The Effect of Euro Zone Membership - British Airways and Emirates Airline - Case Study Example

Contemporary Business Issues Insert Name Course, Class, Semester Institution Instructor Date Contemporary Business Issues Introduction The Euro Zone membership is an economic monetary union of countries belonging to the European Union. It is comprised of seventeen countries that have met the requirements of joining the European Union. Common currency is used throughout the countries that are members of the European Union (Masson, 2012). The policies used are common and it controls the operations of the member countries. The main objective of the union is to ensure that the inflation is controlled and hence improving the economy of the member countries. The single monetary policy however has some impacts on the economy of the member countries. A country cannot act independently in terms of controlling its monitory policies. Printing of the money is not allowed for countries that have joined the European Union. The currency of the member country is usually devalued depending on its Euro zone trading partners. This plays a role in making exports cheaper and hence ensuring the balance of trade. The countries that meet the requirements are usually allowed to become members. However, there are no procedures that have been established for the withdrawal of the members from the union (Hutson, 2010). The Euro zone membership has some effects on the operations of companies and hence impacting on the prospects of the company. There are differences between the companies that operate outside the membership and those that are within the membership of the union. The paper thus discusses the contrast of operations in a company within the Euro zone membership and another one that is not within the Euro zone membership. Case Study of Two Companies British Airways British Airways is one of the most prominent companies in the United Kingdom. The company has several destinations allover the world and its headquarters is based in Waterside. The company has attained an international status and hence the reason for operating in different destinations (Balmer, 2009). However, the policies of the company are guided by the decisions made by the head office. The procedures for doing business in Europe have been impacted by the European Union economic and monetary policies. The company therefore has to operate under the European Union framework. The use of the Euro is thus common in the company. The policies made by the company are also dependant on that of the European Union. This is for the purpose of ensuring that the company is able to remain competitive in the market and enjoy the benefits of the European Union policies. The Euro zone crisis was one of the economic problems that affected most of the countries in the European Union. This effect was felt by most of the companies as the economic and monetary policies had to change. It led to a negative impact on the operations of most of the companies as the access to the bank loans was limited and the interest rates were also increased. British Airways also experienced a lot of economic difficulties at the time as most of the customers were also impacted negatively by the policies and framework put in place (Shumsky, 2010). This is because the Euro zone is about ensuring that inflation is thus responsible for putting in place measures to combat inflation. However, some benefits are also present in the Euro zone and have impacted positively to the growth of the company through improving the economic policies. Emirates Airline Emirates Airline on the other hand is a company that is based in the United Arab Emirates and it operates in the aviation industry. The company is ranked among the most profitable companies in the region. It has also won several awards in the aviation industry due to its exemplary performance (O’Connell, 2011). This has boosted the prospects of the company and it has played an important role in ensuring its growth and development is enhanced. However, the economic policies in the United Arab Emirates have contributed to the growth and development of the company. This is has led to the good performance of the company both locally and internationally. The economic policies support the business operations and hence providing a platform for the development of the company. On the other hand, the company operates within the economic framework of the company and this has enabled it to achieve a lot of success. The United Arab Emirates was not affected greatly by the global economic recession and inflation. This is due to its economic policies. The company therefore encountered little difficulties as compared to the other countries in Europe and America. The company has thus continued to make profits throughout is operations. The economic difficulties had negative impacts on the price of oil. This is considering that the Airline industry is dependant on the oil sector and hence it’s direct effect on the sector. However, Emirates Airline was able to survive the inflation as oil is a natural resource that is abundant in the country. The operations of a company are this dependent on the strengths of the economic policies that have a direct impact on the operations of a company (Stratton, 2012). Evaluation of contemporary business issues Regulation and governance is an important concept in the operation of a business. This is because it determines the action taken by a company to ensure compliance as well as proper management of the company (Prakash, et al, 2010). The business regulations in the European Union are for the purpose of promoting the growth and development of businesses as well as protecting the customers. All companies should abide by the regulations for the purpose of ensuring compliance. The laws are stiff for the companies that do not comply with the regulations. British Airways has ensured compliance with al the regulations in the aviation industry. This is also considering the safety and security issues that are facing the aviation industry. The governance of the company is also for the purpose of ensuring the efficiency in terms of the management. The company has a chief executive officer as well as a board of directors. The success of the company can be attributed to the good governance. Emirates Airline on the other hand places a lot of emphasis on the issues of compliance and governance. The company has been able to win several awards due to its observation of high safety standards. The company is thus been keen in terms of ensuring compliance with the regulations. It is also for this reason that the company has experienced a low number of accidents in relation to failure to observe safety and compliance to the regulations. The governance of the company is spearheaded by the chief executive officer while the board of directors advises the company. It is thus evident that the regulations and governance is important in the operations of a company (Börzel, 2010). The service offered to the customers plays an important t role in terms of ensuring that the company is successful. A customer will only opt for the services of the company when the experience is good. High standards of customer care are also a determinant factor for the purpose of attracting other customers (Cook, 2010). In the European Union countries, customer care is usually given the first priority. British Airways places a lot of value to its customers. This is for the purpose of benefiting the customers as well as the company. This is also due to the high competition as the customers may opt for services in a different company once they are not satisfied. The company therefore has a customer care desk that is responsible for the customers. It is through this desk that the customers can lounge the complaints against their companies or ask for clarifications. However, it is important to note that the customers do not have to avail themselves in person but can use other means like emails and phone calls. The response rate is quite high and it takes less than a day for an email to be responded to. The availability of such services is important in terms of maintaining the customers. Emirates Airline on the other hand also has customer care department that deals with the issues raised by the customers. A feedback is usually given to the customers incase they raise any issue. The department is also involved in determining the rate of customer satisfaction. It is for this reason that the company always follow up on the customers to determine whether they are satisfied with the services of the company or not. Customer care is thus an important issue when it comes to contemporary business issues (Lewis, 2012). Competition in the market is usually common for any business. It is for this reason that there is no single monopoly as the existence of alternative products can also increase competition in the market (Meier, 2011). The Airline sector in the European Union countries is quite high. This is due to the existence o several companies that offer the services to the customers. British Airways has been one of the leading companies and it has put in place several measures to deal with the competition. This includes forming alliances with other companies within the European Union. The reduction in trade tariffs is one of the main advantages of companies in the European Union. This has enabled the company to grow and hence emerging a competitive company in the region and across the world. The reduction in the trade tariffs across the European Union block is an important economic policy that gives competitive advantage to the companies in the region over the other companies (Qin, et al, 2012). The Emirates Airline on the other hand is also a competitive company in the Middle East and other regions. This is due to the strategies that it has put in place to deal with competition. One of the strategies is to explore new markets and hence increasing its market share in the region. The company also has expansion projects in the region for the purpose of remaining competitive in the market. However, the trade barriers is one of the disadvantage that the company faces in its bid to be competitive. This is unlike British Airways which enjoys a wide coverage with low trade barriers. Building the brand image of a company is one of the most important aspects of doing business. This is for the purpose of attracting more customers and hence ensuring that the business remains profitable (Urde, 2013). The European Union is aimed at ensuring that the image of the region is good both locally and internationally. It therefore supports the building of the brand image of multination from the region. This is done through a massive campaign on the international media. The policies of the European Union support the company in terms of ensuring that it builds a positive image of the European Union. A considerable effort usually made by the company in terms of building its brand image. It is also for this reason that the company became the official partner of the Olympics in London. This played an important role in terms of building the brand image. The Emirates Airline on the other hand values its brand and thus places a lot of importance to the process of building its brand image. It is for this reason that the company is usually involved in massive campaigns in the international and local scene trying to build its brand image the internet has also been used by the company in terms of building the brand image. The support of the government has also been important for the company as it is partly owned by the government. The company has been able to attract most of its clients through the process of building the brand image. It is thus important to note that building the brand image is an important contemporary business issue that affects the operations of a company (Liu, 2011). The use of modern technology in the operations and management of businesses plays an important role in improving the operation s of the company. This has been a common trend that has led to the changes in the methods of business operations (Wang, 2013). In the European Union countries, the use of modern technology ids widely adopted and it is an acceptable means of doing business. The number of experts is high in the European Union countries when it comes to the use of technology. British Airways has thus adopted the use of modern technology in most of its business operations. The services have been automated to en sure that the rate of service delivery is fast and efficient. This has played a useful role in terms of ensuring that the company is able to serve a high number of customers. Most of the procedures that were present before have now been eliminated due to the automation process. The use of technology has therefore plays an important role in the operations of a company. In the United Arab Emirates, the use of technology is also common. However it is not advanced as compared to the countries in the European Union. This is because of the low number of experts in the field of information technology in the country. However, the Emirates Airline has taken note on the importance of using the modern technology while doing business. It is for this reason that the company has employed expatriates who are knowledgeable in the field of information technology (Bieger, 2011). This has played an important role in ensuring that the company is able to meet the demands of the customers. Automation of some selected services has also been done by the company. However, since most of the local customers are not conversant with the technological methods, the manual processes are still used to assist them. Business ethics is one of the most important contemporary issues of doing business. This is because it determines the ability of a company to win the trust of the customers (Chonko, et al, 2012). The concepts of ethics are independent of religion and it has nothing to do with the religion. The organizational culture is however important in terms of ensuring that the business processes are ethical. In the European Union countries, the ethical values are important in terms of doing business. Some of the ethical values have been put in place for the purpose of ensuring that the customer benefits. British Airways has put in place ethical measures that ensure that the customers are well taken care of. The ethical values have also been incorporated in the organizational culture of the company. The staff of the company usually undergoes training on the ethical issues for the purpose of ensuring that the company is able to prosper. The employees of the company who violates the ethical values of the company are usually sacked. On the other hand, the Emirates Airline is considered as one of the most ethical companies in the world. This is due to the high standards of ethics that is in the company. The Arab culture which is friendly has contributed to the high ethical standards that are witnessed in the company. The customers have a lot of trust for the company due to the high ethical values and hence its success in the region. The company has also won recognition from other organizations due to the high standards of ethics within the organization (Ferrell, 2012). Recommendations The contemporary business issues play an important role in terms of ensuring the success of the company. The contemporary business issues differ in the Europeans Union and in the United Arab Emirates. However in order to improve the situation in the European Union, the economic policies needs to be reviewed and enhanced. This is for the purpose of ensuring that the policies are friendly in terms of streamlining of the operations of companies. The business regulations also requires some adjustments in order to ensure that the companies are able to gain due advantage and remain competitive. However it is important for British Airways to consider putting in place measures that will ensure that it deals with the tough economic situation. Emirates Airline on the other hand should ensure that the issues of technology are fully embraced. This should however be done depending on the market situation and the level of use of technology in the local market. However more measures should be put in place in the international market. On the other hand it is important for both companies to put more efforts in the issues of globalization. Although both companies have several destinations, it is important to ensure that it invests in many countries. This is especially important for British Airways as other continents are not hit hard by inflation and economic recession as compared to Europe. However, it is also important for both companies to fully comply with the regulations. This is especially on the issues of safety and security as the aviation sector is faced by terrorist threats. Conclusion In conclusion, the contemporary business issues play an important role in terms of establishing the success of a business. However, the contemporary business issues differ from one company to the other depending on the country of operation. This is due to the differences in the economic policies that have been put in place in the different countries. The economic policies therefore determine the strategies that the company has to use in order to avoid going against the law. The ethical issues are also useful in the operations of a company. It is important to note that both companies place a lot of emphasis in the area of ethics in doing business. On the other hand it is also evident that the both companies comply with the rules and regulations of the authorities. This has contributed to the success of both companies. The use of technology is also important for the purposes of streamlining of the operations of a company. Both companies have adopted the use of technology but the use of technology is high in Europe. The customer care initiatives that have been put in place by both companies and it is also for the purpose of benefiting the customers. It is also evident that both companies have a lot of similarities despite the differences in the countries of operations. List of References Masson, P, 2012, Fiscal asymmetries and the survival of the euro zone, Economie internationale, (1), 5-29. Hutson, E, 2010, Firm-level exchange rate exposure in the Euro zone, International Business Review, 19(5), 468-478. Balmer, J, 2009, Aligning identity and strategy: corporate branding at British Airways in the late 20th century, California Management Review, 51(3), 6-23. Shumsky, R, 2010, Dynamic revenue management in airline alliances, Transportation Science, 44(1), 15-37. 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