Recommendations And Action Plan Commerce Essay


PIAC is generally considered one of the best organizations in Pakistan. In spite of its popularity as a well managed and a modern organization in the country, it is facing hard time in the last few years.

During my internship at PIAC Peshawar, I found their staff friendly, well behaved and cooperative. There exists an atmosphere of frankness, friendship and harmony among the employed. However, some weak areas were observed during the internship period. The following are the Findings about PIAC during the period:

10.1.1 Overstaffing

PIAC has employees more than the required number. This overstaffing is not only a burden on the revenue but it also affects the smooth functioning of the business in addition to duplication of efforts.

The main reason for overstaffing is the political interference, favoritism, and bribery.

10.1.2 Job Description

Being an old and well-matured business organization PIAC does not have any specified description. There is no written charter of duties and no checks whether employees are doing their job for PIAC or not. There responsibilities are not fixed. This lack of direction has caused PIA employees more inefficient in its job of providing better services to its customers.

10.1.3 Centralized Planning System

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PIAC has centralized planning system. The weakness in this system is that it has hampered the initiative and drive of its employees. Their potential and creativity has remained unutilized. They do only the functions of gathering and passing information to higher authorities. This affects the overall planning process of the organization.

10.1.4 Lack of Punctuality

PIAC employees particularly the managerial staff lack punctuality. They are not strict in observing the office timings, which is not a healthy sign for the organization.

10.1.5 Government Interference

There is a lot of undue Government interference in routine matters of PIAC. People had been recruited without any merit or vacancy. The corporation is more like an elite Government set up and less like an efficient forward looking commercial organization.

10.1.6 Insecurity

Due to recruitment the employees feel great insecurity. They feel that will be fired next morning when they would get up from their sleep. They do not know whether they will be offered any financial package or not. This uneasiness and fear of secure job are affecting their motivation resulting in poor organizational performance.

10.1.7 Congested Accommodation


Office and storage accommodation provided for some of the department and sections are not sufficient. The staff members are forced to work in a congested and overcrowded atmosphere, causing them to have low level of efficiency.

10.1.8 Computer System and Direct Dialing Facility

Most of the official matters and reports and returns are required to be communicated on short notice to Head Office. But no hot line is there between Head Office and various stations. PIAC just recently has furnished its computer system with the introduction of departure control DEPAK and flight monitoring FREPAK. However they still has to go a long way to reach the international standards. Stations are connected to head office through T & T lines, which is not a good system, because messages are interrupted and interfered anywhere on its destination.

10.1.9 Subsidiaries

PIA is a conglomeration of many diversified businesses. In addition to providing air transport services, it also owns different hotels, an advisory agency, a poultry farm, duty free shops and motels. The purpose of having these additional businesses is to earn profits. But unfortunately PIA is loosing even on these subsidiaries over the past few years. The reason is lack of expertise. PIA employees are unable to run such businesses because they are trained to take care of airline and aircraft. So, it is difficult for them to run a hotel or a poultry farm and this finally leads to losses in these businesses and has over all negative impact on the revenues.

10.1.10 Unnecessary Expense and Cost

PIAC spent amount on unnecessary projects like PIA platinum. Also free tickets are given to PIA employees for foreign tours. Unnecessary facilities are being provided to Government departments.

10.1.11 Deteriorating Off-board Services

An organization has its image and reputation. PIA has great reputation in past which is now no more there. The PIAC staff lack professionalism. PIAC employees attitude toward customer is unprofessional. The reservation and ticketing officials do not deal in good manner, especially the labor class traveling to Gulf.

10.1.12 Lack In Marketing Strategies

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Today in tough competition environment an organization is successful it is utilizes all aspects of marketing. PIAC does not seem to be fully acknowledging this aspect. The sales promotion section is concentrating only on personal selling as compared to other elements of promotion mix, which are publicity, sales promotion and advertising.

10.1.13 Lack of MIS

Marketing Information System is an important and useful too for marketing department of any business organization. Although sales promotion officers get market information through their sales agents, yet there is no systematic, planned and organized system to get information about customer and PIAC giving the information to its agents.

10.1.14 No Promotion (Advertising)


Advertising plays a vital role for promotion, but PIAC has not paid any attention toward this useful marketing tool. PIAC Peshawar has no advertising plans and budgets.

10.1.15 No Incentives for sales promotion for customers

Sales promotion is very important in increasing the sales of an organization and attracting more customers. In PIAC sales promotion techniques, almost all incentives are given to travel agents and no attention is paid to customers. This is affecting the sales of PIAC.

10.1.16 Open Sky Policy

Open sky policy was introduced by Nawaz Sharif Government which resulted in huge losses to PIAC. Now other International Airlines can operate at any International airport of Pakistan. This system is only introduced in Pakistan and is not there in any other country of the world. Due to this Emirates and Gulf Airlines are now taking passengers from Peshawar to Gulf States which are a big market for PIAC, as most of the labors belong to NWFP who work in Gulf States.


10.1.17 Government License to Private Airlines

Nawaz Sharif Government had awarded licenses to private Airlines even they had only one aero plane. CAA do not impose tax on these Airlines because of single plane, while CAA impose taxes on PIAC because of its many number of aero planes.

10.1.18 Government Dictated Fares

PIAC fares are approved by the Federal Government for domestic flights. PIAC has been going in loss due to the Government dictated fares. PIAC is operating flights to even on un commercial rates to remote areas.

10.1.19 Expansion of PIAC Peshawar

With opening of new regional markets, capacity of PIAC Peshawar seems to have reached to its maximum. The present Peshawar airport is not likely to be able to handle the future air traffic.

10.1.20 Lack of Modern Aircraft in its Fleet

PIA lacks modern aircraft in its fleet. Most of the existing aircraft are older than 20 years and have crossed the technical age limit. Most of the passengers wonder that such an old aircraft can fly. Boeing 747-300 is the latest aircraft that PIAC has but even this aircraft is used only for domestic operations by other airlines but PIA uses it for international operations.

For domestic flights PIAC uses Fokker and Twin Otters while other airlines have stopped using Twin Otters. The condition of the Fokker is so bad that people fear from sitting in those plans and they also fear that they might crash on their way.

10.1.21 Appointment of Unqualified Staff At Key Positions


There are a lot of key positions in the organization that are occupied by unqualified staff. The reason for this is the employment of sports men and promoting them to high ranks according to their achievements in their professional field. E.g. the Director Cargo sales and Services is Mr. Wasim Bari the ex- wicket keeper of Pakistan. And the two deputy station managers of the corporation at the Peshawar station in-group 8 are Mr. Qamar zaman an ex squash player and another ex hockey Olympian. They might have achieved quite a bit in their own professional fields but it's not the duty of the organization to reward them. They are a burden on the organization.

10.1.22 Labor Unions

Labor unions are very essential to run an organization smoothly and without any thrift, but this is not the case with PIA. In PIA these unions are used to achieve the vested interests of the political parities and of the leaders of the unions themselves. No matter what steps government and management of PIA takes to improve the conditions, labor unions just simply calls the strike and eventually the management has to take the decision back.


10.1.23 Political Interference

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PIAC is a semi government organization and the Govt. of Pakistan really interferes in its affairs by appointing people in the organization who are not qualified for the posts. It appoints the chairman who mostly is not from the airline industry. The government also appoints the board of directors. Every government in order to please its voters gives jobs to them and thus spoiling the organization. Most of the transfers, promotions and foreign postings are also based on favoritism, which causes de motivation and discontentment in other employees.

The main problem here is instability and uncertainty in the policies of PIAC because with every change in government there is a change in the top management of PIAC. And as every government ahs its own agenda and preferences so PIAC has to follow those and by doing this, the services and the revenue of PIAC are negatively affected.

10.1.24 Monopoly


As PIAC is a national flag carrier and it has monopoly in the market so it is not concentrating on the quality of services and its publicity policies. They are not properly advertising and making specific plans. The condition of the planes is not that great either. The food provided on the planes is also not satisfactory. If this monopoly is finished then PIAC will face a lot of problem due to these factors.


Keeping in view the strengths and weaknesses of the organization, a number of measures are recommended which can be described as follows:

The corporation must stress customer satisfaction, low cost, higher job satisfaction and efficiency in order to improve the overall functioning of the organization.

The corporation will have to establish a new strategic and radical new identity of PIA backed by a realistic three year plan of investment in new services, products, aircrafts, facilities and training. In this regard, the recent deal of $ 1.5 billion with Boeing Company for buying some new and latest aircrafts is step forward in right direction.

PIAC must embark on restructuring and re-engineering programmes including increasing employee productivity, right sizing employees numbers, review of employee benefits and compensation, dis-investment in non-core activities, focus on improved customer services, induction of the state of art information system and technology, review of yields, specific revenue enhancement measures, curtailment of expenditures, optimized fleet deployment and establishing appropriate strategies to meet the interest rate and currency exposures and fuel prices fluctuations.

Planning process plays a vital role in progress of any organization; therefore, it must be most relevant and realistic to achieve the objectives. Regarding planning process, following could be put made:

All the policies should be written with clarity, so that there is no ambiguity about their meanings and all the employees should be aware of essence of policy.

The organization should make use of effective forecasting techniques, so as to estimate the requirements of the future and the plans should be based essentially on these forecasts.

Management by objectives (MBO) should be introduced in which the employees should be given authority to formulate objectives for themselves, thus ensuring the setting of objectives according to the capabilities of the individuals and committing themselves to the achievement of these objectives.

The communication of various rules, regulations, procedures, methods and functions should be properly communicated to all the concerns in time to make the process of planning more rewarding.

5. The organizational structure of PIA needs a number of changes to make it compatible with the modern organizational needs. The following changes needed to be stressed.

Steps should be taken to ensure that all the policies of the organization are followed with commitment and spirit and that the structure of all the offices should streamlined in the organizational policy.

Different departments should be free from their divisional tendencies in terms of setting goals and objectives for that matter.

Unnecessary division of work or fragmentation should be avoided.

There is need to form a pyramidal span of management, with top a narrow span and accordingly expended down to the lower level of management, so that line staff could properly carry out the operations of the organization.

6. PIAC will have to take some real initiatives to supplement the in-house fleet planning process, a plan to replace PIA, s aging aircraft fleet over next three years, enhance fleet utilization and optimize fleet deployment. In this regard recent deal of $ 1.5 billion with Boeing and Airbus companies to buy some new aircrafts is step forward in right direction. In order survive in cut-throat airline industry, aircrafts like 747, 777 and 777-40 are best for PIAC. These aircrafts can also be obtained from other airlines as some airlines have shown their interest to sell some of their second hand aircrafts. The acquisition of second-hand aircrafts best suits the requirements of the PIA according to cost-benefit analysis of its financial position.

The process of disinvestments from subsidiaries, allied companies and non-core activities need to be accelerated.

Government being highest shareholder appoints a permanent Chairman and M.D, so that stability in terms of top-level management can be ensured. As in the past Chairman and M.D were used be subject to change regularly, which seriously hamper the performance of corporation.

Efforts should be made to remove the elements of political involvement in appointment of Chairman and M.D.

There is need to standardize the products and services of organization.

The overburdened organization must be made cost effective by placing the most appropriate staff in quality and quantity.

Cost of hiring expensive foreign consultants can be saved by developing a permanent monitoring and evaluation section in every department, which can constantly monitor the activities and performance of concerned employees and in case of problem, it cab best act to remove it for that matter.

On board service should be improved. The quality and quantity of food should be according to the international standards.

All the staff at the counter on the airport need to be efficient enough to brief passengers quickly and make them maintain discipline in the area by courteous manner.

Having other airlines in competition, PIA staff now has to strive to maintain and improve the goodwill of the corporation. For this very reason, the entire staff of PIAC should treat every passenger so nicely as to make them travel again rather than losing them forever.

In all sort of stores, the inventory system should be computerized that will save and minimize the danger of lot of goods thefted and misplaced.

Flight operation department being one of the most important one, should have staff highly responsible from attendant to the pilot.

The food supplied to the aircraft should be frequently declared for its quality. PIA should have its own flight kitchen at Peshawar station to avoid the food loss ad strict supervision on the whole process.

Engineering department, which has shortage of experienced engineers, Government should fill the vacancies to provide experienced and efficient engineers to the department to ensure the good care of the aircrafts and to avoid resulting delays of flights.

The booking and reservation system should be streamlined. An efficient information system should be installed to increase the efficiency and effectiveness of reservation/booking and ticketing sections of the marketing department.

A Marketing Research cell should be established at Peshawar station.

Sales promotion activities should be increased and directed towards ordinary customers.

The local media (Papers, Radio, T.V, Internet) should be used for creating awareness about PIAC products and announcement of flights.

Regular monitoring should be done of IATA agents to ensure that they are meeting desired productivity level.

The shippers should be encouraged to provide maximum business to PIA and rebated passage facility should be provided to them with personalized services.

10.2.1 Recommendations Regarding Human Resource Management (Personnel Management)

26. The personnel system should be restructured and any anomalies found in recruitment and selection process should be removed. The political interference should be minimized and merit policy should be adopted with true spirit and commitment.

27.There is need to control the unnecessary administrative expenditures and develop a costing system which could contribute towards efficient resource management.

28. Proper analysis and evaluation must be carried out and strengths and weaknesses must be identified, so that effective decision-making and realistic planning could be ensured in almost every department.

29. Highly professionals and experienced specialists must be included in its cadres through proper recruitment and selection processes to improve the overall management of the organization.

30. Top management must be made capable of proper analysis and evaluation of various sectors and suggestions and proposals should be made on that basis. Proposals and suggestions from middle and low management should be encouraged and valuable ones must be acted upon.

31. For reducing the chances of victimization and favoritism, there should be movements/transfers of employees. A person having worked for three years at one station should be transferred except technical staff.

32. A modern and effective performance evaluation system should be devised, so that every improvements and progress in employee's skills, knowledge and performance should be properly reported and suggestions can be forwarded.

33. Proper training and grooming should be carried out on regular basis and if required other educational, technical and skills development facilities should be engaged in. Training progrrammes for the staff at station level should be initiated. Computer training for the employees of PIAC should be arranged, so that they can best exploit this new technology for the corporation interests.

34. Job specification and job description for almost all kinds of jobs should revised and made streamlined with modern organizational needs. A proper system of devising job description and job specification with clear statement of skills, knowledge, experience and responsibilities should be implemented.

35. Residence hostels and colonies should be constructed at station level, so that employees should not face the embarrassment in terms of logging and residence.


As an internee experiencing PIAC and observing the work environment of PIAC Peshawar, I observed some of the faulty areas. One of the major problems of PIAC in that the employees (with regret) of PIAC are not efficient and they are not interested in their duties. From the passengers I have come to know that their dealing behavior is not satisfactory. The reason for this is that there is no monitoring system to have a check on the employees and advice them on their duty to increase employee's efficiency. As administration department have the burden of other works and have no time to monitor the activities of the employees.

To minimize and overcome these problems, a plan is presented on the basis of recommendations.


To hire an officer specialized in dealing with employees. The post title should be employee's relation officer (ERO). Following steps are recommended in this connection.

10.3.1 Qualification and Experience

A person qualifying for this post should have a master degree in Human resource development or public relation from a recognized university. The person must be capable of public dealing and must possess excellent communication skills. He/She should be experienced and skillful to understand the behavior of employees. Must have minimum of 5 years experience in the related field from any organization of repute.

10.3.2 Selection Process

The upper management while recruiting employee relation officer can follow the following selection process.

Selective Interviews

Situational Interviews

Reference an background checks

Realistic job previews

Job Description

Job description of the officer can be considered as benefits of the plan. Following is the job description and benefits of the plan.

Employ information system

A solid information base lies at the heart of effective management. Without information management is unable to handle the challenges. To create employee information system, data about employee in organization, his job, activity and efficiency and ability should be investigated from the concerned organization. ERO can advice managers about their employees and find ways to make their hob more productive and satisfying. Decision about the employees in future will depend on their information.

11.3.5 Punctuality of Employees

Punctuality a discipline is very necessary for an efficient organization. ERO should have check on the employee's punctuality. If employees are not regular, then they should be enquired and the reasons should be known with immediate remedy to the problems they have.

10.3.6 Monitoring Employees Job/Work

The next job of the officer should be monitoring i.e. closely watching and observing the employees without letting them knows. An efficient and motivated employee is needed for an organization that does his duty with keen interest. ERO should have check on employees work and monitor either the employees are performing duties well or not. Either the employees have accomplished the task in time that was assigned to him or he is using the delaying tactics.

10.3.7 Employees Public Dealing

Customer is the king of the market. Every organization needs to satisfy its customer in order to achieve organizational objectives. ERO should closely check and monitor employees dealing with customers. He/She should enquire from the customers about the employee's behavior and should take corrective actions for the betterment of this aspect of the organization.

10.3.8 Taking Corrective Actions

The ERO should be given the authority of have immediate corrective actions where faults are found. The employees should be given orientation and advised on those areas where they are inefficient.

Encourage Employees for their Suggestions

ER should meet employees and encourage them to give their suggestions about their job and how can it be improved, as the employees hesitate to give such suggestions to the higher authority. It will be easy for them to give their advice to employees' relation officer because of day-to-day interactions with him.

10.3.10 Employees Relation and Assessment

Maintaining an effective workforce requires more than just pay, benefits. Employees need to be motivated and satisfied with their jobs. ERO can give essential advice to managers to motivate employees as he knows the behavior of the employees. To increase employer satisfaction such advice and communications are important as it will also increase efficiency of the organization.

10.3.11 Suggestion in Rightsizing

When an organization is over staffed or in loss, then it starts the process of downsizing. The drawback of the downsizing is that both efficient and inefficient employees are removed from their jobs. Another threat of the rightsizing is that employees who left behind have an unknown fear in their and lose their interest in their jobs as they feel that they will also be fired sooner or later. Survival sickness is the term used for such feared employees. Management should have a sound policy while firing some of their employees. Rest of the employees should taken into confidence and be told that it is not only done for the betterment of the organization but also is in their best interest. As downsizing is always done at the expense of employees morale, so this aspect should be kept in mind and be cleared to every single employee.

10.3.12 Cost of the Plan

It is obvious from the above mentioned advantages of the ERO and by analyzing the cost and benefits of the plan that its benefits exceed its cost. The cost of the plan is only the salary of the ERO while the pluses of the plan are numerous. Let suppose it PIAC Peshawar gives ERO Rs.25, 000/ per month and Rs.5000/ to lower staff employees, then the total annual cost of the plan would be Rs.420, 000. But this cost in comparison of its benefits is nothing. PIAC being a huge organization which deals thousands of people on daily basis should not consider this cost. By adopting the plan the PIAC will be able to attract more of the passengers and can maximize their annual revenue up three times.