Features of the Corporate Culture of Ryanair

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Features of the Corporate Culture of Ryanair

Language used by O’Leary became synonymous with Ryanair. He can tell anyone to ‘fuck off’ and his favourite insult is ‘wanker’, he used his own ‘bolloxology’. A volatile atmosphere was created at the airline, where people were impatient, shouted and roared when they shouldn’t.

Ryanair does not publish an official vision and mission. However, the literature acknowledges that Tony Ryan’s original vision was modified over the years. Ryanair was established as a ‘value for money’ company, which provided affordable air fairs, with excellent and professional customer service. O’Leary had only one vision – to make money. He was concentrating on providing deals and ignoring the value that it brings to the customers.

O’Leary is cutting costs in every organizational aspect. Basic assumptions of the staff that they would get uniforms, refreshments, health checks, airport passes, vetting procedures, car parking spaces or Christmas parties have been changed. Working in Ryanair means that you are paying for these things yourself. It is staff’s responsibility to get pens, post-it notes or paperclips. Moreover, they are not allowed to charge mobile phones at the airline’s expense or use cover sheets when sending a fax.

Harrison and Stokes’ (1990) Classification Scheme

According to Harrison and Stokes’ (1990) classification scheme, Ryanair, since its establishment, maintained a power culture. In the early days, Tony Ryan, who had no shareholding in the company, actually ran the business. The central power role was transferred to the new CEO, O’Leary. The company continued to be driven from the top to down, where O’Leary always had a final say. Opposing discussions by other managers were not tolerated. A flat management structure (three layers) was kept despite rapid growth of the company. Only numbers of aircrafts, pilots, in-flight people and engineers were increased. This enabled them to avoid bureaucracy. Ryanair has the ability to react and respond to competitive threats quickly, which is crucial in the competitive environment within which they are operating.

Slocum and Hellriegel (2007) Framework

Ryanair’s aim and objectives are very clear: to be profitable; to be Europe’s leading low-fares scheduled passenger airline; to prevent further airlines’ domination in the market; and to generate traffic numbers through low fares. Its relationship with employees is performance-based. Everyone in the company can benefit from the company’s success. When the company was established its employees became shareholders. The performance-based rewards scheme was strengthened and taken to a different level after the agreement between Ryan and O’Leary. His bonus percentage was directly linked with company’s profits. Under O’Leary’s management, employees’ salaries are productivity based and related to incentives and commissions for on-board duty free goods sales and for numbers of hours flown. The above-examined factors enable us to make assumptions that, according to Slocum and Hellriegel’s (2007) framework, Ryanair culture can be classified as a market culture. The concept has not changes since the company’s establishment.

Impacts of Ryanair’s culture

The impact of Ryanair’s culture will be discussed from two perspectives. Firstly, what impacts have to be faced by the organisation. Secondly, the influence perceived by the stakeholders.

Impacts on the Organisation

“For decades air travel had been the preserve of money classes” (Ruddock, 2008:231). Ryanair low-cost fares revolutionised air travel. The concept of budget airlines became the norm across Europe. Moreover, due to Ryanair’s low-cost fares, a new short break phenomenon developed. Furthermore, Ryanair became one of the most profitable of Europe’s low-cost airlines.

After establishment, Ryanair was known as a small company with a very positive atmosphere. However, because of O’Leary and his ‘bolloxology’ used to insult any stakeholder on his way, the Ryanair brand is being seen as cheap, nasty and rough to anyone (Byus, 2005; Ruddock, 2007). It is disliked, even by the customers who continue to fly with it. The organisation’s revolutionary impact on the airlines industry is often forgotten.

Impact on Stakeholders

Gratitude or appreciation for its stakeholders is not acknowledged in Ryanair’s corporate culture or policy. Two groups of stakeholders: customers and employees are mostly impacted by Ryanair’s culture. Cost-cutting strategy applies in every aspect of the company.

During the years, O’Leary is sending a message to the public that it is a cheap airline with no concessions. The airline’s commitment to the customers is to provide the lowest fair, and a safe and on-time flight. Its attitude to the passengers when something goes wrong is not to provide anything extra because they are paying too little and have no right to complain. The no frills concept includes everything where the right to use of a wheelchair or use of toilets in the airplane can be charged.

The staff at Ryanair are seen as a tool for maintaining high productivity. The concept is to make them work hard through long hours and short holidays, get rid of them when they are not useful and put in a fresh team. Ryanair’s culture and especially its customer service policy are perceived as embarrassing by the staff, and causes high staff turnover in customer service-related positions. Conversely, the main advantage of Ryanair’s culture is that it stimulates a company’s growth and opportunities for promotion are considerably higher than in other airlines.

Management

In the organisation’s early days it was believed that those who joined Ryanair – joined a dream. It was easier for management to contact and negotiate with employees because everyone had the same dream and the company was small. Nevertheless, the young staff employed weren’t restricted by union conditions and job definitions. In a crisis, employees were expected to help out where they could, this flexibility was crucial to Ryanair’s development. After the 1990s, people were joining an airline. The rapid expansion of the airline complicated direct contact with employees. A tough management style, policies and cultural dissatisfaction increased threats of strikes.

Conclusions

Ryanair’s culture and its low-cost strategy had a major impact on airlines, the tourism industry and society lifestyle. Power and market cultures identified in the airline have not changed since its establishment. However, the CEO, Michael O’Leary, revolutionised the company’s cultural artefacts, values and basic assumptions. There is strong evidence that the cost-cutting concept is implemented in every aspect of the company’s operations. Customers cannot expect to gain anything more than a cheap, safe and on-time flight. If something goes wrong, nobody has the right to complain and the company does not take any responsibility. Employees can be awarded for excellent performances, but at the same time abused and ‘bolloxed’ if they made a mistake. Language used by O’Leary internally and externally is a cultural attribute which had direct impact to its corporate culture and image. A volatile atmosphere is dominating the company. The brand is recognised for its rudeness and nastiness by various stakeholders. The only measurement of success is profits and there is no place for loyalty appreciation or gratitude to stakeholders. Management of the company can be seen as complicated because there are high demands and very few incentives provided.

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