Qantas Group's Management Control System: Essay On Results, Action, Personnel, And Cultural Controls. (70 Characters)

Results Controls at Qantas Group

Management control system is tool used by the management or decision makers of an entity to evaluate performances of organizational resources in references to the strategies adopted by the entity. Management control system covers all types of resources used by an entity including human, tangible and financial resources. In this report on management control system different aspects of management control system used by Qantas Group will be discussed. This report will include results controls used by Qantas Group to resist employees from taking any unethical action. Action controls adopted by Qantas Group to help employees to take necessary actions in favor to the entity will be discussed in this report. The personnel controls used by Qantas Group will also discussed in this report. Personnel control is an extension of the result control and action control. Which motivates employees to initiate actions in favor to the entity on their own. Cultural control is important in entities with diverged employee base. Qantas Group is a multinational entity and operates in several countries. Hence, cultural control should be taken care by the management of the entity with highest priority. Financial objective achievements are the highest priority for a profit driven entity. Hence, without analyzing the financial result control of Qantas Group, overall management control of the entity cannot be analyzed. In the conclusion of the report, the adequacy and efficiency of management controls used by Qantas Group will get analyzed.    

Result controls are an indirect form of control. As the same, indirectly focus on the actions of the employees. Result controls can be achieved through various methods. Qantas Group is an airline entity engaged hospitality and transportation industry. Qantas Group has implemented the following described result controls in its operations (Qantas Group Business Practices, 2022):

• Financial benefits – To achieve result controls in operations, Qantas Group has implemented STP (Short-term pay) cash bonus and non-cash benefits scheme for employees. With good performances delivered in business operations, employees can gain STP cash bonus schemes.
• Consumer satisfaction – On-board and airport employee performances are measured through consumer ratings provided by Qantas Group. Consumers of Qantas Airline are provided with feedback form after each and every journey completed by them through Qantas Airlines. The average outcome of the feedback forms is used to determine the customer ratings.
• Unethical activity mitigation - Qantas Group has a strong and effective unethical behavior and activity mitigation strategy. Where, an employee must accept the negative consequences appear to the organization for the unethical activities conducted by any individual employee. This strong and effective accountability management system adopted in the Qantas Group prevents any unethical or inappropriate actions of employees.  

Action controls are required to be maintained in an entity engaged in the tourism and hospitality industry at the highest level. Theses action control activities are required to be designed by the higher management and the same should be communicated to the entity employees in advance. Action control activities are tools that helps an entity to mitigate risks identified prior to initiate any activity or project. The action control activities designed and implemented by management of Qantas Group are (Qantas Group Business Practices, 2022):

• Laws and regulations – Being an entity engaged in aviation industry requires to comply multiple laws and regulation regarding passenger safety and security. The employees directly associated with the entity operations are primarily responsible for maintaining and complying these applicable rules and regulations. Qantas Group provides trainings programs to its employees to make them understand the applicable rules and the procedure to comply with them.
• Treat people with respect - Qantas Group is a service entity. Hence, customer satisfaction is the highest priority for entity’s success in the long run. Customer satisfaction can be achieved with treating people in a respectable manner travelling through Qantas Airways. Qantas Group provides directions to the onboard and airport employees the desired method of communication with people so that the entity can obtain and retain regular air travelers.
• Risk management – Aviation industry is considered as a risk probable industry. Sudden things can create an adverse situation which may lead to air accidents and other mis happenings. Hence, to avoid such situations, Qantas Group provides basic risk management trainings to all employees associated with the entity and particular risk strategy trainings to appropriate employees so that the chance of mis happenings can be reduced.

Personnel controls are designed and implemented in an entity to enhance employee participation in the entity to get desired benefits. Personnel controls are mechanism adopted in an entity to make employees act in their own in favor to the entity. Employee work satisfaction is the primary source of getting personnel control in an entity. Further, an entity engaged in travel and hospitality industry through aviation services are required to maintain personnel control at the highest level with appropriate care. The personnel control mechanism adopted by Qantas Group is given in the below paragraphs (Qantas Group Business Practices, 2022):

• Employee satisfaction – Regular and periodic employee satisfaction surveys are conducted in Qantas Group through personal interviews and written responses obtained form employees. Through adopting the required changes identified by employees in this process, management of Qantas Group tries to enhance employee satisfaction level. Further, where employees observe that, their suggestions got adopted in the entity operations their work participation increases and Qantas Group obtains increased personnel control.
• Innovative methods – Being an entity engaged in the dynamic aviation industry requires to be competitive at all occasions. Innovative methods and technologies are the primary tool through which an entity can obtain competitive advantages. Employees of an organization can provide innovative tools through their work experiences they gather from their field works and academic knowledge they possess. Though, engaging employees at higher level of responsibilities in the organization, Qantas Group tries to obtain innovative methods implemented in their work.
• Jetstar values - Qantas Group has its vision to obtain the place and reputation of world’s best passenger friendly airline. Jetstar values implemented by the management of Qantas Group by adopting the mission of safe and reliability, genuine care and team work of employees are contributing towards the entity’s vision. Team work is the basic method which leads employees of Qantas Group towards achieving management goals through personnel controls.        

Cultural controls are the primary source of obtaining internal stability in an organization. Appropriate cultural controls implemented in any organization reduces internal conflicts and creates sense of belongings towards the entity among the employees. Further, Qantas Group is a multinational organization. Hence, maintaining an independent and uniform cultural values over the entire organization is a challenge for the entity management. The management of Qantas Group has adopted the following cultural controls in the entity (Qantas Group Business Practices, 2022):

• Appropriate report – Management of Qantas Group has constructed an environment in which, employees are motivated and instructed towards reporting of errors and hazards on timely basis to appropriate management level in proper manner. Effective and timely hazard identification and reporting contributes towards an entity’s safety management system.
• Values from diversity - Qantas Airways operates in multiple countries. Hence, the work force of the organization is from a diverged culture with different values. The management of Qantas Group is committed towards developing a work environment which is free from any discrimination and harassment for any individual from any part of the globe. Further, Qantas Group management tries to obtain cultural diversification benefits in its operation.
• Equal opportunity - Qantas Group management tries to build a cultural environment in the organization where discrimination does not occur due to someone’s racial background. Further, economic benefits and employment opportunity get transferred to all employees on the basis of their merit, commitment and dedication of work.  

Action Controls at Qantas Group

The financial results of Qantas Group have been negatively impacted in the recent operating years due to the covid situation across the globe. The global air travel and communication was restricted in the pandemic period to resist the spread of the corona virus. Due to the same, many scheduled flights operate by Qantas Airlines were canceled and the revenue base of the Qantas Group got negatively impacted due to the same. As per the audit report of the financial years 2019, 2020 and 2021 the management’s financial controls implemented to counter the pandemic situation were satisfactory (Qantas Group, 2022).

Qantas Group maintain a strong and effective financial control mechanism in the entity’s operations. Being an entity engaged in one of the most competitive industry, financial control tools are required to be effective for Qantas Group to provide the entity competitive financial edge over its competitors. The details of financial result controls adopted by Qantas Group is given in the below paragraphs:

• Financial statement and reporting - Qantas Group is a listed entity. Hence, financial interest of general investors is high in the organization. A listed entity, requires to provide periodic financial statements in an appropriate manner so that the stakeholders can use the financial information available in the report for their financial and other decisions making without any misunderstanding or misinterpretation. Qantas Group is regular in reporting of its annual reports in the appropriate manner to compensate the reporting requirements.
• Budgets - Qantas Group prepares and communicates the basis on which the financial resources available with it get distributed among the various jobs or projects undertaken by it in any financial year. The financial budgets are prepared by the entity in the initial phase of any financial year or in the initiation of a project. These budgets are used as a tool to control financial resource misutilization in the actual execution of the activity of project. Further, budgets for other sources such as human resources or time resources are also allocated based on budgets prepared by the management to achieve financial result controls in the Qantas Group (Qantas Group, 2022).  
• Financial records – Sequential and appropriate recording of financial transactions are the primary basis of obtaining financial result controls in any organization. The management of the Qantas Group has adopted a systematic financial transaction recording process so that, all transactions conducted in the business operations get recorded and financial outcome of the entity can be measured appropriately.    

Without financial performance measurement no entity can be able to analyze the compliance of goals and objectives of the entity through its business operations. In the process of financial performance analysis, preparation of the financial statements on a periodic basis is the most effective method of performance evaluation. In addition to the same, the Qantas Group has adopted the following activities (Qantas Group, 2022):

• Variance analysis – In the process of management control on financial performance, Qantas Group has adopted variance analysis among the budgets prepared in reference to the actual outcome of projects or activities undertaken. Further, Qantas Group has adopted an incentive scheme for employees for a situation of achievement of financial targets provided in the financial budgets.
• Retaining of records – Each and every business segment of Qantas Group is responsible for maintaining the statutory requirements and Qantas Group standards to measure the financial performance evaluation for each and every operational segments. This process of management control adopted in Qantas Group helps the management of the entity to evaluate the performance participation of each segment in the overall entity achievements.
• Countering extraordinary adverse situation – Qantas Group has faced a volatile economic environment in the recent time due to the pandemic situation occurred. The financial performance measurement tools have helped the entity to survive and thrive in this hostile economic condition.    

In the conclusion of the above report, it can be observed that, Qantas Group’s management controls tools are effective and operating to counter the entity’s financial risks and other adverse market conditions. The entity has adopted a functioning result control, action control, personnel control and cultural control mechanism in the entity to obtain appropriate employee participation and motivation for achieving the overall business goals and objectives. Further, the financial controls adopted by the entity is sufficient for the compliance of applicable laws and regulations on the entity and the same is sufficient to provide details of actual financial performances obtained by the entity. The audit report attached in the annual report provided by the entity for financial years 2019, 2020 and 2021 are identifying the entity management’s successful measures applied to counter the hostile financial conditions appeared due to the global pandemic situation.   

References

Qantas Group. (2022). Annual Reports. Retrieved 10 April 2022, from https://investor.qantas.com/investors/?page=annual-reports

Qantas Group Business Practices. (2022).

. Retrieved 10 April 2022, from

https://www.qantas.com/content/dam/qantas/pdfs/about-us/corporate-governance/qantas-business-practices-document.pdf

Markowska, M. (2018). The role of action-control beliefs in developing entrepreneurial expertise. Journal of Small Business and Enterprise Development.

van der Kolk, B., van Veen-Dirks, P. M., & ter Bogt, H. J. (2019). The impact of management control on employee motivation and performance in the public sector. European Accounting Review, 28(5), 901-928.

Nani, D. A., & Safitri, V. A. D. (2021). Exploring the relationship between formal management control systems, organisational performance and innovation: The role of leadership characteristics. Asian Journal of Business and Accounting, 14(1), 207-224.

Alkhafaji, A., Talab, H. R., Flayyih, H. H., & Hussein, N. A. (2018). The Impact of Management Control Systems (MCS) on Organizations Performance a Literature Review. Journal of Economics and Administrative Sciences, 105(24), 116.

Pešalj, B., Pavlov, A., & Micheli, P. (2018). The use of management control and performance measurement systems in SMEs: A levers of control perspective. International Journal of Operations & Production Management.