MANAGEMENT CONTROL SYSTEMS AIR INDIA

IBS - Hyderabad 2010-2012

Presentation Submitted to: Prof. V. Narender

Presentation Submitted By: Ashish Mehra Himali Kapoor Manohar S Swapnil Sarkar Tushar Sharma Vishal Soni

AIRLINE INDUSTRY
FACTS Passenger traffic handled by Indian airports increased at a compound annual growth rate (CAGR) of 15.8 per cent between 2004 05 and 2009 2010. International passenger traffic increased at a CAGR of 12.1 per cent between 2004 05 and 2009 2010.

REASONS Introduction of low-Cost Airlines. Rise in Tourism Industry Rising Disposable Income.

CURRENT STRUCTURE

Management Style & Culture

Attitude towards Employees Decision making Process Focus of Air India - Shared Goals FOCUS of - Shared Knowledge - Mutual Respect Credibility & Care Role of Relational Competence Cross Functional Performance
MUTUAL RESPECT SHARED GOAL

Air India
SHARED KNOWLEDGE

Safety Culture at Air India

-Perception of importance of safety

Commitment

-Safety procedures and requirements -Personal involvement and responsibility for safety -Employee behavior with respect to safety

Behavior

-Mutual expectations and encouragement -Job satisfaction -Attitude towards unreported hazards

Awareness

-Awareness of job induced risk -Concern for safety -Pro-activity to prevent negative happenings

Adaptability

-Actions with respect to negative happenings -Employee input -Communication of work related information -Safety issues reporting system -Consequences of safety reports -Communication of safety related information -Information exchange about safety issues -Evaluation of safety related behaviors -Perception of evaluation -Passing of responsibility

Information

Justness

Official Language Implementation

p Speak and Promote HINDI language

p Various Hindi Training Workshops for the Officials

Air India is going GREEN

Various steps taken to save Fuel & reduce CO2 Emission Formed a Fuel Efficiency Gap Analysis (FEGA) Team to take necessary steps

Controls at Air India

p Norms set for the discharge of functions decision-making process

p Public Vigilance

p Internal control systems IOCC and Sabre

p Budget Allocation

Importance of rewards
Managers/employees put in great effort on activities which are rewarding and less effort on activities which are not rewarding. An individual is influenced by both positive and negative incentives. A positive incentive or reward increases satisfaction of an individual and vice versa.

Compensation at Air India

There has always been an issue with respect to compensation for employees of Air India. Company faced losses since 2007 and thus delayed payments of its employees in recent years. The most recent instance is when in 2011 more than 50 employees resigned due to non payment of their salaries. Presently Air India owes 30000 other employees payment of around 2 months.

Analysis of Pay Structure

It can be seen that despite a decrease in the number of employees from 32000-30000 in ITEM MAR08 MAR09 MAR10 2010 the salaries and wages have No. of 32 31 30 increased. employees The directors remuneration has ('000 nos) decreased in the 3 yrs. Salaries & 2893.41 2942.63 2982.79 Compensation per employee has wages increased over the years but Directors' 1.87 1.71 1.43 income per employee first remuneration decreased and then increased showing improvement 9.88564596 10.7337813 11.33 Also if we look at the ratio of sales to compensation to employees Compensation ratio in the years 2008, 2009, it has per employee 46.72 decreased from 4.27 to 3.96in 2009 Income per 46.8350911 43.8969974 and 3.91 in 2010, where the total employee compensation to employees has Sales 13769.33 13248.67 13123.60 increased in spite of decrease in 3224.5 3338.85 3356.72 sales.
Compensation to employees

Coordination/Communication
p Internal Communication Control 1. SITA(Society De Telecommunication Aeronautics provided services) 2. Telephone System 3. Radio Communication System

External communication system

Thank You