Strategic Management of Qantas: CSR, Ethics, and Leadership

This report discusses various aspects of the strategic management operations of Qantas, including its CSR policies, managerial ethics practices, and the leadership of CEO Alan Joyce. It also analyzes the internal and external environment of the company and provides recommendations for addressing opportunities and threats.

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Executive summary
Qantas is the flag carrier airline in Australia and third oldest in the world. It is one of the largest
airlines in the world. The company is led by one of the most successful and visionary leader,
Alan Joyce. In this report, one CSR policy and one business ethics practice of the company and
their impact have been discussed. The paper also includes criticism to these policies and how the
company has been taking measures to overcome the criticisms. Internal and external
environment analyses have been performed for Qantas and various opportunities and threats have
been identified. Lastly, the leadership of Alan Joyce has been discussed in the end. Various
recommendations are provided in the end for the company to address the opportunities and
threats in business growth.

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Table of Contents
1. Introduction..................................................................................................................................3
2. Discussion....................................................................................................................................3
2.1 CSR activity and managerial ethics practice.........................................................................3
2.2 Criticism of CSR activity and managerial ethics practice and its impact..............................5
2.3 Environmental analysis..........................................................................................................6
2.4 Leadership of the CEO........................................................................................................10
3. Conclusion and recommendations.............................................................................................11
References......................................................................................................................................13

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1. Introduction
This report discusses various aspects of the strategic management operations of one of
the major airlines of Australia, Qantas. It is also the flag carrier of Australia and is the largest
airline in terms of fleet size, international destinations and flights. The airline was founded in
1920 and the third oldest airline of the world (Shaffner, Mills and Helms Mills, 2017). It has its
primary hubs in Brisbane, Melbourne and Sydney airports. It started its international flights in
1935. The airline is also the founding member of Oneworld Airline Alliance. It also owns the
low cost airline, Jetstar Airways. In 2017, the revenue of the company was A$16.1 billion
(Qantas AU, 2019). In this report, topics like, the social responsibility and managerial ethics
practice of the company used to engage with the stakeholders and their impact, its criticism and
its outcome, environmental analysis of the company, opportunities and threats of the
environment, actions taken by the company to address those and the leadership style of its CEO
and its impact on the team management and business operations will be analytically discussed.
Thus, the paper will give an overview of the strategic management of Qantas.
2. Discussion
2.1 CSR activity and managerial ethics practice
Qantas has a CSR ranking of 81 in comparison to 17,268 companies (csrhub.com, 2019).
The company has taken various CSR approaches for participating in the sustainable development
of the planet. As per the website of Qantas, the company commits to minimize the carbon
footprint on the environment, that is, on air and on the ground. Qantas publishes a CSR report
and it has taken the 2020 environmental target of reducing energy and water consumption by
20% and reducing waste-to-landfill by 30%. The company has reduced electricity consumption
by 9%, water consumption by 11% and waste-to-landfill by 20% between 2009 and 2014. Along
with that, the organization has also taken the target of cutting the net emissions by 50% by the
year 2050 (Qantas.com (a), 2019).
For achieving these targets, the company has improved the lighting efficiency by
installing LED technology in the aircrafts and on-ground offices, installed other types of energy
saving electrical appliances, water efficient equipments, replaced inefficient cooling towers and

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installed water efficient industrial dishwashers in the catering centers. Furthermore, over 65% of
the general waste from the corporate operations and domestic aircrafts is diverted to waste
treatment facility from landfill, recycle bins are installed at all the major airport terminals, there
is a waste food composting program in the corporate offices (Qantas.com (a), 2019).
Regarding managerial ethics, Qantas has adopted many ethical policies and practices and
among many policies, one is complying with the Anti-Bribery Laws. Under this ethical practice,
the employees of the company must not only oblige with the relevant policies and undertake
training on the laws, but also must maintain practices on not offering, giving or receiving any
kind of bribes in any form and from any person including the government officials, suppliers or
customers. There should be no indulgence in any type of bribery act and while refusing bribes,
the employees will not any consequences even if it affects the business operations negatively
(Qantas.com (b), 2019).
From the above two aspects of social responsibility and managerial ethics practice,
Qantas has been successful in engaging both the internal and external stakeholders. The social
responsibility practice aims to enhance the environmental sustainability and the managerial
ethics practice is meant to conduct the business with the highest level of integrity and ethics,
which not only increases the brand image but also portrays the values of the company.
2.2 Criticism of CSR activity and managerial ethics practice and its impact
It has been reported by Schleimer and Rice (2016) that in all the CSR reports, Qantas
focuses on its role and approach to the global sustainability. However, it has been found that in
the 2016 report that the company focused more on the emerging opportunities and possibilities
for the airline rather than decreasing the damage caused to the environment by the CO2
emissions.
Another report by Davidson (2014) showed that a sudden restructuring in the business
has resulted in 5000 job losses. This was a major unethical move taken by Qantas. To make the
business profitable, the company announced a restructuring in the business operations, which
also included fleet restructure, salary freezing, route restructure and 5000 job losses. Hence, to
cut the operating cost to overcome the challenge of a loss of $305 million in 2014 (Wells, 2014),
Qantas chose these practices, which was unethical for the employees as it meant a sudden blow

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to the 5000 employees, especially to the senior management. It has been criticized that since the
senior management was affected most, the CEO should lose his job too.
Amid the criticism, the company has taken further initiatives to reduce the carbon
emissions from its aircrafts and has taken the commitment of cutting the net emissions by 50%
by 2050 and implement carbon neutral growth from 2020 (Qantas.com (a), 2019). Regarding the
job loss and cost cutting initiatives, the company has modified its policies regarding the
protection of the employees.
2.3 Environmental analysis
Environment of an organization includes both internal and external environment in which
the organization operates. Internal environment refers to the factors that are controlled by the
organization, while external environment consist of factors that cannot be controlled by the
organization (Indris and Primiana, 2015). The internal environment analysis is performed
through SWOT analysis, which represents strengths, weaknesses, opportunities and threats of the
organization.
Strengths  Steady and consistent growth of the airline since 1920, making it the
largest airline in the world in terms of fleet size, international
destinations and flights
 High level of service quality
 Rise in the domestic business
 Successful cost cutting strategies
 High customer satisfaction
Weaknesses  Low profits in the international flights
 Limited presence in the international market
 Fatigue problem of the crew in the long haul flights
 Asset crunch
 Mismatch in the market demand and capacity increase
Opportunities  Increase in business and leisure travel domestically and
internationally

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 Low fuel prices, that is, since 2015, the oil price has gone down
significantly, which created opportunities for growth of the airline
industry, especially for the low cost carriers
 Tie-up with international airline companies to increase its presence in
the global market
 Introducing better loyalty programs and digital marketing
 Increase in travel destinations, especially in Asia
Threats  Increasing competition in local and global market, especially from the
low cost carriers
 Increase in the labor prices
 Regulatory issues
 Fluctuations in the foreign exchange and foreign currency values
Table 1: SWOT analysis of Qantas
The external environment of an organization is analyzed using PESTLE framework, that
addresses the factors of political, economic, social, technological, legal and environmental
(Madhavaram, Hunt and Bicen, 2017). The PESTLE analysis for Qantas is described below.
Political  Political scenario in Australia is quite stable, enabling a
cooperative environment to the airline and other industries.
 Good relationships with countries like China has opened up
opportunities for the aviation industry
Economic  Australia has experienced longest period of economic growth
resulting in creating business growth opportunities
 Liberalization of trade policies of Australia has opened up
opportunities for the aviation industry to expand in the
international industry
Social  Growing population of the country and their preference for
travelling
 Increase in the immigration, resulting in the increase in average

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international travel especially for business
 Increasing knowledge and demand for international and domestic
travel has increased significantly, creating opportunities for the
aviation industry
Technological  Qantas has implemented latest technologies in the aircrafts
resulting in very low rate of accidents
 Development of the IT has led to the growth of the online booking
options, along with self check-in, seat selection, online check-in
etc.
 Engine and other flying technology has improved significantly
reducing lay over and flying time
 Fuel and energy efficiency technology has increased significantly
resulting in sustainability
 In-flight technology, such as, good wifi signal, has improved
which has led to improved flying experience for the customers
Legal  Regulations across countries have been modified for the benefit for
easy flying across continents
 Repeal of the carbon tax by the government has created
opportunities for more profit in the airline business
 Health and security laws of the country ensure that the aviation
industry take good care of the passengers as well as the employees.
Environmental  Qantas has been implementing CSR policies and practices to
reduce carbon emission, and increase fuel and energy efficiency to
follow the environment protection regulations
 Measures for reducing wastes of energy and water have been
implemented in flight and on ground operations
 Investments are being made for renewable energy sources as
subsidies by the government is also being provided
Table 2: PESTLE analysis of Qantas

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From the above two analyses, it can be said that there are opportunities for Qantas to
grow as well as threats to overcome. There are scope for growth in other countries and emerging
markets through partnerships. Improvement in the technology has enabled the opportunities for
better online services and digital marketing. Low fuel cost is beneficial for reducing operation
cost. Moreover, increase in demand for travelling is another opportunity for the company to grow
its business.
On the other hand, the competition in the aviation industry is very high, especially after
the entry of the low cost airlines in almost all the countries. To compete in this scenario, Qantas
has also launched a low cost carrier, Jetstar Airways, however, the demand for Qantas is low due
to relatively higher price and low global presence. The labor prices are quite high in Australia
and in some other developed countries, which increases the operation cost.
2.4 Leadership of the CEO
Alan Joyce, the CEO of Qantas, has been termed as one of the most successful leaders.
His leadership through the most tumultuous decades of global financial crisis and price war with
Virgin Australia has made him a successful leader and helped Qantas to regain its position. He
has been a calculated risk taker. After Qantas faced a huge loss during 2014 and implemented
restructuring measures, the airline has been able to turn around successfully under the leadership
of Joyce. In 2011, due to the industrial dispute, Joyce took a risk and grounded the entire fleet of
Qantas, the share price went to 97 cents, but due to the disruptive risk, the brand awareness
increased substantially and the business grew significantly with share price reaching all time
high of $6.45, making it the most profitable airline in Australia (Hawthorne, 2017). Joyce has
another strategy of campaigning for social causes like prostate cancer and same sex marriage,
which has elevated his image as not only the CEO of Qantas but also as an activist among the
masses. Joyce introduced JetStar, the low cost partner of Qantas, in 2002 to capture the market of
low cost carriers and showed his capability as a visionary (Smith, 2016). Thus, it can be said that
Alan Joyce is a successful leader who through his vision, innovation and risk taking ability has
been able to bring huge success to the business of Qantas and made it one of the most profitable
airline.

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3. Conclusion and recommendations
From the above discussion, it can be concluded that Qantas, despite being the flag carrier
of Australia and one of the largest airline of the world, has quite low presence in the global
aviation industry. Though, it is one of the most profitable airlines in Australia, yet it faces quite a
few challenges in its business growth. It is led by a very successful leader who helped the
business to experience magnificent growth. The airline has taken very rational CSR policies,
such as, reducing carbon footprint and wastes and increasing sustainability, various ethical
policies and practices have been also introduced by the company, all of which has a positive
impact on the business. From the environment analysis, few business growth opportunities and
threats have been identified, which can be addressed in the following ways.
 Qantas can increase its global presence by going into partnerships with other airlines in
other countries. The markets of Asia are emerging and along with China, Qantas can
grow its business in the other countries due to liberalized regulations and international
trade relations with Australia.
 Qantas has the largest fleet size, which can be utilized efficiently to increase its flying
routes and destinations across the world.
 The installation of sustainable technologies and measures can help the organization to
lower its operation cost. It should also utilize the low fuel price for reducing its cost of
operation and grow the business in both domestic and international markets.
 The global demand for various types of travelling has been increasing due to
multinational businesses and increase in the disposable income of people. Hence, Qantas
has the opportunity to achieve business growth through better customer service, improved
technology on-board and online facilities which would enhance the customer experience.
 It should also focus on providing better online service facilities for the passengers, which
would increase convenience for the customers and increase demand for flying with
Qantas.
 To increase brand awareness, Qantas must increase the use of digital marketing platform,
such as, social media. This would help the organization to reach out to a larger domestic
and global audience in a time and cost efficient manner and to the younger generation
and should promote their new age technologies, better and new services and efforts
towards ethical practices and protecting the environment.

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References
csrhub.com, 2019. CSR Information For Qantas Airways. [online] CSRHub - Sustainability and
Corporate Social Responsibility (CSR) ratings on over 31,658 of the world’s largest public and
private companies. Available at:
<https://www.csrhub.com/CSR_and_sustainability_information/Qantas-Airways> [Accessed 25
May 2019].
Davidson, S., 2014. The 5000 Qantas Job Losses Should Include Alan Joyce. [online] The
Conversation. Available at: <https://theconversation.com/the-5000-qantas-job-losses-should-
include-alan-joyce-23761> [Accessed 25 May 2019].
Hawthorne, M., 2017. Risky Business: How Alan Joyce Faced His Critics And Won. [online]
Executive Style. Available at: <http://www.executivestyle.com.au/how-alan-joyce-faced-down-
his-critics-and-won-gzhzdt> [Accessed 25 May 2019].
Indris, S. and Primiana, I., 2015. Internal and external environment analysis on the performance
of small and medium industries (SMEs) in Indonesia. International journal of scientific &
technology research, 4(04).
Madhavaram, S., Hunt, S.D. and Bicen, P., 2017, May. The FREE (Firm Resources and External
Environment) Framework as an Alternative to SWOT: An Abstract. In Academy of Marketing
Science Annual Conference (pp. 49-49). Springer, Cham.
Qantas AU, 2019. About Us | Qantas AU. [online] Qantas.com. Available at:
<https://www.qantas.com/au/en/about-us.html> [Accessed 25 May 2019].
Qantas.com (a), 2019. OUR COMMITMENT TO ENVIRONMENTAL SUSTAINABILITY.
[online] Qantas.com. Available at: <https://www.qantas.com/infodetail/about/environment/our-
commitment-to-environmental-sustainability.pdf> [Accessed 25 May 2019].
Qantas.com (b), 2019. WORKING TOWARDS OUR VISION: AN OVERVIEW OF QANTAS
GROUP BUSINESS PRACTICES. [online] Qantas.com. Available at:
<https://www.qantas.com/content/dam/qantas/pdfs/about-us/corporate-governance/qantas-
business-practices-document.pdf> [Accessed 25 May 2019].

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Schleimer, S. and Rice, J., 2016. Australian Corporate Social Responsibility Reports Are Little
Better Than Window Dressing. [online] The Conversation. Available at:
<https://theconversation.com/australian-corporate-social-responsibility-reports-are-little-better-
than-window-dressing-66037> [Accessed 25 May 2019].
Shaffner, E., Mills, A.J. and Helms Mills, J.C., 2017. Reading Qantas History: Discourses of
Intersectionality and the Early Years of Qantas. In Insights and Research on the Study of Gender
and Intersectionality in International Airline Cultures(pp. 445-469). Emerald Publishing
Limited.
Smith, M., 2016. True Leaders 2016: How Qantas CEO Alan Joyce Became The Turnaround
King. [online] Australian Financial Review. Available at: <https://www.afr.com/boss/true-
leaders-2016-alan-joyce-qantas-ceo-20160711-gq37e9> [Accessed 25 May 2019].
Wells, P., 2014. Qantas Job Cuts Just The Start In Long Haul To Recovery. [online] The
Conversation. Available at: <https://theconversation.com/qantas-job-cuts-just-the-start-in-long-
haul-to-recovery-23521> [Accessed 25 May 2019].