadership plays a major role in this change.
coporate
behaviour
ethics law
CSR
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3.3.4 Innovation in Biman Bangladesh Airlines
What is Innovation? Innovation is crucial to the continuing
success of any
organization. Innovation may be defined as exploiting new ideas
leading to the
creation of a new product, process or service. It is not just
the invention of a new idea
that is important, but it is actually bringing it to market,
putting into practice and
exploiting it in a manner that leads to new products, services
or systems that add value
or improve quality. It possibly involves technological
transformation and management
restructuring. Innovation also means exploiting new technology
and employing out-
of-the-box thinking to generate new value and to bring about
significant changes in
society.
Studies have confirmed that all businesses want to be more
innovative. One survey
identified that almost 90 per cent of businesses believe that
innovation is a priority for
them. The conclusion is that the importance of innovation is
increasing, and
increasing significantly. In the current day economic scenario,
innovativeness has
become a major factor in influencing strategic planning. It has
been acknowledged
that innovation leads to wealth creation. Even though efficiency
is essential for
business success, in the long run, it cannot sustain business
growth.
Figure 1: The need for Innovation
Although the need for more innovation is widely recognized,
there is no commonly
accepted view of what innovation means in a business context.
Many employees think
of it primarily as radically new products delivered by R and D
departments;
Changing business
environment
Changing customers
and needs
Technological
Advances
Intensified competition
The need for
Innovation
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Figure 2 : Innovation Process from Paul Trott, 2006
Business must look ahead, not behind. It's not just the big
companies that need to do
this. Every business must innovate to compete. They must create
new products and
services for new markets. They must be creative, and come up
with new ideas that
never would have been thought of before.
Innovation Management is about more than just planning new
products, services,
brand extensions, or technology inventions. Its about imagining,
mobilizing, and
competing in new ways.
A Study of European Business School, DLR and
PricewaterhouseCoopers shows the
most important success factors for innovation are customer
orientation, creative staff
and corporate culture.
Being innovative does not mean inventing; innovation can mean
changing your
business model and adapting to changes in your environment to
deliver better
products or services. Successful innovation should be an
in-built part of your business
strategy and the strategic vision, where you create an
environment and lead in
innovative thinking and creative problem solving.
In my opinion, innovation is also required to be competitive
today and tomorrow. In a
broader sense, innovation is important to the advancement of the
society around the
world. New and innovative products can increase the standard of
living and provide
people with the opportunities to improve their lives.
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2.2.4 The importance of Market Research
Market research is any organized effort to gather information
about target markets or
customers. It is a very important component of business strategy
which is a key factor
to maintain competitiveness over competitors and provides
important information to
identify and analyze the market need, market size and
competition.
Market research, which includes social and opinion research, is
the systematic
gathering and interpretation of information about individuals or
organizations using
statistical and analytical methods and techniques of the applied
social sciences to gain
insight or support decision making.
Biman Bangladesh Airlines is a national flag carrier, the
biggest public limited
company in the country, which is fully owned and operated by the
Government of
Bangladesh. The corporate body of Biman namely 'Biman Bangladesh
Corporation, is
doing business as Biman Bangladesh Airlines under the Ministry
of Civil Aviation
and Tourism. The airline provides international passenger and
cargo services to its
destinations. It has air service agreements with 42 countries.
Annual Hajj flights;
transporting tourists and non-resident Bangladeshi workers and
migrants; and the
activities of its subsidiaries form an integral part of the
airline's business.
Table 1: PASSANGER, FREQUENCY & REVENUE (JUL02 JUN13)
[1]
PERIOD FRQ PAX REV
(BDT IN CRORE)
JUL02 JUN03 13562 1424802 1839.00
JUL03 JUN04 14276 1543491 2057.41
JUL04 JUN05 15388 1537421 2230.06
JUL05 JUN06 14263 1398556 2349.56
JUL06 JUN07 11319 1200895 2194.93
JUL07 JUN08 8460 1375615 2639.91
JUL08 JUN09 8494 1397664 2341.49
JUL09 JUN10 8012 1425205 2453.55
JUL10 JUN11 9037 1602001 2771.42
JUL11 JUN12 9126 1765922 3243.89
JUL12 JUN13 6762 1578188 3384.32
TOTAL 118699 16249760 27505.54
Source: Mohammad Shah Newaz ,Director, Marketing & Sales,
Biman Bangladesh Airlines
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In FY 201011 it made losses of BDT 2 billion, despite the
government exempting it
a debt of about BDT 11.94 billion and BDT 5.73 billion owed to
the BPC and the
CAAB, respectively In FY 201112 it made a loss of BDT 6.06
billion
(US$75 million, the airlines highest loss ever), in FY 201213
unaudited figures
show a loss of BDT 2 billion. The airline plans to be fully
profitable by FY 2014
15. As of December 2013, The Airline owed BDT 15.60 billion to
different sources of
which BDT 3676.2 million to CAAB and BDT 8.50 billion to Padma
Oil Company,
its fuel supplier [2]. Aside from incurring losses, the national
flag carrier is reputedly
plagued with many problems, including poor customer service,
delayed flights and
schedule disruptions. Bangladesh Economic Review 2013 reported
that since the
Dhaka government converted the airline into a public limited
company in 2007,
Biman posted losses every year except fiscal 2007-08 and
2008-09.
Figure 1: Bangladesh Airlines Profit or Loss fugure from 2007 to
2013
Biman Bangladesh Airlines is counting huge amount of loss every
year because of its
poor corporative culture and starting routes without proper
market research. The
Airline is going suspend the Dhaka-Frankfurt service from 27th
November 2014
because each flight incurs losses of Tk70 lakh due to very low
passenger numbers. On
the first flight to Frankfurt this year, only seven travellers
were on board the Boeing
777 aircraft that has a capacity of 419 passengers. The
Dhaka-Frankfurt route, which
has been offered and discontinued before, was not subject to a
rigorous market study
before it was relaunched. Biman Bangladesh Airlines started its
service to Frankfurt
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55
and the government cancelled flights to Frankfurt in 2006 due to
an insufficient
number of passengers.
Biman Bangladesh Airlines suspended it's Yangon and New Delhi
operations two
months ago. The airline also has reduced its flights to Kolkata,
Hong Kong,
Kathmandu, Bangkok and Kuala Lumpur and planning to add five
international
destinations to Tokyo, Japan; Kunming and Guanxu, China;
Colombo, Sri Lanka; and
Male, Maldives.
Market research is a way of getting an overview of consumers'
wants, needs and
beliefs. Market research is the process of researching to
customers and the market.
Market research enables a compa