Qantas: Ethics & Corporate Social Responsibility Report

This report highlights corporate social responsibility taken up by Australian corporate giant Qantas Airlines limited. The code of ethics followed by Qantas are commendable, the way Qantas operates with all its ethics and values while being a leading aviation company is what society admires. The report analyses Qantas’ CSR activities in the light of Carolls pyramid and Watrick and Cochran’s model of corporate social performance. It also highlights 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.

RUNNING HEAD:REPORT: ETHICS & CORPORATE SOCIAL RESPONCIBILITY
qANTAS
ETHICS & CORPORATE SOCIAL RESPONCIBILITY
Student
6/12/2018

ETHICS & CORPORATE SOCIAL RESPONSIBILTY 1
EXECUTIVE SUMMARY
Corporate social responsibility refers to an organisation’s responsibility towards the society
and environment in which it operates. With growing awareness business organisations
nowadays are taking responsibility of their impact on community and environment. Business
organisations borrow a lot of resources from the society and sell their products to the
customers in order to earn profit hence it becomes their moral obligation to share what they
earn with the society.
This report highlights corporate social responsibility taken up by Australian corporate giant
Qantas Airlines limited. The code of ethics followed by Qantas are commendable, the way
Qantas operates with all its ethics and values while being a leading aviation company is what
society admires. Qantas’ zero tolerance for corruption, its non-negotiable values and its
initiatives for the welfare of the society all add up to make it an ideal corporate citizen. When
analysed in the light of Caroll’s model it turns out that Qantas has been performing well with
respect to all four areas of responsibility i.e. ethical, legal, economic and philanthropic.
Every business organisation has some key stakeholders, and stakeholders have some
expectations from the organisation. In case of Qantas Airlines limited its vision is created in a
manner that it puts communication with stakeholders as their priority, Qantas with its
business policies is able to meet all the expectations by its stakeholders.

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Contents
EXECUTIVE SUMMARY...........................................................................................................................1
INTRODUCTION.....................................................................................................................................2
OBJECTIVE OF THE REPORT...................................................................................................................3
METHODOLOGY.....................................................................................................................................3
What is CSR?..........................................................................................................................................3
CAROLL’S PYRAMID...........................................................................................................................4
STEVEN WATRICK AND PHILIP COCHRANS TYPOLOGY......................................................................5
KEY STAKE HOLDERS OF THE GROUP.....................................................................................................6
STEPS TOWARDS ENVIRONMENT..........................................................................................................7
HUMAN RIGHTS.....................................................................................................................................7
CORPORATE GOVERNANCE STURCTURE...............................................................................................7
PHILANTHROPHY...................................................................................................................................8
CONCLUSION.........................................................................................................................................8

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INTRODUCTION
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.
OBJECTIVE OF THE REPORT
The objectives of the following report are-
1. To identify and analyse Qantas’ CSR activities in the light of Carolls pyramid and
Watrick and Cochran’s model of corporate social performance.
2. To understand corporate governance structure of the company.
3. To analyse how company responds to stakeholder’s expectations and,
4. To identify the gaps between realised and espoused CSR performance of the
company.
METHODOLOGY
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-
 Books
 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.)
 Websites

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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]
CAROLL’S PYRAMID
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]

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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.
STEVEN WATRICK AND PHILIP COCHRANS TYPOLOGY
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]

ETHICS & CORPORATE SOCIAL RESPONSIBILTY 6
(Source: Archie B. Caroll and Buchholtz, 2012)
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.
KEY STAKE HOLDERS OF THE GROUP
Group’s key stake holders are inclusive of employees, shareholders, government, investor
community, customers, suppliers, trade unions and members of community. [Qantas,2018]
1. 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.

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For the prevention of environment Qantas works with government on policies
focused towards innovations for reduction in carbon emission.
2. 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.
3. 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.
4. 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.
STEPS TOWARDS ENVIRONMENT
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.
HUMAN RIGHTS
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.

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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.
ETHICAL MANAGEMENT OF PEOPLE
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.
ISSUE UNDER UNETHICAL MARKETING PRACTICE
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 STURCTURE
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].
Board Committees-
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.

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(Source : Qantas sustainability review,2013 )
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.
PHILANTHROPHY
COMMUNITY WELFARE
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.
CHARITY
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.

ETHICS & CORPORATE SOCIAL RESPONSIBILTY 10
PROMOTES SPORTS
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.
ARTS
In order to develop and nurture the art community of Australia, Qantas has collaborated with
various cultural organisations across the country.
CONCLUSION
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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of Lowa press
Carroll, A. B.,and Buchholtz, A.K.(2014) Business and Society: ethics, sustainability and
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