Wednesday, December 29, 2010

The problems of prejudice in the workplace

Ah, yes. A very tough one from my MBA Prof! She clearly had me figured-out in a nutshell. I wish I were that good judging people and their capabilities and weaknesses. It would prevent me from falling on my face so many times!
Prejudice could be described as a perceived belief or opinion based on a bias towards a certain social group or individual without knowing the actual background. Prejudice in our world is daily executed against people from a different race, religion, social background, gender or from any other social entity. Prejudice can result from biased beliefs, affections towards certain minorities, or from social teachings.

Taking the above into consideration, we need to recognize that our own upbringing, and thus our personal values and beliefs, have been influenced to a large extent by taught stereotyping and biases, which, together with our own perceptions of society, generate prejudices. In order to eliminate our own prejudices effectively, we therefore would need to question all our beliefs and values, rephrasing underlying questions and search for new accurate answers. Clearly, this is an impossible task. It would be feasible though to start reducing prejudice from within one’s immediate surroundings, hoping for a rippling effect into social areas further from the originator.

To start reducing prejudice, we would need to recognize prejudice, understand the reasons behind it by researching as much information as possible, by asking questions, by listening intently, and by starting valuing differences in mankind (Clawson and Smith:1990). We would need to provide constant feedback, not only to the originator of the communicated prejudice, but also to the receptor and to our social leaders. This whistle blowing potentially also would have a resulting effect on copycats since slowly a culture of non-tolerance against prejudice would evolve. The so raised awareness could be regarded as a soft training concept where the trainees adapt almost unconsciously to a newly emerged dominant culture.

So, from a personal level, a first important step would be to speak out against all observed prejudice, regardless its surroundings, in a clear, nevertheless solidly founded manner. Going from the center of a circle, this would start with my own beliefs and actions followed with the ones exercised at my home where my children often pick-up beliefs from their immediate social surroundings and consequently unintentionally display prejudice in a certain form. I would need to actively address issues when socializing with my friends and not be reluctant to deal with the resulting potential conflict. For example, racial jokes should not be taken as jokes anymore since, even when disregarded right away by the receptor, only the habit of hearing them frequently leads to increased acceptance of, or at least indifference to, racism. Work is another social field where constant highlighting of prejudice issues could have a rippling effect. If each individual would actively suppress prejudice in his or her immediate surroundings, the world would eventually be overlapped with ‘prejudice-free circles’, which in turn would eventually offset possible low authority levels by initiators.

A final, and often overlooked, step in reducing prejudice consists of frequent re-evaluations of actions taken and their consequent results. As with most action plans, the concept of reducing prejudice would probably be prone to ever changing social surroundings and therefore would need some kind of adaptive elements. Amended, or even completely new, strategies would need to be implemented in order to achieve maximum gain from the program. Of course, reducing dormant prejudice elements is a mammoth task and will require significant joint efforts by all involved. However, a journey starts with a first step, as the saying goes. Even the smallest success in the endeavors to reduce prejudice would be cause for major celebrations.

Prejudice in the workplace will at some point in time hamper commercial prosperity of the affected organization. Even if prejudice is part of the existing, dominant culture, at least one employee will eventually feel offended and retreat into a state of non-communication and will shy away from interaction with peers, create a counterculture, or even leave the organization altogether; all options clearly not being in the interest of organizations due to loss of expertise and financial reasons. Clawson and Smith (1990) call this form of prejudice ‘institutional prejudice’ and claim that this form of prejudice is exercised by employees in power and continue arguing that this phenomenon has advantages and disadvantages. An advantage would occur in the organization’s selection process where managers would find their new recruits from the start fully adhering to the existing organization’s culture since candidates from different backgrounds and morales would not be considered for the position at all. The obvious disadvantage however would be that staff would be promoted purely based on the ‘blend-in’ factor and not on skills and knowledge.

By excluding non-adhering staff from any kind of further financial and social benefits, it is inevitable that the affected employee will retreat into various negative attitudes that lead eventually into a unwanted subculture, or even into a counterculture, within the organization. If handled unskillfully by management, this situation will counteract the organization’s financial and social profitability in the long run. Unbiased socialization therefore needs to form a prominent part in the organization’s culture. Only then can the organization truly make advantage of its diverse employee’s base.

As with most social phenomena, acknowledging prejudices is a first step to rectification. Leaders have generally the biggest impact on the organization’s culture. The path to an unbiased and non-stereotyping culture should therefore start with management. Once management has recognized that prejudice does form a part of their organization’s culture, research into the topic would need to be conducted by engaging all parties involved in a nondiscriminatory way. Questions as to who, why, and when need to be raised. Only by exposing underlying opinions of difference, a real consolidation process can take place. Of course, appropriate boundaries need to be established by management first. People concerned should be able to talk freely with no fear of prosecution of any kind.

Leading by example should be part of the strategy to eradicate prejudice within the organization. The organization’s policies should communicate clear messages with regards to an anti-prejudice culture. Frequent reminders, either verbally or in writing, by management should form part in the day-to-day operations. These measures however only work when staff recognizes that its leaders display and live by the same desired behavior. Contradicting and conflicting images would diminish the effectiveness of the program instantly.

Additional important steps to be undertaken could consist of training staff in not only displaying non-prejudice based behavior, but also in recognizing initial symptoms. Also, the establishment of organizational legal procedures to address findings and to resolve them would need to be implemented. And finally, the promotion of previously prejudiced against staff into higher positions within the organization based on clearly communicated skill and knowledge factors would send the strong message throughout the organization that indeed all employees are treated equally when it comes to individual career progress.

As an example to illustrate an actual experienced case of prejudice, I would like to refer to a recent situation at my company. Fundamentally, our organization is a relatively small one with little structured guidance in place. We foster a culture of entrepreneurship with high degrees of freedom for our employees with regards to job operations. As such, we do not have formal guidelines against prejudice in place. Generally, arising conflict is solved in an open dialogue manner and this approach has proven to be working.

In my example, we had recently hired a new business development executive. This person is of middle age and originally from the United Kingdom, making him the first Brit to work for us. Our consultants turn out to be almost exclusively older Americans with long experiences in our trade. We decided to hire the business development executive based on his knowledge of the region and his hands-on approach but realized from the start that he would need to learn the trade quickly in order to gain the respect from his potential customers as well as from his colleagues.

What we had not anticipated, however, was that our consultants were not willing to share their knowledge with the business development executive. At first, they complained about him not getting any new business in. Once requests for proposals from the executive’s territory started trickling in, the consultants immediately started complaining about the allegedly poor quality of the requests. It certainly seemed that the executive was in for a tough ride and in the end he would lose the battle and either shield himself from his colleagues as much as possible or even leave the company altogether, both options highly undesirable for the company, since our hiring process had shown that the business development executive would indeed generate additional business in the long run when managed in a very informal manner.

In our traditional way of handling such issues, we held a number of meetings with both parties, individually and collectively. These meetings however never concluded to the desired effect, which forced us to start probing into causes for the obvious hostility displayed by our consultants. We did this by having informal talks with all parties involved. Most of the time these talks took place outside the office after working hours since it is our experience that such an informal surrounding generally allows people to express themselves more freely.

The findings we collected were certainly a surprise to all of us and basically lacked all rationale. It seemed that our business development executive was not allowed into our tight knitted fraternity due to two main reasons: one, he is a British citizen and as such highly suspect (for whatever reason), and two, he is too young to have actual in-depth knowledge of our field of business. Fact is though that this individual has not been the first non-US citizen to work for us and he is certainly not the youngest. Our company prides itself in having a reasonable ethnic diversity, something we proudly advertise to our customers. However, reasoning towards this end did not seem to work with our consultants.

Since the company was getting close to experiencing subcultures, something we would not encourage due to the company’s beliefs and structure, we decided to implement a simple but drastic measure. In order to learn the trade from the more experienced consultants, the business development executive had been scheduled to consecutively share an office with the consultants. What we now decided however was that the respective consultants had to move into the office of the business development executive, starting with the consultant that displayed the most aggressive hostility towards the business development executive. This would hopefully send a message to all colleagues that the company stood by its new recruits.

As expected, the first week was a week of silence in the business development executive’s office. However, upon doing my daily round to all colleagues in the second week, I noticed loud laughter coming out of the ‘ice-box’ office. Clearly, somebody had made a joke and both parties were laughing! Apparently, this incident instantly removed all barriers between both camps. Once convinced of the social ability of the business development executive, the consultant suddenly became aware of the fact that this employee was indeed worth working together with as a person. The once hostile consultant even became an advocate of the business development executive, trying to convince his old buddies that they all needed to give this fantastic young ‘chap’ a chance!

The above example illustrates a classic example of cognitive and affective prejudice. Ever since the British were defeated on American soil, there is a, usually friendly, rivalry going on. However, this rivalry in jest does lead in some instances to more serious cases. World War Two aggregated these particular cases when it became clear that the United States needed to step-in in order to defeat the Axis forces, something the United Kingdom had proven unable to do by itself. Apparently, our consultants had been subject to continuous negative influence by their parents with regards to the ‘Brits being unable to do anything without US help’. A belief that was, while being transmitted, apparently never questioned and as such unconditionally accepted. In the end, all it took to eradicate this case of prejudice was to forcefully have the two parties working together, a solution that, for operational reasons alone, unfortunately never will work with larger corporations or even sovereign state involvement.

The merits of the McKinsey 7-S framework

McKinsey is clearly one of the best around. Usually they advise many, including me, so I thought this time I do the reverse!
McKinsey’s 7-S model has been developed in the late 1970s to evaluate organizations by focusing on seven ‘S’. Over time, the model has been slightly amended, yet remains one of the foremost tools to understand complex organizations. The model presses modern management techniques into a framework of headings starting with the same alphabetic character ‘S’. This paper evaluates the model’s capabilities when used as an analyzing tool. The paper also highlights some of the shortcomings a manager could experience when putting the model into use.
The model addresses measurable factors such as the organization’s structure, systems, and strategy (the so-called ‘hard triangle’) as well as aspects derived from a much more irrational process, namely super-ordinate goals (later renamed into shared values), style, staff, and skills (the so-called ‘soft square’) and argues that a successful organization is one in balance, with all variables heading into the same direction, and without any flaws in the interaction between these factors. Consequently, managers within the organization need to address all aspects of the model in order to run a successful organization, or when attempting to change an existing organizational structure and philosophy, be it financially, strategically, operationally, or from an employee satisfaction point of view (Weber:1998), whereas focusing on a few subjects only will result in failure.
Weber (1998) has described the seven Ss of the model in detail. They consist of the following:
Strategy: the strategy of an organization reflects on three steps:
  • Where the organization is right now;
  • Where the organization wants to be at a certain point in time; and maybe most importantly
  • How to get there.
The Strategy of an organization is also subject to external factors, such as competition and customer demands.

Structure: the structure of an organization depicts on how individuals and business units relate to each other. Flawed lines of communication are usually the bottlenecks within an organization’s structure. It is relatively easy to comprehend the organization’s structure by evaluating the hierarchy of the organization.

Systems: A set of systems can be seen as internal processes that determine how the organization operates on a day-to-day basis. Important to realize is who has factual authority over the used systems.

Style: All organizations display a certain culture, a set of shared actions, values and beliefs that distinguishes the organization from competitors. A question to ask would be: is the leadership style adequate to internal and external demands?

Staff: in the 7-S model, staff refers not only to support functions, but to all human resources within the organization. Competency gaps need to be addressed.

Skills: Skills in the 7-S model is used to address the capabilities of the whole organization, not only the individual skills of its members, and as such, where does the assessment of the skill lie?

Shared Values: Shared Values refer to the fundamental common beliefs held by the individual members of the organization on how to the organization needs to operate. An obvious question would be: are the shared values aligned with the company’s vision and core values?
It is widely believed that McKinsey’s 7-S model incorporates most of the elements of an organization. Studying the seven factors in-depth and linking the respective outcomes according to the model would therefore generate an accurate picture of the organization focused on. The model does not only consist of seven individual components, however. What tends to be equally important is the interaction of the factors and how they affect each other. Any gaps found depict shortcomings in the organization that need to be addressed.
McKinsey’s 7-S framework therefore is a strong analytical tool to evaluate organizations and competitors. Since the model emphasizes the interrelation between all functions, the model forces managers to adhere to a helicopter view and not to focus on a few elements within the organization only. Likewise, through its presentation of hard and soft elements, managers need to address the softer emotional side of the organization, something that has been excluded to a large extent in historical analyses of organizations. The framework is therefore also highly suited to be used when dealing with organizational change since it will also highlight the underlying elements, the ones that do not always figure prominently on balance sheets, of the organization.
However, as with any device to aid one’s memory, the used headings, the seven Ss, tend not always to represent the best choice of wordings and should therefore not be applied without a proper understanding of the underlying meanings. Staff, for example, does not only refer to staff in the traditional sense, it encompasses all people linked with the organization from within. Style, as another example, could be best paraphrased as culture with all its associated values and beliefs.
At the same time, the concepts within the soft square present additional difficulties when trying to quantify them. Variables within the ‘hard triangle’ can be relatively easily found in organizational reports and press releases. The ‘soft square’ factors, on the other hand, are harder to comprehend since these factors tend to be flexible and frequently changing over time. The model therefore rarely calculates a precise analysis of these variables, as such making it difficult for managers to quantify the generated and received data.
Although the model presents itself as a tool for all stakeholders in the organization, an important group within the stakeholders, some might even argue the most important group, is missing, or at least has not the central position it deserves in the discussed framework, namely the stakeholder called customer. Moreover, external factors generally do seem to be underrepresented in the 7-S model. A focus on the organization’s market opportunities for example is not considered, making it necessary to combine the outcome of a 7-S analysis with outcomes of other analytical models, such as a SWOT-analysis. Also, financial results of an organization can only be evaluated to a very limited extent within the 7-S framework. Traditional accounting analyses should therefore complement the McKinsey model when used to analyze financials of an organization.
Additionally, although the model does focus on people, it does not incorporate nor does it address human traits, such as the resistance to change, or the sometimes inherent incapability to communicate effectively. So in the end, although McKinsey’s 7-S framework is a very valuable tool to analyze organizations, one should however be aware of its shortcomings. Additional methods might be required to properly assess the organization and as with all management techniques, proper training needs to be received by the implementer. Or, to be using a popular phrase, train the trainer first.

What can management do to create a more ethical culture?

Another piece of hard-worked for research. Sometimes, I feel it is easier to sit at a desk and think about a subject than to go out there and actually do it! Good that I have so many good friends around me that help me in my daily duties!
Organizational culture could be defined as a system of shared actions, values, and beliefs that develops within an organization and guides the behavior of its members (Schermerhorn, et al.:2002). As such, organizational culture is an intangible, a staff oriented and perceived strategy that, when applied correctly, can be used by any organization’s management as a strong tool to increase the organization’s identity, to foster the organization’s stability and to display the organization’s external strategy. At the same time, the organization’s culture can be misused, either on purpose or accidentally, to resist internal and external change and diversity of the organization. The good-ole-boy’s networks come to mind where often admission to potential personal prosperity, power, and influence will only be granted in return for a high degree of historical and present conformance, such as family background, education, gender and race.

However weak the organization’s culture may be, it is nevertheless inherent in any organization. I would argue that it is very difficult to find two identical organizational cultures in the vast array of worldwide available cultural pools. A laissez-faire culture usually leads to a strict, high level bureaucracy within the organization, effectively reducing its adaptability to changing internal and external demands, with the organization lacking internal predictability and consistency (Robbins:1996). Yet, a strong culture also prevents the organization from being effective when facing challenges, such as mergers with and acquisitions of other organizations (Robbins:1996). Leaders in both the potential partner organizations need to come to consensus and implement a mutually acceptable culture without favoring one of the existing individual ones. This possibly is one of the greatest challenges in the corporate world. Everybody has heard of the big merger failures in corporate history, more often than not the result from the inability to streamline both organizations into one with a common vision with an underlying single culture.

An organizational culture is important for the good or the bad of an organization in the sense that it addresses two important concepts, namely the one of how the day-to-day operations need to be handled, and how the associated human resources resolve their interactional conflicts (Schermerhorn, et al.:2002). This paper argues that leaders of an organization set and influence the organizational culture to a great extent. As such, leaders must be aware of their behavior and actions and their subsequent implications. It is important to realize that any existing organization knows a historical grown culture and possesses therefore a strong momentum. Turning the existing culture completely around is a mammoth task not to be taken lightly since it is in the character of humans to resist change. Any new manager trying to bring-in his or her own counterculture that rejects the philosophy of the dominant culture will at best succeed only in creating various subcultures.

Although the organizational culture is in its basis defined, lived and communicated by the founders of the organization, the established culture will be heavily influenced by the organization’s leaders at its evolving stages. By frequent interaction with their line managers, subordinates will be continuously reflecting on their own behavior and will potentially align their actions with the ones of the organization’s management. However, a forced top-down approach by aggressively communicating the culture from a management position will only be effective to a certain extent. Forcing the culture through the ranks will inevitably be met by resistance, a strong human attribute, leading to subcultures that in extreme cases can oppose the dominant culture of the organization, effectively hampering organizational development. Therefore, proper input and initiatives from all employees at all levels must be sought before attempting to change an existing culture.

The organization’s selection process plays another important role in maintaining the perceived culture. Tangible attributes of the potential employee, such as knowledge and skills, need to be complemented by intangible ones, such as the ability of the employee to blend-in with the organization’s culture. Selecting a candidate that has been tested to be a loner might not be the best choice when the organization is proud of its team-player culture. The organization therefore must assure taking adequate steps to align its selection process with its espoused values. The Human Resources department plays a vital role in this process since generally its members deal with the employees on an administrative level.

However well selected the new employee may be, chances prevail that he or she needs some level of adaption to fit into the actual organization. Robbins (1996) divides this process into three consecutive stages, namely the pre-arrival stage, the encounter stage, and the metamorphosis stage. Any new employee holds a set of beliefs and expectations when commencing his or her career at the new organization. This phase in the employee’s career is called the pre-arrival stage. The subsequent encounter stage might be best described as ‘facing the reality’. Enacted values by the organization’s staff might very well contradict the ones the new employee learnt during his or her selection. The new employee now needs to compare previously held and actual beliefs and values, sometimes leading even to extreme occurrences, such as resignation from the organization. The last stage within the indoctrination process, called metamorphosis, then furthers when the held perceived culture is amended to the imposed reality.

Robbins (1996) argues that there are five different entry socialization options. These options range from explicit training, either individually or collectively, fixed time-duration promotion schemes to divestiture socialization, where ones beliefs and values are shaped according to the encountered dominant culture. These options all contribute to work satisfaction and thus employee turn-over conditions at the organization.

Rituals, language, and the organization’s symbols all form a strong basis to influence and manage the organization’s culture. Tales about the organization, often grossly exaggerated over time, will leave an everlasting mark on the receptor and thus influence his/her beliefs and consequent actions. It is not uncommon to hear questions like: is it possible to reach the top of this organization within ten years? Commonly given answers to these types of questions will create a common bond between the newly hired employee and the existing human resources and thus changing and influencing their behavior.

By adhering to an organization’s distinctive philosophy, its members do not only create a clear picture of what the organization stands for, they also create a united group with shared traditions, concepts and beliefs. Modern organizations tend to design its structure to be flat, with a wide span of control, reduced formalization and empowered employees organized in teams (Robbins:1996). With the resulting lost bureaucracy and formalization within organizations, Robbins (1996) argues further that an organizational culture helps aligning employees towards the organization’s vision.

As stated before, organizational leaders tend to influence the culture to a high extent. Leaders should therefore be very aware that their actions will influence, positively or negatively, the behavior and held morales of their subordinates. Creation of an ethical culture must therefore be realized by ‘leading by example’. It is important not only to hold ethical values as a leader; these also should be visibly communicated throughout the organization. Financial results should never be the only measurable within the organization; on the contrary, leaders should emphasize and reward the road taken to financial success. Staff training needs to reflect and actively address the ethical values of the organization, and whistleblowers should never fear to be punished.

A relatively simple way of influencing an existing culture that delivers reasonably quick results is to modify the more visible aspects of the organization’s culture, such as the mentioned rituals, the language used, and the symbols of an organization. Creating new rituals, for example when finishing a project, can, if done correctly, enhance tremendously the sense of belonging of the employees. Organization’s internally floating stories do affect employees in their behavior towards their immediate boundaries. By communicating positive lessons learnt from these stories, even if the latter might be grossly exaggerated, leaders and managers will influence the ethical behavior of not only the employee, but more importantly of the whole organization. Leaders do have the power of making their subordinates see what they want them to see. Without any doubt a tremendous operational and commercial weapon that, if used ethically, will benefit the whole organization.

Three conditions that make team participation difficult within an organization.

Another excerpt from my exam paper. I figured all those long hours most be worth more than a grade? Well, if you find it rubbish, please feel free to comment here!

Organizations consist not only of individuals but also to a large extent of groups, formal charged ones and informal - or unofficial - ones. A team could be defined as a tightly knitted group, with the group consisting of interdependent individuals interacting with each other; individuals that share common values and goals (The Association of Business Executives:2008). The key word for the purpose of this paper certainly is ‘individuals’. Individuals might share the team’s vision, they possess however all different cultural backgrounds, levels of education, personal traits, and personal values and goals. In addition, any team is subject to internal and external factors, such as team size, management style, team and individual norms, team tasks and team roles (The Association of Business Executives:2008).

All these factors create potential functional and dysfunctional conflict within not only the team, but also within the whole organization. Research has shown that participation in any form is one underlying cause for conflict (Robbins:1996). Although healthy to a competitive environment (within limits), conflict needs to be accepted as part of human nature, addressed, and resolved in a variety of ways by the organization, the team’s management, or the team’s members in order for the team to be a successful work entity within the organization (Robbins:1996).

McGregor argues that in order to be successful, the teams must be effective and characterizes an effective team by open discussions, with members being prepared to listen and to learn, by reaching decisions by a process of convincing members rather than majority voting, by using situational leadership where different people may lead the group under various circumstances, by accepting healthy conflict as a positive contributor to creativity, by pursuing common goals, and by assessing its own progress (The Association of Business Executives:2008). This paper will highlight some of the issues that arise from a team’s behavior and managerial ways of dealing effectively with it.

Per definition, team members are charged with a common goal that should prevail over their own. The team’s vision most likely is announced to all its members during the early stage of the team’s formation. Tuckman calls this the Forming Stage in his studies (Robbins:1996). In an organizational way of speaking, the team has become a united resource. Of course, no team can interact on its own, neglecting external, organizational, and departmental factors. Teams and its members are pooled interdependent, sequential interdependent, or even reciprocal interdependent (Robbins:1996). Common outputs or inputs, or an exchange of inputs and outputs are shared by teams and individuals. Proper management must therefore be in place to oversee the different entities and to keep their interactions in balance.

Communication, in all its various forms and different quantities, is historically seen as one of the major contributors to conflict in general. This might come from the fact that humans spend a large part of their lives communicating, verbally or non-verbally (Robbins:1996). Wrongly applied, or even wrongly perceived, communication can cause a variety of sources for potential conflict. Goals can be misunderstood, intended meanings can be misinterpreted, especially in written communications or where language barriers exist, and individuals can feel left out of the team, or indeed teams can feel left out of the organization. Research has shown that both too little and too much communication increase the chances for conflict (Robbins:1996). I would argue however that wrongly communicated actions and plans, and wrongly perceived communication contribute as much to misunderstandings and conflict as the sheer quantity does.

Personal - be it individual or team - traits, values and backgrounds also contribute to a large extent to interpersonal or intergroup behavior. Entities, be they individuals or groups, from different ethnic or cultural backgrounds value different standards. These standards may all be very valid, even common, in their respective cultures; they can easily be perceived as unethical, immoral or indeed plain illegal in another society. Equal treatment of staff therefore would hardly result in positive results. Managers and staff need to be made aware of individual differences. However, team members from different backgrounds can complement each other’s thinking when guided properly towards the team’s goals, and should therefore be encouraged to speak out, even when language barriers might restrict proper communication.

Western societies are generally speaking individualistic ones. Western influenced organizations therefore will need to train and raise its employees to become team players. Hiring outside consultants might work if the company’s culture has historically not been one of team work. Setting clear ground rules that commit to open participation is another proven strategy. Roles within the team should always be assigned with a clear scope of work and authority. Arising conflict needs to be turned into win-win situations for the team members by debating and accepting solutions rather than voting by majority. And last, upon achieving the common goal, the team, rather than the individual, needs to be the focus of reward thus eliminating to a large extent the competition factor within the team.

Whatever strategy might work best depends to a large extent on the organization’s structure, its culture and strategy. It is up to the company’s management to find a balance between team play and extreme cohesiveness of the team. The latter could lead to the formation of independent subcultures contradicting, or even denying completely for self-interest reasons, the organization’s vision.

What motivates professionals?

And this is an excerpt from an exam I submitted for my MBA. It was graded all right so it made me proud and my wife forgot all those long nights...

Motivation within an individual or group may be defined as a driver that makes the individual or group achieve a set goal in order to fulfill a need (The Association of Business Executives:2008). Research shows its key characteristics being uniqueness to the individual, being under the individual’s direct control, and, probably to a large extent ignored by modern managers, leading not necessarily to higher performance of the individual (The Association of Business Executives:2008). In other words, high levels of efforts by the individual need to be structured according to the organization’s goals and vision in order to gain benefit from them (Robbins:1996).

Motivational techniques are far from being modern business tools only. They have been known to organizations and societies throughout history. At its very basic form, motivation decided between life and death. Upon failure of a crop, starvation would be imminent. Physical punishment, or the lack of, has been a motivational driver throughout the early stages of the industrial revolution. It is indeed still found in many cultures globally and as such very much alive. In more recent times, western style organizations believed that money was the prime motivational force. However, to the surprise of most modern managers, Herzberg found in its studies that achievement, recognition, the work itself, and responsibility are far greater motivators than the actual earned salary (The Association of Business Executives:2008). At the same time, the Cognitive Evaluation Theory teaches us that extrinsic rewards, such as pay rises for performance, automatically reduce intrinsic rewards, such as the pleasure of doing what you do best (Robbins:1996), leaving managers with a priority to find and apply other and better means of motivation.

So what is it exactly that does professionals motivate? And how can management implement proper motivational techniques? This paper argues that each individual is different as an entity, has a different immediate surrounding and therefore has different needs. A logical result being the need of a broad spectrum of to be offered rewards by the organization, with each reward to focus not only on characteristics of the individual employee but also on his/her position within the organization. An almost impossible task for any organization from a financial point of view, however; the sheer cost alone of such a program would exceed most human resources departments’ yearly budgets. Yet, as can be observed over the last few years in corporations across the world, valid attempts have been made by organizations to fulfill the individual employee’s need for reward and thus motivation. These motivational techniques range from various employee involvement programs, over variable remuneration schemes, to so-called cafeteria style benefit plans.

Maslow’s Hierarchy of Needs states that there are common levels of needs for individuals and that each individual needs to satisfy the lower level in order to meet the higher one (Robbins:1996). Although this theory has been proven inadequate in certain specialized circumstances (for example, modern society sees in many instances the social level as a result of the esteem level instead of the other way round as stipulated by Maslow), the general concept is still believed to be valid. The basic needs in Maslow’s model are taken care of by modern society in the developed world, leaving the concerned individual to satisfy its social needs first. Alderfer calls this need the Relatedness Need in his ERG Theory of 1972. McClelland further strengthened this theory by stating lower levels of organizations relate to a need for affiliation (The Association of Business Executives:2008). The problem that arises now in developed countries is the increased specialization of a number of low level jobs. The associated tasks can be so boring and monotonous with so little interaction with peers on the work floor that only the basic needs (those that are in fact already taken care of by society) can be met. One could argue that in this case indeed a material reward (used as a factual esteem level reward, bypassing the social level) is the only motivation possible, leaving the employee and his/her manager exposed to the consequent reward paradox found in the Cognitive Evaluation Theory.

Of course, work tasks in an organization are seldom stand-alone ones and free from interaction with other business processes. It is therefore important to note that human interaction influences the individual employee in his/her motivation towards his/her to be accomplished tasks. The Equity Theory is the outcome of a research into work floor gossip, so to speak. Employees will always compare their input into work tasks with the consequent outcomes relative to the ones received by their peers (Robbins:1996). Inherently linked to human nature, these outcomes are highly subjective and thus as such perceived by the respective employee, generating additional problems in finding a fair reward system.

Another human characteristic that is closely linked with rewards is to ask the question: “What is there in for me?” This Expectancy Theory states that an employee goes through a series of consequent thinking steps before attempting to express individual effort. First, the employee will ask himself if his to be applied additional effort will be recognized by the organization. If so, will this recognition result in rewards? And last, would I find this potential reward to be personally attractive (Robbins:1996)? The Expectancy Theory touches a concept often neglected in organizations, the one of communication. If an employee feels his work not to be appreciated, no matter how hard he/she tries, he/she will likely not put in that often needed extra effort into his/her next work task and will perform the bare minimums only. Proper communication always needs to end with feedback to the initiator of the action, it is therefore important that the employee’s line manager communicates his/her findings back to the employee. Even if the organization itself does not foresee a specific reward for individual accomplishments, a pat on the shoulder by a line manager often is appreciated as much, a theory underlined by Herzberg’s research.

As valid as all the research into the different motivational drivers may be, it shows one thing in particular: different people have different needs. In order to satisfy those different needs of the respective employees, whilst at the same time apply a fair and tangible reward system, Peter Drucker has proposed a Management by Objectives program. This program emphasizes participatively set goals throughout the organization (Robbins:1996) resulting in not only reasonable and achievable objectives, but most importantly in measurable outcomes.

To illustrate the above, I recall a moment of personal anxiety and enlightenment that I would like to share in this context. When I was heading the operations department for a mid-size company, the company as a whole was faced with the task to implement a newly introduced set of governmental rules and regulations. These new rules had been in the pipeline for some time already, and as always with governmental bodies, delays in announcing the set are directly passed onto the end-user. The timeframe given to implement was so short that the management team of the company actually feared the company facing bankruptcy, being a mid-size company missing the political clout to ask for an extension and lacking the funds for additional project staff. Having worked on the implementation schedule for at least a week and anticipating the failure of the project, I realized that all staff of the operations department needed to come together in a brainstorming session and decide on an action plan. This would not only eliminate floating rumours in the department and present a clear picture of what situation the company was facing, it also would force individual staff to actively set their own goals; goals by which the individual employee could be appraised on, resulting eventually in potential company rewards.

The planned for one session turned eventually into three whole morning meetings. The outcome turned out to be highly unexpected, yet in a positive way. Each and every employee had set his/her own set of goals, sometimes even cross-tasking, so that together the department would finish the project just short of the deadline received. Every employee knew exactly each of his peers’ tasks and could therefore easily recognize bottlenecks and critical paths. To make a long story short, the whole department succeeded in getting ready for the big audit ahead of schedule. The organization decided to reward the whole department rather than certain outstanding individuals, and even with the knowledge that some employees in the department had gone so much further than others in their tasks set by themselves, this outcome was happily accepted by all.

The above example not only demonstrates a Management by Objectives project, it also represents another form of motivating techniques to address the different needs of individuals, a program that is commonly known as Employee Involvement Program. Although there are various forms of Employee Involvement Programs, such as participative management, representative participation, quality circles, and employee stock ownership plans, they all have one thing in common; they grant subordinates a considerable say in the organization’s decision making process thus enhancing employee’s work satisfaction, which in turn underlines Herzberg’s theory.

Variable pay, skill-based pay, and in very recent times, cafeteria style benefit plans where one is able to choose from a range of offered benefits, also reflect the search by organizations to address the individuals’ needs since not all employees want the same thing. Above all, however, there needs to be a equally fair benefit plan in place. A plan, that does not allow any room for conflicting rewards. Perceived unfair treatment would demotivate the negatively affected employee again, effectively reducing the benefits of the originally well intended plan.


... if flying First Class is just no longer good enough and you feel the time has come for your own plane, Alex de Vos reveals how to go about it.Alex de Vos reveals how to go about it.

Yes, you all have read it correctly. Finally the ultimate guide on how-to... and... FOR FREE! Wow, I must be generous (not really, not even my wife would claim that I am a generous person). The article was published in a monthly business magazine, so I needed to use fancy words to grasp the hot-shots' attention. Well, what do you know: it apparently worked!

So you just bought your second Ferrari and now you are in the market for a used aircraft. A walk in the park based on your previous experience with high dollar cars, right? Even easier now since an old acquaintance offers you that impeccable Boeing 727, low hours, all checks completed, ready to fly the blue skies! So now, you can do two things: either rush into the purchase of that shiny B727 (you really do get them for peanuts nowadays) or you take a step back and start the good ole thinking process. Guess which action I recommend (not to mention you probably want your lovely wife still to talk to you in a few months down the road).

First you have to realize that, unlike with automobile purchases, an aircraft buyer enjoys very little legal protection. Once the purchase agreement is signed and you fly home to proudly show-off your new shiny metal, you have passed the-point-of-no-return. Landing gear won’t work? Tough luck, buddy, you better get out that cheque book of yours!

Do not get me wrong: I believe it is one of the best times ever to acquire an aircraft. There is a surplus of excellent maintained aircraft currently on the market. Prices have never been cheaper. So how do you prevent an aircraft acquisition from becoming a nightmare (and maybe more importantly: you becoming the laughing stock of the local airport)? Easy enough: PLAN!

Here is what you have to ask yourself: Do I really need that B727 when 90% of the time I fly with my family of five within the region? Maybe a mid-range business jet would be the better deal? And if yes, do I have adequate maintenance facilities nearby or do I need to fly halfway around the world for a minor aircraft check? What support do I have nearby with regards to operating/maintaining the aircraft? What countries do I fly into most of the time? What about their legal requirements? Is there any special modification to the aircraft required? Compare aircraft market prices and operating costs (don’t get fooled by acquisition costs only. In aviation, you are forced by law to perform certain predetermined aircraft checks and modifications). Obviously the list is much longer but if you keep the above points in mind, you are halfway there of becoming a happy and proud aircraft owner!

So after you have done your homework and have come up with a few suitable aircraft for your missions, the fun part begins: you will be able to look at real metal (or composite materials, nowadays)! First: have a cup of tea. Did it take only a day for you to buy that Ferrari? Exactly! Does the seller tell you that he has 27 interested parties and you need to make-up your mind quickly? Good for the seller, have another cup of tea, and call your next opportunity!

Insist on a precise listing of the current state the aircraft is in. Does it come with a coffee-maker? Have it listed since manufacturers of aviation equipment have a tendency to charge double the price of regular equipment. Do a title search. It will reveal the registered current and past owners of the aircraft plus any mortgages on the aircraft (the last thing you want is to pay-off that debt by a previous owner). Audit all the required logs of the aircraft, it will tell you how the aircraft has been treated by its owners/operators. Has it been used extensively on routes from obscure South-American airports to private fields in the US at nights? Might be a good time to have another cup of tea and go see that other aircraft!

Discuss warranties with the current owner. If he has nothing to hide, he will gladly agree to a reasonable demand by you. After all, he is trying to sell his asset!

And lastly maybe the most important piece of advice: get as many professional opinions together as possible. Talk to financial, risk, and operational professionals. Talk to your wife and family. It is worth the extra time. When was the last time you bought a house without consulting a realtor? Exactly...

Very Light Jets (VLJs): Hype or real necessity?

Here is what I thought of the (then) new Very Light Jet segment. Unfortunately, it now seems that I was right. Don't you just hate that.
It happens to me more and more. Whenever I am attending a seminar or conference, one of our business partners approaches me and tells me that he heard about the new “Wunderwaffe” of executive air travel: the Very Light Jet or VLJ in short. Imagine, they will say, the aircraft flies as fast as conventional jets at a fraction of the cost! Now, why don’t you (and by you they mean Gulf Executive Aviation) offer a VLJ for our travel missions? Instead of spending a few thousand Dollars for conventional jets we could cover the same distances, at the same speed, and at the same comfort level for a few hundred bucks, right? Well, yes… but also no. Here is why:

A VLJ is per definition a small jet with a maximum take-off mass of under 10,000 lbs (4,540 kgs) and approved for single pilot operations. Fabulous, you will say but what does this mean? Well, it generally means that you will fly fast and at high altitudes with no more than 7 passengers on short routes, say from Bahrain to Jeddah. Further good news is that the aircraft will be able to take-off from airstrips as short as 3,000 ft (900 m). The thing however is, most civil airports in the Middle East are designed for wide-body jets and feature therefore runways of at least 9,000 ft. So, what is the real major benefit of operating a VLJ as opposed to a conventional business jet? Well, remember the second part of the definition of a VLJ: approved for single pilot operations. Believe me, this is exactly what makes your CFO smile all day long!

Current Civil Aviation Authority regulations all over the world stipulate that all commercial passenger flights in a jet (such as you are flying when hiring-in GEA or Gulf Air, for example) must be operated with at least two cockpit crew members. Therefore flying by VLJ means that you actually cut flight crew costs more than in half (since the cabin diameter of a VLJ is comparatively small, you probably won’t see a Flight Attendant onboard a VLJ). In addition, all VLJs are in the process of being designed as we speak. Therefore you can expect the most modern engines and composite materials, plus cockpit lay-outs that make the Airbus 380 look old fashioned. All this reducing further maintenance, and more importantly, fuel costs. You want more good news?

Here it is: VLJ manufacturer Eclipse and its CEO, Vern Raburn, a former Microsoft executive, had a vision of a low cost jet, first announced to be delivered for under $1,000,000.00. Imagine: a proper jet with a price tag of an (expensive) car! You want some bad news? Ok, Cessna estimates its VLJ, the Mustang, to cost almost twice the price. More bad news? Except for small scale deliveries of the Eclipse and the Mustang, the VLJ has not entered the operational market yet. So where does this leave the mighty VLJ?

My personal opinion is that the VLJ will not take-off as proudly as predicted a few years ago by the then potential manufacturers. We already have seen quite a few aircraft manufacturers declare bankruptcy over its VLJ program. Moreover, insurance companies will watch closely when the first VLJs fly. Will the single pilot part be a big concern to them? If yes, the industry will face further problems since no lessor will lease out any uninsured risk. How will the pre-owned aircraft market react to the VLJ? Do the used composite materials last as long as old-fashioned aluminum?

All in all, who will be the potential buyers of the VLJ? Will it be the new to be formed air taxi operators, connecting large airports with small airfields not being served by airlines as per the manufacturers’ vision? I doubt it sincerely. Except for maybe the United States, no country has the infrastructure to support a new operation on such a large scale. Just think of all the small airfields that need to be built right in the middle of the large cities throughout the Middle East. This requires not only a major change in strategic urban planning but also needs to be done at extremely low rates in order to justify the inexpensive ticket costs of the air taxi operators to be.

However, remember when a few years back airlines replaced its propeller driven fleet by regional jets? I am convinced that we will observe something similar in this case as well: you will see at least a number of charter operators replacing its propeller aircraft with the new VLJs. Especially when fuel prices stay at the same level as they currently are. Now obviously this is a completely different topic. Do ask me about fuel prices when you see me the next time at a conference!

Not just another rich and famous play toy

Ever wondered who is flying those shiny jets and why? Keep reading beacuse I will reveal it all (sort of...) in this article published in a weekly magazine. They even rolled-in the photographer to take a picture of me sitting at my desk! However, we all quickly realized that my desk looked nowhere near to an ideal example of a hard thinking man... so for the picture I went off to use the office of my HR manager!
Alex de Vos, is the general manager of Gulf Executive Aviation, a company which deals in private aviation which he founded in 2005. Its head office is in Bahrain, providing central access from and to all countries in the Middle East. It has also been involved in major projects within the Middle East, ranging from arranging charter flights to sourcing and financing aircraft for airlines. It is currently bidding for three major charter contracts in Saudi Arabia and Kuwait. GEA represents a European tour operator and a large flight school in the GCC. In this exclusive column in GulfWeekly he shares his views about the rise of the industry.

We all have seen the numerous shiny private jets during the recent highly-successful Formula One race in Bahrain. Ever wondered who actually fly these highly-sophisticated aircraft? Well, the answer is obvious, isn’t it? Only the Michael Schumachers of this world are capable and willing of spending huge amounts of money on such an unnecessary tool. Do you agree with me? Then keep reading, you might be in for a big surprise.

It is estimated that there are approximately 300 private jets based in the GCC region. The fleet’s growth forecast is around eight per cent per year. Now I ask you: does the GCC really host 300 Michael Schumachers within its boundaries? No, we don’t. So, who is flying those jets then? Politicians? Top executives? Your neighbour?

Actually, all of them do. Simply put, people that value time use private jets. Imagine you have a meeting in Cairo at say 11:00 in the morning. Now guess what: your scheduled flight leaves Bahrain airport at 11am! That means that you will have to fly the day before and spend a night in an impersonal hotel of your company’s choice. At least you want to return home immediately after your meeting right? You’d better think again! I am sure the hotel receptionist will start calling you by your first name by now.

Now, do the maths with a private jet. You leave Bahrain early morning and return the same day. Simple, easy and hassle free. You do not have to be at the airport two hours before the flight takes place, nor will you face any checkin queues. Now, if that meeting takes a little bit longer, your aircraft is still waiting for you. YOU are in charge of YOUR travel mission! Imagine the high-level of privacy onboard your private jet. Nice? Picturing your personal flight yet?

No wonder an ever-increasing number of executives, managers, but also private individuals are turning towards this easy and convenient way of air travel. Ask yourself the question: is a meeting of two hours really worth spending three days away from home? Wouldn’t you rather be with your loved ones and charge that inner battery for your next
workday? At least I do, and with me an ever-increasing number of Middle Eastern travelers.

It is therefore not surprising that we see an increase in private jet flight-hours regionally of about 15 per cent per year. By the way, did you know that studies prove that passengers of a private jet get actually more work done onboard than they would at the office? Caught the attention of your boss now, didn’t I?

Despite existing regional difficulties like lacking open sky policies and state monopolies on scheduled airline services, the Middle East is the fastest-growing aviation market in the world, with private aviation contributing to this growth with an over-proportional percentage.

So, the next time you see a private jet waiting to take-off, do not assume Michael Schumacher has come over for his daily shisha. It is probably your neighbour taking charge of its own time. Who’s rich and famous now?

Airline staffing issues

And here are my thoughts of airline staffing options, possibilities and problems presented during a trade show. I was honoured to be accompanied by a few of our trade's elite. As usual, the journalist got my company's name wrong but hey, at least she spelt my name right! Obviously, by claiming our sector to be top-of-the-league, I cannot be angry with her...

LIZ MOSCROP investigates the changing demand for pilots in the rapidly expanding Gulf aviation market and how the recruitment industry is gearing to supply the manpower.

We are living in interesting times. Much of the developed world is in turmoil, with financial markets in chaos, house prices tumbling and food and energy costs soaring. Oil is barrelling off the scale and airlines dying off in droves. However, there is one area of the world where air travel is thriving. According to the latest statistics from the International Air Transport Association (IATA), Middle East carriers recorded 18.1 per cent growth in passenger traffic through 2007, the highest in the world.

This was the result of strong regional economies, growing oil wealth, expanded aviation capacity and new routes. It was accompanied by a 10.1 per cent increase in airfreight traffic and huge growth in low-cost carriers. The private sector is booming, too. Fiona Betts, MD, of Betts Recruitment in the UK said: “In the Middle East 80 per cent of our contracts are for business aviation. We supply pilots and flight attendants to the region. We do a lot of VIP work, particularly private families, rather than the corporate sector. Local royal families keep buying aircraft and constantly need people. They also tend to buy bigger planes, like 747s and Airbus.”

The runaway growth of business aviation has swollen the number of corporate crew coming into the region. This is a sharp change from a few months ago. Earlier this year global strategic management consultants AT Kearney warned that the shortage of commercial pilots throughout the world was dire. Industry experts foresaw a need for at least 200,000 new pilots in the next two decades. The number of pilots required in the UAE and other GCC countries would increase by 75 per cent by 2020.

Bill McKnight, associate director with AT Kearney’s global airline practice, said at the Middle East Aviation Summit in Abu Dhabi earlier this year that the extraordinary growth of the airline industry had put a great strain on attracting and retaining qualified commercial pilots. He said: “Investments are in place to fuel industry growth in the Middle East but the shortage of pilots is rapidly developing into a potential constraint on growth. The double-digit growth of passenger traffic in the past four years, and the expected delivery of 5,000 aircraft throughout the industry in the next five years, means more flights, hence the need for more pilots.”

Today, Middle Eastern airlines are still demanding pilots at a rate of knots. Emirates, Etihad and Qatar Airways all regularly recruit and local private operators, such as National Air Services or the region’s various royal flights, are constantly on the lookout. Emirates has 1,200 pilots from 60-plus countries and is looking to double this number by 2012.

At the top end of the market, executive charter companies are enjoying their most lucrative stretch ever. Companies such as Royal Jet, which last year took delivery of its fifth Boeing Business Jet to satisfy demand for travel to Europe, India, China and Russia, has achieved growth of up to 30 per cent over the past two years. Royal Jet and others compete fiercely with fastgrowing local airlines for skilled flight crews.

In spite of the phenomenal local growth, winter 2008 offers a ray of hope for Middle Eastern charter companies, largely due to the effects of turbulent financial markets and the collapse of several airlines in the West. Philip Markham general manager of Abu Dhabi-based Falcon Aviation Services (FAS) reports his company has no problems in attracting new talent. “We are doing all right for pilots at the moment,” he said. “We are paying a competitive salary with several on-the-job privileges. It is hard for European candidates to come here because of the strength of the Euro. However, our currency is pegged to the US dollar, so South Africans or crew from the Asia Pacific region, or North Americans find us an attractive prospect.” FAS offers its pilots 56 days on and 28 days off, so every
three months they get a month of paid leave. This is ideal for people with families. The company also offers flight attendants a similar touring roster deal, two months on and two months off. Its technicians are offered a comparable package. They also have the option of a six-week on/off roster. This is another enticement.

McKnight had highlighted that the job conditions for commercial pilots have changed dramatically in the past decade. “Global air travel has generated high demand while the advent of low-cost carriers has put a strain on pilot compensation packages,” he said. “Reducing the salaries and increasing pilot productivity takes a lot of glamour out of the job, particularly given the high cost of initial training.” According to Markham, the recession has meant that more pilots are coming on to the market. He said: “Six months ago it was a dry market but, because of financial problems, blue chips are downsizing as corporate fleets run out of cash. When airlines collapse, more pilots are back on the market. Embraer 145 captains can fly the Legacy 600.”

Captain Alex de Vos, general manager of Gulf Aviation in Bahrain, echoed his sentiments. “Here in the region there is not a big pilot shortage. Since various companies are in financial problems today, there are several qualified people around and the Middle East pays a better rate for many.” Jordan-based Arab Wings’ general manager Sameer Hdairis agreed. “It seems availability is much better than six months to a year ago. There is a large surplus of pilots in North America. The market outlook is that the Middle East will continue to grow and I do not feel that we will be generally affected by the slowdown,” he said.

However, one issue that remains is that the corporate aviation sector requires highly experienced people who are flexible and comfortable with dealing with VIPs. They are also likely to have north of 3,000 hours under their belts. Not everyone is suitable. Betts said: “Although we definitely assess pilots on experience, it is vital to find the right person, which is usually someone who has done VIP and corporate work. They generally have 3,000 to 8,000 hours, but total time is not the first thing we look for.” According to de Vos, experience is a key factor when hiring someone. “We only ever fly two captain cockpits. The stress level is far higher than that of an airline captain,” he said. The reasons are apparent. Business aircraft often operate into smaller airfields lacking the safety equipment associated with facilities serving scheduled commercial air traffic. Eighty per cent of accident investigations place pilot decision making as the primary cause. Cockpit resource management is an essential element in the training of all pilots and crew and accidents are often proven to have taken place due to poor crew co-ordination and not following standard operating procedures.

There is still a shortage of local flying talent. De Vos believes that the industry has suffered as the high salaries commanded in the technology and financial sectors have driven more local young people away from aviation. He is involved in flight training at the Fujairah Aviation Academy, a joint venture with British company Cabair. Currently most of the students find the prospect of flying a 747 or an Airbus A380 far more alluring than the private sector. “We see the odd one or two who have just graduated that are interested in the corporate sector, but we would not put a 250-hour pilot into business jet operations,” said de Vos.

There are industry-wide calls to develop local training further. Speaking at the Abu Dhabi conference, Maktoum al Maktoum, director, AT Kearney Middle East said: “The GCC must produce more local pilots to offset the challenges of recruiting expatriates to fill this gap.”

So how do companies find their staff? Generally by word of mouth. Betts said: “We network people we know. When pilots have done two or three years in their current positions, sometimes they are ready to move. We also go to friends and colleagues. Sometimes we get a captain and a first officer together as they function as a good team.” Hdairis, de Vos and Markham all agreed that behind-thescenes recruitment was the best method. De Vos said: “Getting pilots in the corporate sector is mostly by word of mouth.” Markham pointed out that Abu Dhabi has the highest GDP in the world, offering rich pickings for crew and technicians from countries such as South Africa, who are attracted by the tax-free environment. Consequently, highly skilled and experienced people are drawn to the region. The rest of the Middle East is a good place to be for aircrew today.There are also schemes in place to develop technicians. For example, FAS is currently sponsoring two young apprentices through its training programme. It looks like they’ll have their pick of jobs.

AT Kearney predicts that the GCC will be the fastest growing region for passenger traffic, with an average annual growth of 7-8 per cent between 2007 and 2015.

My thoughts on ticket surcharges

Here is what I thought a while ago about air ticket surcharges. I even got published in the local newspaper, so it must be right, wouldn't you say so? And btw, I believe the editor did a fantastic job, right?

Gulf Executive Aviation has been bought since but the company's concept is still being applied today! 

Global airlines 'to spend $7bn extra on fuel'
By Mark Summers
Published: 22nd August 2007
MANAMA: The cost of aviation fuel now accounts for one third of the price of an air travel ticket compared to one ninth as recently as four years ago, a senior figure at a Bahrain- based charter airline writes in a new discussion paper.

Gulf Executive Aviation general manager Captain Alex de Vos says a combination of the difficulty in sourcing enough kerosene to keep pace with a global aviation boom and rising crude oil prices will see aircraft operators globally spend $7 billion more on fuel this year than they did last year.

In a paper addressing the practice of adding a jet fuel surcharge to air travel tariffs and whether this is a "necessity" or a "fairytale", Mr De Vos reiterates that "the fuel market price is the single most important operating cost an aircraft operator faces".

"Availability is the keyword here. If we take into consideration that over the last 25 years we have seen a yearly increase in jet fuel demand worldwide of about two million gallons a day, you can imagine the burden on refineries to keep up with the production. To keep talking airplanes, this number is roughly the equivalent of 35 additional Boeing 747s that take the sky on a daily basis. With such huge quantities it is no wonder that jet fuel market prices follow closely the market prices of crude oil," he said. This shadowing of crude prices during a rise in prices has had severe consequences for the aviation industry, Mr De Vos adds.

"Brent crude prices have approximately tripled over the last four years, meaning that aircraft operators also have to pay three times the fuel price they used to pay in 2003. This means that with current prevailing market prices, all aircraft operators worldwide are estimated to spend $7bn more on fuel this year than they did last year!"

Mr De Vos also gives an insight into the sheer quantities of fuel - at premium prices - required to propel an airliner. "More important to the passenger is what percentage of operational costs of an aircraft is taken up by fuel consumption? To give you an idea, a modern Boeing 747 jet has a fuel capacity of about 200,000 litres. On a typical flight, the four engines use approximately 12,500 litres per hour."

"To express this figure in hard currency, the aircraft has used about one-third of your ticket price just on fuel. Taking your airline ticket price into consideration, it may not sound like a lot, but remember - in 2003 the fuel share was only about one ninth," he says.
Mr De Vos said there is no immediate solution to rising fuel prices and their effect on the price of travel - but said suggestions being discussed included new propulsion systems and the hedging of fuel