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When We start writing, We stop for while and think what to write? How to write? We have no
words to express our feelings. But We have to write to offer our humble be essense to“Almighty
ALLAH” The most beneficial, gracious and merciful who enable us to perceive higher idea sof life
and helped us throughout our life especially in writing this report and all blessing toHis Favorite
Prophet Muhammad (PBUH) who is the greatest personality of this universe.After God we owe our
heartiest gratitude to our parents and our family whose prayers encouraged us to complete our
task.We are extremely thankful to our teacher Sir Adeel Anwar for his sympathetic treatment,
rewardless help, precious suggestions, constant encouragement and personal interest that enable us
to write a report.We are also thankful to Mr. Ashraf(air trafficcontroller) and Mr. M.
Nasir(salaryMaintainer)For co-operating with us


In 1955 Pakistan International Airline formed. It is the 16th largest airlinein Asia, operating scheduled
services to 73 destinations throughout Asia, the Middle East, Europe and North America, as well as
an extensive domestic network linking 24 destinations.PIA is three stars International Airline.When
Pakistan was founded in 1947 it comprised two territories on either side of the expanse of India. It
was in this unusual circumstance that Pakistan International was formed in 1955. Despite
wars andeconomic trouble, the carrier survived to grow and prosper.Pakistan International Airlines is
the flag carrier airline of Pakistan,based in Karachi. It is the 16th largest airline in Asia. Its main bases
are JinnahInternational Airport, Karachi, Allama Iqbal International Airport Lahore.


Airblue is a private Pakistani airline based at Jinnah International Airport Karachi. It started its
operations on May 24, 2004. It was the first private carrier of Pakistan to operate the Airbus A320
when it initiallystarted. Airblue has been expanding rapidly despite experiencing competitionfrom the
other three airline operators in Pakistan. The airline mainly flies ondomestic routes plus
internationally to Dubai International Airport and also has plans to fly to the Gulf, UK, and USADuring
the first year the airline became very popular, which allowed the airline to compete directly with the
flag carrier Pakistan International Airlines and the two other private carriers, flying more than 400,000
passengers in the first year with aload factor of over 90%. This allowed the airline to expand into
more cities inPakistan including Peshawar, Quetta and Nawabshah. Airblue intends to expand
operations with additional aircraft to destinations in Europe, China, and theMiddle East aiming to
become a major player in Europe

The project aims to analyze the organizational behaviour of two organizations belonging to the same
nature of industry; one from the public sector while the other from the private sector of
pakistan. Pakistan International Airlines is selected as the public-sector organization whereas
Airblue as the private-sector organization.A comparative study of the two organizations
comparing and contrasting on various parameters of Organizational Behaviour has been carried
out in the report. This has been done to analyze the impact of individuals, groups and structures on
behaviour within the organization for the purpose of enhancing the effectiveness of the organization.
Thus, the report evaluates the two organizations on their organizational culture,leadership styles,
employee behaviour, development and motivation, group behaviour andorganizational politics. After a
thorough analysis, recommendations have been proposed to improve the efficacy of the organization.

We have selected two organizations, one is from government sector i.e, PIA(Pakistan airlines) and
other from private sector i.e, Airblue. These bothorganizations are similar in respect of their area,
job, spread, size and strength.


Government Sector = PIA (Pakistan airlines)

Private Sector = AirBlue

Headquarter PIA

Jinnah International Airport Karachi 72500,Pakistan

Headquarter AIRBLUE

12th Floor,

Islamabad Stock Exchange Towers

ISE Towers 55-B Jinnah Avenue Islamabad Pakistan

Pakistan International Airlines


Pakistan International Airlines (PIA) is a national airline, operating passenger and cargo services
covering eighty-two domestic and foreign destinations. Established in 1955, PIA has a vast
experience in the airline industry of Pakistan with a large fleet of aircrafts. The fleet size is forty.PIA is a
huge corporation with more than 17,000 employees. This organization is divided into following
departments: Human Resource and Administration, Marketing, Corporate Planning, Information
Services, Finance, Flight Services, Flight Operation, Engineering,
Procurement and Logistics, Customer Services, Training and Development, Quality Assurance.The
organogram of the organization follows, with the Chairman at the top and
directorsof departments reporting to him. The structure is centralized with the top-level management
making the decisions.
Birth of a Nation, Birth of an Airline
Air transport has probably never been more important to the development of a new nation than in the
case of Pakistan. In June 1946, when Pakistan was still in the offing, Mr. Mohammad Ali Jinnah, the
Founder of the upcoming nation, instructed Mr. M.A. Ispahani, a leading industrialist, to set up a
national airline, on a priority basis. With his singular vision and foresight, Mr. Jinnah realized that with
the formation of the two wings of Pakistan, separated by 1100 miles, a swift and efficient mode of
transport was imperative.

Orient Airways Takes to the Skies

On 23rd October 1946, a new airline was born. Initially registered as a pilot project in Calcutta, Orient
Airways Ltd. had at its helm Mr. M.A. Ispahani as Chairman and Air Vice Marshal O.K. Carter as
General Manager. The new carrier’s base remained in Calcutta and an operating license was
obtained in May 1947.

The designated route for Orient Airways was Calcutta-Akyab-Rangoon, which also happened to be
the first post-war international sector to be flown by an airline registered in India. Within two months
of Orient Airways’ operational beginnings, Pakistan was born. The birth of a new nation generated
one of the largest transfers of population in the history of mankind.

A New National Flag Carrier for Pakistan

Orient Airways was a privately owned company, with limited capital and resources. It could not be
expected to grow and expand independently. It was then that the Government of Pakistan decided to
form a state-owned airline and invited Orient Airways to merge with it. The outcome of the merger
was the birth of a new airline, through PIAC Ordinance 1955 on January 10, 1955.

New Planes, New Directions, New Management In 1959, the Government of Pakistan appointed Air
Commodore Nur Khan as the Managing Director of PIA. With his visionary leadership, PIA ‘took off’
and within a short span of 6 years, gained the stature and status of one of the world’s frontline
carriers. In aviation circles, this period has often been referred to as the “golden years of PIA”.

Development, expansion, and growth were keywords that the new management was committed to. In
March 1960, PIA launched its first Boeing 707 jet service on the London-Karachi-Dacca, route which
later proved to be very successful. This trail-blazing accomplishment resulted in PIA becoming the
first Asian Airline to operate a jet aircraft, setting trends for the future. PIA’s helicopter services
carried over 70,000 passengers during the first year of operation. At the time, it was regarded as a
stellar operation, equal to any other in the world. Unfortunately, due to two mishaps, the service was
discontinued in 1966.
PIA is Pakistan's largest airline, and operates a fleet of more than 30 aircraft. The airline operates
scheduled services to 25 domestic destinations and 28 international destinations
across Asia, Europe, Middle East and North America along with 19 interline destinations. It operates
nearly 100 flights daily.

The airline well known slogan was "Great People to Fly With", which was given to the airline by
Omar Qureishi

Pakistan International Airlines Corporation Limited (PIACL) is majority owned by the Government of
Pakistan (87%) while the remainder (13%) by private shareholders. The airline is under the
administration of Ministry of Defence. The airline is managed by managing director as well as
the Board of Directors
President & Chief Executive Officer (CEO)
Mr. Muhammad Saqib Aziz

Advisor to President & CEO

AVM Noor Abbass

Chief Operating Officer

Mr. Muhammad Ali Aftab

Chief Financial Officer

Mr. Asad Abbas

Chief of Flight Operations

Capt. Uzair Khan

Director Precision Engineering

AVM Rizwan Pasha

Chief Supply Chain Management

Amanullah Qureshi

GM Safety & Quality Assurance

Capt. Amir Aftab

In the late 1990s, the Government of Pakistan considered selling the airline to the private sector due
to the persistent losses suffered by the airline. The government announced its privatization plans but
they were never implemented.

During 1997, Pakistan called in a team from International Finance (IFC), the consulting arm of
the World Bank, to advise on restructuring and privatization of Pakistan International Airlines (PIA).
However, no agreement was reached.

In 2013, Government of Pakistan once again aimed to privatize the airline due to increased losses by
selling twenty-six percent of shares & management control to the investor. This plan was dropped
due to heavy protest by airline unions and associations

In 2018, the newly elected government aimed not to privatize the entity and make it a profitable
through the change in its top management

PIA hosts both international and domestic destinations. PIA’s vast network spans across the globe,
flying to 25 countries across Asia, Europe and North America, and to 24 cities within Pakistan.

 Domestic Destinations
 International Destinations
 Interline and Codeshare Travel
Management Strategies

 Human Resourse Management

 Proper recruitment Process
 Training and development
 Specialized people are hired
 Head office in Karachi
 Proper organization structure

 Administration
 Decision making
 Motivation and Incentives

Human Resource Management at PIA :

Since 22000 employees are currently engaged in serving PIA and these employees are figured to be
the valuable for the organization and management of the seem employees is a big challenge for
HRmanagers engineering is the biggest department of PIA after which Is IT department, marketing,In
average organizations have only one human resource manager wooIstaking over all the
responsibilities but as PIA Is a big organization It has 10 HR managers a teach city including Lahore,
Quetta, Karachi, Peshawar ,and Islamabad. In Multan there Is only one senior Human resource
officer i-e Is Sheikh Bilal Rasool. PIA has de..concentrated some of its departments tO Ought here
are others which are centralized. All the small departments at PIA have been aggregated under one
HR manager and the application of corporate policies In these departments Is same as in others

 Objectives of PIA:
 According to PIAC Act 1956 following are the main objectives of PIA Corporation is to provide
further develop safe efficient adequate economical and properly coordinate domestic as well
as international air transport system
 To operate any air transport service or any flight by air craft for a commercial or other purpose
and to carry all forms of aerial work
 To acquire, own, run or participate in the running management of any hotel or business
connected therewith.
 To provide for the instruction and training in matters connected with aircraft or flight by aircraft
of persons employed or desirous if being employed either by thecorporation or by other
 To promote any organization outside Pakistan for the purpose of engaging in anyactivity of a
kind which the corporation has power to carry out
 To acquire hold or dispose of any property whether moveable or immovable, or any transport
 To repair overhaul reconstruct assemble or recondition aircraft, vehicle or other machine
parts, accessories owned by the corporation or by any person
 Achievements and Recognitions

 First airline from an Asian country to fly the Super Constellation.

 First Asian airline to operate a jet aircraft.
 First Asian airline to be granted maintenance approval
bythe US Federal Aviation Administration (FAA) and the AirRegistration Board, predecessor
of the British Civil Aviation Authority(CAA)
 First non-communist airline to fly to the People's Republicof China, and operate a service
between Asia and Europe via Moscow.
 First airline in Asia to induct the new technology Boeing 737-300 aircraft.
 An IBM 1401, the first computer in Pakistan, was installed in PIA.
 First airline in the world to operate scheduled helicopter services.
 First airline to show in-flight movies on international routes

 Unique feature offer by PIA

 Reliability an d safety
 Has best engineering facilities.
 Has best trained pilots.
 National flag carrier.
 Pakistani expatriates when step in the PIA plane they get they homely feelings because of the
national airline which plays a role of ambassador.
 High linkage to the remote areas of Pakistan.
 Using state of art technologies and highly equipped engineering

Existing Competitors of PIA

PIA operates both domestically and internationally. So it has different competitors on both scales of

 Domestic Competitor

is a private air line based inKarachi,Pakistan. It is a scheduled domestic and international airline
operating 30 dailyservices linking seven domestic destinations and international services
toDubaiandManchester . Its main base isJinnah International Airport, Karachi.Airblue was the
firstairline inPakistanto introducee-ticketing, wireless check-in and self check-in kiosk facilities.

 International Competitors of PIA

PIA is having market share of 48.4% in the international market and having toughcompetition from its
international competitors. Following international competitors of PIA.

 Thai Airline
 Ethad Airways
 Qatar Airways
 Singapore Airline
Marketing objective

Satisfying the loyal customers Bring back the customers which shifts toward the competitors
Increasing marketing share.




Airblue Limited (styled as airblue) is a private airline which offers passengers and cargo
transportation to both domestic and forign destinations.Shahid Khaqan Abbasi is the Founder and
CEO of Airblue.He also served as Chairman and CEO of Pakistan International Airlines from 1997 to
1999 It is Pakistan's second largest airline with over 20% share of the domestic market.Its main base
is Jinnah International Airport, Karachi. Airblue's fleet consists of next-generation Airbus A319, A320
and A340 aircraft. Led by a team with decades of experience in the industry, airblue embodies a new
era in passenger air travel. The company's shareholding structure includes a group of investors
including Mr. Tariq Chaudhary with majority stake. Mr. Chaudhary also serves as CEO and Chairman
of the Board.The Airbus A320and introduce e-ticketing, wireless check-in and self check-in kiosk

Major departments include: Human Resource, Marketing, Sales, Finance, Operations andSystems
Support and IT.The size of the organization is not as huge as PIA and mostly comprises of
youngemployees. It is the first airline to have employees trained according to international standards

Founded 2003 Commenced operations 18 June 2004 Hubs Jinnah International Airport Focus cities
Allama Iqbal International Airport Benazir Bhutto International Airport Dubai International Airport
Frequent-flyer program Airport lounge Fleet size Destinations Blue Miles Blue Lounge International
Air Blue Pakistan. The airline was inaugurated in 2004 by Prime Minister Zafarullah Khan Jamali

During the first year the airline became very popular, which allowed the airline to compete directly
with the flag carrier Pakistan International Airlines and the two other private carriers, flying more than
400,000 passengers in the first year with a load factor of over 90%.This allowed the airline to expand
into more cities in Pakistan including Peshawar, Quetta and Nawabshah.

On 14 August 2005 Airblue launched its first international flight from Karachi to Dubai. On June 4,
2007, Airblue launched its inaugural flight to Manchester using the Airbus A321.

In June 2012, Airblue finalised an agreement to acquire one Airbus A320 and two leased A340-
300s for existing and new international routes. It was also looking at various types of turboprop
aircraft for new domestic routes but this plan was eventually dropped. The A340s joined the fleet in
October 2012, enabling the airline to strengthen its Manchester route with nonstop flights as well as
launch a second UK destination Birmingham in September 2013, and connect both stations with
Lahore. The A340s later also flew to the Middle East. Technical issues related to the aircraft
eventually led to them being phased out by January 2014; they had been leased for a five-year term.
UK operations also ended with Birmingham being dropped after just three months' service and
Manchester ending in January 2014.



Mr. Tariq Chaudhary is the chief executive Officer.He is responsible for the smooth
running the company.


Mr. Shahid Khaqan Abbasi is the Chief Operating Officer.He takes care of the daily operations
and reports directly to the board of directors.

The primary responsibility of Director Commercial is sales and marketing.
He also is the chief information officer.Mr. Raheel Ahmad holds this post.

Mr. Athar Hassan Shah plans and implements line maintenance routine checks
heavy maintenance Barriers to Entry Strict regulations by government until 1993 Low
operating margin High Taxes and difficult to acquire license's
 Pakistan
 Peshawar - Bacha Khan International Airport
 Lahore - Allama Iqbal International Airport Focus City
 Karachi - Jinnah International Airport Hub
 Islamabad - Benazir Bhutto International Airport
 Oman
Muscat – Muscat International Airport
 United Arab Emirates
 Sharjah - Sharjah International Airport
 Dubai - Dubai International Airport
 Abu Dhabi - Abu Dhabi International Airport
 United Kingdom
Manchester - Manchester Airport Airblue

The business strategy of air blue since its inception has been to have a quality,well managed and
technologically advanced airline focused on low aviation fuel costs combine cost leadership with
differentiation cost-effective carrier providing superior service camera.

 Focus on customer defined quality attributes and endeavor to shapeprocesses and operations
to achieve quality objectives withoutcompromising safety and legal requirements
 Prevent or minimize all aspects that can lead to unacceptable impactson environment.
 Ensure adequate management of occupational health and safety of ouremployees and others
involved in our areas of activity.
 Abide by all applicable national & international legislation, adopt bestindustry practices and
conform to the requirement of the subscribedstandards for self and for outsourced services.
 Continually improve the effectiveness of Airblue’s Quality &Management Systems and to
regularly review its components for theirsuitability.
 Provide for all necessary resources to achieve the defined Qualityobjectives; to bring all risks
to an acceptable level or as low as reasonably practicable.
 Ensure active participation of representatives from relevant areas indecision making and shall
ensure that good performance is recognizedand rewarded

Airline industry of Pakistan is not much saturated and competitive as compared to the other
airline industries in the world.
The main competitors:
Shaheen Air
Work Environment:airblue
A positive work environment makes employees feel good about coming towork, and this provides the
motivation to sustain them throughout the day. Airblue whichstarted its operations last year, set a
new dimension in the aviation industry. With new generation aircraft, spacious seats, elegant and
charming hostesses, Businessmen, the elite and professionals preferred to travel by Airblue, since
its flights were 100 percent punctual. As a result, it captured more than 20 percent market share
on domestic routes, in less than a year.In essence, a transparent and open form of communication
addresses the employee’s need to feel that what they have to say has value. It is what makes
employees feel that they belong inthe Airblue. Work then becomes meaningful because the
employees know that what theycontribute affects the AirBlue and AirBlue is also well aware of how to
response in order toattain maximum outcome


 Purchase order of eight airbuses two aircraft for an estimated cost of $790 million.
Extend flight destinations. Route expansions to Europe, North America, UK, USA and
South Africa.
 Increasing demand for low cost flights
 Business diversification into cargo
 Business class travel and high quality services.
 Demotion of PIA; good opportunity for Airblue to penetrate
 The development of Gwadar Port can boost the airline industry.
 Excellent credit rating

 Escalating fuel prices
 Chinese Airline planning to enter Pakistan’s domestic air.
 High insurance cost for aircraft
 Security threat and security conditions of the country
 Declining tourism industry
 PIA’s possible privatization
 Emirates and Qatar Airways
 Increase in taxes by CAA
 Based on Jim Harvey's speech structures


 30 % market share
 cost effective approach, offering lower prices
 Punctuality of flight timings i.e. 98%
 special fare packages for minors and students
 More technology oriented, zero paper work
 efficient e-ticketing
 customer friendly refund policy
 wireless check-in
 self-check-in kiosk facilities
 effective communication system
 agreement with ONAIR to launch mobile on-air voice and data services.


 Do not offer Business Class Travel

 Airblue’s 2010 plane crash...
 Low and poor marketing strategies
 Lack of awareness among customers
 Doesn’t have its own repair and maintenance facility
 Small fleet of aircrafts, refueling from foreign suppliers
 focuses on only passenger services
 Two dry leased aircrafts while one wet leased aircraft
 Lesser number of staff --- burden on pilots, cabin crew and hostesses




The distinguished culture is determined by the vision and values communicated throughout
the structure and amongst people.

Pakistan International Airlines is a bureaucratic organization, so the culture is similar to that of any
government organization.On the contrary

Airblue is a privately held company and has an open organization culture.

The culture determines the type of leadership, communication and groupdynamics within the
organization. The workers perceive this as the quality of work life which directs their degree of
motivation. The final outcome is performance, individual satisfaction, and personal growth and


‘To be a world class airline exceeding customer expectations through excellent

sevices,on time performance,innovative products and absolute safety.’


‘To provide exceptional customer service at low prices.’

PIA Corporation has stated its mission statement as “a symbol of national pride, aspired to be an
airline of choice, operating profitably on modern commercial concepts and capable of competing with
the best in the International as well as Domestic markets”

Mission statement of PIA is mentioned in a way that:

Employee team will contribute towards making PIA a global airline of choice through:

 Offering quality customer services and innovative products.

 Using state of art technologies.
 Ensuring cost effective measures in procurement and operations.
 Developing safety cultures.
 On Jan 15, 2010 strategic objectives of PIA were given in 33rd BOD meeting i.e.
 Introduction of new additional flights, real time tax revenue management system
 Introduction and success of Pakistan remittance initiative
 Increasing market share by 5 %
 Successful monitoring of routes

Enjoy The Difference – Freedom, Flexibility And Savings. Airblue will be recognized as the most
progressive enterprise in the transportation business. We will offer our customers cost effective
transportation service within geographical areas and market segments that can benefit from our
services and will insure a return on investment and growth rate consistent with current management

 Customer expectations
 Service
 Innovation
 Cohesiveness
 Integrity
 Reliability
 Safety
 Social reasonability

 Customer Centricity
 Passion for travelling
 Innovation
 Integrity
 Fast and easy acces
 Service Quality

Hierarchy of PIA:

This organization is divided into following departments: Human Resource and

Administration,Marketing, Corporate Planning Information Services, Finance, Flight Services,
Flight Operation,Engineering, Procurement and Logistics, Customer Services, Training and
Development, Quality.The organogram of the organization follows, with the Chairman at the top
and directors of departments reporting to him. The structure is centralized with the top-level
management making the decisions.Corporation (PIAC) has been divided into thirteen
departments as shown in organizationalchart. PIA is one of the biggest commercial organizations
in our country and has worldwideoperation, the corporation has network of flights around the
globe, to control worldwideoperation, there is a department meant for overall management of
PIAC. AdministrationDepartment consists of seven Divisions and units. Each department is
headed by a Director,each division is headed by GM, each section by manager and subsections
and units arecontrolled by assistant managers
Hierarchy of Airblue:
Seven Characteristics of an organization Culture

Characteristics PIA AIRBLUE

Innovation and Risk taking Low High
Attention to detail Low High
Outcome orientation High Low
People orientation Low High
Team Orientation High High
Aggressiveness Low Low
Stability High Low

The results show that PIA focuses more on the goal rather than means to achieve it
whileAirblue does the opposite. Therefore, employees are highly valued in
Airblue. Thecharacteristics and values form the organizational structure which determines the behavi
our of employees and the effectiveness of the organization.

PIA Recruitment :
Pakistan International Airlines is a large organization with 18,043 employees. Itsfleet comprises of 43
planes. It operating planes are just 33. It means roundabout525 employees per plane. The industry
average is being between 150-250people. This describes the position of the company clearly. This
drivesthe cost of the company further.

External Recruitment
To encourage external hiring PIA publicize the vacancy on the leading newspapers like
Dawn,Jang,express.Other than this,the vacancy post Is also publicized on PIA website
Internal Recruitment
Internal Recruitment is done by advancing the rank of any current employee by as certaining its
capacities, for this the human resource managers assisted by the performance appraisals or the
employees which has a record of their performances. The succession planning Is done

Airblue Recruitment
Recruitment in Airblue is sensible. As it is private company it does not believe in Coreemployment.
They have few core and permanent employers. They mostly recruit employers oncontract bases.
Contingent employment is used by AirBlue. It decreases the cost of companyThis describes the
position of the company clearly.
Motivation programs:
The airblue uses contingent employment. It helps in motivating their employees. Employees aremore
committed to their tasks and project. They have a lot of motivational programs tomotivate employees.

Experienced Staff:
The staff of Airblue is efficient. Airblue hire those people which are experienced and competent.
Employers have vast background experiences. There is diverse and dynamic workforce.

Advertisement and Management:

We see a lot of advertisements of Airblue. They mostly come up with new innovative packagesto
attract more and more of customers


A public organization, PIA, has an autocratic style of leadership. The decisions are made by the top
level management without involving their employees. These decisions are primarily policy-based
decisions like the purchase of new planes, replacement of new fleets and changes in the fares of

On the other hand, Airblue involves employees in the decision making process, however, the right to
make the final decision rests with the authorities.The top management reserves the
right to take decisions regarding discount offering, chartering of flight, or investment in any particular
sector. Therefore,Airblue follows a participative style of leadership.


Delegation of authority is limited due to the centralized structure of PIA. The authorities reserve the
right to make decisions in interim board meetings.

Airblue has a decentralized structure :it believes in delegating power to its

employees.Decentralized structure helps in motivating employees through involving
them in the decision making process.The scope of delegation of power in Airblue depends upon
situation; the more critical the situation the more top level management is involved and vise versa.
This is because at the end of the day, decision making affects the processes. Thus, decisions are
made by right people-the competent and experienced employees.To ensure job involvement of
their employees, Airblue believes in empowering them according to their designations.
Apart from that, there are some restrictions like every employee cannot visit the passenger
check –in data. Only the authorized employees, whouse ‘ED NET’ (intranet, protected by strong
firewall) have the access to such information.This leads to differentiating one employee from the
other in terms of delegation
At PIA, every employee is expected to show complete responsibility through their attitudes
and avoid behaviour which clashes directly with the organization’s interest. In case of deviant
workplace behaviour, administrative action is taken against the employee according to the
standing rules of PIA.All human resource issues are dealt in accordance with the

POLICIES AND PROCEDURES MANUAL VOL. I & II,which deals with every aspect of
employee behavior.

At Airblue, if a conflict arises between the individual’s work behavior and the organizationally
desired behavior, there exists a formal ‘Resolution Process’ in which an inquiry committee takes
a thorough review of the problem. The employee is called personally and the matter is
discussed along with a verbal warning. If the situation arises again, the employee is given a
written warning to strongly clarify his inappropriate performance. The third time a letter of
termination is handed over to that person. This signifies that Airblue is very particular in
maintaining high standards of quality, negligent behavior is never overlooked.

If PIA believes that dissatisfaction or absenteeism is affecting the productivity level
of employees, then the root cause of such factors is identified. If a genuine reason emerges,the
employee is assisted in rectifying the situation; if not, then the employee might get aletter of
warning.Employees at PIA can express dissatisfaction through the ‘Suggestion Boxes’ located
at various sites of PIA. Furthermore, quarterly employee co-ordination meetings are
heldwhere all employees can share their views with their bosses and subordinates.

If Airblue perceives factors such as dissatisfaction or absenteeism are leading to the decline in
productivity then following measures can be taken:Shifts among the employees can be rotated.
There are 2-3 shifts in day so they can take turns doing the shifts from morning to evening as
convenient.In case of frequent absenteeism, AirBlue investigates the reason. If the reason
isvalid, the company voluntarily grants the employee a leave, for instance, if an employee
is getting married or a member of his/her family is critically ill.However, under normal
circumstances, absenteeism is unacceptable apart fromthe stated holidays.In the employee
wishes to raise his voice against dissatisfaction, there is a proper channelto report the issue at
Airblue. Initially, the employee can report to the supervisor. If the problem still persists, then the
matter can be taken to the assistant manager, who inaccordance with the marketing or other
senior manager takes into consideration the causeof employee dissatisfaction.
If the code of conduct is violated in PIA, a ‘Show Cause Letter’ is issued while in severe cases
the employee is suspended until a proper investigation takes place.Airblue strictly emphasis on
the code of conduct for its employees as it aims to maintain the behavioral ethics set by the
organization. In case of a conflict over the code of conduct, then formal discussion between the
employee and the upper management takes place to resolve the issue. Largely, the
organization believes in maintaining a flexible culture for the employees.

The organizational structure of PIA is centralized, therefore decision-making is a
time-consuming process and delays occur in downward communication. Though, it is believed
that the current Chairman is inclined towards a decentralized system, the effectiveness of such
an approach in PIA remains to be seen.Effective communication is essential in all organizations
and it becomes even more essential in an organization like PIA due to its large size and
expanded network. It is necessary that people from various departments communicate between
each other to have an overall uniformity. Previously fax was widely used to transmit
information,however,with the technological advancement e-mails are used for this
purpose. Another mode of communication is through letters.

The preferred means of communication at Airblue among different departments is via e-mail,
through internet, since it saves time. In addition to this, there is quite frequent intermingling of
people across different department. Cross functional teams often meet together to discuss
issues at hand.

Employee feedback is considered important in PIA to an extent as it enables the management
and the human resource department to have an insight on the needs and the requirements of
the employees. Accordingly top management is informed about employees’ necessities which
have led to decisions being made in the favor of the employees in the past and has also
improved overall system of the organization.

Airblue strongly focuses on employee feedback to enhance the productivity of the organization.
This is conducted in two patterns:

Informal feedback is conducted throughout the year. Employees can easy access their
higher officials for any kind of issues, suggestions or complaints. Every feedback is regarded
carefully and sent to the higher management if it serious innature.
Formal feedback is conducted once in a year. This involves a formal documentation
processes.Every employee gives their open feedback and these complete documents are
forwarded to the top management where a formal meeting is conducted to discussevery issue
governing employee satisfaction, suggestion or complaint.Apart from this, any striking idea from
employees, if it actually suits the organization interest is soon adopted and the employee
is given due credit for that in either monetaryterms or promotion. This shows the high employee
involvement in the organization culture.

Public perception About PIA:
The public opinion play vital role in determining the future of any business. If it is positive then
there are great chances of being that organization profitable. If it is negative then it means
people are dissatisfied and they will spread negative word of mouth about that organization, not
only losing one customer but this chain can lead to drastic results. If we talk about PIA then
reports of PIA cabin crew’sincreasing involvement in drug smuggling and those of cock pit crew
caught while flying under influence of alcohol are cause of grave concern, the recent
revelationof a few senior PIA pilots holding fake educational degrees exposed the grave.moral
degradation that has crept in the airline’s higher echelons.While increasing instances of aborted
takeoffs, engine failures, in-flight technical problems and emergency landings in both PIA’s
heavy bodied andlight aircraft reflect serious problems with PIA’s maintenance/quality

systems, it also points towards a weak oversight by Civil Aviation Authority (CAA),the airline’s
inspecting and regulating authority.With over 18,000 employees, the airline has abnormally high
aircraft to personnelratio of around 1:450 (450 persons to support one aircraft) as against the
average1:150 for many successful and profit-making international airlines.Despite being cash
strapped, the PIA hired a deputy managing director at a reported monthly tax-free salary of
$50,000 and other lucrativeperks for almost four years, till he was fired recently after public hue
and cry.Can PIA or other state enterprises that are stuffed with former terrorists orknown
crooks, ever progress to remain financially viable? Successive PPP governments since 1988
ensured systematic deterioration of public sectorinstitutions through politically motivated and
merit-less inductions that resulted in poor quality of human resource and created a culture of
inefficiency, slacknessand corruption.If PIA is to regain its lost glory and the richly deserve
slogan of ‘Great people to fly with’ of the past, this miracle could only be performed by another
Air Marshal Asghar Khan or Nur Khan-style committed,selfless and bold leadership witnessed in
the sixties/seventies. Unless PIA wins back passengers’ confidence through professionalism
and commitment to safetyand service, the public perception of ‘Dangerous people to fly with’
may soon become a reality
Public perception about AirBlue:
Public opinion is the aggregate of individual attitudes or beliefs. Public opinion can also
bedefined as the complex collection of opinions of many different people and the sum of all
theirviews, or as a single opinion held by an individual about a social or political topic. The
meaningof public opinion has changed dramatically over time.The public perception about
AirBlue is much better and positive as we compared it to PIA.People enjoys safe journey at
comparatively cheaper rates. The reputation of AirBlue in front ofpeople was damaged after
repeatedly crashes, their continues negligence and poorperformances.An Airblue jetliner
crashed into the Margalla hills on July 28, 2010, killing all 146 passengers andsix crew
members on board.The court issued only a show-cause notice to Bhoja Air’s Managing Director
Arshad Jalil, sayingthat since no representatives of the airline had appeared before the court,
taking stricter actionwould not be correct.The Peshawar High Court issued orders to the federal
government to suspend the director-general of the Civil Aviation Authority (CAA).An assistant to
AirBlue Counsel Wasim Sajjad told the court that 107 of 152 affected familieshad been
compensated and paid Rs5.5 million each. However, a petitioner refuted the claimsaying that he
had presented all documents and certificates but was yet to receive anycompensation. The
court then gave AirBlue 20 days to compensate all heirs, saying that inthe event that the airline
fails to comply with the order, the court will ask the federalgovernment to suspend its activities
and withdraw all facilities. CAA releases crash report According to data recovered from
the black box, the aircraft’scaptain had ignored the air traffic controller’s suggestions several
times.Aircrew failed todisplay superior judgment and professional skills in a self-created unsafe
environment.In their pursuit to land in inclement weather, they committed serious violations of
proceduresand breaches of flying discipline, which put the aircraft in an unsafe condition over
dangerousterrain at low altitude

At PIA, employees are not rotated amongst various departments unless they request for a
rotation.In order to make the employees familiar with multi-dimensional tasks,
employees ar erotated within the department at Airblue: employees in finance exchange tasks
relating tofinance; employees for operations are rotated so they learn various kinds
of operations instead of one. However, there is no rotation between departments.

According to the “Business Principles & Ethics Policy”, employees at PIA are required
tomaintain an environment, devoid of harassment, in which all members are equallyrespected
and encouraged to contribute to the best of their abilities in an atmosphere of freedom and
mutual trust. Employees are encouraged to voice their troubles and apprehensions so that
dissatisfaction levels are curbed.

Airblue believes in maintaining a secure culture within the organization to rule out anyverbal
abuse, sexual harassment or any other irregularity. The company maintains a set of HR policies
that clearly defines the issues, procedural solutions and the penalties the violator has to bear.
Especially for those departments where there is more female staff, a supervisor is kept to check
for any irregularity on every shift to ensure a safe working environment.

At PIA, exit interviews depend on the immediate supervisors and Departmental
Heads.Some of them are keen on the idea, others are not: there is no clear policy for exit
interviews mandatory to complete certain number of flight hours before employees are taken to
foreign flights.

Airblue conducts various program and meetings to signify the achievements made by its
employees that depend on particular region, District or Sales Office. The ceremony for this
purpose is held every third month and titles such as ‘Employee of the Quarter’ or ‘Employee of
the Year’ are awarded. They have the ‘Travel Counselor of the Quarter’ whose job is to
handle the traveling and various flight processes the customer convenience. According to the
Area Manager: “

We consistently challenge our employees(to remain competitive) by maintaining a healthy competition

between them. For examplewe divide our aircraft maintenance staff into teams and challenge them to
turnaround theaircraft within 35 minutes. If they finish the task before time (say 32 minutes), their
team gets 5 points. These points are added at fixed intervals and are used to recognize
and reward teams with excellent performance.”

There is no flexibility in the company’s benefits and administrative procedures according to the
policy of PIA. This can also be due to the reason that the organization hires contractual
employees regularly.

Airblue does not have benefits and administrative policies that are unique for any particular
employee: they are unanimously applicable to all employees. However, there is some leniency
for senior officials; for instance, a person amongst the top management who had served for
considerablylonger period of time will enjoy more health andinsurance benefits as compared to
a person of middle level management
The success stories at PIA are narrated to employees in order to motivate them and obtain the
finest performances from them.Airblue believes in narrating past examples, of those who have
made an extraordinary difference in the organization, as an essential tool to motivate
employees. This is achieved through two methods:

Quarterly Conferences are conducted in their press room where they call some worthy guest to
address the employees to narrate paradigm examples from the past.

Being highly technology-oriented, they mail the success and development stories of renowned
people to every employee, from the head office, for easy access.

Efforts are made by PIA’s management to ensure that employees are exposed to information in
a manner which minimizes uncertainty amongst them so that they are not disillusioned.
However, information through grapevine disturbs this process at times.In terms of sharing
information to its employees about company apprehensions.

Airblue does not disclose complete information to its middle and lower management, only
information relevant to employees is disclosed. This, however, never acts as a de-motivating
tool for its employees rather it is a part of the organization charter that is set by the top level
management. However, customer feedback is notified to every employeefor acknowledgement
and improvement purposes.

In an airline industry almost all tasks are performed through team work and PIA is notany
different. From ticket reservation to the landing of the plane team work is the decisive factor.
Employees work in various teams such as ground staff, cabin crew, flight attendants, office staff
etc. All these teams have different sets of tasks to perform but cohesion among these teams is
necessary to run the day to day operations. Considering the diverse nature of employees PIA
has, it is difficult to make team work efficient so it is major challenge for them.

Airblue strongly believes that its efficiency and effectiveness is attributed to team work,so it
takes all measure to enhance teamwork performance. The work processes are carried out by
mutual collaboration, and the right distribution of work according to the caliber of employees. To
enhance team spirit among various teams that are meant for specific project or assignment, the
organization motivates them through certificates, shields, and personal word of appreciation.
The continuous interaction with each other and learning asa one unit helps to increase overall

At present, all unions have been banned in all public/semi-government organizations under the
policy of the government. Disagreement among employees is resolved throughapplications and
appeals. Some cases may be dealt by the ELT (Employee LeadershipTeam), headed by the
Chairman.Being a service provider.

Airblue does not have any labor unions that could go on strikedue to disagreements. If
disagreement occurs, the issue is taken to the concerned manager for mutual discussions to
resolve the issue. The organization takes care in providing convenience to its employee to
avoid disagreement situation.


The sheer size of the organization leads to the formulation of various formal and informal groups
at PIA. The informal groups influence the overall decision making process tosome extent due to
the nature of the workplace. These informal groups are formed because many employees have
been there in the organization for several years and theyshare common interests.At Airblue,
only formal teams have the authority to take part in the decision making process while informal
teams does not take part in such processes. Nevertheless their good work is always

In PIA employees are less empowered which means all the power rests with the top
levelmanagement and they can exercise it at their will. Also their power cannot be challenged by
the employees and compliance to the decisions being made by them is essential. Wecan also
say that in PIA that legitimate power is exercised. This also leads to high employee
dissatisfaction because in order to be influential one needs to have personal contacts.
This is the reason employees focus more on networking rather than concentrating on their jobs.
We were not able to get an insight on the various political issues in the organization but it is
a common observation that illegitimate political behaviour is a common practice. It is present in
the form of nepotism, intentionally damaging the image of other employees.In Airblue
employees are empowered and have a freedom to express their own opinions though
compliance to the decisions being made is also mandatory there but before the decisions are
being made employees feedback are taken. Contacts do matter but the level of competency
overwhelms it. In Airblue expert power is exercised and employee feedback is considered

Attributes PIA AIRBLUE

Destinations 5 7
Punctuality 7 5
Quality of food 7 6
Hospitality 5 6
Economical 6 5
Technological 7 5

Comparison Of Debts Between PIA and Airblue Debt:

Debt of Airblue

AirBlue has a significant amount of debt.It hasshort term financing of Rs.254million current and
future debts could have important consequences for stakeholders of thecompany . For example,
debt could impair AirBlue’s ability to make investments andobtain additional financing for
working capital, capital expenditures, acquisitionsor general corporate or other purposes.Debts
could also put AirBlue at a competitive disadvantage to competitors that have lesser debt and
could also increase the company vulnerability to interest rate increases.
Debt of PIA

PIA has a significant amount of 42 billion debts. Current and future debts could haveimportant
consequences for stakeholders of the company. For example, debt could impair PIAability to
make investments and obtain additional financing for working capital, capitalexpenditures,
acquisitions or general corporate or other purposes. Debts could also put PIA at competitive
disadvantage to competitors that have lesser debt and could also increase thecompany’s
vulnerability to interest rate increases With total losses exceeding Rs150 billion and almost
a dozen of its 38 aircraft grounded,secretary defence and PIA’s new chairman Lt-Gen (Retd)
Asif Yaseen Malik is justified in terming the airline as a ‘bleeding organisation’


De-motivated employees:
Pakistan International Airlines is a company which is constantly going in loss.Higher number of
employees and the company already going in loss de-motivatesthe employees.

Nepotism and Political involvement during recruitment and selection:

Pakistan International Airlines being the government organization has the stronginfluence of the
politicians and government officials. Reports say that Mr. TariqKirmani was appointed chairmen
PIA due to being a friend of Primeminister Lack of experience relating to aviation industry for the
top management:

Look at the background of former three chairmen of PIA. Mr. Tariq Kirmani wa sfrom PSO, Mr.
Zafar Khan was from PTCL and Mr. Ahmad Saeed was fromService industry having no
experience of aviation industry. What couldthey contribute to the organization with no
such knowledge?

Lapses in the management:

The PIA’s management is ineffective to resolve and plan at the right time. Planes with damaged
Nose Random are grounded for consistent 9 days.

Low scale advertisements and awareness:

No advertisements and awareness to the organization’s brands in such a modern era of
marketing. No such efforts to enhance the brighter and soft image of the nationas well as airline
are made
Rising fuel prices in the World:
There is been consistent rise in fuel prices in the international market. Fuel priceshave impacted
on almost every airline in the world. This has affectedPakistan international Airlines more than
any other airline due to its aged fleet. New planesare fuel efficient as compared to old ones. In
an airline normally 30-35%of expenses account for fuel expenses but in Pakistan
InternationalAirlines this number goes to 45-50%.

Aged fleet:
Pakistan International Airlines fleet has total 43 planes. Out of those 43, only 33 are operating at
the moment. The average age of the fleet is 13 years which hasbecome 13 years with the
induction of 4 new planes. Previously it was 14. Due toaged fleet the fuel is consumed more and
maintenance expenses are increase.

Maintenance problems:
Besides having a large number of engineers, there is always been a question mark on PIA’s
fleet maintenance. Last year European Union banned 20 out of 42 planes werebanned from
operating in Europe. This results a 4 billion Rs. loss to the company just from Europe’s segment
to the company. This ban was imposed just due to the lack of proper maintenance.

Corruption at its peak:

Corruption is a sin that has hollowed Pakistani society bases. Like allother departments of our
country corruption is at its peak in PakistanInternational Airlines. Sale of Roosevelt hotel in
Dubai is a clear example of it.The hotel was valued about 1 billion but it was sold only in 40

Less technology advanced as compared to its competitors:

PIA is competing with the airlines from all over the country especially with theMiddle East
airlines which are coming in with heavy investment. PIA being already ina financial crunch faces
a tough task.

Lack of training facilities:

Although PIA is running a training and development department in Karachi but it is insufficientto
feed such a big organization with almost 18000 employees. Special skills such as
engineering,technicians are lacking. If they are there, they are not delivering
Organizational Behavior forms an integral part of any organization for prosperity. Greater
emphasis needs to be laid on controlling and monitoring of organizational behavior because in
the present dynamic environment employees are the key to success in any organization.It has
been observed that PIA and Airblue share similarities and differences. This is mainly due to the
varying structures and leadership styles. As mentioned on various accounts, PIA has a
centralized structure in contrast to the decentralized nature of Airblue. This has caused
higher conflicts and poor management of employees as decisions are made by the top level
management without involving the employees. In addition, this leads to complexities in
employee tasks as it takes more time to reach the information from top to bottom. Due to this
bureaucratic nature of PIA, inefficiencies have crept in and morale of the employees has
plummeted over the years.Delegation of tasks is minimal at PIA.
Both prefer communication through electronic mails. However, Airblue has directcommunication
s in the form of meetings of cross-functional teams. This enables two-waycommunication in
contrast to the to-down communication at PIA.Relatively effective channels of expressing
dissatisfaction are present at Airblue. Themeetings and suggestion boxes at PIA are ineffective;
employees feel reluctant to voicetheir concerns in a meeting amid others and complaints in the
suggestion boxes take timeto reach bosses and therefore, action is postponed.It has been
observed that Pakistan International Airlines fears change. They fear that thesystem will
become unstable, their security will be lost, and they will not understand thenew process,
therefore, will not know how to respond to the new situations. PIA turned itsattention on
employees when it faced competition. Otherwise, it was concentrating more on expansion
and profitability: an outcome oriented approach. On the contrary, Airbluehas maintained a
culture focused on their employees from its inception

Explain which organization is better in the performance of its main

objectivesand why?
As we all know that PIA is Government owned organization and Airblue comes under
privatesector. If we compare that which organization is better in its performance PIA or Airblue.
Wecan prove it through looking at their performance, strategies and completion of their

Let’s talk about the PIA first,

Traditionally, government jobs have been considered safe with no or little threat of job
loss,especially when job opportunities in the private sector were not. There was a time
whengovernments, both Federal and State, were the biggest employers. Then, job seekers
andbelieved that bagging a government job made their or their children's lives more
secure.Nevertheless, Government jobs have traditionally offered many perks which private jobs
donot. Here are a few job benefits and reasons for choosing a government job over a one in
theprivate sector

 . Pension; this is one of the attractions

 Financial services, such as mortgages at a low rate of interest offered by the
respectivedepartment where the employee is working.
 Promotions and pay raises offer immediate social recognition/status to employees
atspecified intervals.
 Higher positions often entail unmatched administrative power.
 Relatively stronger immunity against job loss.
 Some governments promise employment to relatives of employees.
 More relaxed, congenial working style.

There are a few downsides to government positions, too. Government jobs offer a low
startingsalary, in comparison to private employers. Salary hikes are sometimes meager as they
areregulated by standardization. Career growth opportunities can be few and far between,
aspromotions are standardized and often based on seniority. Another aspect of government
jobsis that they may be perceived as less challenging. A common complaint about government
jobsis that the routine and mundane nature of the job often leads to complacency


PIA should decentralize is its structure that would lead to the easy management,increased
motivation, easy access to information and resolution of the conflicts (asthey would be resolved
by the immediate manger time span would then reduced). Since employees issues regarding
their behavior would lessen, so it would ultimately lead to more satisfied employees
that would result in enhanced productivity of the organization.


PIA should make efforts towards empowering the employees that is going to leadto more
employee participation in the decision making process and also result inmore employee
satisfaction and enhanced motivation. Apart from this, employeeswould feel more independent
to discuss the issues explicitly without hesitation.This would also enhance team work process at
PIA as quality team and cross-functional teams. The employees will work with more
commitment and dedicationand every employee would work to his/her fullest due to increased
motivation.However, with empowerment comes accountability, so it is suggested that whilethey
empower their employees, there should also be a “controlled check’’ on them to ensue the
correct usage of power delegated to every employees within their circumscribed limits.

PIA should also reduce its overhead costs that are it should mange its resources:labour more
effectively, so that with less input, more out put can be achieved andthe saved resources can
be utilized in other areas such as introducing moretraining courses for the employees so that
the quality of the workforce could beincreased. Hiring the services of expertise can improve the
efficiency of their services, so by saving the overhead costs, they can utilize that money for
theexpertise services. So by analyzing the various segments of the organization and making
the right corrections, it can substantially improve the standards of Organizational behaviour.


The suggestions of the employees can prove to be very effective in improving the operations
as they are the ones who manage them. Therefore, a top-down approach should be replaced
with two-way communications. In this way, the employees would feel motivated and valued
as they would be included indecision-making


 Consistent hiring policies should be administered and should not change from time to
 People should be encouraged to exercise expert power.
 New venture teams should be incorporated to develop new ideas based on the feedback
taken from customers and employees.
 Total quality management should be catered to within the work groups and
implementation of various skill enhancement programs for quality and productivity
improvements such as Six Sigma should be provided to its executive employees.

 Diversification:
 introduce business class facilities.
 introduce cargo services

 Differentiation:
 introduction of new flight destinations
 hajj flights
 Europe and North-America, Austrailia

 Cost Leadership:
 Purchase of new aircrafts on economic lease, wet lease.
 Strategies should focus the core values described in its mission statement