Management and Operations: A Case Study of Uber

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Management and Operations: A Case Study of Uber

Management and Operations









Introduction

The management function of the organization looks after the authoritative organizational command of the company whereas the operations function is responsible for the operational efficiency of the company(Chary, 2017). The manager and leader are two distinct authorities with their distinct capabilities and authorities. Their differences are depicted in the assignment by discussing the roles and characteristics of the respective people. The functions and roles accompanied by various leadership styles are analyzed and discussed with the help of the management structure of Uber. The importance and value of operations management and the key approaches to the operations management function are evaluated by taking into consideration the business model of Uber. The factors in the business Environment that affect the operational management of the company are discussed and supported with relevant examples in the context of the operational management of Uber.





Company Background

Uber was found by Travis Kalanick and Garett Camp in the year 2009 and was officially launched as an app in 2011 in San Francisco. Uber started as a small scale car hailing service and now has its operations in over 900 metropolitan areas where they match the passengers to their drivers. The products and services offered by Uber vehicles for hire, package delivery, Food delivery services, freight transportation and also courier services. The CEO of Uber is Dara Khosrowshahi succeeding Travis Kalanick in the year 2017 (Uber.com,2020). Uber operates its business model on the gig economy principle. The values, management and leadership styles of Uber are evaluated in this assignment.



LO1 Differentiate between the role of a leader and the function of a manager

P1 Define and compare the different roles and characteristics of a leader and a manager



Roles and Characteristics of a Manager and Leader

Attribute

Manager

Leader

Setting direction and Planning a direction

The manager’s responsibility is to ensure optimized resources with productivity within the organization. The managers take the decisions with a cost driven objective. Uber recently laid off 3700 employees amidst the covid-19 outbreak. The jobs eliminated were of the frontline customer support employees who worked in almost 46 countries. (Snider, 2020). This decision was taken after considering the costs and profits for the company. The ride hailing giant had to let go off the employees via a zoom platform as due to the lockdown it seemed like the best option. The management decision of laying off their employees is a measure taken to set a direction for the company to sustain in the tough situations raised due to the pandemic.


The Leader sets the vision for the enterprise. He carves a pathway for the employees and his customers to walk on. The leader is considered to be a visionary of the organization. The Uber CEO has plans to completely eliminate the car ownership and make a transformation into the reliance on public transportation. The vision is to become the Amazon of Transportation. Uber also aims to launch Uber air which will act as a flying taxi for its passengers. For the same Uber has also partnered with 5 plane manufacturing companies to make its vision true.(Karanovi?, 2019). This visionary statement is a clear depiction of how the leaders inspire and motivate by planning a direction for the organization.



Leadership Style

(Transactional and Transformational)


















Transactional Leadership

The Manager’s responsibility is to foresee the tasks performed by the employees to ensure optimum utilization of resources. The manager’s relationship with the employee is transactional in nature where the manager relies on productivity and the employee takes home his bonuses and compensations. Travis Kalanick had a transactional approach to its stakeholders which had an unanticipated downside for a valuable startup (Frei and Morriss, 2020). The management style of Travis Kalanick was focus on the costs and growth of the business disregarding the internal concerns of the employees.


Transformational Leadership is a leadership style that focuses on motivations and inspiration amongst the group of employee working for the organization. The transformational leaders are listeners to the employee’s problems which make them more desirable. Dara Khosrowshahi when joined as the CEO if Uber spent almost 2 months travelling and meeting the employees and managers worldwide. He wanted to be the one people come to with their concerns. He laid around new values for the organization which were more than just cost driven (Kashyaap, 2018). This leadership style is what makes a leader respectable in front of the employees.

Table No 1: Roles and Characteristics of a Manager and Leader





LO2 Apply the role of a leader and the function of a manager in given contexts

P2 Examine examples of how the role of a leader and the function of a manager apply in different situational contexts.

The role of the leader and the functions of the manger are an important aspect required to shape the business towards growth and sustainability. The vision of the leader and the decisions of the manager together act as a base for the organizational operations. The roles and functions of managers and leaders are discussed below and supported with suitable examples with theories that have been applied in the situational context of Uber.

Role of a manager

The management function comprises of the planning, directing, organising, staffing and controlling of the business activities. The planning function is the start of the strategic implementation of a business plan. The planning function examines the data collected and plans the execution of the plan. The planning is done by the core members of the organization that will also include the insights given by the various departments involved in the organizations. The planning process determines the execution of the business plan. When companies are aiming to expand their capabilities there is extensive research required to do so. In the case of Uber, Fred Jones, Uber’s Head of New Mobility for the UK and Ireland stated how the company is planning to ease the efforts of their customer by introducing features like a multi stage option which will be cost efficient and suggest routes that are time saving. The planning process of the brand manager can be clearly seen as a distinctive feature of strategic implementation. This plan needed research and technology for the navigation of maps. Ahead of the UK electrification of vehicles plan Uber has planned to launch an all-electric fleet in the capital by 2025(Reid, 2019). These plans are laid out as a pathway for further actions for the strategic implementation of a process. The manager performed the planning function which led to the company taking a strategic direction to launch their electric fleet.

Role of a Leader

The leader’s traits are to inspire and motivate their employees and influence an ethical environment by their own actions. A leader doesn’t have a two-way communication with all the employees of the organization and yet is followed by the entire firm as actions speak louder than words. The Leader of the company determines the vision of the company and lays down the path for the company. The former CEO of Uber Travis Kalanick had created a bad reputation of Uber as he did not take any action against the sexual harassment claims that were running in the media about the inner circle of Uber. Travis Kalanick was also known as a transactional leader who had his objectives that were cost driven for the growth of the company. Dara Khosrowshahi took the place of Travis Kalanick and cleaned out the mess that the former had created by apologizing to the media on behalf of the company. The Leader took the responsibility of actions and became a listener to all the problems that were there in the organization. He also laid out his values that were to be complied with in order to bring about a change in the atmosphere of the company (Pontefract,2017).







P3 Apply different theories and models of approach including situational leadership, systems leadership and contingency

Leaders have a varied approach to the way they wish to lead their team. The varied approaches depend upon their personal traits as well as the kind of work environment they aim to create for the organization. To discuss the leadership styles the various leadership approaches have been taken into consideration. The leadership approaches that are explained below are Systems, Contingency and Situational leadership. The different theories are supported with relevant examples in context of the business model and leaders of Uber

Situational Leadership

Situational leadership talks about how leadership cannot be a one size fits all approach. Different leaders have to take up different leadership levels to approach the employees to ensure there is optimum productivity with an organizational design within the work environment. The Situational leadership model gives 4 leadership approaches that depend upon various communicative and directorate authorities. The four leadership styles are Directing, Coaching, Supporting and Delegating. The Uber CEO Dara Khosrowshahi took over the reins of Uber when it was in the news for all the wrong reasons like sexual harassment allegations and their cultural crisis. Dara Khosrowshahi made it a point to communicate with all the highest level of employees so that he could understand the environment he was about to enter. His strategy was to apply these 4 styles of leadership accordingly by establishing a communication. He removed the “growth at all costs” mentality and spent time working on the regulatory aspects for the sake of growth of the firm (Gaudé, 2018).

Systems Leadership

A systems leadership is based on the skill-set and expertise of the leader. A systems leader is a visionary and deals with complex and infrastructural complexities which reflect in the potential benefit and productivity of the firm. A system’s leader uses his skill set and expertise to resolve any issues that arise in his team to ensure there is a smooth functioning of operations .A systems leader deals with issues that might not be included in his by the book definition of leadership, here he has to cross departmental boundaries for the wellbeing of the firm. For instance, the former CEO of Uber was a systems leader that utilised his technical expertise to lead his team. The unique expertise if the leader transformed the company from a statup to a globally positioned company.

Contingency Leadership

Contingency leadership depends on the adaptability factor of the Leader. The leader should be able to react according to the crisis. Uber entered Africa with a vision of expanding its operations and faced a concern in its way. The African population wasn’t used to the cashless transactions approach so the managers at the respective centers were informed about taking suitable action accordingly. In Uganda, they first introduced cash transaction option and saw a threefold increase in its usage (Bright, 2016). This adaptability factor helped Uber act according to the situational concerns that might arise in the unforeseeable future.





LO3 Demonstrate an appreciation of the role leaders and managers play in the operations function of an organization

P4 Explain the key approaches to operations management and the role that leaders and managers play.

The operations management process is the administration of all the business practices to ensure there is efficiency in the work produced and certify optimum utilization of resources in the business. The operations management processes and transitions are aligned with the company’s strategic goals and objectives (Chary, S.N., 2017). These processes are vital aspect to ensure the operations as well as the growth and profitability affecting the reputation of the business.

Lean Manufacturing

Lean Manufacturing refers to the concept of using as few resources as possible to simultaneously ensure efficiency in the operations of the business. Lean operations creates value and reputation for the company by focusing on the satisfaction of the customers and eliminating waste. The elimination of unnecessary costs and resources leads to a reduced operating expense on the balance sheet eventually having a long term benefit for the company’s profits and growth. Uber was initially a car hailing service and later cut its resources and invested in the app that wouldn’t require car ownerships. The leaders of Uber that time influenced these decisions as they were inclined towards reducing their operational costs. Uber’s business model relies on the gig economy where the drivers meet the passengers through their matchmaking services. Through its platform it has created strong value propositions (Lahoti, 2019).

Supply chain Management (SCM)

The distribution channels certain the efficiency of the response time required to resolve an issue. The efficiency and effectiveness of an organization depends on the supply chain management of the company. Rahul Vijay is the head of connectivity and Supply at Uber and is responsible for leading the digital supply chain of Uber. Mr Vijay and his team are ensuring that the operations of the company’s offices, data centers and hubs stay connected(Zeman, 2020).

Total Quality Management (TQM)

The quality management of the company is accountable for the standards of product or service quality that is delivered to the customers and perceived by the customers. The quality standards are proportional to the customer satisfaction of the consumers. Uber delivers a personalized customer service by collecting data is further used to curate and remember the pickup and drop points the customer usually prefers (Aubagna, 2020). The managerial function of Uber to oversee the quality management leads to an enhanced customer experience of Uber’s customers.

P5 Explain the importance and value of operations management in achieving business objectives

The operations management is a fundamental aspect of any firm that ascertains the work standardization emphasizing the productivity of the organization. The value and importance of the operations management function for the firm has been discussed below by providing relevant examples in the context of Uber’s leadership and management (Chary, 2017). The below mentioned are the objectives of the company to which operations management has played a significant role in achieving them.

To maintain the Service Quality

The product and service quality of any product is a standard that decides the perception of the product in the market and regulate the customer satisfaction. The service quality of Uber is of utmost importance for the firm and thereby the CEO of Uber personally got involved in the app development process of the Uber app and also was open to listening to the drivers feedback to bring about the necessary changes required in the app development process (Bhangoo, 2018).

The customer loyalty completely depends on the customer satisfaction and hence the service quality remaining a very important fragment of the operations management process.

To Motivate the Employees

The employees that work for the company should be driven by inspiration and motivation that goes beyond a transactional approach. The employees want to feel that they are doing the right thing by working with the organization and this makes it the responsibility of the managers and leaders to determine the key factors that employees might feel should be changed in the organization. Ensuring a way of communication is one way to do that. Uber CEO Dara Khosrowshahi spent months to get to know the grievances of the employees around the world and take corrective actions against the problems that were raised regarding the cultural crisis in the working environment of Uber (Gaudé, 2018).

To comply with the regulations

The compliance of any company regarding the ethics and laws and regulations mandated by the country are an indicator of the values that the company abides by. The cultural norms and the regulations put forth should by complied with by any company to keep its operations functioning in a smooth manner without hindrance. Uber was facing may legal battles due its lack of compliance and ethical issues within the organization. The working environment of Uber was not a healthy working environment according to the employees of Uber and hence the company had suffered a blow out of a bad reputation in the market (Murr, 2017).

The compliance factor, the motivation of employees and the service quality are the various fragments that are of value to the organization. The operations management process looks after them and subsequently adds value to the organization.





LO4 Demonstrate an understanding of the relationship between leadership and management in a contemporary business environment.

P6 Assess the factors within the business environment that impact upon operational management and decision making by leaders and managers.

Resources

The resources are the most important factor in the business environment as without the resources the company will lose its body and framework. The resources can be in a financial form, tangible form, intangible form, employees or assets of the company. The strategic decisions about the allocation of resources impact the operations and profitability of the company. The factors within the business environment that affect the business decisions and operational management of the leaders and managers of the company are assessed below. Uber was involved in its biggest rival DidiChuxing in China. Uber was almost losing $200 million in its battle in China and had to eventually let go of the battle to focus its resources on India. The Uber CEO at that time Mr. Travis Kalanick had to let go of the battles in China as they had to focus on their other initiatives like Uber Eats(Tyagi, 2016). The major decisions taken by the managers and leaders about choosing battles wisely affect the operations of the business on a global spectrum.

Capital Sourcing and Requirement

The capital requirement decides the extent to which the company can carry about its operations. The capital available and sourcing of the required capital are the decisions made by the finance department aligned with the core members of the enterprise. The decisions regarding the same affect the next move of the business. Uber had been a private company till 2019 after which the Uber CEO Dara Khosrowshahi decided to take his company public to fulfill their capital requirements and ease transparency and build trust. Uber announced its first IPO in the year 2019 by ringing the bell at the New York Stock Exchange (Alba, 2019). The decisions regarding the company’s capital requirement and sourcing taken by the leader of CEO have a permanent effect on the operations and reputation of the company.

Employee Relations

The employee relations of the company determine the work culture prevailing in the enterprise. The security and safety of the employees give them a sense of being a part of the team which is essential to run a profitable business. Uber operates in a gig economy where the drivers of Uber cannot be claimed as full time employees of the firm rather they are employable on a flexible contract basis. This puts them in a situation where they might feel that they are being taken advantage of and consequently lead to unrest. The drivers of Uber went on a strike to highlight their poor working conditions and unsatisfactory payment. This has a very bad effect on the reputation of the firm (Hawkins, 2019). The drivers of Uber are the face of Uber as they are the ones that interact with the customers and hence the decisions about them will affect the operations of the entire firm. The business operations were severely affected due to the poor employee relations of the company.

CSR activities influencing operations management if Uber

Uber aims at transforming its business processes into a zero emissions mobility platform. The strategic implementation will contribute towards the climate change by transforming the operations of the company. Uber wants to make its fleet electric that will reduce the carbon emissions in the environment. The company aims at providing sustainable and shred alternative instead of a car. Uber’s business model contributes towards the environment as it reduces the impact on the environment that the community has. To comply with the business objectives the company has partnered with local transit agencies. The strategic alliances that have been established by Uber will allow the company to reduce their negative impact on the environment. These strategic alliances will affect the operations management of the company by introducing modification and transformation of resources in the previously existing business line. The above mentioned CSR activities of Uber require tremendous operational effort to implement the strategies that have been formulated by the management.



Conclusions

The operations management involves the planning, organizing and supervision of the activities from the sourcing to the post sales decisions that are required for the data collection required for the development of a product or a service. The roles and characteristics of managers and leaders with respect to their leadership approach and planning process has been differentiated. The theories and models that different leaders of Uber have adopted have been discussed where it had been found how the new CEO of Uber has a situational leadership approach for fixing the issues of the firm. The key approaches that are discussed to explain the role of leaders and managers are Lean Manufacturing, Supply chain Management (SCM) and Total Quality Management (TQM). The managerial function and the leadership roles regulate the operations management function. The operations management function regulates the service quality, compliance and motivation of employees which gives it a competitive advantage over its competitors in the market.





References

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