Negative Review of Managerial Ethics and CSR of Qantas Airlines Assessment 3 Answer
Title: Individual assessment, A Report
Reference Style: Harvard
This report primarily addresses the major aspects of business of an enterprise, discussing elaborately the role of the stakeholders, both internal and external. Additionally, this paper describes the negative review of managerial ethics and CSR activity of Qantas Airlines. Moreover, the internal and external environment analysis of the business has been performed along with an analysis of the leadership styles of the leaders at Qantas Airlines. This report identifies CSR, corporate governance and differentiation as major strategies for the Airlines. From the analysis, it can be evident that there has been an issue of poor display of managerial ethics as evident through the challenge for senior management and board members, through the issue of poor management in some of the sections of the flights. The identified CSR strategy as proposed in the paper could be helping both the internal as well as external stakeholders through the application of managerial ethics in the company policies.
Management constitutes an important aspect for all efficient business enterprises. The report aims at identifying the stakeholders of a chosen firm and investigates the negative CSR and managerial ethical practices of the firm. Furthermore, an insight into the effectiveness of the leadership styles and the significance of the external and internal environment analysis of the firm has been considered. Qantas Airlines has been taken into account for this report. It is one of the largest airlines operating in Australia, which carried approximately 15% passengers in the country (Qantas, 2019). Qantas was founded in 1920, making it the third oldest airlines in the world (Qantas, 2019). However, the commercial passenger carrying for the firm began in 1935. It has a fleet size of about 130, excluding several of its subsidiaries, like Jetstar Airways, Qantas Link and more (Qantas, 2019).
Task 1: Stakeholder analysis
In order to undertake an analysis of the stakeholders of Qantas Airlines, the internal and external stakeholders are separately identified. While employees, owners and managers are considered to be the internal stakeholders, suppliers, shareholders, society, creditors, government and the customers have been regarded as the major external stakeholders for the firm as depicted in Figure 1 (Maxwell and Grant, 2018).
Figure 1: Segregation of stakeholders
(Source: Maxwell and Grant, 2018)
CSR or Corporate Social Responsibility can be established to be a model which enables the firm to represent itself as accountable and responsible to the relevant stakeholders and shareholders of the firm (Forsyth and Guiomard, 2019). On the contrary, the set of regulations or principles developed or guided by the top management of a firm which outlines the considerations for right and wrong within the organisation can be regarded as managerial ethics. Qantas Airlines has facilitated the Aboriginal and Torres Strait Islander Programme which promotes the indigenous population of the country (Qantas, 2019). It has been reported that since the year 2007, Qantas Airlines has successfully integrated and managed this program as a CSR policy of the company (Qantas, 2019). A Diversity Coordinator is employed in this regards for overseeing matters related to the program. It may also be stated that bark paintings, a specialty of the Aboriginal culture, had been purchased by the organisation in 1996 and donated to the art gallery in Australia (Qantas, 2019).
According to a report published by Qantas Airlines, it has been emphasised that the organisation implements and thoroughly follows the highest level of corporate governance and managerial ethics for conducting business. There have been multiple policies within the firm, which promotes the employee rights. For instance, the Whistleblower Policy of Qantas enables the employees to report improper and unethical code of conduct (Qantas, 2019). Furthermore, it empowers the employees to raise concerns regarded misconduct and misgovernance. Hence, it has been evident that both the internal as well as external stakeholders have been benefited through the identified CSR strategy (the public, the indigenous population, the owners through gaining a positive reputation, the investors and more) and through the managerial ethics application in company policies (the employees, managers, suppliers and more). The major shareholders of the firm have been identified as Pendal Group Ltd (6.06%), AllianceBernstien LP (4.96%), Norges Bank Investment Management (2.73%) and more (Qantas, 2019).
Task 2: Review of negative review of Managerial ethics practice or CSR activities
Over time, there have been a number of complaints identified with respect to the CSR activities of Qantas. One of the major examples of the same can be cited as the consideration of being one of the most polluting airlines in Australia. Despite being one the largest and oldest passenger carriers in Australia, Qantas Airlines has failed to demonstrate effective environmental concerns.
Figure 2: Average passenger-kilometer per liter of fuel (Fuel efficiency) in 2016
(Source: SmartCompany, 2019)
Taking the ranking of Qantas Airlines into account as illustrated in Figure 2, it may be stated that the airlines has been named as the most polluting airlines operating in the transpacific passenger route. The use of the Boeing 747-400ER and Airbus A380 lack the required passenger yields and reduced freight shares, contributing to the pollution of the environment (SmartCompany, 2019). Furthermore, the support for issues such as LGBTIQ and Marriage Equality has been advocated by CEO of Qantas Airlines, which had been met by severe criticisms including ones from Peter Dutton, the former Home Minister, claiming that Qantas Airlines should focus on their brand rather than using it to promote political issues (SmartCompany, 2019).
An issue of poor display of managerial ethics has been evident through the challenge for senior management and board members, through the issue of poor legroom spaces in the economy section of the flights. Additionally, there have been reports of abuse and harassment against an employee. Though, it may be stated in this regards, that accused manager found responsible for the bullying, had been fined around $15,500 for the mistreatment (Qantas, 2019). Despite this action and the compliance to the established company policy Whistleblower policy, the incident has been able to taint the brand reputation of the company.
Task 3: Internal and external analysis
3.1 General Environments (PESTLE) analysis
Table 1: PESTLE analysis
(Source: Author’s creation)
3.2 SWOT analysis
Table 2: SWOT analysis
(Source: Author’s creation)
3.2 Specific Environments analysis
- Customers: The customers have been strongly influenced due to the brand image of Qantas as well as the collaboration with various domestic and international companies. Regardless, there has been complaint from time to time, such as the policy of seating for unaccompanied children, which has led to humiliation of several people as a potential paedophile, and leading inadvertently to complaints regarding sex discrimination (Forsyth and Guiomard, 2019).
- Suppliers: The procurement of Qantas also involves certain criteria for code of conduct and ethical practices. The suppliers are paid in compliance with the Australian Supplier Payment Code, and there are different suppliers depending on the scale of purchase.
Figure 3: Supplier Invoice and Payment guideline
(Source: Qantas, 2019)
- Credit entity: Financing is required for the operations of Qantas. It has often been noted that the company experienced major losses between the years 2011 and 2014. Cut down in jobs and other factors have been evident as well.
- Competitors: Emirates and Singapore Airlines have been regarded as Qantas’ major competitors. However, Qantas has efficiently managed the issue through striking collaboration with Emirates in terms of flight carrying (Chatzoglou et al. 2018). Furthermore, a subsidiary of Qantas, Jetstar has started collaboration with Singapore Airlines.
3.3 Resource Based Model analysis
The resource-based model has been chiefly found to be responsible for the identification of the strengths and weakness of the firm. Though a SWOT analysis has been conducted in this regards, a Resource Based Model analysis is needed in order to identify the viability of the resources as well as to evaluate the outcomes. The application of the VRIO framework as well as value chain analysis is also performed in this regards.
Figure 4: Resource-based view model
(Source: Yahaya and Ebrahim, 2016)
The resources are categorised whether tangible or intangible. For instance, effort is derived through manual labour, which is tangible; nevertheless the human resources are technically tangible. Digital resources are intangible while the financial resources are not. Immobility in case of financial resources cannot be expected due to the volatility and evolving demands in the market (Arnold et al. 2015). The VRIO framework addresses the factors which determine the effectiveness of a resource, which may eventually aid in the development of competitive advantage of the firm.
- Value: All of the resources are valuable
- Rarity: Certain resources such as the services are rare, in terms of availability
- Imitability: The resources can be imitated
- Organization: The utility or the exploitation of the resource of Qantas is extensive as it has achieved a lot through the process of strategy development and growth owing to the organisational capabilities
Task 4: Leadership styles of leaders at Qantas Airlines
4.1 Core values and competencies of the company developed by the CEO(s)
The core values and competencies of Qantas Airlines have been identified as effective leadership, provision of effective services through differentiation strategies, as well as the aspects of safety and security. Furthermore, the provisions of affordable pricing and value for money to its customers are the key core competencies and values identified with respect to Qantas (Qantas.com.au, 2019). The major competencies have been established during the tenure of Alan Joyce. However, the governance of Alan Joyce has also faced several critical reviews as well. Furthermore, the governance of Geoff Dixon has made the organisation develop its chief value and core principles. Geoff Dixon has been noted to state that he has inherited a dysfunctional enterprise, thus his role in developing the organisation before handing it over to Joyce is to be taken into consideration as well (Cooper, 2017).
4.2 Inspiration of CEOs to employees
The former CEO, Geoff Dixon, is to be applauded for his management skills, as he stated that the organisation he was handed down was thoroughly dysfunctional (SmartCompany, 2019). Improving the conditions required a strong managerial view, which was followed by Dixon through a coaching and strategic leadership style. Additionally, the current CEO, Joyce demonstrates a persuasive mindset for addressing the hurdles faced by the firm. Joyce’s leadership style can be considered as a combination of democratic, strategic and transformational leadership style. Moreover, James Strong, another former CEO mentioned his leadership style to be “out and about”, roughly following a bureaucratic leadership style (Walulik, 2016).
4.3 Development and implementation of the strategies
The major strategy can be cited as the Differentiation strategy, aiming to cover a variety of services ranging from basic to premium in certain packages. CSR strategies such as sponsorship of the cricket team of Australia, as well as Grand Prix have also been efficient. Additionally, the development of numerous initiatives for the empowerment of the indigenous population of Australia, such as Aboriginal and Torres Strait Islander Programme, has also been undertaken. The strategies have been developed due to certain crisis faced by the company from time to time. For instance, in order to improve the sales after the period of losses between 2011 and 2014, the privatisation of the company had also been another strategy to improve the sales, and reduce the losses of the firm (Qantas, 2019).
This report identifies CSR, differentiation and effective corporate governance as major strategies for Qantas Airlines. Furthermore, the leadership styles of the CEOs, such as Geoff Dixon, James Strong and Alan Joyce have been identified and discussed, along with a PESTLE and a SWOT analysis of the firm.