Qantas Airlines Risk Management - Research Paper Example

QANTAS AIRLINES-RISK MANAGEMENT Chapter One: Introduction 1.1 Background Risk management is not a new concept in different industries and it is usually applied in different sectors in the industries: insurance, finance, manufacturing among others (Caproni, 2005, p.10). Despite this, research in risk management in industries and companies has gained power in the recent years. This raises concern as some service industries call for more risk management. In Qantas airlines, risk management is an issue that can never be left behind or ignored at any point (Anderson 2005, p.12). This is because their services are directly related to human lives. (Shutterstock.com, 2012) Risk management in such a service industry plays different roles and among them is minimizing of threats together with maximizing opportunities. In such a case, all the stakeholders to the industry will enjoy fringe benefits of the industry. Risk management could also save money, which can be utilized for different needs thus budgeting becomes easy (Wogalter 2006, p.11). This paper will focus on the present scenario of risk management in Qantas airlines, the biggest airways company in Australia and probably among the top ten worldwide international air companies (Plunkett, 2007). 1.1.1 Defining Risk Management Risk management has been defined as the process of identifying, analyzing and either accepting or controlling uncertainties in making appropriate decisions (Armstrong, 2011). In general, risk management will mean identifying the possible risks in a company and then taking care of such risks. Risk management is done on an economics ground thus the definition of risk management is relevant in an economics perspective. Risk management as a process has been split into risk classification, risk identification, risk analysis, and risk response. The latter are all used to define everything that happens in risk management. In addition, other terms that must be used in risk management are retention, reduction, transfer, and avoidance (White & Patton 2002, p.13). There are also different standards that have been used to classify risk management in different companies. 1.2 Statement of the Problem Applying of risk management is crucial in any project to help in utilization of opportunities and overcoming of challenges. As a result, customers travelling through Qantas airlines will travel safely from Australia to other nations or from other nations to Australia. Despite the fundamentality of risk management in service industries, in Qantas airlines the issue has not been taken with the seriousness deserved (Caravan, 2011). The company still lags behind when it comes to risk management in the different sectors of the company. Therefore, the study aims at identifying the level to which risk management has been implemented in the company. The study will seek to establish the current scenario in the service industry on the grounds of risk management (Beard & Wilson, 2001, p.14). 1.3 Research Questions and Objective The main question that this study will seek to find clarification on is: What is the present scenario in risk management in Qantas airways in Australia? Arising from the question at hand, the objectives of the study will be: i. To give a deeper definition of risk management in the different sectors in the industry. ii. To show that Qantas airways has been employing risk management although not to the appropriate standards. iii. To identify the plans for the company in applying risk management in the different sectors in the industry. 1.4 Justification of the Study In any business, risk management is the basis of any practice. However, the term risk management has not been well understood by different business owners and this is a major reason why implementation of the same has not been perfect (Plunkett, 2009, p.22). In Qantas airways, there are different incidents and accidents that have been reported with concern to risk management. In airlines, risk management should be prioritized since the services that are offered work around technology (Whetten & Cameron 2007, p.21). With anything involving technology, risk management is essential. The working environment should be safe for the workers and accommodative to their customers (Djellal and Galloui, 2008). Therefore, risk management should be all round such that it caters for the needs of all those who have a relation, whether direct or indirect, to the industry. This study will seek to identify the current scenario in risk management in Qantas airways on the grounds of the latter arguments (Birn, 2004; Mills, 2001; Cress, 2010). This will need data from the field to justify the literature review as it is below. 1.5 Research Methodology In the course of research, different types of data will be required: primary and secondary data. Primary data is the raw data collected from the field that is yet to be analyzed. On the other hand, secondary data is data that has been published and already researched on thus mostly used in drawing conclusions and inferences with comparison to the raw data. Secondary data will be provided from different sources and done in the literature review. The main aim of the literature review is provision of theoretical data that already exists in the field. The methods that will be used in collecting data are questionnaires and interviews (National Library Of Australia, 1984). Chapter Two: Literature Review Literature review is a crucial stage in any research process. This provides a theoretical part that is used in drawing conclusions by comparing it with the raw data collected from the field. Although the form of literature review will vary from one kind of research to another, the purpose will remain the same: to show how the study fits into the already existing body of knowledge and reveal data gaps and ways of filling the same (Boone, & Kurtz, 2011, p.20). In risk management, one concept that can never be ignored is creativity. It is crucial in risk management as it ensures that there is no fear in handling any matter at hand. In Qantas airways, risk management can be seen to arise from different factors including unstable markets, failure in projects, accidents, risks in credit, legal liability, natural disasters, and worker safety among others (Whatmore & Stewart, 2002, p.18). Diagram 1: process of risk management (Hubbard, 2009) Risk management is done as a process and this is done through the following procedure: Establish the context: the first thing in risk management is to identify the area of interest to employ risk management. This one will incorporate the different stakeholders and their expectations of the industry. In this stage, there are different tools that have to be made use of and among them are technology, organizations and human resources (Welch, 2001, p.14). Identification: after establishing the context, the next crucial thing is identification of the potential risks. This will involve source analysis that means identifying the source of the problem after which risks will be triggered. Identification of the risks may depend on the culture and common methods that are used in identification are: objectives based method, scenario based methods, common risk checking method, and risk charting methods (Uher, 2003, p.22). All the latter methods can be applied in risk identification but they will be controlled by other factors. Assessment: this involves assessing the seriousness of the risks and how probable they can occur. This will help in prioritizing the risks and eventually in risk management plan. However, it cannot be lagged behind since it is a difficult stage (Turner 1999, p.10). Potential risk treatments: there are different techniques used in treatment of risks and they are all categorized into four: avoidance, reduction, sharing, and retention (Miller & Lessard 2001, p.21). Risk management plan: a risk management plan is crucial, as it will control the techniques in handling the risks. This will also make consideration of the most vulnerable risks. In addition, individuals in the organization will be made responsible for different risks through the management plan. When there is good possession of risks in an organization, then risk management is done with practiced ease and in the course success is enjoyed by all parties (Seglin, 2003; Latham, 1994; Lee-Davies, 2007). Diagram 2: The process outlined (Seglin, 2003) Information Technology in Qantas Airways Qantas airways are a service industry that employs much technology. Many of the decisions that are made in the industry revolve around information technology. In the recent years, the airway has endured two high profile IT failures and a third major one seems to appear as a substantial risk (Royer, 2000; Miller, Jones & Pinheiro, 2003; Hubbard, 2009). There are different IT projects that are on progress in the company. From 1995, there have been upgrade projects of the IT infrastructure in the company since the existing infrastructure was found to be complex and unwieldy. Despite this, the upgrading has been poorly done and different incidents have hit at different times thus increased risk. One key problem that has been reported by the engineers involved is dysfunctional relationship with software users (Rowan & Starner 2008, p.32). There is lack of proper planning and discussion on the kind of software the engineers are supposed to use. Most of the engineers who are involved in the upgrading project did not receive quality training and this has still resulted to increased risks (Ingram, Laforge & Avila 2008, p.23). Another thing that has exposed Qantas to more risks is complex technical infrastructure, outdated legacy systems, and poor leadership (Hopwood & Thompson, 2006; Harris, 1999; Hammer, 1980). With leadership, it has been said that the leaders do not understand basic IT issues thus they do not give them first priority. This has led to poor risk management planning, hence, IT failures have occasionally hit. This is threatening the working environment and in addition the expectations of the stakeholders are not being met (Robbins, 2005, p.20). (Seglin, 2003) Chapter Three: Research Design and Methodology 3.1. Methodology In carrying out the study, there are questions that will be developed and answered by the participants. The main method of collecting data that would be used in the study would be through a questionnaire. This would be done besides interviews so that the interviews seek more justification for the data that will be written down in the questionnaires (Grant, 2000; Goh, 2004; Gueters, 2004). The questionnaires shall be filled for fifteen minutes, as each individual shall have an interviewer who shall use the questionnaire to come up with interview questions. The interviews are expected to take twenty to twenty five minutes, as clarification shall be found. The participants will be granted with the authority to ask questions to the interviewer. Experts in risk management will carry out the interviews so that they can be able to get in-depth information from the respondents. The interviewers also require psychological expertise in order to read between lines and classify the data since in most cases; respondents have tried to use creativity to give answers thus making the data false. The interviews will also be carried in different environments including offices, IT centers, and customer reception centers (De Wit & Galloui 2008, p.29). 3.1.1 Populations In this study, three populations will be involved. The first are the customers who are the beneficiaries of the different services in the industry. The next population is the workers in the industry and probably engineers who are involved with implementation of IT infrastructure. The last population will be the managers in the organization (Cohen & Palmer 2004; Carter & Dunston, 2007). 3.1.2 Sampling Group In this research, the sample group will comprise of 30 respondents. Among them 10 will be customers, another ten will be workers while the remaining ten will be office workers. The method of sampling that will be used is random sampling. A list of customers who will be making a flight in the next two days will be taken and then ten of the customers will be picked randomly. This is a crucial way of sampling since the availability of the populations is unpredictable. This will also be the same case with the workers. The managers or the office workers will be selected through random sampling; however, in this there will be a need to consider the availability since most of them are involved in international activities. The research site is already established, as the study will be carried out in the industry. All the populations will be conducted within the industry thus; this will ease collection of data. This will also minimize on the expenses to be used in collecting the data. 3. 2 Research Design The study will be structured in different ways. The main methods that will be used in collecting data are questionnaires and interviews with the major being the questionnaire. The interview will just be used to backup the data collected. Therefore, the questionnaire would be given the first priority in analyzing and drawing conclusions from the data (Boote & Beile, 2005). Choosing the wrong method of collecting data would mean that there would be a problem comparing the empirical with the theoretical data since the acquired results would be unpredictable. The participants would be told in advance so that they can have enough time to prepare adequately for the study. Data collection would be crucial in this case as it would help to provide primary data which would be used to draw conclusions comparing it with the secondary data already in place. Limitations of the Study 1. The study is only limited to one airline thus there will not be comparison with other airways that are ranked above it. 2. There is numeric data to be collected that the analysis would be lengthy. 3. Getting in-depth information is attempted and this may have a negative impact on the results as some of the populations may not have enough information. Strengths of the Study 1. The results of the study are likely to be of high quality, as different populations will be involved in the study. 2. The data that would be collected is likely to be enough as there are enough participants in the study. 3. The methods of collecting data are also perfect as they are used beside each other thus in case one of them fails the other one will act as a backup. Conclusion Interviews and questionnaires will be the main methods of collecting data. They will be done differently on the different populations with different questions as in Appendix A. After the study is carried out, discussions will be held to analyze the data. The data would be analyzed quantitatively and qualitatively. Conclusions will then be drawn from the results. This will be done by comparing the raw data with the secondary data already collected at the start of the study. References Anderson, M, 2005, The new airline code, Sydney: iUniverse. P. 10-14. Armstrong, M, 2011, How to Manage People: Handle People Problems; Motivate Staff; Boost Your Performance, London: Kogan Page Publishers. Beard, C. & Wilson, J., 2001, The Power of Experiential Learning: A Handbook for Trainers and Educators, Maryland: Kogan. P. 9-23. Birn, R, 2004, the effective use of market research: how to drive and focus better business decisions, London: Kogan Page Publishers. Boone, E.L & Kurtz, D.L, 2011, Contemporary Marketing, Thousand Oaks, Cengage Learning. P. 21-27. Boote, D. N. & Beile, P., 2005, Scholars Before Researchers: On the Centrality of Dissertation Literature Review in Research Preparation. Educational Researcher, vol 34 (6), .3-15. 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Gueters, M.K, 2004, Aviation psychology: practice and research, New Jersey: Ashgate publishing ltd. Hammer, W. (1980). Product safety engineering and management. Englewood Cliff, NJ: Prentice-Hall. Harris, R.P, 1999, New works culture: HRD transformational management strategies, Oxon: Human resource development. Hopwood, D. & Thompson, S. (2006). Workplace Safety: A Guide for Small and Midsized Companies. New Jersey: John Wiley & Sons. Hubbard, D., 2009. The Failure of Risk Management: Why It is Broken and How to Fix It. John Wiley and Sons. Ingram, N.T., Laforge, W.R. & Avila, A.R, 2008, Sales Management: Analysis and Decision Making, New Jersey: M.E. Sharpe. P. 23. Latham, M., 1994. Risk Management - The Commercial Imperative. London: HMSO. Lee-Davies, L, 2007, Developing Work and Study Skills, London: Thompson.Miller, K., Jones, R. & Pinheiro, L, 2003, Fiji, New Jersey: Lonely planet. Miller, R. & Lessard, D., 2001. Understanding and Managing Risks in Large Engineering Projects. International Journal of Project Management, Vol. 19, pp. 437-443. Mills, A., 2001. A Systematic Approach to Risk Management for Construction. Structural Processes for Achieving Strategic Objectives, 2nd edition. London: McGraw-Hill p.529. National Library of Australia, 1984, APAIS, Australian public affairs information service: a subject index to current literature, Sydney: National library, Australia. Plunkett, W.J, 2007, Plunkett's Transportation, Supply Chain and Logistics Industry Almanac 2007 (E-Book): Transportation, Supply Chain and Logistics Industry Market Research, Statistics, Trends and Leading Companies, Sydney: Plunkett research ltd. Plunkett, W.J, 2009, Plunkett's Transportation, Supply Chain and Logistics Industry Almanac 2009 (E-Book): Transportation, Supply Chain and Logistics Industry Market Research, Statistics, Trends and Leading Companies, Sydney: Plunkett research ltd. Robbins, C, 2005, A journey into creative music therapy, Paris: Barcelona publishers. P. 20. Rowan, M. & Starnes, D, 2008, Papua New Guinea & Solomon Islands, New York: Lonely planet. P. 32. Royer, P.S., 2000. Risk Management: The Undiscovered Dimension of Project. Seglin, J. L, 2003, The Right Thing: Conscience, Profit, and Personal Responsibility in Today’s Business. Rollinsford, NH: Spiro Press. Shutterstock.com, (2006), Risk Management, retrieved 28 March 2012 from . Turner, J.R., 1999, The Handbook of Project-Based Management: Improving the Management. Project Management Journal, Vol.31, (1), pp. 6-13. Uher, T., 2003. Programming and Scheduling Techniques. Sydney: UNSW Press. P. 22. Welch, D. A, 2001, Decisions, Decisions: The Art of Effective Decision Making. Amherst, NY: Prometheus Books. P. 14. Whatmore, M. & Stewart, I, 2002, Rough guide to Guatemala, London: Rough Guides. P. 18. Whetten, D. & Cameron, K, 2007, Developing Management Skills, 7th (Ed), New Jersey: Pearson. P. 21. White, S. P., & Patton, W.G., 2002, New Ideas about New Ideas: Insights on Creativity with the World is Leading Innovators, Cambridge, MA: Perseus Publishing. P. 13. Wogalter, S.M. (2006). Handbook of warnings. New York: Routledge. P. 11. APPENDIX A QUESTIONNAIRE QUESTIONS Questions to the customers i. Do you personally feel secure when travelling with Qantas airways? ii. From (i) give reasons to why or why not you feel secure? iii. Do you think that the industry is careful in offering different services to the customers? iv. From (iii) if you feel they do not care, how do they show their lack of care to customers through the different services they offer? v. Do you find anything that they should improve on as a service industry? Questions to the office workers i. What do you personally understand about risk management in your industry? ii. Which areas do you find critical for risk management? iii. What measures of risk management have you put in place in the places identified in (iii) above? iv. Which areas have you been able to implement risk management effectively and what are the factors behind the success? v. Which areas have you not been able to implement risk management effectively and what are the reasons behind the failure? Questions to the workers in the IT centers i. To which degree can you classify the risk management in the industry? ii. Do you feel that you are working in a safe environment? iii. From (ii) why or why not? iv. What do you think can be done to ensure that there is proper risk management in the industry? v. How can your working be made more safe is that you offer quality and quantity work. Read More