With growing awareness a lot of organizations today, are contributing towards CSR. One such organisation is Qantas, an Australian airline company which not only believes in the concept of CSR but has been taking innovative steps towards environment sustainability since its foundation in Queensland. Qantas is one of the leading airlines, started in 1921, Qantas has very well integrated its business objectives with its obligations towards society. For instance, business objective of Qantas group is to be a leading airline committed to environmental sustainability.
Following report will be inclusive of the meaning of corporate social responsibility, CSR activities conducted by Qantas group, its initiatives towards the betterment of environment, community, customers, and shareholders. The report will also highlight corporate governance structure of the company, the ethics and the values held by the group, and it will also put forward company’s actual CSR performance in the light of Caroll’s pyramid and Watrick and Cochran’s CSR model.
- To identify and analyse Qantas’ CSR activities in the light of Carolls pyramid and Watrick and Cochran’s model of corporate social performance.
- To understand corporate governance structure of the company.
- To analyse how company responds to stakeholder’s expectations and,
- To identify the gaps between realised and espoused CSR performance of the company.
There are two types of methods which can be used to conduct research first is by using primary sources for data collection and second is using secondary sources for collection of data.
For the following report secondary sources have been used, such as-
- Annual reports of the company (sustainability report and financial report of Qantas airlines limited)
- Published documents (Qantas airlines limited: Business practices document, corporate governance statement etc.)
What is CSR?
Corporate social responsibility is commitment made by business organisations to take responsibility of their impact over environment and society’s wellbeing [Bowen, 2013].
CSR is an approach that promotes sustainable development by providing all the stakeholders with social, economic and environmental benefits [Mcelroy,M.W. 2012].
Various responsibilities of business organisations under CSR are:
- To conducts business operations ethically.
- To promote welfare of the community in which it operates.
- To comply with all the legal proceedings required to conduct several business activities.
- To discourage corruption and all other unethical business practices.
- To take initiatives towards conservation of environment. [Haynes, K. 2013]
According to the CSR model of Archie Caroll a corporate has four responsibilities: first is economic responsibility that is to earn profit, second one is legal responsibility that is to ensure legal compliance, third one is ethical responsibility which is to do what is right and last one is philanthropic responsibility that is best measured by the amount of resources an organisation chooses to contribute towards society (Grow your giving, 2018).
In the light of Caroll’s model, critical analysis of Quanta’s performance can be discussed through following four points:
Economic Responsibility: Qantas is a profit maker. It is evident from the financial report that the major businesses of Qantas group earned huge profits in FY2017. Qantas was able to meet all of its financial objectives while outperforming its domestic and global competitors. A total of 20.1% return on invested capital was reported by the group. The group has not only met its targets but also outperformed $ 2 billion target by $125 million. [Qantas, 2017]
This reflects that the Group is financially strong enough to reward hard work of its employees, extend benefit its shareholders and invest more for its customers. This shows that the company is able to meet its social obligations with the help of revenues earned by them.
Legal responsibility: Qantas group has strictly instructed employees working overseas to comply with Australian competition law as well as local laws even when Australian laws set higher standards as compared to local laws. The group has further instructed its workforce to: take compliance training (where relevant), immediately report any actual or suspected non-compliance, refer response from the law regulators to compliance team and immediately contact the compliance team in case of queries. Such business practices by Qantas make it stand out as a good corporate citizen. [Qantas, 2018]
Ethical responsibility: Group’s ethics code is inclusive of some non-negotiable business principles, which are: commitment to safety as first priority, compliance with laws and regulations, treat people with respect, commitment to environment sustainability, pro-active risk management and to safeguard group’s image, brand name and assets. Operating business with such principles contributes to betterment of society at large. [Qantas, 2018]
Philanthropic responsibility: since its inception Qantas has been playing a major role in development of community in which it operates. Through its varied partnerships with organisations working in different fields, Qantas continues to support arts, sports, history, charity and donations, under privileged children, and indigenous communities across Australia. All this reflect that Qantas has constantly been working as a responsible corporate citizen, well focused towards society. Along with the development of community Qantas takes responsibility of environment and has been taking initiatives to reduce carbon emission.
Watrick and Cochran revised corporate social performance model in which they integrated economic and public responsibilities within social responsibility. The new model shows the relationship between social responsibility, responsiveness and social issues. With reference to economic responsibility as described in Carol’s model Watrick and Cochran argued that profit making is not the only responsibility because nowadays business organisation are often politically involved hence they need to be socially active as well. [Caroll, A. 2014]
In the case of Qantas, the company being flag carrier of Australia, is not only a profit maker for the economy but also an ideal corporate citizen who takes responsibility of the society and the community it operates in as well as works towards identifying and resolving environmental issues faced by the world today.
Qantas group works with government on its policies aimed at innovations to reduce carbon emission, spends a part of its profits to buy fuel efficient aircrafts, every year it invests a certain amount of money in order to buy verified carbon offsetting device besides all these steps Qantas group also invests its profits in research and development in order to develop a commercially viable biofuel market in Australia for Aviation industry.
All these things reflect that Qantas group is not only a money maker but also a responsible corporate citizen who always makes several efforts to share its huge financial profits with the society for its betterment.
Group’s key stake holders are inclusive of employees, shareholders, government, investor community, customers, suppliers, trade unions and members of community. [Qantas,2018]
- Government: from a powerful business entity like Qantas government expects a collaborative relationship and ethical behaviour in every aspect. [Tencati, A. 2011].
Qantas group do not support any political donations or charity. Fairly at Qantas any contribution or charity to the community which is recommended by any government official is not made unless approved by the legal department of the group.
For the prevention of environment Qantas works with government on policies focused towards innovations for reduction in carbon emission.
- Shareholders: Shareholders invest a lot of money and therefore they expect to be well informed about company’s operations at all times. [Monks,R. 2011]
Qantas encourages communication with shareholders and their participation at AGMs. Qantas follows rules and regulations under Australian corporation Act and ASX listing rules.
- Members of community: Qantas has been taking several initiatives to meet the expectation of community members for example- donations and charity, promotion of sports and art, extending help at the time of natural disasters etc.
- Customers: customers are the reason why business organisations prosper, customer expect value for money from the organisations they trust. [Rahbek,E. 2015]
Qantas airlines limited puts first safety of its passengers and provides them with utmost comfort while travelling at compatible prices.
QANTAS group is well aware of its own impact on environment and it further believes that growing environmental challenges are a shared responsibility of governments, nations and businesses across the world .In order to face major environmental challenges the group continuously strives to achieve fuel efficiency in order to reduce carbon emission. (Qantas 2018)
Following are a few measures taken by Qantas group-
- Initiated research to develop commercially viable, aircraft biofuel market in Australia
- Replaced fluorescent tube lights with LED lights in all its airports to save energy and cost.
- Initiated fly carbon free programme.
- Worked with government on its policies that focus on innovation to reduce carbon emission.
Qantas’ internal audit committee performs environmental audit function to keep track of the environmental initiatives taken up by the group in order to reduce its impact over environment.
With reference to poverty alleviation, Qantas group in order to help the unprivileged section of society extends funds to various charitable organisations, and through its various programmes like work place giving programme and Qantas helping hand community, collects funds for society from customers on board as well as from its employees who wish to donate a part of their salary towards a noble cause. With the objective of fighting corruption, In February 2017 Qantas group confirmed its support to all ten principles of the United Nations global compact, aimed at safeguarding human rights, environment, labour and to prevent corruption.
Additionally In order to discourage corruption, group follows a zero tolerance approach towards bribery and other un-ethical business practices in all its operations. Group observes highest level of ethics and integrity and it has always been committed towards compliance with relevant laws.
Group holds a very good record of managing people ethically, Qantas encourages work force diversity, it runs various programmes for employee development to remove the gaps between career aspirations and current capability of work force along with these, efforts are made by the group to support employee engagement.
Under the new project, project sunrise Qantas is going to provide its elite passengers with seats in cargo hold where they can exercise and sleeps in pods. While it continues to provide economy class passengers with seats which are 17.5 inches wide but are very uncomfortable due to insufficient pitch space. Hence it is highly unethical on part of the airlines to do nothing about the comfort of their economy class passengers but to propose a more luxurious experience for its elite customers.
Corporate governance affects every aspect of business right from leadership to execution, from communication to overall business decisions [John,K. 2011].
The way board governs the organisation and the manner in which it conducts itself has a major impact over corporate performance [Deloitte,2016].
Under corporate governance structure several committees are established by the board in order to help directors (Qantas’ Annual Report, 2017).
The board has the responsibility to endorse corporate government principles and recommendations suggested by both Australian securities exchange and corporate government council.
ETHICAL ISSUE - on one hand Qantas group supports gay and lesbian community of Australia on other the group involved itself into partnership with Emirates an airline run by a government that punishes people from gay community.
Since its inception in 1920 in Queensland, Qantas has been playing a major role to promote welfare of the communities in which it operates. Right from helping Australians at the time of natural calamities to helping medical patients and supplies fly across their network, Qantas is constantly striving to drive a positive social impact.
Qantas has collaborated itself with a number of charity organisations, and extends help to them to help others. For example:
- Beyond blue: an organisation that works towards the problem of anxiety and depression.
- Make-a-wish Australia: it’s a national charity organisation that work towards fulfilling wishes of young and children suffering from life threatening diseases.
Qantas promotes and sponsors various sport events and organisations like Australian Olympic committee, Australian Paralympic committee, Cricket Australia, etc. in order to keep up Australia’s Competitive spirit.
In order to develop and nurture the art community of Australia, Qantas has collaborated with various cultural organisations across the country.
From the discussion undertaken in the previous segments it can be concluded that Corporate Social Responsibility is a growing concept and according to its modern definition it is an approach that promotes sustainable development by providing all the stakeholders with social, economic and environmental benefits. Qantas, has been taking innovative steps towards environment sustainability since its foundation. Qantas has very well integrated its business objectives with its obligations towards the society. Since its inception Qantas has been delivering value to its stakeholders, the organisation completely understands its impact over society. It constantly strives to make a positive change, by taking initiatives to develop society and to protect environment. The study also points two out unethical practices on part of the group, 1st its partnership with emirates, and seconds its lack of initiatives towards the comfort of economy class passengers, hence it can be concluded that there are a few gaps between espoused and realised CSR performance by Qantas.
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