Sample Business Law Paper on Saudi Airlines “Privatization and booking system”

The year 2014 saw the major business sectors of Saudi Arabian Airlines (Saudia) get
earmarked for privatization. The intention of privatization focused on the Saudi Airline’s four
main units including Principle Sultan Aviation Academy, Saudia Private Airline, Medical
Services and Saudi Airlines Real Estate Development Company (Oxford Business Group). The
privatization exercise for Saudi Airlines Medical Services unit is earmarked to include a four
hundred (400) bed hospital. The privatization plan is an official communication from the Saudi
Airlines Public Relations Department’s vice president Abdullah Al-Ajhar as was quoted by the
Arab News.
The news of further privatization of the four business units of the Saudia Airlines is an
exercise following the already privatized five units including catering, cargo, ground services
and Saudia Aerospace Engineering Industries. The overall target of the Saudi Airlines is to
privatize eighty percent of the Saudia Airlines units (GMB Publishing Ltd). According to Al-
Ajhar, on behalf of the Saudia Airlines Public Relations division, it is observed privatization is
already bearing fruits and has significantly helped Saudi airlines boost its revenues. Of notable
impact has been the ground services posting profits of SR600 million ($160 million) as the
catering company has been making a profit of SR400 to SR600 million.
The Saudi Airlines has additionally had its focus fixed on plans to purchase 35 new
aircrafts. The planned acquisition is proposed to step up services, particularly in the domestic
sector. This was gathered from the additional information from Al-Ajhar as quoted talking in the
Arab News report (Ham).
In order to survive and prosper in the current global market amid the intense business
competition, as part of its business strategy, the Saudi Airlines has improved on its flight
schedules to various destinations including Los-Angeles, Africa and Manchester City (August,
Mayer and Bixby). There has also been a key reason for the airline to venture into the activity of
privatizing several units in its business sector. That is the need to increase its competitive base.
The case of privatization of the Saudi Airlines’ strategic business units alongside its booking
systems can, however, be seen and even described, by many as being problematic (Butler, Carter
and Duston). But before delving into the problem of privatization and booking systems of the
Saudi Airlines, this paper shall first set forth to lay the foundation of understanding the brief
history of the Saudi Airlines.
Historically known as Saudi Arabian Airlines, it is the flag carrier airline of Saudi Arabia,
operating as Saudia. The airline, which reverted to its earlier abbreviated English brand name
Saudia, has its headquarters based in Jeddah. The name change was indeed occasioned by a
major marketing and a larger re-branding exercise, as the company celebrated its entry into the
Sky Team airline alliance (Zhao). The Saudia airlines flights are an expansive operation with
domestic and international scheduled flights to several destinations across continents (Int'l
Business Publications).
The airlines operations also engages in domestic and international charter flights that are
often operated, special religious seasons of Ramadhan and the Hajj. It is equally noteworthy that
the Saudia Airlines has its main operating base at the Jeddah-King Abdulaziz International

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Airport (JED), while also commanding major hubs at Riyadh-King Khalid International Airport
(RUH) and the Dammam-King Fahd International Airport (DMM).
From a comparative business analysis point, the Saudi airlines was generally regarded as
the largest carrier in the Arab region, but is since considered to have lost this enviable position to
the competitors, the Emirates and Qatar Airways. The airline, however, is a member of the Arab
Air Carriers Organisation, in addition to repeating that it is a member of the Sky Team airline
alliance (Fabozzi and Drake ). From the forgoing industry competitive position of the Saudia
Airlines versus the major completion of Emirates and Qatar Airways, it is possible to view or
indeed regard the privatisation at the Saudia Airlines as being problematic (Dlabay and Burrow).
That the airline has slipped to position three is a strong indicator of the possibility of wrong
strategic choices or wrongly implemented strategies. This is in spite of the insistence of the
airlines department of public relations of success indicators of financial performance.

Privatisation is an involving exercise and needs thorough evaluation before departments
or business sections are considered for privatisation. There are of course core business
departments that are unique to the overall corporate function. In the case of the Saudia Airlines,
the considerable force in driving its core business, as a carrier airline, resides in its potent
capacity to attract travellers (Luizzo). Travellers need more and constant reassurance that they
are safe, secure and timely, in the business of air operations. That a core corporate practice like,
booking clients for an airline, can be off-loaded to a third-party, is in itself eroding the airline of
its inherent power to entice clients, reassure them or even make appropriate and timely follow-
ups, even if only to say thank you. This scenario becomes fairly complicated in the eyes of the
clients as there appears to be remoteness between the airline and its clients. The detachment, in
this case, by the airline from its prospects is a major problem that may give room to competitors

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to establish more vigorous links with the market and become more attractive enabling their quick
growth and performance (Vonderembse and White).

The privatisation process for Saudia airlines was in itself complex and fragmented as the
airline divided itself into Strategic Business Units (SBU), with the catering unit being the first to
go. A year after the privatisation process began, Saudi Arabia’s Council of Ministers approved
the conversion of airlines strategic units into companies, that were planned to become
subsidiaries of a holding company (Schriver).

Creativity in Business

Business creativity is the major step towards strategic success. Every business ought to be
a live to the fact that it cannot be everything to everybody every day. As a result a business
quickly needs to settle down on one or a few areas of capabilities and be really good at it. It is
agreed across the board that only strategy keeps a business focused. The world has become over
interactive and pervasive forcing businesses to rethink their strategy development process,
altogether (August, Mayer and Bixby). While the historical perspective was its emanation from
inside out, today’s strategy process development calls for stakeholder involvement with all
concerned. It is true that a modern approach to the strategy development process is wrought with
challenges. The core of the strategy process is to unleash a great power of stakeholder analysis
that considers internal and external relationships with customers, suppliers, legislation and
employees etc, in order to set the overall strategic direction for an organisation (Dlabay and
Burrow).

According to the scholars of strategy, a change approach like strategic planning no
longer works in pre-designed plan horizons like a year or a couple of years. Predominantly,

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market changes have become rapid consequently forcing organisations to redefine newer and
faster ways of doing things, even if it is just for survival’s sake. Businesses increasingly face
challenges from their environments, both external and external, that impact heavily, on their
diagnostic system for a strategy that is necessary, timely and timeless (Aamodt). These
challenges may range from lack of basic understanding of the context of defining a strategy.
Strategy should be looked at from the perspective of participants’ common understanding of the
reasons, service and vision of the strategy, in order that an organisation should stay on course.
Often, companies, perhaps when in a hurry, formulate strategies without giving enough regards
to the strategy content that can entirely enable it to focuses on the quality of the strategy. It is
noteworthy that if the content within which a strategy is formulated is understood, then the
resulting outcome will be all encompassing and detailed. Real-time business analysis should
enable models that are essential to help organisations understand environmental possibilities to
help develop the right strategy option. The strategy development and execution process can only
be effective if it is inspiring. The basic criteria answers are to focus on who, the why and the
what of the system processes. In short, the drive is to sort the rules of engagement which must be
driving commitment rather than repulsion. Among key essentials for commitment to the process
of strategy development, is high quality involvement of participants in the process. In addition,
participants must be willing to analyse, and engage in foresighted thinking before initiation of
the strategy implementation process (Butler, Carter and Duston).
Long-term business vision continues to be the basis of every business strategy. Classic
scholars of strategy development have referred to the organisational goals as stretching and
attainable, but which also run in parallel in a deep passion and commitment in the strategy areas.
Such goals and visions must be focussed looking at them in terms of the customer need that a
company distinctively propose to resolve, speaking in competitive industry terms. The second
concurrently running question in the triad seeks to answer a defining moment for a company, in
terms of what it considers itself better at. This unique self-association with best-in-class
competency, can focus on the tangible corporate components like the goods, but may also look at
the innate components like employee intellectual creativity etc. Finally, the last parallel question
in the triad is answers to what composes the core driving elements of the company’s economy
(Rynes, Gerhart and Minette). This could result from the optimal productive utilization of core
processes or certain factors of production. Answers to these questions all have the indications of
the creativity processes of a business as residing in the strategic process. The future of a
company needs to be worked at by a positive enthusiasm of business capabilities and alternative
strategies. The difficulty in proactive creativity process hampers the organisations view of the
changing customer needs and quick formulation of the responses (Ritzer). Many organisations
then resort to dramatically launching the next strategic intervention without regard to the larger
picture of the business environment.

Successful Problem-Solving

Successful problem-solving is a staged or step-wise process that eases the understanding
of the problem and the methodical way of seeking appropriate solutions to the problem. The
stages of a successful problem-solving programme begin with recognising and defining the
problem, finding possible solutions to a problem, choosing the best solution among options and

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implementing the solution (August, Mayer and Bixby). These stages provide a very flexible
framework which can be adapted to suit almost all problems.
Before a solution is formulated towards a problem, the primary action is to first recognise
that a problem exists, in the first place. The main technique useful in identifying a problem is to
label it as so, to enable a coherent search of information that provides a basis for solutions.
Closed- ended are circumstantial and deviations from the norm, while in defining open-ended
problems, the technique is to define the objectives and any obstacles which could stop reaching
them. The problem definition provides the basis for finding solutions (GMB Publishing Ltd).
The second action, in the problem-solving programme is to find the possible solutions to
the alternative sets of the problem. While closed problems appear to be constraining with a
limited number of possible solutions, open-ended problems usually can be solved in a large
number of ways selected from a wide range of possibilities (Ham). The process of problem
solving involves full understanding of the problem and appropriately constructing courses of
objectivised action.
Analysing the problem involves identifying and collecting the relevant information and
representing it in a meaningful way while constructing courses of action to solve the problem
involves discovering what actions will deal with any obstacles to help achieve the objectives. In
the third phase of the problem-solving process, best options are chosen for solutions, at a stage
which evaluates alternative possible solutions and selects the most effective potential solution as
understood in terms of risks and decisions to implement this solution (Dlabay and Burrow).
In the fourth and final problem solving process, a solution is only considered complete
when it is implemented to solve a problem (GMB Publishing Ltd). This process has the
initiatives of planning and preparing the implementation process, acting accordingly with
measures of monitoring and reviewing of the ultimate success of the chosen action.

Six Thinking Hats and Business Creativity

Edward de Bono’s six thinking hats can be a classic system for developing business
concepts and theories of creativity that vary accordingly with situations and circumstances.
Based on the classical theories of lateral thinking, De Bono has crystallized the thinking process
into the non-normative No and Yes depicting the scenarios where alternative decisions are
considered on the value of acceptance or rejection. In the typical classic, No is considered a tool
of logic while Yes is a theoretical tool of the belief system. It is generally anchored on the
principle of saying no to what one considers non-conforming to his beliefs or supports systems,
more like in a non-rational approach, while yes considers the optimism of options and believes in
the dimension of hope for the best. In a normal business discussion emotions are to be subdued
and merely disguised as logic (Ritzer).
Common reference to creativity holds that it is a phenomenon whereby something new
and valuable comes to life. It is a creation either from scratch or from an existing phenomenon
such as an idea, a joke, an artistic or literary work, a painting or musical composition, a solution,
an invention, among others. But even as more recent considerations tend towards creativity
involving new and useful products or ideally producing something that is both original and

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worthwhile (MacIntyre). Whatever the product is, it must be characterized by an imagination,
originality and has to be expressive.
In Edward De Bono’s lateral thinking, a product whose symptoms are indicative of a
down-turn in revenues can be thought of to be perceived by buyers as old fashioned, and,
therefore, is no longer marketable to the same or new clientele. These signals can be seen from
studying the revenue trends over a period of say, years, months or days. This trend can be
imposed over a similar trend at some earlier point to help clarify the points of deviation. The
deviations could be in sales quantities, stock outages, customer repeat orders, among others.
While symbolically studying the Debono’s six hat thinking, it exemplifies the possibility of
rotating idea to a 3-dimension perspective, attempting to extract a possibility or eventuality in a
scenario rather than looking at only a single perspective. In the Debono’s characteristic
observation of the variety of objectives, a product whose sale is dwindling can be reflectively
created to either re-engineer the sales or the product chosen for improvement or altogether take
the decision to discontinue the product. In short the thinking would look at the most viable
options while evaluating and defining the problem of low sales, the possible cause of the
problem of low sales, finding possible solutions in handling the product and looking at the best
possible option as a solution to the problem (Schriver). For example a product may be dealt with
from the perspective of change of attributes such as the change of colour of the packaging. This
may be associated with flooding the market with even older-looking products to deter
differentiated completion, call the product retro and segment the market to sell the product to old
people, or sell it to young people who would give it as a gift to the old people. This product may
altogether be creatively handled and marketed as a completely new product.
The product sales change handling would represent the characteristics of the model of De
Bono’s symbolic hat colours. The pathway of the product sales change process would sieve
through known information, optimism and positivity, dropping negative and critical thinking,
and instituting creative new ideas, while relying on certain feelings, hunches and intuitions to
constitute, and plan new product profiles (Luizzo). This is a slow cautious stepwise activity
involving critical judgement dropping pessimism and separating logic from emotions.
Communication
Creative problem solving models and techniques aid the understanding of an issue that an
organization faces through investigation. The investigation will usually put the perspective of an
issue as a problem or challenge that a business is facing. For purposes of this paper, the loss of
competitive positioning of the Saudia Airlines to third ranking behind Emirates and Qatar
Airways is attributed to loss of sales. The system of ticketing for Saudia Airlines where third
party internet bookings are the primary booking lines makes it tedious, cumbersome and not
quite responsive to the customers. Indeed it is not clear with whom one is booking the Saudia
flights a situation warranting the definition of problematic relation suggested before. The Saudia
Airline challenge of low sales resulting from the privatised and cumbersome faceless ticket
bookings will be communicated with purpose to both guard the customer loss and to re-institute
a new dimension of change towards customer responsive booking (Butler, Carter and Duston).
The top management at Saudia Airlines have to raise alarm over the dwindling sales;
prepare evidentiary and simplified proof of the reduced sales including connotations of
percentages, graphs, pie-charts, among others, for ease of communication. The low sales
statistics should be attributed to booking trends observing seasons and attempting to find out

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what is not right in the booking system. Concerned sales people and the department must be
given a proper chance to study the defined problem deeply isolating possible causes of the
difficulties in the Saudia booking systems, since they will have responded to the problem by first
acknowledging it as a problem. Beyond this phase, is the need for the team to define the problem
into proportions that can be solved, move forward to suggest possible solutions irrespective of
the implication of the suggested solution, including the bold suggestion of rescinding the
privatisation or the change of agency (Int'l Business Publications). Additionally, is the need for
all stakeholders to sit and sift through various alternative solutions and their import when chosen
as the one to implement. The primary point to start, for the sake of smooth transition, is to
change dimensions of the existing system rather than dropping the booking and ticketing system
at a go. The pros and cons of each proposed solution should be discussed openly and all grey
areas clarified.
Options must include pre-trial in closed company circles and revelation of the basic
database conveniences or inconveniences in the use of the web-based system. This should reveal
the true nature of information required, the ease of inputting the information considering culture
and language differences and individual country laws, literacy levels and internet access. The last
of the best options has to be opted for by the team and a plan drawn to implement it. Any
haphazard implementation of the best solution option, will lead to either no significant appealing
change, poor change or wrong change that may negate the efforts to create new and lasting
change (Butler, Carter and Duston). There might be no significant positive change in the
bookings leaving the airline struggling with the process.

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