AAR Corporation’s Organizational Environment & Behavior

Introduction: Company Background

The AAR Company has been long known as one of the pioneers in global aviation. Having captured its momentum in the target market, the company has firmly established itself as a powerful leader in the aviation economy (AAR Corp, 2019). This paper will study the AAR Company’s organizational environment to analyze the issues that the firm is currently experiencing and define the course of further improvements that could be introduced to improve the company’s record.

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Company Analysis: Organizational Environment and Behavior

AAR has a well-established approach toward managing its organizational issues. Nonetheless, to progress in the modern economic environment, the firm will need to change and adapt to the new requirements of its target market. Therefore, strategies geared toward improving performance through innovation and staff motivation are needed to help AAR Corp in retaining its competitive advantage.


Having transferred its processes to the realm of the digital market seamlessly, AAR Corp has created a unique approach toward addressing its organizational issues with the help of an inimitable decision-making framework. The company has built the tool known as Evolution, which represents a digital device for managing repairs and the relevant issues (AAR Corp, 2019). Therefore, guided by the motto “Doing its rights,” the organization has been working toward the enhancement of its decision-making and the minimization of errors made while addressing aviation-related issues, especially as far as repairs are concerned.

However, the current framework for decision-making at AAR Corp could use some adjustments to the approach presently followed by company managers. For example, AAR Corp could introduce improved and updated risk management strategies that could improve the product life cycle and increase the extent of organizational learning as a major step toward reducing risks in the future (Hanreider, 2015). For this purpose, the very notion of risk will require a redefinition since it will need to embrace every possible aspect of the threats that the target market environment includes. According to Rodrigues, Araújo, Tereso, Faria, and Assis (2018), business risks can be expanded to “any variable in the project that causes its failure” (p. 206). Though being overly generalized, the proposed explanation of the nature of risk in business helps to encompass the problems that pertain to economic, financial, technological, political, legal, and communication-related constraints.

Team Building

The ability to introduce cohesion and cooperation into a team of staff members is one of the essential goals that a manager has to meet in order to facilitate seamless transfer from one production process stage to another. Therefore, the importance of a properly chosen teambuilding strategy is critical for companies such as AAR Corp, where mistakes made in the process of delivering the end product may cause fatal outcomes. AAR Corp has created a sustainable team-building strategy over the years of operating in the aviation market, yet the firm’s approach toward encouraging collaboration could use adjustments. The present focus on interdisciplinary work at AAR Corp deserves appreciation since it allows communicating key information effectively without losing any essential piece of data. Thus, the probability of production errors is reduced (Mourdoukoutas, 2015).. The cross-functional approach toward team building, which the company has been using since recently, has created the culture of knowledge sharing, introducing staff members to the concept of continuous learning.

The use of the cross-functional team-building strategy has led AAR Corp in the organizational environment has helped the company to create a series of web applications that increased the company’s performance and improved its functionality (AAR Corp, 2019). The observed rise in the efficacy of the firm’s performance is owed to the well-coordinated actions of team members, which, in turn, became possible with the use of the cross-functional team-building strategy (AAR Corp, 2019). Thus, the cross-functional system has helped to connect the tasks associated with research and development, marketing, and customer relations to increase the performance rates within the firm’s supply chain and make it function coherently.

The prompt responses to challenges that arise in the global context are the immediate outcome of using the cross-functional approach toward team-building, which has launched a series of changes across AAR Corp to alter the current framework for communication and collaboration. Therefore, the team-building efforts made by AAR Corp can be defined as positive. The company has attained high levels of functionality and developed a range of tools that allow it to transfer information across its supply chain, thus making the performance of its team flawless. Arguably, AAR Corp could work on its present approach toward managing communication and interpersonal relationships within its teams of staff members. Innovative tools aimed at addressing conflicts and managing confrontations between employees could be deployed to accommodate the needs of all staff members and create highly functional teams.

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In managing conflicts within the AAR Corp’s organizational context, managers will have to teach participants to shift from the emotional perception of a problem to the substantive one. At AAR Corp, conflicts typically occur both due to interpersonal and intergroup issues, which implies that employees have developed competitiveness within their team (AAR Corp, 2019). The interpersonal issues can be addressed by reinforcing corporate ethics and philosophy, which are aimed at approaching conflicts objectively and abstaining from personal confrontations in the workplace. Thus, managers should help staff members to accept their emotions and set their priorities toward resolving the conflict to move the production process forward (Mourdoukoutas, 2015). In turn, intergroup conflicts, which mostly take place due to miscommunications and misunderstandings, have to be addressed on the organizational level by restructuring the approach toward employee relations and convincing staff members that each of them is valued individually by the organization. Thus, the extent of rivalry within teams will be reduced, and the performance levels will rise.

Change Management and Innovation Culture

Being a leader in its market, AAR Corp has been famous for its innovative and often groundbreaking solutions to the problems of aviation and the associated concerns. The approaches that the firm uses for repair and maintenance services allow increasing the safety of flights and leads to faster detection of possible issues (AAR Corp, 2019). Therefore, the focus on using the latest developments in the aviation industry in order to increase the safety of passengers and reduce the amount of time taken for the transportation process is a clear sign of innovation being integrated firmly into AAR Corp’s services.

The tendency to invest in digital innovations should also be perceived as a positive trend in the AAR Corp setting; however, while the company’s recent decision to focus on more effective data management seems to fail to capture the necessity to use digital tools for every aspect of the company’s performance, especially for its customer relations. The development of digital tools that allow for prompt responses to the issues that AAR Corp’s clients have with its services is also essential for AAR Corp to be able to improve its services and adapt to market demands.

Organizational Structure

Effective structuring of the relationships and collaboration within a company creates premises for an organization to run its key processes smoothly keep its processes consistent. In addition, the ethical standards that create the foundation for interactions at AAR Corp have also been designed specifically to keep the company’s performance levels at the highest rate possible. However, by far the most important change that the firm has to establish and articulate to all participants is the introduction of the consistency of purpose. The notions of innovation, quality, and communication must be engraved into the corporate policies of AAR Corp so that staff members could rely on them when making decisions. Thus, the firm will succeed in maintaining its appeal to its customers, business partners, and potential investors.

In addition, the mission of the organization could use several changes. The current mission of the company is to “be the best at designing and delivering technical, operational and financial solutions to enhance the efficiency and competitiveness of our commercial aviation and government customers” (“AAR Corp,” n.d., par. 1). Although the specified mission statement seems to be sufficient for effective management of tasks linked to facilitating high-quality aviation maintenance services, it may need a stronger emphasis on innovative solutions and the readiness to satisfy the needs of all stakeholders.

However, for the firm to improve its performance and ensure that its top spot in the hierarchy of aviation companies is not taken by another firm, AAR Corp will have to target the needs of every stakeholder that its actions affect. These include not only AAR Corp’s customers but also its employees, shareholders, and suppliers. The company currently incorporates nine (9) subsidiaries, joint ventures, and the firms that are somehow affiliated with it (Hage, 2018). Therefore, the introduction of a linear approach toward supporting the organizational structure is pointless at this time. Consequently, AAR Corp utilizes the model based on the principle of horizontal integration, which allows managers to control internal processes without restricting the decision-making process (AAR Corp, 2019). However, with the expansion of the organization into the global market, a different framework will have to be used to keep the information management across the organization’s departments consistent. Thus, the linear function of data distribution will have to be replaced with a more advanced approach.


The setting in which AAR Corp operates can be described as neutral in its effect on the firm’s performance. While the organization does not enjoy any exclusive advantages due to the environment in which it works, there are no major obstacles that could block its path to success entirely. Therefore, AAR Corp’s operational environment can be seen as moderately positive. The internal setting in which the firm functions also does not contain any factors that could potentially lead to the detriment of the organization (AAR Corp, 2019). Quite the contrary, AAR Corp has developed a rather healthy organizational environment in which the communication process occurs with very few conflicts (AAR Corp, 2019). Therefore, the general impression of the context in which AAR Corp operates is rather positive.

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The impact of power and politics might seem as distant from the concerns that a firm such as AAR Corp has to consider, yet the issues associated with the political setting are quite relevant to AAR Corp’s functioning in the aviation market. The necessity to embrace a larger range of markets, as well as the fact that AAR Corp provides services for international flights, entails the necessity to comply with the political standards of other states. Therefore, AAR Corp needs to be very careful in its choices of strategies for managing trade-related regulations and the transactions with other companies and customers. Moreover, the regulations issued by the U.S. government in relation to economic transactions affect AAR Corp significantly.

Moreover, organizational politics will have to be geared toward addressing the needs of each and every stakeholder. Particularly, AAR Corp will have to focus on catering to the requirements of its suppliers, customers, and staff members. The levels of employee engagement can be raised with the introduction of incentives and opportunities for professional development. Training courses with the help of which employees will gain new competencies will be incorporated into the AAR Corp’s organizational design and corporate politics to increase engagement rates and motivate its employees to achieve performance excellence.

In addition, AAR Corp will have to pay close attention to how it exerts power over its subordinates. While pursuing organizational interests remains an understandable priority of the company, it should not come at the price of failing to meet its employees’ requirements. Therefore, the policies of the company will have to be built on the premise of exerting reward and expert power. While the former implies that staff members can be motivated to perform better when provided with an incentive to do so, the latter suggests that the skills and proficiency of employees should be seen as the merit of their value to the company (Hage, 2018). However, when applying the specified concepts to the corporate setting of the AAR Corp, one will need to make several changes to the described notions.

The reward power seems to be a legitimate tool for boosting the extent of staff members’ performance. However, the use of the expert power framework may discourage the employees that have lower proficiency levels from ever trying to be proactive or excel in their efforts since the specified type of power rewards employees for them possessing a certain extent of skills. Therefore, the type of power based on the staff’s willingness to gain new competencies and knowledge, as well as the rate of them developing these competencies, will have to be represented in the organization (Deghetto, Russell, & Ferris, 2017). The emphasis on what staff members can become and what potential they contain will offer the employees that have not yet gained the knowledge or experience needed for success an opportunity to achieve the required level someday. Moreover, the expert approach with a focus on learning will empower staff members to strive to learn more, leading them to the idea of lifelong learning.

Conclusion and Recommendations

To address the communication issues, which are going to affect AAR Corp to the greatest extent unless attended to properly, the company will require the development of an Omni-directional, or diagonal, communication network. The described tool for information management will help the organization to expand its supply chain and build the dialogue across all elements of its supply chain, increasing the efficacy of collaboration with its stakeholders. Thus, AAR Corp will manage two problems simultaneously since the enhancement of communication, and the introduction of a communication network will help to build a rapport with its primary stakeholders. Consequently, numerous issues will be addressed. Reciprocity of the dialogue with customers will help to increase their loyalty levels, whereas a more accurate analysis of employees’ feedback will lead to a rise in their loyalty toward the organization. Finally, the establishment of a diagonal communication network will help to resolve the governance issue, encouraging the firm’s shareholders to trust the process of decision-making to the firm’s leaders. At the same time, the input provided by the shareholders, especially in regard to the firm’s financial strategies and specifically its investment options, will be appreciated and interwoven into AAR Corp’s financial framework.

Moreover, the focus on innovative solutions in the digital context will need to be expanded to maintain the quality of the company’s services. Currently, AAR Corp needs to focus on the enhancement of communication with its target customers, which is why the creation of additional digital tools for receiving feedback and providing support to buyers of its services should be regarded as an unquestionably necessary change to make. The leadership approach that AAR Corp has been using could use certain changes since the firm will inevitably need to expand in the nearest future. While the firm has been showing the tendency to include a laissez-faire style of leadership into its set of strategies, it still clearly gravitates toward a tighter control over the key processes, with the decision-making tasks rarely being allowed to its employees. However, given the need to develop and grow, AAR Corp could consider incorporating the elements of the situational leadership approach into its strategy. Thus, the organization members will receive a much greater amount of flexibility in decision-making, which will allow for better management of corporate issues.


AAR Corp. (2019). Airvolution. Web.

AAR Corp (n.d.). Our purpose. Web.

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Deghetto, K., Russell, Z. A., & Ferris, G. R. (2017). Power, politics, and political skill in job stress. Occupational Stress and Well-Being, 15(15), 1-32.

Hage, G. (2018). Organizational innovation. New York, NY: Routledge.

Hanrieder, T. (2015). International organization in time: Fragmentation and reform. OUP Oxford.

Mourdoukoutas, P. (2015). Business strategy in a semiglobal economy. New York, NY: Routledge.

Rodrigues, B. M. A., Araújo, M. M. T. D., Tereso, A. P., Faria, J. M. P., & Assis, P. (2018). Improving risk management practice in industrialization projects: case study of an automotive company. ICOPEV International Conference on Project Economic Evaluation, 1(1), 205-211.

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