British Airways Analysis Essay
Introduction Stakeholder is a person having direct or indirect interest in the firm’s objective, which include customer, board of directors, employees, shareholders, suppliers etc. They track the satisfaction of various constituencies who have critical interest in and impact on the company’s performance (Kotler Keller,2012). Take gate gourmet as an example it is the supplier of British airways, as a stakeholder it plays an important role in the development of the firm whereas it is also crucial to assess the stakeholder for maintaining the long-term relationships.
There are three main connection features, which drives the value of the stakeholders. This essay will map British Airways stakeholders as well as the ethical concerns it has dealt with from its different stakeholders Background of British Airways The group of British airways comprises of British airways plc and various other subsidiary companies. It is one of the great airlines in the world, which provides its customers transportation services up to 149 destinations in 72 countries.
In the year 2004-2005, it succeeds in carrying 35 million passengers and 900,000 tons of the cargo. The network of the airline is centered in United Kingdom where it has a network of its 85% workforce working there. The core activity of the British airways and its group is to provide international and domestic scheduled airline services for the passengers, post mail, and provision of additional services. British Airways has a variety of stakeholders and most of them are considered dominant.
Likewise the code of conduct in British Airways with respect to ethics is been made applicable to the entire stakeholders, which primarily consists of its employees, customers, suppliers, financial institution, local communities and directors of British Airways Plc and its subsidiary companies. It is however strictly been discussed with each employee at the time of recruitment and failure to do so will lead to punishment and or charges under the act of EG 901. The code of conduct is been made especially for the acts including, conflicts of interest, misuse of opportunities and information, confidentiality and fair dealing.
Furthermore, British Airways approach is to develop a strong relationship with its stakeholders. It (British Airways) has developed leadership programs to acquire professional leaders who will be able to communicate effectively with people to get them involved and feel part of their future business decision. British Airways Stakeholders. British Airways Stakeholders. Figure 1. 0 Power| Low| Interest| | | Low| High| | | Minimal Effort| Keep Informed| | High| Keep satisfied * Government: The Company has to keep legal legislation satisfied because the power here is high.
They can close down the company when tax or other duties are not met. * Customers: Though they have very little interest on how BA runs it business but the power is high because customers provide most sales for the company| Key Players * Employees: Employees have high interest and high power on the business because they have the power to attract customers. * Competitors: The competition can affect the decisions and strategies of the business because of the nature of the market. * Suppliers: BA relies on its suppliers mainly Airbus and Boeing because they generate high income to the business. Financial Institution: Banks assistance is required to support BA and they can refuse to provide the necessary finance needed. * Shareholders: They have the power to employ and dismiss any staff and they make the key decisions on the company. * Local Communities: BA’s brand image can be damaged if they don’t keep the community satisfied. As a result environmental issues have high power on its direction of CSR. * Media: BA has to keep a good relationship with the media so as to have a worthy relation with the public. Figure 2. 0 As illustrated in figure 2. 0 above, both employees and suppliers have high interest and high power in the development of British Airways. In the year 2005 Gate gourmet a food supplier for BA disputed with workers over restructuring its plans, which resulted in an unofficial strike. The food supplier terminated over hundreds of its workers prior to that British Airways staff took action, the trade union disapproved of it.
Actions taken by British Airways workers resulted in cancellation of over 700 flights during a vigorous time of the year. Around a thousand Heathrow staff expressed their support for the terminated gate gourmet workers, both BA and gate gourmet staff belonged to the same union and community who were mostly Asian British. The incident led to a thousand passengers being stuck and resulted in the costing the company an estimated amount of ? 40 million. Furthermore it outlaid a bad reputation for the airline.
This was the third sequential summer that BA passengers have faced severe interferences due to industrial action. Without delay, BA was constrained to interfere openly in the Gate Gourmet clash, because it remains reliant on the company to source the heavy quantity of meals it demands at its Heathrow hub. BA decided to renegotiate its contract on the condition that Gate Gourmet fixed its own labor dispute. BA proposed an addition of two years to its existing contract, moving it to 2010, with some progress in terms to assist cover the anticipated ? million cost of a dismissal program. After days of dialogs conducted with the involvement of the Trades Union Congress, a biased deal was gotten which involved a request for volunteers for an enhanced dismissal program. This included a payment of two weeks’ pay for each completed year of service. The offer was stretched to both the dismissed workers, some of whom had already been replaced as they had been away from work for other reasons and the 1,400 still working for the company. A reported 675 applications were obtained.
However a foremost stabbing point was that senior management said that it would not restore any of the 200 workers it considered as radicals. In the aftermath about 700 staff applied for redundancy, 300 from those terminated and 400 from existing staff. Negotiations between the company and the union were organized to take place. The Gate Gourmet dispute has been one of the most bitter in the current history of British industrial relations. The company accused sections of its workforce and their union of stubbornness in the face of necessary cost-cutting and flexibility measures.
Management appealed that shop stewards wanted to hold the company to ransom, for example using commercial penalties attached to late deliveries as a lever to defend old and unproductive ‘custom and practice’ rules. They also said that radicals organized the walkout on a false cause, as it was normal practice for provisional workers to be hired in the busy summer period. The union in turn accused the company of inciting the strike in order to dismiss workers without reimbursement, with union activists. (James A, 2005).
Application of Triple Bottom Line Concept (TBL) to British Airways Elkington initiated triple bottom line in the year of 1999. It is an enhanced approach for the social development, which supports environmental stewardship, maintainable development and social equality. The triple bottom line is built up of social, environmental and economic “the people, planet and profit”. Additionally triple bottom line struggle are as diverse as the firm and societies in our statewide network. This moves towards the more elastic and pioneering building of new economies that defend, improve and reinstate natural, educational, historic and social resources.
The following are the importance of Triple Bottom Line; the social improvement includes training, improvement in the training and educational systems dismantling of racism as well as power sharing (crane and matten, 2004). Secondly, economic gain involves job creating, getting environmentally responsible industries engaged and poverty reduced or lessened. On the other hand environmental benefits will include protection of resources, local ownership of the lands, water management, reducing environmental pollution and improvement in its quality.
Environmental Perspectives (Responsibilities) Of British Airways: In the case of British Airways minimizing the ethical issues is an appreciated effort and has benefited many lives. It is a business that struggled in minimizing the waste on the environment from the raw material and the production process, to the shipping and administration. It includes recycle of goods. Although this maybe true but British Airways has been trying to reduce its CO2 emissions since the year of 2005 and it won’t reach its target until the year 2050. Below is a graph showing climate target. ( CO2 emissions)
Source: British Airways corporate responsibilities report 2010-2011. The graph above illustrates the future improvements of carbon efficiency and climate change. The upper dotted line represents projected emissions if the industry doesn’t invest in new technology and governments do not introduce policy measures. The demand reduction area represents the reduction in flying due to the inclusion of carbon costs in airfares. The lowest line is the net emissions level achieved after all emissions reduction actions have been implemented. Social Perspective (Responsibilities):
Many employees from British airways prefer doing charitable activities on a large scale however management also supports employees in such a good cause. Charitable project conducted by British Airways includes giving scheme; the British Airways community volunteering awards band British Airways fun runs for Cancer research UK. Social responsibilities are promoted through on board announcements and the displaying of the onboard video. Overall, British airline is having crew of almost 2400 members who coordinates the onboard collection from passengers.
Additionally, the airline has also built their collection point where one can donate as much as one can. British Airways offered support in the form of funding, free flights, excess baggage, merchandise, cargo space and fundraising events. Their main concerns for funding are the community and conservation started in 1984. They offered these schemes around the world. Many of BA staff is involved in aid organization work in and abroad as the part of the management they support their staff in their charitable work.
Economic Perspective (Responsibilities): The economic responsibility is additionally about making a sincere profit. It must be created in accordance with the other two principles of People and Planet. While major corporations used to smirk at the idea of a Triple Bottom Line reporting system. A progressive movement on influence to their suppliers. Supply chains are also responsible for the general impression of a company. A contracted idea of economic responsibility focuses on the economic implementation of the corporation itself.
The responsibility of management is developed, produced and marketed to those products that assure long-term economic performance for the company. This involves an emphasis on strategies that indicate a long-term rise in share price, revenues and market share rather than short-term outbursts of profits at the cost of long-term feasibility. While taking it critically, there were many negative outcomes that later drove to the industrial level and to understand the problems we have to analyze another stakeholder. In the dispute the key players were from the suppliers gate gourmet.
The negative outcomes were that British Airways lost an estimated amount of money through the cancellation of 700 flights. Around 100,000 number of passenger were stuck and this affected British Airways concern badly. Resultantly, the problem surfaced because of the major role player the suppliers’ employee and less attention was given to the suppliers. Conclusion The effort put by the British airways for CSR is appreciable, it truly believed that they also have some responsibilities towards the environment and employees. It has a vision of become world’s most responsible airline.
British Airways approached the social responsibility with the help of triple bottom line model and stakeholder mapping. Apart from that, Its good to see such a great corporate industry doing great for people and environment, but it should be kept in mind that projection of each CSR should be calculated by the corporate industries otherwise, the negative impact of CSR could make corporate concern sink. Correspondently, BA should conduct researches in order to know deeply who it will go into business with considering that to avoid any upcoming troubles or misunderstanding with stakeholders.
On the other hand due to the high power of employees of BA it managed to help Gate gourmet workers ethically by getting involved in a more concerned way. References Petya Laleva, 2011, British Airways stakeholder analysis, [Online] Available at:http://www. slideshare. net/petysha/1-british-airways-stakeholder-analysis-petya-laleva [Accessed : October 12, 2012] James Arrowsmith, 2005, British Airways’ Heathrow flights grounded by dispute at Gate Gourmet, [Online] Available at : http://www. eurofound. europa. eu/eiro/2005/09/feature/uk0509106f. tm [Accessed: October 12, 2012] Strategic Report, 2009 [Online] Available at: http://www. scribd. com/doc/23329171/British-Airways-Strategic-Plan [Accessed: October 13, 2012] British Airways ,2010, Corporate Responsibility Report [Online] Available at : http://www. britishairways. com/cms/global/pdfs/environment/ba_corporate_responsibility_report_2010-2011. pdf [Accessed: October 12, 2012] Andrew C, Dirk M, 2010. Business Ethics. 3rd ed. Oxford University press plc. New York. Kotler K. , 2012. Marketing Management. Pearson Education Limited.