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Air India - Mismanagement

In: Business and Management

Submitted By sachinjoseph90
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1. Understand the relationship between strategic management and leadership
1.1 Air India comes directly under the Ministry of Civil Aviation, Government of India. The Board of directors and CMD have to work under the guidance of bureaucrats and politicians. What in your opinion have been the influence and effect of such a leadership and the strategic management and decisions taken on Air India over a period of time?
(Criteria 1.1 Explain the link between strategic management and leadership)

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1.1.1 The Initial Surge
• The airline made a net profit of US$2 million and increased revenue by 15% in the 2005 financial year. This success initially showed how Air India was flourishing in the earlier years under the Indian Government.
• They were following the Trait Theory and the leaders are characterized with some specific activities.
1.1.2 The Influence
• To ensure its business and technical staff could maintain and use the system, the company sent 40 employees to Oracle University. They were more employee oriented leaders, but when gradually, the Ministry of Civil Aviation had to work under the guidance of bureaucrats and politicians, they became more product oriented leaders the amount of losses were huge.
• With this drastic change we could sum it up as follows
 With reference to Behavioral Theory, within the managerial grid , we can observe a shift from A to C
 With reference to the Michigan Studies on Behavioral Theory, we see a stark shift from employ oriented leadership to production oriented leadership.
• Political and bureaucratic hurdles made management ineffective on critical decisions, particularly on operations, finance and staffing.
• Competition was restricted in order to protect the state enterprises, even though their service...

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