Corporate Social Responsibility of Qantas Airline - Case Study Example

Corporate Social Responsibility Qantas CONTENTS CONTENTS 1 1. EXECUTIVE SUMMARY 1 2. INTRODUCTION 1 3. QANTAS HISTORY 1 4. GOVERNANCE IN QANTAS 2 5. RISK MANAGEMENT 2 6. SAFETY AND SECURITY 3 7. HEALTH OF CUSTOMERS AND EMPLOYEES 5 8. IMPORTANCE OF CSR FROM THE CASE OF QANTAS 6 9. CRITIQUE OF QANTAS AS A CSR 6 10. WHY QANTAS MUST ACT AS A CSR 7 11. CULTURE SHIFT IN QANTAS 8 12.RECOMMENDATION 8 13. CONCLUSION 8 14. REFERENCES 10 1. EXECUTIVE SUMMARY One of the things that have been recently brought in the society is corporate social responsibility. This is an alternate way of dealing with things that are connected to human beings. A good example of these CSRs is Qantas Airways. This is a company in Sydney, Australia that deals with air transportation of people and good. This company offers its services in a unique that make people to term it as a CSR. Because of this it has received some criticisms on its operating nature. 2. INTRODUCTION Corporate Social Responsibility plays a vital role in modern business environment. It aligns the corporate actions and activities to the government law and ensure the business model is ethical. The goal of Corporate Social Responsibility is to embrace responsibility for the company's actions and to encourage the positive impacts through its activities on the environment, consumers, employees, communities and stakeholders. This report will analyse the implemented CSR policies of Qantas Airways and assess their effectiveness to determine whether the practice has helped the organization in achieving its goals and objective. 3. QANTAS HISTORY According to Qantas Airway Limited Website, Qantas was established in 1920by Paul McGuiness, Hudson Fysh, Fergus McMaster and Arthur Baird. After almost 91 years of growing and developing, Qantas nowadays is widely regarded as the world's leading long distance airline and one of the strongest brands in Australia. It employs approximately 32,500 employees and offers services across a network spanning 182 destinations over 44 countries. The main business of Qantas is transportation of passengers, with two main brands, Qantas and Jetstar; operate the total passenger fleet of 252 aircrafts. For the full year ended 30 June 2010, Qantas reported underlying profit before tax of $377 million. Net Profits after tax was $116 million. 4. GOVERNANCE IN QANTAS In Qantas, there is a corporate governance framework that works under the Safety, Health, and Environment Security Committee (SESC). This is a board of oversight that was introduced in 1994 is found at Qantas.com. Currently the board has six members with each having his or her rank. There is the chief executive officer of the board and five independent non-executive officers. The board has laid down a charter that is available at their website. The charter talks more of their objectives, visions, and missions (Tymson& Lazar, 2006). The SESC has its objectives that are all aimed at assisting the board in performance; the SESC also assists the board on issues concerning safety, health, security matters, and the environment. They aim at making the working environment to be conducive for working. The SESC also deals with risk management, which in any business, is one of the areas that require a lot of concentration. A good process of risk management should be laid down and then implemented to point. Apart from the working of the audit committee, SESC also works in a way to ensure that there is credibility and transparency. SESC holds meetings regularly from where it sets objectives of achieving the latter objectives and there are some qualifications that members of SESC must meet before joining. All this is meant to ensure that the performance of SESC is done to perfection, and with practiced ease (Vogel, 2006). 5. RISK MANAGEMENT Risks are usually expected in any business. There is a need for a strong and reliable risk management team in any business to ensure that all challenges on the way are conquered. Though it is not usually easy, Qantas Group has made it by embracing opportunities and managing business risks related to non-financial resources. There are many types of risks that are mandatory to any business. When a risk is perfectly overcome, it sets the business at a better face-to-face future risk with more perfection and ease. The working of the risk management committee in Qantas is usually through various processes, the processes that the program deals with include: i. The program analyses and rates risks whether financial or non-financial. This helps in prioritization to know which risks must be first settled before going into the others. ii. There are different causes of risks. This program looks at the causes of the various risks and then analyses their contexts. With the cause it becomes easy and quick to solve the risk unless to a situation where the cause of the risk is not known. iii. This program lays down the procedures and directions to be followed in managing the risks. The procedures are drawn according to prior risk thus, they are perfect. iv. The program prepares reports on either monthly or annual basis showing all what they have been doing over that duration. The reports usually include the risks that have been managed, their causes and the ways that have been applied to apply them. v. This program makes consultations with other environmental groups. This is usually important to identify their weaknesses so that they can work on them and then identify their strengths so that they can keep them up. In corporate social responsibility, reports play a key role. The reports on risks management are very important. The procedure of making the reports must be followed to the latter (Samson & Daft, 2005). 6. SAFETY AND SECURITY Safety and security is usually given the first priority in any corporate social responsibility group. There are different ways that are usually used to attain this. Some groups may also be employed to help in ensuring that there is safety. Qantas has been said to make over 300,000 flights per annum. Due to the many flights that the group is making per year, there are many incidents that occur and call for security and safety measures. When the incidents arise, there is a group with the responsibility of working on them to see to it that the incidents are solved for once and for all. They lay down good safety and security measures to ensure that such kind of incidents will never reoccur. This is truly what makes the Qantas Group to be different from other airlines even others that are very big and more popular (Waddell, 2000). The Qantas Group has done many aviation considerations to ensure that there is appropriate security in place. There are many developments that have been achieved by Qantas in terms of security. One of the ways through which Qantas has developed more security is by making external links. This group has linked with many external airlines for instance the Australian Government Security. This is a good technique they have used to minimize their spending on security and ultimately making the process to be easy. There are also some cross border security agencies that have been put in place to ensure that some fears like terrorism are mitigated if not done away with (Weiss, 2006). Some other issues like corruption have been handled effectively through the measures that the security management team has laid down. The group currently introduced a policy that was to ensure that people are aware of the security issues and the measures that are already in place to solve them. In crime control, the group has increased its external collaborations. There are some countries that are well known to be prone to criminal activities. The Qantas Group has ensured that there is tight security in those places. They have used latter experience and case studies on criminal activities in order to come up with the best security measures that will serve and protect clients. There are many recent technologies in safety and security. The Qantas Group has done a lot of research both nationally and across the borders to identify the best technological approaches to security. Most of them have been implemented and they have improved and made the working of the security management team to be easy. The Qantas Group has also increased security training among its members to help in ensuring that the personnel in place is capable of solving all security matters whether local or international with prowess. The security team gives annual reports that help to lay down future strategies that will solve insecurity with more perfection (Oetterli, 2008). There are many monitors that have been put in place to monitor the flights. These help to ensure that immediate actions are taken where necessary. In some cases, for instance, there are incidents in the water and therefore it becomes hard for the group to act immediately but they try their level best to ensure that they address the issue. Their aim is to ensure that customers feel comfortable and have no fear. This is an advantage that this business group has over other airline business groups who are money oriented. Many cash has been invested in security operations and infrastructure. Some of the infrastructures are very expensive to put in place but Qantas has made it to ensure that customers create credibility on the business. This is usually the trick to survive in these kinds of businesses (Matten, Crane &Chapple, 2003). 7. HEALTH OF CUSTOMERS AND EMPLOYEES Unlike other businesses, Qantas is one that is very keen with the health of the employees and the customers. They ensure that the customers are secure so that they may have good health. They believe that good health goes hand in hand with security. Without security then it would be difficult to have good health. They ensure wellbeing of the employees. When the employees are healthy then it is more likely that their performance will be better and more effective compared to a situation whereby they are working when having health problems. This is a trait that is rare in many businesses and it really makes Qantas to be a unique business with programs and strategies of its own. While other companies are struggling to make money, this company has been said to work towards making customers comfortable with the services they receive and then ensuring that the employees work under a conducive environment (Mullerat, 2005). There are some aviation health issues that are usually addressed worldwide by International Air Transport Association Medical Advisory Group. Qantas relies on some advice they get from this organisation however, in most cases, they do a lot of improvement on them to make sure that both customers and employees are secure. There are some latest technologies that are used in this field to help in mitigation and solving of health issues like outbreaks. Qantas has employed all those technologies all for the benefits of the customers and employees. There are some directives that are usually given by the government concerning health issues, Qantas adheres to them vividly. They also rely on information from World Health Organization (WHO) in order to make their performance on health issues to be better if not the best (Hill, et.al. 2007). When it comes to the employees, they look at previous cases of health problems. From this, they lay down good strategies to make sure that such kind of health problem will never reoccur. A good example is the case of 2008 when one of the employees collapsed over a high lift truck guardrail. From this case, they laid down objectives to ensure that the same thing will never occur again (Kotler& Lee, 2004). 8. IMPORTANCE OF CSR FROM THE CASE OF QANTAS CSR has been observed to influence all aspects of businesses using various approaches. There are usually different aspects in a business however many will deal with the customers and employers need. CSR brings in some concepts that decide whether businesses fit within the social fabric (Harvard Business Review, 2003). CSR helps to address issues in the society. Though the aim of businesses is usually to make profits, Qantas has addressed issues in the society like health issues. This group has also been sponsoring people that are a strategy to fight poverty in the society. Therefore, from the case of Qantas we can see that CSR helps to solve issues in the business, concerning the clients and employees while at the same time addressing issues from different groups in the society. CSR has also been observed to help businesses to lay effective strategies that will improve their performance. It influences all aspects of a business thus the business owners learn from the outcomes and they lay down strategies that will help the business in future to serve customers better while protecting the employees (Grayson & Hodges, 2001). 9. CRITIQUE OF QANTAS AS A CSR Just like any other CSR, Qantas has faced a lot of criticism. Most of the critiques that this business has faced are directed towards the perceived purpose. Qantas has been criticized as a non-profitable business. It is known that in any business there are must be set objectives to ensure that there are profits. Qantas has been criticized as a business that does not aim or even worry about profits. It has even been termed as a sort of a charity business. This criticism does not recognize that in a business there is need of acting more conscientiously rather than scrambling things around in order to make money without worrying of the conditions of the customers and employees (Docherty, Kira&Shani, 2009). Although Qantas aims more at achieving sustainable development, it has been criticized on the grounds that it is playing wrong tasks. Some tasks like sustainable development are played by the government of the specific country and not other organs within the country unless they have been obliged to do so. This is a critique that makes Qantas to be termed more of a charitable business in society (Dunphy& Benn, 2003). 10. WHY QANTAS MUST ACT AS A CSR There are many instances where customers have received unfair treatment just because the owners of a business are aiming at making profits. Qantas as a CSR will address such issues and ensure that customers are served and protected. Some businesses grow rapidly due to the high profits they are making but it is clear that the same businesses will fall down gradually since it will reach a point where they will not be bothered about the needs of the customers and workers any more. This is a real problem that has been observed in many businesses. Qantas will address such issues and make itself to be a long lasting business due to the quality care and hospitality it gives to its customers while protecting its employees (Collins, 2001). As a CSR, Qantas will act as a role model to other businesses. Some businesses will learn from Qantas and they will be able to change their motives from money-oriented businesses to customer and employee satisfying businesses. This will help to change the business arena in the country (Carroll &Buchholtz, 2003). 11. CULTURE SHIFT IN QANTAS Change is usually important in any society and business. Change becomes important when it occurs for the better. Qantas has been shifting its culture from time to time. This is usually determined by some factors. Qantas has been changing its practice so as to meet the needs of the society. They also change their culture with the changes in technology. All these changes are meant to improve the working conditions of the workers and to serve the customers better. Strategies that are laid by this business have been changing from time to time. The aim of this is to ensure that customers are well served. For instance, the business has been changing the transport costs with the recent change in the economic condition of the country (Beatty & Williams, 2008). 12.RECOMMENDATION Qantas airline is a company that is highly relied on. The owners should make strategies to ensure that the services they are offering are helping people of different classes. There are different people in the society thus; whatever they offer should satisfy the needs of people. I recommend that there should be bodies in place to find the needs of people so that they can satisfy them. I recommend that Qantas should do some research from other companies offering the same services so that they can know what to change and how to do it. The changes to be done should help customers and improve the working conditions of the workers. 13. CONCLUSION From the above key policies, Qantas has demonstrated very positive corporate social responsibility for the company stakeholders. This positive initiative not only further cements the strong national brand slogan – Spirit of Australia, but also proactively protects and minimises the company financial loss from any possible law suit/prosecution due to neglect of care. Hence, corporate social responsibility plays a main role to contribute to the overall success of Qantas business. 14. REFERENCES Beatty, B. & Williams, E. (2008), Keeping good companies: The corporate responsibility officer- does your company need one? Vol. 60(1): 16-21. Carroll, A. &Buchholtz, A. (2003), Business and society: Ethics and stakeholder management, Ohio: Thomson. Collins, J. (2001) Good to Great, Chapter 2: ‘Level 5 Leadership’, London: Random House Business Books. Docherty, P., Kira, M. &Shani, A.B. (2009), Creating sustainable work systems: developing social sustainability, London: Routledge. Dunphy, D. & Benn, S. (2003), Organizational change for corporate sustainability, Abington: Routledge. Grayson, D. & Hodges, A. (2001), Everybody’s Business: managing risks and Opportunities in today’s global society, London: Dorling Kindersley. Harvard Business Review (2003), Harvard Business Review on Corporate Ethics, Boston: McGraw Hill. Harvard Business Review (2003) Harvard Business Review on Corporate SocialResponsibility, Boston: McGraw Hill. Hill, C., Jones, G., Galvin, P. &Haidar, A. (2007), (2nd ed.), Strategic Management, Sydney: John Wiley & Sons. Holliday, C.O., Schmidheiny, S. & Watts, P. (2002), Walking the Talk: The Business Case for Sustainable Development, Sheffield: Greenleaf. Kotler, P. & Lee, N. (2004) Corporate Social Responsibility: Doing the Most Good For Your Company and Your Cause, US: Wiley and Sons. Matten, D., Crane, A. &Chapple, W. (2003) ‘Behind the mask: Revealing the true face of corporate citizenship’, Journal Business Ethics Vol. 45 (1/2) . Mullerat, R. (ed) (2005) Corporate Social Responsibility: The Corporate Governance of the 21st Century, The Netherlands: Kluwer Law International. Samson, D. & Daft, R.L. (2005) Management (Second Pacific Rim edition) South Melbourne: Thomson. Vogel, D. (2006) The Market for Virtue: The Potential and Limits of Corporate SocialResponsibility, US: Brookings Institute Press. Tymson, C., Lazar, P. & Lazar R. (2006), The New Australian and NewZealand Public Relations Manual, Sydney: Tymson Communications. Oetterli, G. (2008), Keeping Good Companies: CSR Reporting, Vol. 60, No. 1, pp. 26-31. Weiss, J.W. (2006), Business Ethics: A Stakeholder and Issues Management Approach, (4th ed.),Thomson South‐Western, Mason, pp.6-7. Waddell, S. (2000) ‘New institutions for the practice of corporate citizenship; Historical Intersectoral, and Developmental Perspectives’, Business and Society Review, Vol. 105, . QantasAirways Limited Website, 2011, Qantas History, available:http://www.qantas.com.au/travel/airlines/history/global/en (Accessed 01st December 2011) Read More