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Contemporary Developments in Business and Management

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UNIVERSITY OF SUNDERLAND

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University of Sunderland

REPORT

S I M3 3 7 Contemporary Developments in Business and Management

Name: Student number: Hand-In-Date:

Eugen Nagel 089 111011 08 January 2010

Abstract

This is a management report of 3,500 to 4,000 words on the organisation TUI Aktiengesellschaft (AG = PLC), situated in Germany, which operates globally. This report should assesses the impact of external and internal factors on the organisation and evaluate the organisation responses. (In the case of a large organisation or industry-sector it is permissible to confine your report to part of the organisation or industry-sector.) The report consists of two tasks: The first task is to describe and analyse the primary internal and external influences to which the organisation TUI (Touristik Union International) is subject. The second part will deal with the demographic factors. Furthermore in relation to the demographic factors, it is to:    Analyse how it influences policies and decision-making within the organisation. Critically evaluate the effectiveness of TUI AG’s response. Demonstrate some areas for improvement in the response of the organisation.

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I. Table of Contents

I.

Table of Contents ............................................................................... II

1. 2. 3. 4.

Introduction ......................................................................................... 1 Internal environment ........................................................................... 1 External environment .......................................................................... 3 Demographic factors ......................................................................... 11

II. References ......................................................................................... 21 III. Appendices ........................................................................................ 23

II

1. Introduction

The first part of this report has the objective to analyse the primary internal and external influences to which the organisation TUI AG, the Europe’s leading travel group situated in Hanover/ Germany, is subject to. Firstly, the focus will be on the main internal influences such as:     the organisation’s structure (company profile) business activities Human Relations approach TUI’s influence on internal environment

Secondly, the external influences by using the PESTLE analysis, such as:       Political Economic Socio-cultural Technological Legal and Eco-environmental factors will be considered.

Furthermore, the consideration of the influence of competition will be achieved by Porter’s five forces model. The company profile of TUI AG gives an insight into the company. (See appendix 1)

2.

Internal environment

Elements of an organisation’s internal environment are:    Current employees Management and especially corporate culture, which defines employee behavior 1

There are three major approaches to analyse internal elements of the business: Classical, the HR approach and the systems approach. The Hawthorne studies correspond to the realization that human performance does not only depend on objective working conditions, but also on social factors. “Human relation approach focuses on the importance of employee attitudes and opinions”.1 In 2009 TUI received the Corporate Health Award for “demonstrating above-average commitment to the health of their employees, pursuing a forward-looking sustainable HR strategy and documenting their activities accordingly through the Corporate Health Audit.”2 The employee is not only seen as a worker, but also as a human being. TUI states that this philosophy is identical to the customer. TUI tries to improve the well-being at work with offers concerning subjects, such as health and the right balance between work and family. In fact, TUI’s management signed the Luxembourg Declaration on health support at the workplace in the European Union. Beyond that, TUI supports:3     compatibility of job and family with flexitime, day nurseries for employee’s children, support during the pregnancy help for people with disabilities by training disabled young adults Health promotion schemes HR development: Further training and personnel development

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Script: SIM 337 Contemporary Developments in Business and Management, Version 5.0, University of Sunderland. page 22
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http://www.tuigroup.com/en/sustainability/employees/health_family_/corporate_health_award 04/01/10
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http://www.tui-group.com/en/sustainability

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3.

External environment

A significant difference between internal and external environments is that businesses “…have less influence on the external environment.”4 In times of globalisation, there are many changes and developments occurring from different factors of the environment which affect businesses, their management, and which have a principal effect on business’s activities. Tsiakkiros (2002) states that the "radical and ongoing changes occurring in society create an uncertain environment and have an impact on the function of the whole organization". As already mentioned above, the future-oriented analysis tool PESTLE includes six factors. Due to the complexity of each factor, the first two aspects, political, economic will be analysed in depth. The other four, socio-culture, technological, legal, eco-environment will be briefly described. In addition to the PESTLE analysis, Porter’s five forces model deals with five competitive forces which can have an influence on the achievements of organisations.5 Political environment Political forces, as much as legal forces, are “outcomes of changes in laws and regulations” resulting from political developments. These developments occur within a nation, a region in the world, or across the world. They always have a significant effect on organisations and businesses. Regarding the situation of TUI AG in Germany, it is obvious that this organisation can operate in a democratic system in which fundamental elements of the human rights are established in the constitution (appendix 3). Regarding economic systems, Germany adopts elements from the marketdriven as well as from the centrally-planned economic system known as

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Script: SIM 337 Contemporary Developments in Business and Management, Version 5.0, University of Sunderland. page 4
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Script: page 11

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mixed economy. Being precise, it is a social market economy which means a mixture between a classical liberal way of thinking and social, state managed elements. There are three principal elements (Michael Rösch)6:    the principle of individuality the principle of solidarity the principle of subsidiary

TUI AG operates in a country with an economic systems with elements of a free market such as private property, free foreign trade, exchange of goods and elements as part of the social security system (pension insurance, health care and unemployment insurance). In the last decades, Germany followed the process of privatisation. Privatisation is the transfer of certain previous government activities in the private sector of the economy to create a more competitive business environment. TUI AG has never been under government control but organisations like Deutsche Bahn AG (transport and logistics) or Deutsche Post AG (logistics). The government sold its assets through the stock market. The reasons for the government are more competition, lower costs and more efficient structures. To conclude, Germany is a federal parliamentary republic with a mixture of market-driven and centrally-planned elements in its economy system called social market economy. In this context, TUI AG operates in a system which should be characterised by:    Freedom of enterprise Privacy of property Monopoly or oligopoly

Freedom of enterprise is the basic freedom for anyone to engage in business. But if someone wants to set up and run a business, government control, regulations and restrictions are present in this process.

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http://tiss.zdv.uni-tuebingen.de/webroot/sp/spsba01_W98_1/germany1b.htm 04/01/10

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Further government influences are:         employment law consumer protection environmental regulations industry-specific regulations competitive regulations taxation providing advice and support for business encouraging business activity through subsidies and support.

It is obvious that the freedom of enterprise is influenced by government limitations. A further external influence of the government is the intervention when a market is dominated by monopolies or oligopolies. TUI AG operates in a market with many sellers and with a few large tour operators dominating the touristic market (appendix 4). The oligopolistic distribution has a positive effect on the competition and therefore on prices, quality, touristic products and service. Regional agreements like the European Union have made a contribution to a stable democracy within the member countries. As member of the European Union, the following advantages exist7:    Europe offers German companies the single largest market in the industrialized world. Model for the peaceful coexistence of peoples. The possibility to live without major restrictions in foreign countries, to work and to learn, to conduct joint research and develop new ideas.  Freedom to travel.

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http://www.bundesregierung.de/Content/DE/Publikation/Bestellservice/__Anlagen/23eu,property=publicationFile.pdf 02/01/10

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Europe offers the world a benchmark for human rights, democracy, social cohesion and equal opportunities.

Some political influences are linked with legal regulations such as laws which constrain the operation of the organisation and the managers. Economic environment Economic forces relate to changes in the wider economy and have mainly to do with8:      Interest rates and exchange rates Inflation Unemployment Economic growth Other factors that affect health and well-being of a nation or the economy of an organisation In the economic environment, the organisational analysis should be based on those aspects of the economic system that directly impact the type of business being considered. An interest rate is the price of acquiring a loan. The Federal Bank reduces interest rates, which means that businesses will face cheaper loans both for new loans and for existing ones (appendix 6). Businesses will be more encouraged to expand and take risks when economic conditions are right, e.g. low interest rates and rising demand. The exchange rate can be simply explained as the price of one currency expressed in terms of another. For business, like TUI, trading abroad, the change in exchange rates has a significant effect due to the difficulty to plan ahead and changes in exchange rates affecting the demand for both imports and exports because they change the apparent price of both imports and exports.

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Jones/ George (2009): Contemporary Management page 199

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The level of economic activity is how much purchasing and selling happens in the economy over a period of time, which can be measured by using Gross Domestic Product (GDP). The effect of the GDP and therefore the economic growth can be the following:  GDP slows down, businesses will experience a fall in demand for their goods or services, revenues will fall and profit margins may be reduced as they cut prices to increase sales. Unemployment may start to rise up.  GDP rises at a faster rate, businesses will sell more goods and services. They might need to try and increase stock levels, which puts pressure on prices and prices may start to rise up. Unemployment will fall because businesses look to employ new staff to help them cope with the increase in demand. An important aspect of the economic environment is the problem of inflation. That means a "significant" increase in the price level as a result of long-term expansion of money by states or central banks. The consequence for businesses9:  Difficulties for businesses for future plans because inflation affects the amount the business receives from sales and also the prices of inputs - raw materials.  Businesses may face pressure from employee’s organisations for pay awards to keep up with inflation and this can affect costs of production.   Savings can fall in value if the rate of interest is lower than inflation Inflation in the Germany at a higher rate than in other countries affects businesses that try and sell abroad. It makes it harder for them to sell goods and services because they are less competitive.

The main aspects of the eco-environment: Environmental factors include the weather and climate change.

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http://www.bized.co.uk/educators/level2/external/activity/context14.htm 03/01/10

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     

Environmental issues, such as global warming, acid rain, disappearance of rare species Governmental actions: policy of sustainable development,

precautionary principle Economic viewpoint: amenity services, natural resources and waste products, ISEW, option value, existence value Corporate responsibility Market mechanism and pressure groups General move towards more environmentally friendly products

The main aspects of the technological environment:  Most important technological developments: computer, world wide web, new material, speed and availability of travel, communication, energy use and waste disposal  Benefits from technological developments: product, minimising development time, maximising the fit of customer needs and product quality and efficiency   Information technology E-commerce, such as online shopping

Technology can improve quality, reduce costs and lead to innovation. These developments can benefit consumers as well as the organisations providing the products. The main aspects of the socio-cultural environment:  Elements: culture, values and attitudes, norms and society, language, religion, manners and customs, aesthetics, education, cultural differences and change, Hofstede’s    Demographic changes: size and distribution of population and age structure Discrimination based on disability, race and religion, sex and sexual orientation, types: overt, covert, structural Ethical theories

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The main aspects of the legal environment that affects businesses, see appendix 7. Porter’ five forces model Porter’s concept is based on the basic understanding that a company’s strategy has to consider its competitive environment. There are five forces (appendix 8):      Potential entrants Byers Substitutes Suppliers Industry competitors

The aim of the corporate strategy should therefore be to search for ways to weaken the competitive forces in relation to the own company. Porter's model serves as the analysis of the competitive forces acting in the respective industry or sector. Based on this information, the company can decide on activities for specific manipulation or exploitation of individual aspects to “gain advantage over its competitors”10. Considering the five forces on the company TUI, following results occur. Potential entrants:    Third-party supplier, e.g. a supermarket that offers package holidays New potential seller, such as speciality tour operator (DIAMIR Travels) Merger or cooperation of small tour operators

The problem for the entrants are high barriers in the market (capital and image of TUI, niche, networks) Buyers:

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Script: page 11

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   

Final customers/ clients (tourists, business traveller) Travel agencies General intermediaries who work on a commission basis Company owned hotels, haulage contractors

Substitutes: There is no real substitute in the travel and tourism sector, but a few may be:    Special tours, e.g. trekking tours to Tanzania Individual travels and vacation without booking at TUI Direct sales/ distribution from service providers to consumers

Suppliers:   Service provider, such as airlines and other haulage contractors, hotels, tour operators for excursions, travel agencies Broker

In this case, TUI AG has greater power because it has a good reputation and many suppliers depend on the business with TUI AG. Industry competitors:   Other large tour operators, such as Thomas Cook ( Frankfurt) or REWE Touristic (Cologne) Online business, agencies on the web, like expedia.de or octopustravel.com As analysed, there are many competitive forces but TUI is established as the leading tour operator, the market leader, offering high quality travels for higher prices.

Words: 1995

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4.

Demographic factors

Demographic forces describe the changes in socio-economic “characteristics of a population, such as:           Age Gender Ethnic origin Race Sexual orientation Social class ( education and income level) Religion Birth and death rate Average size of families Average age of marriage”11

The first part of this report dealt with the forces of the general external environment which offers opportunities, results in threats for managers and organisations concerning TUI AG in Germany. Size and age distribution of the German population Germany's population includes all residents who are registered and reported with their main residence in the Federal Republic of Germany, therefore, all foreigners and foreign women, as well. The Federal Republic of Germany is a densely populated country. There are about 82 million inhabitants, which corresponds to a population density of 230 persons per square kilometer12.

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Book page 201

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http://www.destatis.de/jetspeed/portal/cms/Sites/destatis/Internet/DE/Navigation/Statistiken /Bevoelkerung/Bevoelkerung.psml 05/01/10

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The population structure is composed as follows (figures of 2008)13:             Age 0-14: Age 15-64: 13,90% 66,30%

Age over 65: 19,80% Age average: 43 Male: Female: 40,1 m. 41,8 m. -0,03% 8.3 births/1,000 population 10.1 deaths/1,000 population 0.49 migrant(s)/1,000 population

Population growth: Birth rate: Death rate: Net migration rate:

Level of education: people at the age of 15 and up are able to read and write; Religion: 99 % of the population Protestants 34%, Roman-Catholics 34% Moslems 3,7% Unaffiliated or others 28,3%



Ethnical groups:

German 93,0 % Others 5,0 % Turkish 2,0 %

There are a few consequences of these figures that can be predicted. Germany has one major problem which is similar to most industrialised nation: the aging of its population. The Federal Statistical Office found out that by 2050 the population in Germany will shrink by around seven million people on a total of 75 million. Demographic trends and the ongoing structural change will significantly alter the German’s society. Regardless of the absolute population, the ratio of younger to older people will drastically change. The difference between birth and death rate results in the natural population growth. In Germany (GDR and the old Federal Republic added)

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http://www.destatis.de/jetspeed/portal/cms/Sites/destatis/Internet/DE/Navigation/Statistiken /Bevoelkerung/Bevoelkerung.psml 05/01/10

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the number of deaths since 1972 is higher than that of people born (surplus of deaths), the natural population growth is therefore negative. Since 2003, immigration has no longer been sufficient to compensate this shrinkage in the natural evolution of the numbers. The number of people in today's conventional working age between 20 and 60 years will decline in 2050 to more than one fifth, the number of the under-20s even about 30 percent. At the same time, the proportion of over 60-year-olds in the population will be increasing of today's 25 to 37 percent.14 The proportion of people whose native language is not Germany is currently about 19% of the population, or about 15.3 million people. Almost half of the immigrants and their descendants have become German citizens. The majority of the immigrants are from Near Asia, South, Central and Eastern Europe (former Eastern bloc countries). Demographic changes may affect the tourism in different places. They have a direct impact on the demand (volume and structure) and the touristic job market (quality and quantity of the workforce). Furthermore, indirect consequences can be observed in touristic jobs and touristic offers. In addition to the declining size of the population, migration of people and the changing age structure are the focus of touristic trends. How does an organisation in the touristic sector, like TUI AG, respond to this development? Businesses like TUI “need to consider demographic change from two viewpoints, in relation to its customers and its workforce.”15

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http://www1.bpb.de/themen/GWGCUY,4,0,Bev%F6lkerungsentwicklung%3A_Soziale_A uswirkungen.html#art4 05/01/10
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Script: page 162

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Viewpoint customer

The progressive aging of society is changing the tourist offer. There will be an adjustment of supply to new target groups, because of the change in travel behavior, destinations and times. TUI AG will be focusing on tourism for elderly which is not a homogeneous market segment. There are special segments called "Master Consumer" or "Adventures" or "Happy Ender" versus economically-thinking consumers. Elderly pair-tourism is a potential field in this market. Offers need to be created differently and specifically on target groups. To respond to the drastic changes in the demand of future tourists, TUI must already set the course for the development of its products and offers for the future.

TUI Club Elan TUI offers a special programme under the slogan “Enjoy your life together” which connects people in their prime of life. TUI Club Elan Hotels offer their customers16:           Choice of bed and breakfast, half board or all inclusive Comfortable seating areas Sure-footed walking trails nearby Good access to public transport Medical care (in German language) Spacious room Often no extra charge for singles using double rooms Elevators Indoor Pools Facilities and services for health and wellness

TUI AG, especially TUI Travels, established these Club Elan Hotels in Cyprus, Turkey, Egypt and Mallorca.

These types of hotels are an optimal respond to the demographic change. The target groups become older. It is a combination of a common hotel with

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http://www.clubelan.de/ 05/01/10

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facilities which satisfy the needs of the so-called “Best-Agers”. Besides the option of the hotels under the company’s own brand, TUI expanded its offer for long-term vacationers (holiday makers) in this winter season. 175 hotels offer discounts for vacations lasting four or more weeks. That is 57 more than last year. There are discounts such as “55 plus” and “60 plus” which receive discounts up to 140 Euros17. “Retired people tend to take more holidays, and those holidays are often outside the peak holiday season.”18 Besides TUI AG, there is another organisation called “50 plus hotels in Germany” which awards selected hotels with this seal of quality. Hotels with additional attractive services for the "experienced traveler" receive this seal. The qualitative criteria include:        Classification with at least three to five stars Located in the most popular holiday regions in Germany or in cities with a diverse cultural offering Individual care, courteous consultation, attentive service Execute small errands on the front desk Transfer from or to the nearest public transport Providing tours, event visits, guided walks, Nordic walking tours, etc. Wellness, beauty and relaxation offers

Viewpoint workforce - Internal response to demographic changes According to the predictions of the Federal Statistic Office, there will be a fall in the proportion of people of working age in the next decades. The pool of recruits in the future will be very small. Predictions relating to the under30s make the following clear: In 2006, about 10 million of that age were available on the, by 2040 this figure will decrease to about 6 million (Source: Fox, J. Demographic aging and labor resources. Institute for

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http://www.touristikpresse.net/news/25358/TUI-Mehr-Angebote-fur-BestAger-undLangzeiturlauber.html 05/01/10
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Script: page 163

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Employment Research of the Federal Employment Agency, Nuremberg 2003). From my own experience, I have to say that TUI AG employs young as well as more mature people. Due to the demographic change and statistics shown above, there will only be a few young qualified workforces available on the job market but TUI created a system, or more a programme to promote young people in the company and also to bind those young workers with the company. TUI introduced a special programme called TUI Youngsters, a real junior company that trainees have to set up. (See appendix 11) Diversity in the workplace Objectives of diversity management are (listed by the society for diversity)19:  The control and elimination of overt and covert discrimination at work and in working life because of age, sex, race, ethnic origin, physical disability, sexual orientation or religion  Promotion of the diversity of people at work and working life in terms of age, gender, race, ethnic origin, physical disability, sexual orientation, religion, marital status, parenthood, education and life and work experience  Promotion of tolerance in the economy

The objectives will be achieved in particular by:     participation in the establishment of exchange groups and counseling services education, training and supervision of diversity consultants promotion of training programs for diversity management creating, publishing and distribution of information materials and publications

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http://www.diversity-gesellschaft.de/ 06/01/10

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opinions on sexology, educational, philosophical, social, legal and political issues concerning diversity management and (anti-) discrimination



media work to promote tolerance and reduce discrimination in economic life

Managing diversity is a challenge for each management. There are several reasons for managing diversity effectively. “Discrimination is ethically and morally wrong.”20 Discrimination is a qualified type of unequal treatment. To discriminate stands for "separate" to "make distinctions“, "separated". Social discrimination is understood as discriminating people because of group-specific characteristics such as ethnic or national origin, skin color, language, political or religious beliefs, sexual orientation, gender, age or disability. To oppose discrimination, the management has to treat its workforce fairly. That means: a fair distribution of jobs, payment and promotion. If you treat people equally, they will increase their performance and will be satisfied. Furthermore, you will not get in trouble with the law. It is a benefit to the business. There is an initiative called “Diversity Charter. The company signed this charter which is a commitment to fairness respect and to tolerance for people in the company. TUI, as well as 200 more companies, committed to creating a working environment that is free from prejudice. Nobody is excluded from this working environment. Actions to promote diversity:21  Helping and supporting people with disabilities: for example, by training disabled young adults. The German TUI companies currently employ around 230 employees with disabilities.  Promotion of an inter-cultural environment, open dialogue and corporate citizenship: TUI staff coach students with learning

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Script: page 173 http://www.tui-group.com/en/jobcareer/employer/diversity_charter 04/01/10

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disabilities in reading aloud; children of employees can join the Open Door exchange programme; TUI offers sponsorship and TUI Foundation projects.   Health promotion schemes (analysed in part one of the report) Help for families. (analysed in part one of the report)

G.R. Jones and J.M. George explained, in their edition of contemporary management in 2007 (page 170), steps to managing diversity effectively:  Secure top-management commitment: Managers need to develop correct ethical values and performance or business-oriented attitudes to create an exemplary atmosphere and to make use of an optimal workforce.  Increase the accuracy of attending: Managers should encourage the people who work under their hierarchical power to be open to changing their views when something is incorrect and nobody should have prejudices and judgments about people without sufficient evidence.  Increase diversity awareness: Diversity awareness programmes, such as mentioned when stating the objectives of diversity management, should strengthen view and attitude towards diversity in the company  Increase diversity skills: Effective communication between subordinates and managers through diversity education  Pay close attention to how organisational members are evaluated: managers have to pay attention on the evaluation of employee’s performance and should avoid vague performance standards.  Consider the numbers: An underrepresented number of members in a group can be of importance to managers and may lead to a problem which needs to be solved.  Encourage employees to challenge any discriminatory incidents: Courage of one’s conviction, a well-established corporate culture can prevent discriminatory actions and behaviours 18

  

Rewards for effectively managing diversity Provide training utilising a multipronged, ongoing approach Encourage mentoring of diverse employees

From May to July 2009, Corporate Environmental Management and Management for sustainable development of TUI AG carried out a survey among people who are in direct relation to TUI, such as shareholders, board directors, consultants, employees, NGOs (non governmental organizations), Private Sector, etc. About 104 persons were questioned, 80 answered on the following aspects:   What is the relevance of the following aspects for TUI? - relevance How much does TUI already deal with these issues? - intensity

The questioned persons could respond to numbers between 1 (very low) and 5 (very high). The results of aspects concerning demographic factors and diversity management were the following:
Aspect of sustainability
Corporate Governance / Compliance Demographic development Diversity Management Human resources development Human rights Social responsibility for employees 4,06 3,32 0,75 4,20 3,35 0,85

Relevance

Intensity

Difference

3,91

2,87

1,04

3,76

3,10

0,66

4,03

3,08

0,94

4,04

3,27

0,77

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(Source of the survey: http://www.tui-group.com/dms/nachhaltigkeit/nachhaltigkeit_bei_tui/ nachhaltigkeitsaspekte/ Report_Stakeholderbefragung2009/ Report_ Stakeholderbefragung2009.pdf 05/01/10) The consistently positive difference in the values (> 0) of relevance and intensity shows that TUI already has a strong commitment to the individual aspects, but in all areas need for action is seen. This survey among different groups of the people at TUI has a great representative importance because everyone, the management and the employees know what aspects need to be improved. There is a great difference in demographic development. This aspect is obviously not effectively dealt with. Regarding diversity management, the management of TUI made steps to managing diversity by signing the diversity charter, explained earlier in the report. There are always improvements that can be made but the first step is the commitment to be willing to improve certain aspects. TUI AG must be seen as a company, performing contemporary management by doing business relating to changes in the future.

Words: 2051

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II.

References
SIM 337 Contemporary Developments in Business and

Script:

Management, Version 5.0, University of Sunderland. Jones, R.J., Goerge J.M. (2009) Contemporary Management, Sixth Edition, McGraw-Hill International Edition, New York. Kotler, P. (1998) Marketing Management – Analysis, Planning,

Implementation, and Control, 9th Edition, Englewood Cliffs: Prentice-Hall. Porter, M.E. (1980) Competitive Strategy, Technics for Analyzing Industries and Competitors. New York. Tsiakkiros A (2002) "Strategic planning and education: The case of Cyprus", The International Journal of Educational Management Bradford 2002 Web pages: http://www.tui-group.com/de http://www.tuigroup.com/en/sustainability/employees/health_family_/corporate_health_aw ard 04/01/10 http://tiss.zdv.uni-tuebingen.de/webroot/sp/spsba01_W98_1/germany1b.htm 04/01/10

http://www.bundesregierung.de/Content/DE/Publikation/Bestellservice/__A nlagen/23-eu,property=publicationFile.pdf 02/01/10 http://www.bized.co.uk/educators/level2/external/activity/context14.htm 03/01/10 http://www.destatis.de/jetspeed/portal/cms/Sites/destatis/Internet/DE/Navig ation/Statistiken/Bevoelkerung/Bevoelkerung.psml 05/01/10 21

http://www.destatis.de/jetspeed/portal/cms/Sites/destatis/Internet/DE/Navig ation/Statistiken/Bevoelkerung/Bevoelkerung.psml 05/01/10 http://www1.bpb.de/themen/GWGCUY,4,0,Bev%F6lkerungsentwicklung% 3A_Soziale_Auswirkungen.html#art4 05/01/10 http://www.clubelan.de/ 05/01/10 http://www.touristikpresse.net/news/25358/TUI-Mehr-Angebote-furBestAger-und-Langzeiturlauber.html 05/01/10 http://www.diversity-gesellschaft.de/ 06/01/10 http://www.tui-group.com/en/jobcareer/employer/diversity_charter 04/01/10

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III.
1. 2. 3. 4. 5. 6. 7.

Appendices
Company profile of TUI AG PESTLE Basic Rights Largest tour operators in Germany Freedom in the World – Country Ratings Basic rate pursuant to section 247 of the German Civil The main aspects of the legal environment Code that affects

businesses 8. 9. Porter’s five forces model Development of population and age structure from 1960 to 2050 in Germany 10. 11. 12. Age structure in 2050 in Germany TUI Youngster Our people

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1.

Company profile of TUI AG

As mentioned, TUI AG is the leading travel group in Europe consisting of three touristic sectors:    TUI Travel TUI Hotels & Resorts Cruises

It is also one of the world's largest shipping companies, holding financial investments in Hapag-Lloyd AG and concentrated on the shipping sector. Another proof why TUI AG is Europe’s travel leader can be shown with a few financial facts: In 2008 this group had a turnover of €24.9 billion with total earnings of €759 million (underlying EBITA) and a number of employees of 70,200. Facts (October 2009)     30 million clients each year TUI Hotels & Resorts is currently, with 238 Hotels and a capacity of approximately 150,000 beds, the largest holiday hotelier in Europe With more than 150 aircraft, TUI Travel has one of the largest and modern aircraft stock in Europe. The flagship of Hapag-Lloyd Cruises, the MS Europa has been awarded for the tenth consecutive year by the Berlitz Cruise Guide as the best cruise ship in the world.  The balanced combination of economic goals with social and environmental concerns is fundamental to sustained economic success. Responsibility for society, employees and environment is an important guideline of entrepreneurial activity.  Our Mission: "Putting a smile on people's faces"

Source: http://www.tui-group.com/ 03/01/10

1

2.

PESTLE

Source: http://www.jiscinfonet.ac.uk/tools/pestle-swot.png 03/01/10

3.

Basic Rights Article 1 Article 2 Article 3 Article 4 Article 5 Article 6 Article 7 Article 8 Article 9 Article 10 Article 11 Article 12 Article 12a Article 13 Article 14 Article 15 Article 16 Article 16a Article 17 Article 17a Article 18 Article 19 Source: http://www.bundestag.de/dokumente/rechtsgrundlagen/grundgesetz/gg_ 01.html 03/01/10 [Human dignity] [Personal freedoms] [Equality before the law] [Freedom of faith, conscience, and creed] [Freedom of expression] [Marriage and the family; children born outside of marriage] [School education] [Freedom of assembly] [Freedom of association] [Privacy of correspondence, posts and telecommunications] [Freedom of movement] [Occupational freedom; prohibition of forced labor] [Compulsory military or alternative service] [Inviolability of the home] [Property, inheritance, expropriation] [Socialization] [Citizenship; extradition] [Right of asylum] [Right of petition] [Restriction of certain basic rights by laws respecting defense and alternative service] [Forfeiture of basic rights] [Restriction of basic rights]

4. Largest tour operators in Germany The German tour operators TUI AG (28%), Thomas Cook (19,1%) and REWE Touristik (18%) maintain the highest market shares in the German touristic sector.22 (2009)

Source: http://www.welt.de/multimedia/archive/00721/Toptenneu2_DW_Reise_ 721564a.jpg 04/01/10

22

Script tour operator management EBC Dresden

5.

Freedom in the World – Country Ratings

Source: http://www.freedomhouse.org/uploads/fiw09/CompHistData/CountryStatus &RatingsOverview1973-2009.pdf 04/01/10

6.

Basic rate pursuant to section 247 of the German Civil Code Current rate 0.12 % 0.12 % 1.62 % 3.19 % 3.32 % 3.19% 2.70% 1.95% 1.37% 1.17% 1.21% 1.13% 1.14% 1.22% 1.97% 2.47% Applicable since 1 January 2010 1 July 2009 1 January 2009 1 July 2008 1 January 2008 1 July 2007 1 January 2007 1 July 2006 1 January 2006 1 July 2005 1 January 2005 1 July 2004 1 January 2004 1 July 2003 1 January 2003 1 July 2002

Source: http://www.bundesbank.de/presse/presse_zinssaetze.en.php 05/01/10

7.

The main aspects of the legal environment that affects businesses

     

Civil, common and theocratic law Regional, national and international laws Contract laws Property rights and intellectual rights Health and safety (worker safety), product safety legislation Legislation on personal, individual rights (labour relations, minimum wage legislation, human rights, data protection)

 

Consumer laws (protect customers against unfair practices) Competition laws (aimed at protecting small firms against bullying by larger firms)

8. Porter’s five forces model

Source: http://itstrategyblog.com/wp-content/uploads/2008/01/portersfive-forces.JPG 05/01/10

9. Development of population and age structure from 1960 to 2050 in Germany

Source: http://www1.bpb.de/themen/WM0Z6D,0,0,Zur_demografischen_Lage_ der_Nation.html 06/01/10

10.

Age structure in 2050 in Germany

Source: http://upload.wikimedia.org/wikipedia/de/7/7b/Bevpyr_2050.png 06/01/10

11.

TUI Youngster

TUI Youngsters is the name of the junior company that trainees have set up and is a real company which indeed should break even. The company acts under the umbrella of TUI Deutschland but is fully managed by trainees from all departments of the three companies which have been involved from the start – TUI AG, TUI Deutschland and TUI InfoTec. The junior company is structured just like a real company with different departments and has its own cost centre and offices and furnishings. All tasks and roles are fulfilled by a group of six trainees. Depending on their role in the junior company and the trainee plan of the companies, they work for one to six months here after which the next trainees arrive. Top priority from all this commitment is, of course, a good final result at the end of their training. Mistakes are expressly allowed. The goal is that the young entrepreneurs feel responsible and always learn new things. The trainees can get help and support in this from a whole network of “sponsors” from all departments of the companies involved. TUI Youngsters offers at its offices in Hannover a service for arranging short trips, events and projects for internal and external customers. The range of short trips offers not only a set programme of excursions but also individually organised arrangements, for example for departments, associations and school classes. Event organisation includes planning, preparation and organisation, for example Christmas, department or birthday celebrations as well as special events ranging from bowling evenings to dinner theatre. As part of the internal project support, TUI Youngsters also helps with, for example, PowerPoint presentations, data updates and Mystery Shopping. The up and coming new entrepreneurs also offer further services upon request. Source: http://www.tui-group.com/en/sustainability/employees/youngsters 06/01/10

12.

Our people

Involving and empowering our colleagues to take action for sustainability TUI Travel operates a global portfolio of businesses, employing approximately 50,000 people across the Group. We’re proud of the commitment and dedication of our colleagues in delivering the levels of service and efficiency which make us stand out from our competitors. Valuing our people Our aim is to have the most capable and engaged teams achieving optimum business performance and supporting the goals of delivering high performance and creating superior shareholder value. Everyone is valued for their skills and talents and we make every effort to help people achieve their full potential. Reward and recognition We aim for a reward strategy that underpins business objectives within Groupwide principles and for these principles to provide a framework for local environments. Recognising and rewarding our people in ways that are attractive and relevant to them is key to performance. Work environment We believe that positive people deliver positive results, and this starts with a supportive working environment. All over the world, our local managers take responsibility for creating a positive workplace through communication, coaching and clear performance targets. Opportunity to develop Retaining people is critical to our continuing business success. We review skills levels across the Group regularly at Board level, with the aim of retaining and developing individuals who are able to take the business forward. We actively move people to career opportunities across the Group, so we can enhance our mix of innovative, entrepreneurial and management skills. Leadership capability We continue to invest in our leadership capability with key Groupwide leadership programmes to build the skills and capability of those with the greatest responsibility for leadership and strategy. Involvement and communication It’s important that everyone works towards the same vision and is involved in matters that affect them. We hire people we believe share our passion for our products and serving our customers, communicate regularly in ways that suit our colleagues’ working environment and culture, and listen to what they have to say. Supporting diversity

Our Code of Conduct (view Embedding page) states clearly the approach we expect at work in operating with integrity, openness, tolerance and, of course, within the national law of the countries in which we operate. We support diversity in the workplace and do not tolerate discrimination on the basis of nationality, gender, race, skin colour, disability, origin, beliefs, age or sexuality. It is part of working life at TUI Travel to respect different views, individuals’ personal dignity and their personal rights. The 2008 Leadership Voice survey (see below) confirmed that 80% of our leaders think the management of TUI Travel supports diversity in the workplace. It is our aim to continue to measure perception of diversity so that we continue to improve in this important area. TUI Travel gender profile

Source: TUI Travel Financial HFM system, September 2008 07/01/10…...

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