8/3/2019 MCS-AI

1/13

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 SharmaVishal Soni

8/3/2019 MCS-AI

2/13

FACTS

Passenger traffic handled by Indian airports increased at a compound annual

growth rate (CAGR) of 15.8 per cent between 200405 and 20092010.

International passenger traffic increased at a CAGR of 12.1 per cent between

200405 and 20092010.

REASONS

Introduction of low-Cost Airlines.

Rise in Tourism Industry

Rising Disposable Income.

AIRLINE INDUSTRY

8/3/2019 MCS-AI

3/13

CURRENT STRUCTURE

8/3/2019 MCS-AI

4/13

8/3/2019 MCS-AI

5/13

Management Style & Culture

Attitude towards Employees

Decision making Process

Focus of Air India

- Shared Goals

- Shared Knowledge

- Mutual Respect

Credibility & Care

Role of Relational Competence

Cross

Functional Performance

FOCUS of

Air India

SHAREDGOAL

SHARED

KNOWLEDGE

MUTUAL

RESPECT

8/3/2019 MCS-AI

6/13

Commitment

-Perception of importance of safety

-Safety procedures and requirements

-Personal involvement and responsibility for safety

Behavior

-Employee behavior with respect to safety

-Mutual expectations and encouragement

-Job satisfaction

Awareness

-Attitude towards unreported hazards

-Awareness of job induced risk

-Concern for safety

Adaptability

-Pro-activity to prevent negative happenings

-Actions with respect to negative happenings

-Employee input

Information

-Communication of work related information-Safety issues reporting system

-Consequences of safety reports

-Communication of safety related information

-Information exchange about safety issues

Justness

-Evaluation of safety related behaviors

-Perception of evaluation

-Passing of responsibility

Safety Culture at Air India

8/3/2019 MCS-AI

7/13

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

8/3/2019 MCS-AI

8/13

Controls at Air India

pNorms set for the discharge of functions decision-making process

pPublic Vigilance

p Internal control systems IOCC and Sabre

pBudget Allocation

8/3/2019 MCS-AI

9/13

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 positiveincentive or reward increases satisfaction of an

individual and vice versa.

Importance of rewards

8/3/2019 MCS-AI

10/13

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.

Compensation at Air India

8/3/2019 MCS-AI

11/13

Analysis of Pay Structure It can be seen that despite a

decrease in the number of employees from 32000-30000 in2010 the salaries and wages haveincreased.

The directors remuneration hasdecreased in the 3 yrs.

Compensation per employee has

increased over the years butincome per employee firstdecreased and then increasedshowing improvement

Also if we look at the ratio of salesto compensation to employeesratio in the years 2008, 2009, it has

decreased from 4.27 to 3.96in 2009and 3.91 in 2010, where the totalcompensation to employees hasincreased in spite of decrease insales.

ITEM MAR08 MAR09 MAR10

No. of

employees

('000 nos)

32 31 30

Salaries &

wages

2893.41 2942.63 2982.79

Directors'

remuneration

1.87 1.71 1.43

Compensation

per employee

9.88564596 10.7337813 11.33

Income per

employee

46.8350911 43.8969974 46.72

Sales 13769.33 13248.67 13123.60

Compensation

to employees

3224.5 3338.85 3356.72

8/3/2019 MCS-AI

12/13

Coordination/Communication

p Internal Communication Control

1. SITA(Society De Telecommunication Aeronautics provided services)

2. Telephone System3. Radio Communication System

External communication system

8/3/2019 MCS-AI

13/13

Thank You