British Airways Stakeholders Mapping and Dealing with Ethical Concerns - Essay Example

?BRITISH AIRWAYS; STAKEHOLDERS MAPPING AND EXPLORATION ON HOW THE COMPANY DEALS WITH THEM COUPLED WITH ETHICAL CONCERNS. BY……………………………………………………… OF THE UNIT NAME OF THE PROFESSOR NAME OF THE UNIVERSITY ACADEMIC LEVEL DATE OF SUBMISSION Executive Summery The purpose of the paper is to understand British Airways, map its stakeholders and to examine how the company dealings of the company with them coupled with ethical concerns. The paper begins by a general overview of British Airways, defines business ethics and stakeholders. After this the paper explores stakeholders mapping and discusses matrix and quadrant models of stakeholder mapping. Finally the paper discusses the dealings of the company with four stakeholders together with their ethical concerns. Further it maps four stakeholders of British Airways being: customers, employees, competitors and the local community. Table of Contents General Overview of British Airways…………………………………4 Definition of Business Ethics………………………………………….4-5 Understanding Stakeholders…………………………………………..5-6 Examining Stakeholder mapping………………………………………6-7 Discussing and mapping British Airways Stakeholders………………7-10 Conclusion…………………………………………………………….10-11 Bibliography…………………………………………………………...12 British Airways is the UK’s leading airline dealing in both international and domestic freight, mail carriage services and provision of auxiliary products. Its roots can be traced back to the emergence of civil aviation following the infamous world war one. The company has evolved tremendously over time with its first international flight between London and Paris on 25th August 1919 by its forerunner company Aircraft Transport and Travel Limited, (A&TT) to the current worldwide destinations with extremely sophisticated planes both for cargo and human transport (Britishairways.com, 2012). The United Kingdom leading airline has been very profitable with a turnover of ?8.99bn in the year ending 31st March 2009 (Petya, 2011). For this famous airline company to witness such growth, and market dominance, there has to be proper coordination and professionalism coupled by high degrees of commitments by the stakeholders of the company. In the business world, the act of ensuring a well coordinated relationship between a company and the stakeholders is called corporate governance. The paper will explore, discuss and map some British Airways stakeholders, their ethical concerns and how the company has dealt with them in general. To tackle this paper efficiently, it is prudent to understand its key terms. Businesses operate in human societies and need to uphold the moral values that are advocated within their locality and beyond due to globalization. The world has increasingly become a global village and what affects one part of the world automatically affects the other. For a company to gain desirable public image it has to uphold business ethics in its operations and decision making. Applied-Corporate-Governance.com (2012) defines business ethics as, ‘‘the application of moral code of conduct to the strategic and operational management of a business’’ It is important to note that different people have varied moral standards, hence what may be considered morally upright to one may not necessarily be so to another person owing to individual diversities. Ethics is about personal moral judgment of right and wrong. The business entity has to understand this and to operate in a manner that facilitates it to win the public trust for a desired culmination to enhanced profitability. The same can be achieved through careful moral examination of corporate social responsibility, political and social systems coupled with individual moral standards. A business entity that desires to flourish should embrace ethical practices as this will enable attraction and retention of customers and investors, motivation of employees thereby reducing turnover, and building and safeguarding the image of the business. All these work together to ensure the progress and the profitability of the business while the reverse is true. Before delving into the topic, it is appropriate to be acquainted to the term stakeholders. According to BusinessDictionary.com (2012), a stakeholder is, ‘‘a person, group or an organisation that has interest or concern in an organization.’’ Due to their interests and concerns they directly or indirectly affect the organisation. Bourne (2010, pp. 5) concurs with this definition, but also views it more critically and observes that stakeholders may also be groups or individuals who are opposed to an organisation or particular aspects of its actions. Their control can be felt in a company either positively or negatively in the spheres of profitability, growth, policies and operations. BusinessDictionary.com (2012) lists the examples of stakeholders to be: directors, creditors, employees, governments, suppliers, shareholders, unions and the community among others. When a company deals shrewdly with its stakeholders, then its collapse is inevitable. Jean (2012, pp. 4) documents Nutt( 2002) analysis of 400 strategic decisions which half failed due to their inability to embrace the interests and the information held by the major stakeholders. This calls for proper corporate governance for sustainable cooperation between an organisation and the stakeholders. The ultimate goal of this paper is to map the stakeholders of British Airways and it is very vital to understand what stakeholder mapping. BSR (2011, pp. 1), describes the term as a process that involves a collaboration of research, debate and discussion to come up with varied perspectives aimed at identifying the key stakeholders out of all stakeholders in a particular organisation. Stakeholders mapping is a crucial tool in business management since it provides a platform for understanding, analyzing, classifying and management of stakeholders for the good of the business. Jean ( 2012, pp. 12) lists some of the benefits of stakeholder mapping like helping managers and entrepreneurs to understand the important social, political and economic contexts of the business in order to develop and to envisage good strategies for the business coupled prioritisation. Stakeholders mapping is also vital in ensuring that ethical considerations are embraced by business organisation. Due to the fact that it provides a framework for understanding stakeholders, it can be useful in managing change within an organisation coupled with facilitation of strategic development. There are various models of stakeholder mapping but the paper will explore of two of them. The matrix model is one that employs the analysis of stakeholders using their power and level of interest in the business to classify and to manage them. For the stakeholders with low power and low level of interest there should be minimal efforts by the company in dealing with them, those with low power but high interest should be informed, those with high power but low interest should kept satisfied, and finally those with high power and high interest should be made the key players in the organization (Jean, 2012, pp. 14.) Just to mention, another model is the quadrant tactic, where the factors evaluated are the level of expertise and willingness of stakeholders. BSR (2011, pp. 3) documents that stakeholders with high expertise and willingness should be engaged, the organization should be passive on stakeholders with low willingness and low expertise while those with high willingness but low expertise should be communicated to moderately and finally those with high expertise but low willingness should be engaged in massive communication. Having demystified the key terms, we can now safely delve into discussing and mapping the stakeholders of British Airways. The company being a large and an international nature, it has myriad of stakeholders, but the paper will discuss and map four of them using the matrix model. One of the major stakeholders of British Airways is the customer. Customers are the end consumers of the products of British Airways and in their absence, the company cannot be in operation since they are the source of profit. Owing to their extreme importance, it is necessary to involve them in the decision making regarding the company’s operations. Despite their importance, Petya (2011) observes that they have a little impact in the management of British Airways. The society is in a state of flux, and so does the demands and the requirements customers. The current era of globalization has come about with enormous technological advancements and as such the same should be observed by British Airways when handling its clients. This is not a desirable state and much more need to be done to ensure customer satisfaction. According to British Airways Strategic Report (2009, pp. 11) customers of British Airways are becoming more concerned about the price, convenience, market segmentations and the use of contemporary communication mediums like the internet and the company is not ignorant of the same. This is a commendable move that will go a long way in promoting customer satisfaction. However, there have been lapses in these requirements like poor reliability of baggage handling, slow innovations and insensitivity in products costs (British Airways Strategic Report, 2009. pp. 11). After the discussion, it is apparent that customers have high powers in the company but low interest in the actual management of the company and as per the matrix mapping model the company must always endeavour to keep its customers satisfied for sustainable growth. Competitors are also major stakeholders of British Airways and cannot be wished away. They influence the operations and decision making in the company. Though, British Airways is the largest and the leading airline company in the UK, it does not have a monopoly for the market but faces competition from other airline companies in the region. Petya (2011) outlines the competitors to be Easyjet and Virgin Atlantic with a turnover of ?2.69bn and ?2.24bn respectively in the year ended 31st March 2009. Other competitors are United Airlines, Star Alliance, Air France, Lufthansa and Emirates. Competition is very healthy since it forces companies to improve their services in their quest to remain relevant and profitable. However, competition should be done within the confines of the laws and ethical considerations. The liberalisation of this sector of the economy is very helpful to the customers since they have a wide range of service providers to choose from. The chosen services should be those that suite their schedules, and pocket friendly. British Airways Strategic Report (2009, pp. 12) indicates that competition and economic downturn has led to reduced prices and this is really beneficial to the customers. British Airways has had some shortcomings that lower its competitiveness for instance poor attraction of passengers across all classes unlike Virgin Atlantic, slow baggage recovery and regular breakdowns among others. In stakeholders mapping, competitors have low power and low interest in the company since they do not engage in the actual management of British Airways and the company should use minimum efforts on them just to understand them in a bid to conquer the market. Competition is very vital for the success of British Airways since it must continually improve its services to ensure it attracts and retains more customers to maintain the profitability and wealth maximisation of the company; customer satisfaction is more critical than the competitors. British Airways Strategic Report (2009, pp. 4) indicates that the company’s employee head count in 2008 revealed that the company had 42,377 employees. This is a big number and indicates how large and dynamic this organisation is. Employees are key stakeholders in British Airways as they ensure that the plans and the activities of the company are implemented effectively. The employees work together in ensuring that the company meets its goals and objectives. In case of sabotage or neglect of duty by an employee, a section in the company or even the entire employee fraternity, which is unethical, then the company cannot operate as planned. The welfare of employees should be treated with a lot of seriousness for quality output. Employees have direct contacts with the customers and they can therefore influence them a great deal. The employees should be dealt with in an ethical and in a satisfactory manner to avert negative effects like employee turnover and strikes which are detrimental to the progress of British Airways. Petya (2011) states that the layoffs the company has to make has lead to dissatisfaction of employees, hence these plans need to be dealt with proactively rather than casual reactive manner. British Airways employees’ dissatisfaction has been evidenced by the fact that its cabin crew staff has always addressed their grievances through strikes and this is disastrous to the image of the company. Trade unions are legal entities the UK and the employees should be allowed to form and join unions to agitate for their rights and to represent them in the top leadership and decision making in the company. The management should take very seriously the concerns that aired by the union officials to safeguard the employee welfare are as this will improve the image of the company through ensuring quality service. Employees should be accorded attractive and motivative packages like allowances and incentives coupled with conducive and safe working conditions to ensure quality output. In mapping the stakeholders using matrix model, employees have high power and high interest in the management of British Airways and should be made key players in the company for the realisation of business success. The local communities are another category of stakeholders that the company has to care about. The local communities have their expectations of the company and if not met adequately, the image of the company may be jeoperdised. The local community expects British Airways to be actively involved in the area of corporate social responsibility together with ensuring environmental conservation. Petya (2011) observes that British Airways is in the business of ensuring corporate social responsibility and lowering carbon emission in a bid to uphold a good relationship with the local community. This is a commendable move since it enables the company to compete fairly and to have many customers due to the favourable perception caused in the minds of the local community. Another problem of the local community is the growth of unemployment and they expect British Airways to handle this menace (British Airways Strategic Report. 2009, pp. 7). It unethical for the company to neglect the plights of the local community members and the company is obligated to care about their concerns. This stakeholder has a high interest in the operations of the company but a low power to engage in the decision making of the company and according to the matrix stakeholders mapping model, they should be kept informed. British Airways is a leading airline company in the UK, and it has come this far due to constant consideration of the interests and concerns of its stakeholders. There are many stakeholders of the company but the paper discussed and mapped four of them: customers, employees, competitors and the local community. It has been evident that the company must embrace and deal with stakeholder in an ethical manner to attain sustainable growth. It is also vital that British Airways maps its stakeholders regularly and deal with them according to their importance. Bibliography Applied-Corporate-Governance.com. (2012). Define Business Ethics-Discussion and Debate. Retrieved November 11, 2012 from http://www.applied-corporate-governance.com/define-business-ethics.html Bourne Lynda. (2010). Why Stakeholder Management is so Difficult. Stakeholder Management Pty Ltd. Retrieved November 10, 2012 from http://www.mosaicprojects.com.au/PDF_Papers/P123_Why_is_Stakeholder_Management_so_di fficult.pdf British Airways Strategic Report. (2009). Strategic Report 2009. Scribd. Retrieved November 12, 2012 from http://www.scribd.com/doc/23329171/British-Airways-Strategic-Plan British Airways.com (2012) Retrieved November 13, 2012 from http://www.britishairways.com/travel/explore-our-past/public/en_gb BSR. (2012). Shareholder Mapping. BSR.ORG. Retrieved November 12, 2012 from http://www.bsr.org/reports/BSR_Stakeholder_Engagement_Stakeholder_Mapping.final.pdf BusinessDictionary.com.(2012). Stakeholder; Definition. WebFinance, Inc. Retrieved November 13, 2012 from http://www.businessdictionary.com/definition/stakeholder.html Jean Clarke.(2012). Governing the Entrepreneurial Venture; Stakeholder Mapping. Leeds University Business School. Retrieved November 12, 2012 from www.leeds.ac.uk/wrcetle/MBAenterprisemodule/ENTERPRISEMODULE Petya Leleva. (2011). Stakeholder Theory and its Impact on British Airways. Slideshare Inc. Retrieved November 11, 2012 from http://www.SlideShare.net/petysha/1-british-airways-stakeholder-analysis-petya-laleva Read More