Business unit structure is a horizontal design allows each airline group to ark independently by focusing on the essential capabilities to increase the effectiveness as a whole. Moreover, business unit provides its own departments such as call service center, catering, rental, finances and so on (McKinney, 2006). This helps the leaders to concentrate more on the productivity and profitability of the company. In addition this model is beneficial for the cost reduction, advance manager strategies.
Issue that can be raised with the hybrid model within the airline organizations is that it can generate duplication within the departments (Jones, 2013, p. 334). This could ring unnecessary roles and functions to the industry and generates coordination problems. This is costly and produces a lost towards to the cost- savings in the departments. Nevertheless, the functional airline structure is a vertical design holds a CEO with the main dependent functional groups. It does not permit various mangers to work together where CEO is usually responsible for the day-to- day operations.
There are no essential responsibilities for productivities and profitability of the senior level managers for the daily operations and tasks. According to Jones, 2013, an advantage of the functional model is that it pulls gather the groups with the same skills and capabilities to learn from each other to work effectively (P, 404). This strategy works well in a low- cost airlines that are involved in outsourcing. Organizational functions start distancing from each other (Jones, 2013, p. 405).
Airlines arise the communications issues within the airline departments. They would have difficulties finding where is the loss money and profits originating. Airlines would face the customer relation issues. (p. 405) Lack of communication within the managers by being busy solving the issues, increases the implement and bottleneck in manager’s decision-making for the higher-level leaders (McKinney 2006, p. 2). Based on the Honeyed and Responder, the article indicates that Hybrid model would have too much differentiation, if it were not coordinated successfully.
It is important to establish strong methods of responsibilities and roles to build communication skills among the different departments and units (2006,p. 4). According to Jones, as an organization grows larger, leaders need to find a way to have a good control and manage the activities of their departments to generate value (p. 44). Stability is essential for integration and differentiation, as an organization gets larger and more complex (p. 354). The functional structure is mechanistic model; it is a centralized authority for decision-making to all the units and departments.
It is designed to advance workers abilities to higher performance skills and cannot be altered to adapt to a new environment. The CEO is responsible for communication and coordination of operation. The hybrid model is an organic structure. It is much more complex and high in differentiation and units work independently for success. Hybrid structures are decentralized in decision-making authority and it fits to an existing demands (Jones, 2013,p. 362). The support structure remains the same at the corporate level. By hybrid model is centralized, this helps for the structure to be coordinated within the airline business units.
Departments such as accounting call center, marketing and HER needs to be coordinated within the Airline Business unites structure to achieve their goal Both structures have some advantages and disadvantages. Smaller organizations can use the functional model. However, as the organization test bigger and extends the traditional model needs to be replaced. An organization can switch to the different structure to be fit in present environment. Honeyed, Y. , & Responder, J. (2006, May). A new organizational model for airlines, The McKinney Quarterly, 1 – 7. Pearson custom resources, MAMBA 610. 2013) Boston, MA: Pearson Learning solutions. Jones, G. R. , (2012). Organizational Theory, Design, and Change (6th deed. ) Upper Saddle River, NJ: Pearson Education, Inc. Too much diversity and differentiation to the company, and it developments the organizations to attain their goals Therefore,). As it was explained in McGinnis article, the competition in the airline world has been increased. In order for the airlines to stand up for the low-cost pricing of other airlines, they have to come up with new strategist of generating their own budget and reduction to the cost of the organization.
The changes increased the complexity and bottleneck in managers decision- making for the higher-level leaders (2006, p. 2). Business unit model works the best for bigger and more complex firms. In functional model the workers who work together with common skills can control each etched performances. It allows each unit for decision-making on cost-saving and purchasing control 2 Functional model is a vertical structure with more specialists to support the centralized authority with the CEO operating the day-to-day operations.
There is less number of managers with more power of decision-making skills to greater spans of control. This is due to managers direct reports and activities with bigger number of employees with related tasks. Hybrid model is a horizontal and complex structure. This structure is a decentralized decision-making design and the control is spread out between the departments and units. In hybrid model, multiple leaders have managerial authorities within a company. As the organizations get larger it generates coordination problems. (Jones, 201 3, p. 80) Leaders authority decreases by having more mangers within the organization. This is resulting in lesser span of control. Leaders in the functional structures are less with larger span control than the hybrid model. It is due to the responsibility of the standardized departments for function of the organization as a whole. Hybrid model has a smaller span control with larger number Of managers, and specialized function. This is because of multiplies mangers per units. This is a report to the principle of minimum chain of command where there should be a balance between the managers of the units to obtain a success.
An organization attempts to have few stages of hierarchy (Jones, IPPP. 379,380). Functional model has more levels of hierarchy in compare to the hybrid structure. According to Jones, the rational-legal authority is a principle of an authority that manger has because the position they hold within an organization (2013, p. 387). Hybrid design permits leaders to have more rational-legal authority u to the ability of decision-making in the business unit. The manager authority spreads among the units.
There is more rational-legal authority in business model than in functional unit. CEO is the only one that has the rational-legal authority in functional structure because they are the only one with the authority of decision-making. Functional model is vertically different from their hybrid structure. Hybrid design has to be The hybrid model has larger groups of managers in compare to the functional structure. Hybrid model is a complex design With complex Each unit is insisting of separate managers to handle a specific part of the departments.
Therefore, each unit needs to have one subordinate manager to take over each specialized units. They have large number of managers with less span control. -? structure. Hybrid model is a complex design with complex Each unit is each specialized units. They have large number Of managers with less Span control. 3) The hybrid model is consisted of larger groups of managers in compare to the functional structure. By reading the airlines organization article by Honeyed & Responder, the hybrid del proves to be a more enhanced design from the standpoint of work specialization and coordination.