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Norwegian Air Shuttle Aspires to Become the Cheapest Global Airline It’s snowing in Copenhagen as Norwegian Air Shuttle Flight DY7041 lifts off. There are nearly 30 passengers on board, most of them Norwegians, Swedes, and Danes eager to escape the gloom that engulfs their part of the world in late November. Today they will arrive in Florida faster than usual. This is the first direct flight from Scandinavia to Fort Lauderdale. And it’s a bargain: The tickets are a fraction of what larger airlines charge. Norwegian Air Shuttle Chief Executive Officer Bjorn Kjos has come along to celebrate the occasion. . . . Norwegian is Europe’s fourth-largest discount airline. Until recently, it was little known outside Scandinavia. Then, in 2012, Kjos made the largest airplane order in European history, buying 222 jets from Boeing and Airbus Group for $21.5 billion. Most of these are narrow-bodied Boeing 737 Max 8’s and Airbus A320neos that will begin arriving in 2016. Kjos will use them to increase Norwegian’s presence in Europe and challenge the top three discount carriers: Ireland’s Ryanair, Britain’s EasyJet, and Germany’s Air Berlin. Last year, Norwegian acquired its first two Dreamliners, which list for as much as $289 million each. Kjos is using these wider-bodied jets to offer cheaper international flights to distant places such as New York, Los Angeles, and Bangkok, undercutting established carriers in Europe and the U.S. Norwegian’s $180 tickets between New York and Oslo cost 10% of the equivalent ticket on British Airways. In effect, Kjos wants Norwegian to become a global version of Southwest Airlines. Other upstart airlines have tried this and failed. Kjos says Norwegian will succeed because it has the Dreamliner and a new group of travelers to fly: the emerging middle-class citizens of China and India. He predicts that in the next decade there will also be 500 million new airline passengers, and he hopes to attract them with low fares. Kjos will have to do many things right for it all to work, and he’s already run into turbulence. He narrowly averted a strike by 600 pilots in November. They are unhappy with his plan to base Dreamliner flights outside Norway and to staff them with lower-paid workers from Thailand and elsewhere. The Dreamliner still needs debugging. Kjos’s new jets have been grounded repeatedly by technical problems. . . . Four U.S. airlines are trying to keep the U.S. Department of Transportation [DOT] from allowing Norwegian flights into the country because they worry that their foreign competitor will launch what they describe as an unfair price war with them. Kjos, however, doesn’t think anything will get in the way of his plan to reshape international travel. “In the future, you will travel to Asia for nothing,” he says, “You think I’m joking. You wait and see.” Obscure outside the aviation industry, Kjos is a celebrity at home; he’s Norway’s Richard Branson. In the early Aughts, Kjos introduced low-cost flights to a region that has historically been dominated by Scandinavian Airlines (SAS). At the time, SAS, which is controlled by the governments of Norway, Sweden, and Denmark, had some of the highest fares in Europe. “He has changed the lives of many, many Scandinavians,” says Hans Erik Jacobsen, an analyst at First Securities ASA. . . . The company went public in December 2003 at 32 kroner a share. Then, Kjos says, SAS reduced its prices in an effort to destroy its rival. (SAS denies that this was its intent.) Norwegian again lowered its prices. Its revenue dwindled, along with its stock price. . . . Then, they say, they learned from government investigators that SAS had been tapping into Norwegian’s computer system and using data about its ticket sales to underprice it. Norwegian sued SAS for illegally using its trade secrets, eventually winning a 160 million kroner judgment in 2010. SAS says it accepts the court judgment. Kjos says the revelations ended SAS’s predatory pricing, and Norwegian had its first profitable year in 2005. But Kjos soon had something else to worry about: rising oil prices. Oil had soared from $25 to $75 per barrel in the previous five years. Kjos and his top executives modeled what would happen if oil prices continued to climb at that rate. “We found out . . . if we hit $120, we’re going bankrupt,” Kjos says. Norwegian’s planes were burning too much gas. The company needed a new fleet to survive. . . . In August 2007, Kjos reached an agreement to buy 42 new jets from Boeing for $3 billion. Frode Foss, Norwegian’s CFO, said the company couldn’t afford it. “Frode, would you like to go bankrupt with old airplanes or with new airplanes?” Kjos swaggeringly replied. He later increased the order to 84. Three years later in 2010, revenue and profit had more than doubled. Norwegian was flying twice as many passengers and routes. The new planes “really enabled them to drive down the cost level,” says Jacobsen. “It was a big step forward.” Later that same year, Kjos ordered Norwegian’s eight Dreamliners, but he also concluded that his newish fleet of shortrange planes was already becoming outmoded. In 2012 he and [Norwegian Airlines chairman of the board Bjorn] Kise took advantage of the euro crisis to get favorable terms from both Boeing and Airbus for 100 planes. . . . Norwegian’s international routes will prevail, Kjos says, because the Dreamliner burns much less fuel than previous jets. “The Dreamliner is the first airplane that can do it,” he says. He’s also counting on lower personnel costs. Although the airline is headquartered in a country with some of the highest salaries in Europe, Kjos is trying to get around this by basing flights in lower-salaried countries such as Thailand. That’s why Norwegian’s pilots wanted assurances that he wouldn’t try to use geography to cut their salaries. . . . Norwegian also faces opposition in the U.S., where American Airlines, Delta Airlines, United Airlines, and US Airways are urging the federal government to reject an application by Norwegian Air International. The company is a Norwegian subsidiary that Kjos has set up in Ireland to operate its Dreamliner flights. Norwegian’s critics say Kjos is doing this so he can hire cheap nonunion pilots and cabin crews. “[Norwegian’s] scheme must be immediately and unequivocally rejected,” Lee Moak, president of the Air Line Pilots Association International in Washington, said in a statement last month. “The DOT must not permit U.S. airlines and their employees to face an unfair competitive advantage from this runaway shop.” A Norwegian spokesman, Lasse Sandaker-Nielsen, says the company isn’t doing anything improper and its critics are making “false and misleading statements.” As for the Dreamliners, they have been problematic. The U.S. Federal Aviation Administration ordered Boeing to stop delivering them last year until it fixed their lithium batteries, which had caught fire. Norwegian’s Dreamliners never burned, but one jet was grounded in Bangkok in September [2013] because of pump problems, stranding 200 passengers bound for Stockholm. In December, Stockholmbound Norwegian customers were stuck in Fort Lauderdale before Christmas because of a disabled Dreamliner. On New Year’s Eve, 276 passengers headed for Oslo spent the night stewing in hotels near John F. Kennedy International Airport in New York because of brake problems on one of the jets. Norwegian’s Sandaker-Nielsen says the company apologizes for the delays. . . . Kjos responded to the latest crisis by doubling down. He announced in December that Norwegian would lease two more Dreamliners.

1. To what extent is GM using evidence-based management? Are they overdoing it? Explain your rationale.
2. To what extent are the managerial practices being used at GM consistent with principles associated with management science and operations management techniques? Discuss.
3. How are the managerial practices being used at GM consistent with the Quality-Management viewpoint? Explain your rationale.
4. 4. To what extent does GM represent a learning organization? Discuss.

Answer 1

Answer1:

GM is victimization proof-based management once it involves the recall chief operating officer worked with the data that she had concerning the incident and place along groups to repair all aspects of what was happening Evidence-based management as outlined by the textbook “means translating principles supported the best evidence into structure follow, delivery rationality to the decision-making method. CEO did this by investigating the issues with the automobile so conducting tests to research additional. With this data, she then had a gathering wherever the vehicles were then recalled. I don't believe that the metric weight unit was overdoing it as a result of this matter dropped to the protection of the vehicle and therefore the company’s customers. Once a corporation makes a product that would damage somebody if it malfunctions, all steps ought to be taken to work out the matter and either fix it or recall the things.

Answer2:

Operations management focuses on managing the assembly Associate in nursing delivery of an organization’s product or services additional effectively. It’s involved with work programming, production designing, facilities location and style, and optimum inventory levels. GM's social control practices were related to management sciences as a result of they used engineers that were specifically qualified to good and improve elements within the assembly method to maximize potency. The operations management aspect of things was imperfect thanks to the actual fact that when the primary recall, the difficulty wasn't resolved as occurrences continuing and therefore the solely prioritized facet of the corporate was still the effectiveness of productivity instead of the urgency to repair the aforementioned issue.

Answer3:

The contingency viewpoint emphasizes that a manager’s approach ought to vary consistent with the individual and therefore the environmental state of affairs. Internal control is perfecting every stage of production and testing every stage. Metric weight unit employed specialized engineers that were accountable to check and troubleshoot the merchandise when the initial recall. Once the occurrences continuing when the recall the defects were clearly, once again, unmarked and discharged as "imperfect". Total quality management was enforced to additional train workers to stop additional instances within the future to enhance client satisfaction and restore the company's integrity.

Answer4:

A learning organization is a corporation that actively creates, acquires and transfers data inside itself and is ready to change its behavior to replicate new data. Metric weight unit clearly detected a desire for a revamp of their automotive line on each the planning level and acknowledgment or the reactions to imperfections and faulty products before being discharged into the general public.