Analysis of Corporate Governance and Ethical Issues at EasyJet

This report delves into the corporate governance and ethical challenges faced by EasyJet, a prominent airline company. It examines the influence of corporate governance, highlighting instances of ethical breaches and their impact on the brand's image, profitability, and stakeholder relationships. The report identifies issues such as organizational leadership, environmental concerns, and auditing practices. It also explores theoretical frameworks like agency, stewardship, and stakeholder theories to analyze the issues. A comprehensive literature review supports the analysis, discussing EasyJet's rigid rules, discriminatory practices, and lack of corporate social responsibility. The report concludes by proposing recommendations for EasyJet to address these challenges, improve its governance, and enhance its ethical conduct to ensure long-term sustainability and stakeholder satisfaction. The report emphasizes the need for ethical considerations in business operations to foster a positive brand image, enhance financial performance, and maintain consumer trust.

ACTION PLAN

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
Influence of the main corporate governances.........................................................................1
Concerning the theoretical aspects over the case of Easy Jet and the critical of such
professional and legal analysis...............................................................................................3
Literature Review...................................................................................................................4
Addressing the issues of organisation and the appropriate solutions taken by professionals to
overcome such obstacles........................................................................................................5
Current legal scenario of UK Governance to overcome such issues......................................7
Overview of EasyJet ..............................................................................................................7
Description of key events.......................................................................................................8
5. General lessons learnt from the case..................................................................................9
6. Rationale and justification for investing in firm...............................................................11
CONCLUSIONS............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
Ethical issues are developed when the activities of a person or organisation influence it to
choose between the alternatives that must be assessed as either right or wrong (Mishra and
Mohanty, 2014).While performing the business operations, an entity faces several issues that
dominates over the effectiveness of other activities. EasyJet is one of them. The rigid rules
prepared by the firm are main reason behind the arousal of ethical issues. While following the
implemented roles and regulations the firm has attempted various philosophical errors that has
impacted business value, brand recognition, etc. Present undertaking is based on some of the
issues associated with ethics that have harmed the effectiveness of EasyJet. This report is thus
prepared to suggest EasyJet some effective actions that can be taken to deal with the corporate
governance issues. This plan will further help the selected organisation to allocate its resources
in such a manner that it will benefit all stakeholders.
Influence of the main corporate governances
In consideration with the case scenario of easy jet in which they have refused to allot the
seat to a paralysed 65 year old just because she does not have anyone to look after. Hence, there
has been various similar cases which are affecting the brand image or this airline organisation.
Hence, it can be said that there is need to make the adequate implication of various corporate
governance as well as their serious adoption in the action. However, in terms with implication of
such governmental issues there has been influence of various operations which in turn helps in
better corporate governance (Chapman, 2016). Thus, Easy Jet has faced various legal issues
which in turn affected the brand image, productivity, profitability as well as consumer gathering
of organisation. Hence, there are several influence sand issues which incurred in the operational
activities of this business such as Ethical, Environmental and corporate governance issues which
can be understand such as:
Organisational leadership and effectiveness of brand:
In order to run the successful airline operations Easy Jet has developed various policies
and procedures which in turn never be replaced or removed for any of the consumer of
stakeholders of the firm (Flottau, 2016). Hence, these polices some times become fruitful for
making the adequate environment as the passengers or crew members act in an effective manner
as well as do not harm the property or image of the business. Thus, the implication of such rules

and policies will be beneficial in having the appropriate execution of such business activities as
well as it become easy to implement any rules and regulations for improving the business ability.
On the other side, these policies and procedures reflect the inadequate responses and unethical
policies which in turn negatively effecting the business process as well as brand image. Due to
such rules and regulation the workforce are forced to follow all such regulations and which in
turn reflect rigidity in their behaviour with the passengers (Kantareva and et.al., 2016). Hence, in
context with various cases the business is having the negative impacts and many consumers do
not prefer to plan any travelling program with such airline industry. Thus, they have once refused
a woman to travel went to the emergency door due to she is handicapped and occupied
wheelchair as well as she is also not having someone to look after her. However, with these
kinds of serious issues and the unethical behaviour of the staff makes reduction in the revenue
gathering of the business as well as consumer distraction (EasyJet - the airline that’s difficult to
deal with. 2017).
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Environmental as well as Ethical issues:
In consideration with the corporate governance of the business there has been various
kinds of issues which are being faced by Easy Jet in terms with making the adequate changes in
such business operations. Hence, due to their disrespect behaviour the brand image and
profitability of this business has suffered as well as it lower down the market share of the
business. Hence, in terms with the operational activities held in the organisation crew members
are mainly focusing over gathering consumers and making the business activities they do not pay
attention over satisfying their needs (Liasidou and Liasidou, 2017). Thus, such issuers effects
over lower turnover acquisition as well as poor business management which in turn affects the
market share of the business. There has been serious reduction in the profitability of the business
such as 40% of the share are reduced and they have faced serious obstacles in maintaining the
adequate capital structure of the industry (Islam, 2016).
On the other side the reduction in the revenue gathering of the firm will negativity affect
the operational activities made by them. There has been various environmental issues which in
turn increasing the pollution. However, in consideration with the researches made by few
analysts which says that approx 100 citizens in US were dead due to air pollution which was the
serious issue for the government and the managerial professional of the company to make
changes in exhaustion techniques of the air plane. However, they have produces the high rate of
carbon-dioxide, Nitrous Oxide as well as diesel combustion which in turn highly affecting the
environment (Ali, 2016). Thus, due to such negative impacts their CSR reporting and integrated
reporting techniques are not providing the helpful outcomes as well as which in turn distracting
investors to make investment in the corporation. Hence, due to such unfavourable impacts the
business will have suffered as well as there will be reduction in such capital structure.
Auditing:
There has been various legal issues which in turn affecting the business as well as capital
structure of the business. Hence, in terms with the various fraudulent acts held in the
accountability as well as auditing of business which in turn represents the negative image of the
industry. Hence, In terms with the penalty and punishments which are need to be paid by the
firm for 60000 euros because of act of discrimination which are the serious issues and the
company has been found culprit for that case. Thus, these kinds of various major obstacle and
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mistakes are consistently made by industry which are also reflecting the poor corporate
governance as well as the poor operational management of the business (Ancell, 2016). If the
auditors or accounting professionals in the business would take serious actions as well as make
the adequate changes in their policies they would become able to make effective business as well
as lower down the crime or fraudulent act in the industry.
Concerning the theoretical aspects over the case of Easy Jet and the critical of such professional
and legal analysis
In order to create proper and broad understanding about the corporate governance in an
appropriate manner some frameworks are to be considered. On the basis of this particular, the
management and local community able to know corporate governance of EasyJet enterprise of
airline industry (Chapman, 2016). Herein, some theories are analysed as well as discussed which
are part of corporate governance. Further, such theories are stated below:
Agency theory: In terms of presenting the investors of business this theory helps in
facilitating various principles and framework to organisation. Hence, there will be recruitment of
the agent who will make the adequate business operations as well as helps in controlling or
executing the business operations (Kuo and et.al., 2016). However, this theory helps in
presenting the adequate financial solutions which in turn helps in improving the productivity and
profitability in a positive way. On the other side, this theory effectively helps in managerial
decision making as well as provoking the adequate solutions to any financial obstacles. In
accordance with the implication of such theory in the easy jet the most of the tickets are booked
by various travelling agencies which in turn benefited with the commission bonuses and relevant
monetary benefits.
Stewardship theory: In accordance with this theory the managerial professionals of the
business presents the goals of the businesses which in turn reflect that the targets and aims were
required the equal responsibility or efforts of all the stakeholders of business. Hence, due to
implication of such theoretical approach in the premises the workforce will be motivated to make
the efforts as well as it increases the efficiency of organisation (Yan, Cui and Gil, 2016). There
will be not communication barriers between employees, managers, board of directors and other
operational heads of the business. Thus, it helps in making the sound environment in the
workplace as well as helps workforce to understand their duties and make their valuable efforts
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for such operational activities. However, it will become easy for the professional in making the
adequate training, monitoring plans for employees.
Stakeholder theory: In accordance with this theory the business will be beneficial in
maintaining the positive relationship with the various stakeholders of the business such as
consumer, directors, managers, owners as well as suppliers and distributors. Thus, in
consideration with the investors and shareholders of the firm there is need to present the
appropriate financial results to the markets which in turn helps them in analysing the profitability
of the industry as well as make their decisions in relation with investments in the organisation
(Chao and et.al., 2016). Hence, with the help of maintaining the relationship with stakeholders
there will be beneficial increment in the capital structure as well as fund gathering of the firm.
Thus, such revenue will be fruitful in making the operational efforts as well as it reflects in
productivity as well as profitability.
Literature Review
As per the views of Dahlmann Branicki and Brammer, (2017) EasyJet is one of the
highly popular company of air line industry which has global presence in this specified market.
Parent companies of this is EasyJet Plc which operates in aviation industry from last 22 years.
When considering to its various aspects like market share and profitability then also it is strong
up to the certain level. Looking at the rules and regulation then it is very strict and rigid in front
of customers. Along with this, it not follows any kind of legal rules and laws which create
negative impact upon brand image among wide range of customers. It does not care about any
kind of ethics and morals which are mandatory to follow firms of aviation sector.
In contrary to this, Sabatini, (2017) argues that, management of EasyJet business
enterprise not focuses upon corporate social responsibilities which are generally used by most of
the firms. CSR is a base of every company which helps to create positive image in eyes of
stakeholders and attract more number of customers towards it. When looking at the general
concept then each firm of every industry takes responsibilities to do CSR activities for welfare of
society. Furthermore, it does not follow discrimination act at the workplace (Chapman, 2016).
The reason is that does discrimination among group of employees as well as customers.
Evidence behind this is that, management of EasyJet refuses to a lady of 65 years old because not
anyone is with her during travelling. On the another side, when lady come for travelling alone in
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EasyJet who is 35 years old then company gave permission. This is totally against to the laws,
regulations as well as ethics of the business up to the higher extent.
According to Flottau, (2016) EasyJet provided higher quality of facilitates to men
travellers or customers as compared to female. On the basis of this, it can be clearly commented
on the firm that it not following acts and laws related to discrimination. Moreover, it follows
those rules which are made and framed by its own. It does not consider those rules as well as
ethics which are settled and amended by government of nation and regulatory body of aviation
industry (Kantareva and et.al., 2016). On the basis of this, they will be able to run as well as
operate overall organisation in proper and smooth manner.
Addressing the issues of organisation and the appropriate solutions taken by professionals to
overcome such obstacles
By considering the various held in the operational aspects of the business which in turn
affecting the commerce of the organisation such as inadequate behaviour of the crew members
with the passengers as well as various penalties or punishment are issued to them. Thus, such
unfavourable acts are making negative impacts over the organisational image. However, the
major issue was faced by the professionals was of payments for 60000 Euros in against penalty
issued by court (Kantareva and et.al., 2016). Hence, it can be said that such penalties and
punishments which are levied over them are appropriate and which in turn presents the fair
judgements to their unethical behaviour with passengers as well as unlawful acts. Hence, there
will be various serious actions which are taken by government in against such airline like various
human right acts and the environmental acts which in turn helps the society to have the effective
judgement as well as healthy environment. However, in accordance with the case where Easy jet
has to make payments for 60000 euros which will be paid by them in approx 12 weeks and thus
it produces the action plan such as:
ISSUES Addressed or not Addressed Time line
Brand effectiveness and
Leadership Addressed by court 3 weeks
Ethical Issues Addressed by court 4 weeks
Environmental issues Addressed by court 5 weeks
Auditive independent Not addressed 12 weeks
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(Have to pay 19 million
In court)
However, this are the legal issues which are need to be covered in such action plan for the
organisation as they could make efforts to overcome such legal obstacles. In terms with the rand
effectiveness and leadership the court will address such issue in the 3 weeks of duration as well
as present the fruitful jurisdiction in these regards. In terms of resolving such ethical issues the
court will take 4 weeks of periods to overcome these kinds or obstacles. Hence, in terms of
making the ethical improvements as well as bringing the adequate changes in such operations
there is need to examine various issues and negative feedbacks from the consumers. However, in
accordance with the environmental issues such as nitrous oxide, carbon dioxide as well as diesel
combustion which in turn negatively affecting the environment such as provoking the pollution
in environment (Islam, 2016). Thus, in this regard the court will take 5 weeks to present the
adequate solution to them as well as they will be increment in the operational performance of
Easy Jet. On the other side, as to make the favourable improvements in the auditing process of
the business thus, such actions will help in making the adequate business decisions as well as
presenting the beneficial audit environment. Thus, such actions are need to be done in an
effective manner as well as present the appropriate outcomes which is beneficial for organisation
in decision making.
Current legal scenario of UK Governance to overcome such issues
By considering the current scenario of the UK governance which in turn helps in
presenting the adequate jurisdiction to make the better corporate governance. Hence, in terms
with behaviour of the crew members with the passengers as well as their CSR activities in the
market will reflect the poor business management as well as poor policies of the government.
Thus, it can be said that in terms with removal of such business obstacles there is need to make
the adequate changes in the policies and procedures issued by UK government in various
corporate acts.
Overview of EasyJet
The selected organisation for analysing the impact of ethical issues in business is EasyJet
which belongs to the aviation industry. Company is a renowned name in the sector and
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operating since 1955. It is headquartered in London and operates globally by carrying passenger
to 4124 different locations. There are around 11,000 people who are employed by the firm
throughout Europe (Tricker and Tricker, 2015). Large size of company sometimes create trouble
in operating it effectively considering all ethics associated with the business functions. The
chosen firm is famous for the strict rules and regulations followed by it. There are different cases
that are observed in the organisation while maintaining compliance with the executed rules.
These issues are mainly observed by the customers and employees. These incidents have highly
impacted on different things related to the firm such as its brand value, revenue, market share,
etc. However, it should be noted that the entity is still growing since its foundation in 1995. This
reflects that effective strategies were formulated time to time to deal with the raised problems.
The corporate governance of the firm is observed to be challenged many times that had left
negative influence over the effectiveness of overall business system. In fact, the cited firm has
faced many problems in context to finance, brand recognition, effective work, performance,
sales, etc. but the more interesting part is to analyse the key decisions and steps taken by the firm
to deal with those problems (McCahery, Sautner and Starks, 2016).
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Description of key events
EasyJet has faced criticism for the various activities that are performed by it. These
actions of the company have put it in trouble in context to customer satisfaction, employee
motivation, brand value, business value, market share, etc. (Bocken, Short, Rana, and Evans,
2013). There are various ethical issues or corporate governance problems that are recorded in the
functioning of EasyJet. Either it be cancellation of a disabled person, providing ineffective
services, discrimination or rigid rules, they have imparted a negative influence on the
organisational activities. The major events and associated action/reaction are described as
follows:
Ticket cancellation of a 65 years old disabled lady: Company has cancelled the ticket
of a 65 years old wheel-chaired lady who does not has any companion with her to travel. After
this activity, many critiques were made on the extreme rigid rules of it which were dominating
the ethics. This has mainly affected the consumers and later their buying behaviour. In addition
to this, a social media campaign was also started by the people against this step of EasyJet.
Overall business effectiveness was affected after the occurrence of this incident. Firstly, the
customers were reduced. This has increased the consumers of competitors. Further, the size of
people in EasyJet was reduced that harmed the brand image of the company.
Discrimination with a 35 year old lady: This issue has allowed various voluntary sector
organisations to take actions. The news was in lights when easyJet discriminated with a 35 year
old lady on the basis of gender. She has claimed that there was no "value for money" as the
services was not provided effectively to her. In addition to this, further claims were made that
easyJet promotes the discrimination by providing effective services to the male customers as
compared to the females. This activity has put the firm in trouble as criticism of this has gone
viral that impacted the sales of the entity (Tricker and Tricker, 2015). In addition to this, a major
retardation in the female consumer was observed after this incident.
Inequality in employees and customers on the basis of gender: It has been further
observed that the cited firm promoted discrimination on a wider level. The internal and external
both environment are affected with this. In context to internal business, it has been found that the
easyJet is not paying equal wages to the employees working in the company. This discrimination
is done on the basis of gender. Further, male workers are paid more money as compared to the
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females for similar work. This is reducing the motivation level of the female employees and thus,
work effectiveness is getting ruined. This, in turn, harming the profitability and performance of
easyJet. In addition to this, the company is not treating customers fairly. It renders effective
services to the male customers however, the scenario is quite in different in subject of the female
consumers (Mishra and Mohanty, 2014).
Restricting a lady to take pudding with her: easyJet is famous for its rigid rules and
regulations. However, it should be noted that there are many time when these regulation has put
the firm in trouble. As per recent case, the organisation has restricted a lady to take pudding with
her. This news later gone viral and criticisms were faced by the entity for prevailing unnecessary
rules causing problems to customers. In addition to this, the satisfaction level of consumer
retarded after this incident had took place. Implementation of large number of rules and
regulations has developed so many issues in front of the consumers that harms the company sales
by limiting the interest of customers in availing the company services.
Thus, these are the major events that were faced by the easyJet that has impacted on the
effectiveness of the operations of the company. The negative influence are measurable and
severe enough to affect the business activities. This, in turn, will create hurdles in achieving the
desired goals and objectives. Henceforth, easyJet is suggested to formulate effective strategies
real soon to avoid any ineffectiveness in proper functioning of the firm (Van Grembergen and De
Haes, 2017).
5. General lessons learnt from the case
This study has assisted in developing the knowledge to deal with the ethical issues in the
businesses. From implementation to avoid happening of the mentioned cases to imparting actions
to resolve them are studied in the undertaking. The present research work further helped in
analysing the importance of considering ethics in the business functions. In addition to this, the
actions taken by the easyJet to cope up with the raised issues were focused on both the business
effectiveness and associated stakeholders (Crane and Matten, 2016). This simultaneousness in
the actions state the skills of managing different business operations along with. The key lessons
learned are further described below:
Role of considering ethics in the business: While formulating the business strategies, it
is essential to conduct an analysis of factors that can generate ethical issues later. This
assessment will help in the formulation of plan appropriately. Further, by considering these
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