The Impact of Corporate Governance on Emirates Airline's Performance

This report presents a comprehensive case study on Emirates Airline, investigating the effects of corporate governance on its internationalization, globalization, and overall firm performance. The study begins with an overview of corporate governance, emphasizing its importance in modern business operations, including accountability, transparency, and stakeholder relations. It explores the significance of Corporate Social Responsibility (CSR) and its integration with corporate governance, highlighting how Emirates aligns with CSR standards and implements strategies to enhance its brand image and customer loyalty. The research methodology involves a review of secondary data from books and journals, followed by primary data collection through questionnaires distributed to Emirates employees across different management levels. The analysis section examines the demographic data and explores the implications of corporate governance on the company's market performance, globalization, and internationalization. The findings reveal the positive impacts of corporate governance, such as curbing corruption and facilitating strategic partnerships. The report concludes with recommendations for improving corporate governance practices and maximizing their benefits. The study underscores the importance of continuous improvement in corporate governance to enhance organizational success.

The effect of corporate governance on
internationalization, globalization and the
performance of the firm: A case study on Emirates
airlines

ACKNOWLEDGEMENT
I am thankful to all those friends and relatives who gave me guidance and support in completing
my dissertation on corporate governance they always encouraged for completing dissertation in
the best possible way. In addition to this, I also appreciate my mentor for giving me guidance in
preparing dissertation. From his support and experience d I was in the position to complete
dissertation in a right manner. Finally, I want to extend my sincere thanks to everyone who have
directly or indirectly supported me in completion of my dissertation.

ABSTRACT
Corporate governance has gained a significant importance in the recent past across the
globe. In order to understand importance of corporate governance in context of business firms,
dissertation has been carried out. In this regard, the research is conducted on an airline company,
Emirates. For preparing a dissertation on corporate governance, lots of secondary data were
reviewed. The information was taken from books and journals etc. On the basis of evaluation of
theories, literature review is prepared. Further, sample of employees at emirates are selected for
collecting primary information. In research, sample of 20 employees were taken which includes
top, middle and lower level of management. In research, primary research was conducted under
which questionnaire was distributed among the respondents. In questionnaire, an attempt is made
to understand various aspects of corporate governance. After collecting the entire data, analysis
of the same is done and reasons behind respondent’s specific response are identified. These
reasons are mentioned in the analysis section of each theme. In research, it has been identified
that corporate governance has significant importance for the firms. By using corporate
governance, the company can curb corruption in an organization. Moreover, they can easily enter
into strategic partnership with any other company in foreign market. Thus, corporate governance
is giving lots of benefits to the firms and they must try to improve their corporate governance
system time to time.

TABLE OF CONTENTS
CHAPTER 1: INTRODUCTION....................................................................................................6
1.1 Overview................................................................................................................................6
1.2 Research aims and objectives................................................................................................9
1.3 Rational of research...............................................................................................................9
1.4 Significance of research.......................................................................................................10
CHAPTER 2: LITERATURE REVIEW.......................................................................................12
2.1 Introduction..........................................................................................................................12
2.2 Meaning of corporate governance.......................................................................................12
2.4 Benefits of corporate governance........................................................................................13
2.5 Significance of corporate governance..................................................................................14
2.6 CSR in the multinational companies....................................................................................15
2.7 Benefits of corporate governance on market performance of the firm................................16
2.8 Ways in which globalization and internationalization affects CSR of an organization......17
2.9 Ways in which Corporate governance promotes globalization and Internationalization of
the Company..............................................................................................................................19
2.10 Ways in which concept of CSR can be used to improve market performance..................19
2. 11 Ways in which corporate governance can help in increasing market performance..........21
CHAPTER 3- RESEARCH METHODOLOGY...........................................................................23
3.1 Overview..............................................................................................................................23
3.2 Research type.......................................................................................................................23
3.3 Research design...................................................................................................................24
3.4 Research approach...............................................................................................................24
3.5 Research philosophy............................................................................................................25
3.6 Data collection methods.......................................................................................................25
3.7 Data analysis........................................................................................................................26
3.8 Validity and reliability.........................................................................................................27
3.9 Ethical consideration............................................................................................................27
3.10 Limitation of study.............................................................................................................28
CHAPTER 4: DATA ANALYSIS................................................................................................29
4.1 Introduction..........................................................................................................................29
4.2 Demographic data................................................................................................................29
4.3 Meaning and significance of corporate governance and CSR in context of multinational
companies..................................................................................................................................32
4.4 Implications of corporate governance in relation to company market performance...........36
4.5 Corporate governance promotes globalization and Internationalization.............................40
CHAPTER 5: CONCLUSION AND RECOMMENDATIONS...................................................44
5.1 Conclusion...........................................................................................................................44
5.2 Recommendations................................................................................................................46
REFLECTIVE................................................................................................................................48
REFERNCES.................................................................................................................................49
APPENDIX....................................................................................................................................53
Questionnaire.............................................................................................................................53

CHAPTER 1: INTRODUCTION
1.1 Overview
Background of research
Corporate governance is a widely used term that has been practised by various
organizations in the recent past. Across the globe, there are many large sized companies which
are known for their high level of corporate governance. This term refers to rules and regulations
that are followed in the entire organization while conducting day-to-day business operations
(Tricker, 2015). Moreover, corporate governance also helps in satisfying the needs of all
stakeholders whether they are internal or external in an appropriate manner. There are several
components of corporate governance and one of the most important components is
accountability. This component of corporate governance states that leaders of an organization
should have clear understanding of their accountability. In order to perform accountability in a
proper manner, the top management must guide their subordinates and ensure that each and
every activity in an organization is performed effectively as per the rules of corporate
governance (Harford, Mansi and Maxwell, 2012).
Transparent and open leadership is an important component of corporate governance.
According to transparency of component, leaders or company, the top management must make
all disclosures regarding company’s operations time to time to their stakeholders. Such
disclosures must be correct and true to its nature. In order to follow corporate governance,
company’s top management is required to make a good relationship with their stakeholders.
These stakeholders are employees, shareholders and creditors etc. A good corporate governance
in an organization ensures that all stakeholders will be treated equally and management will give
them due importance. If management treats employees in a systematic manner then they get
satisfied and put their efforts in achieving organizational goal (Larcker, Richardson and Tuna,
2007). Hence, corporate governance plays an important role in growth of an organization.
In order to make good corporate governance, top management should be allocated full
independence to decide future course of action. In case, the top management have not allotted
power to decide the main owners of an organization will have full grip over the organization’s
management and they will fulfil their own needs to achieve desired goals (Joseph, Ocasio and
McDonnell, 2014). On contrary to this, if directors are working independently then they will
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improve company’s rules and regulations and will also make them strict in order to prevent scam
within a company. Hence, independence of directors is a first step towards making strong
corporate governance within an organization. In this research, an attempt is made in order to
understand impact of corporate governance on an organization. In other words, the positive
impact of corporate governance on company is analyzed through the research. Corporate social
responsibility known as CSR is an integral part of corporate governance because in today’s era
firms are using CSR is a means of building a positive brand image (Westphal and Zajac, 2013).
It is a part of corporate business practice. Hence, corporate governance and CSR are interlinked
to each other.
Emirate is following one of the CSR strategies under which it is complying with the
standards that are determined by the regulatory authority of nation. By doing this, firm is
completing its social responsibility towards government. It is also focusing on updating its
airplane’s technology. Through this, it is trying to control pollution from its airplanes. This is
another CSR strategy that is followed by the firm. Emirate airline is ensuring the safety of people
on its airplane and for this; it adopts many safety measures (Erkens, Hung and Matos, 2012).
With the help of this, it ensures the safety of life of those who are travelling on its airplane.
Hence, it can be said that these are the strategies that are followed by the firm in order to perform
CSR towards government and general public. Under CSR, companies are implementing
numerous activities like opening orphanages, helping handicapped people and reducing carbon
emission to protect the environment. Companies are using it as an instrument in order to create a
positive brand image. Further, organizations are using their CSR activities for institutional
advertising in order to show significant contribution in welfare of an organization. In many
nations, CSR have become an integral part of corporate business practice (Bebchuk, Cohen and
Ferrell, 2009). Today, the most common problem that business organizations are facing is low
retention value of the customers. In simple words, it can be said that companies are not able to
create a loyal customer base. On other hand, stiff or fierce competition is going on between
companies in every sector. In such a situation, it becomes necessary for the firms to build loyal
customer base. Due to mentioned reasons, every company is making an attempt to formulate
effective strategies for success of the business unit. Firms are adopting various ways which helps
them in creating special image in the eyes of customers (Aoki, 2013). By doing this, they can
increase employee’s retention value or can build loyal customer base. CSR is a unique and
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perhaps an effective way to achieve objective of building loyal customer base. It is through
involvement in corporate social responsibilities that companies are trying to establish special
image of their brand name. Companies like Microsoft are giving millions of amount for CSR for
conducting social service activities in countries like India (Farber, 2005). In this way, they are
popularizing their name in foreign countries not only on the base of their product but also on the
basis of the corporate social responsibility activities.
This research is conducted in order to reveal the impact of corporate governance on
internationalization, globalization and performance of Emirates Airline. In this research,
correlation between CSR and corporate governance will be developed. This will be done in order
to show the extent to which the mentioned company effectively utilizes CSR and corporate
governance for its benefit.
Background of Emirates
An emirate is the largest airline company of UAE which is also known as united Arab
emirate. This airline is owned by Sheikh Mohamed binrashid Al Makotoum who is the ruler of
UAE and is its president. It is the world’s largest international airline and in fiscal year 2014-15,
it carried 49.3 million passengers which were 11% more than the previous year. In same fiscal
year, it carried 2.4 million ton of cargo which was 6% higher than the previous year. In
mentioned fiscal year it also increased its capacity by 9%. This reflects that company is growing
and since its inception it is growing rapidly and has emerged as the world’s largest international
airline. Currently, it is operating in 144 cities over 6 continents. This means that it has
geographical presence all over the world (Agrawal and Chadha, 2005). Company is steadily
investing on developing its fleet size and commencing its services on new routes. Emirates
understand that customers or travellers are an important stakeholders and their satisfaction will
play a decisive role in company’s success. Hence, Emirates is following concept of CSR and it is
providing quality food to its customers. Emirates are providing food facility in collaboration with
Dnata an international company that is providing in-flight catering services.
Emirates ensure that food which is provided to the travellers is of high quality. In other
words, it also ensures that their traveller does not find any sort of problem in terms of food while
travelling in airline. In alliance with Dnata, company is aimed at providing full safety to its
travellers (Larcker and Tayan, 2015). In respect to this, it is investing heavy amount of AED 70
million in order to ensure full safety of life of those who travel in its airplane. In respect to this, it
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has made safety program in order to train its employees. Under this program, 850 of its staff
members were trained as observers. Further, s 24,000 observations are carried out till the date
through this program (The Emirates group, 2015). After observation, feedback is collected in
order to identify the weak points. Further, on the basis of these weak points measures are
prepared and implemented which ensures safety of passengers in airlines. Along with this, it also
values its employees and it assumes that they are its valuable assets and organization cannot
grow without their support. Hence, it is giving full support to its employees. Along with this, it is
also committed towards protecting an environment and in respect to this it has adopted several
pollution control measures. Emirates have limited availability of resources and due to this reason
it aims at utilizing its resources in an efficient and effective manner. Emirates are also carrying
out corporate social responsibility activities in respect to conserve flora and fauna. Further, it is
involved in Dubai Desert Conservation Reserve under which initiatives are taken to preserve
natural and cultural heritage. Hence, company is carrying out CSR activities in several areas and
in this way it is popularizing its brand name (Fan, J Wong and Zhang, 2007).
1.2 Research aims and objectives
Research aims at analyzing the impact of corporate governance on internationalization,
globalization and the performance of firm. Case study for Emirates airlines have been analyzed
through the research.
Main objectives as per the aim of research are-
 To critically evaluate the meaning and significance of corporate governance and CSR in
the multinational companies.
 To examine the implications of corporate governance on market performance of the firm.
 To identify the ways in which corporate governance promotes globalization and
Internationalization of company. To recommend the ways in which concepts of CSR and corporate governance can be
used in order to boost the market performance of Emirates Airlines.
Research questions
Research questions are prepared on the basis of research objectives and by using research
questions; questionnaire is formed for collecting primary data.
 What is the meaning and significance of corporate governance and CSR in context of
multinational companies?
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 What are the implications of corporate governance in relation to company’s market
performance?
 In what ways corporate governance promotes globalization and internationalization of the
firm?
 What are the ways in terms of which CSR and corporate governance can be used to
enhance the market performance of Emirate airlines?
1.3 Rationale of research
Operating a business is a very difficult task and organization top and middle management
have to look after so many activities in order to ensure continuous growth of the company.
Corporate governance is simply a set of rules and regulations that an organization follows in
order to run day to day business. It also refers to procedures that an organization is following in
order to complete specific task. Corporate governance also plays an important role in
maintaining transparency in an organization. Due to lack of transparency, organization is
assumed to employ fraudulent practices. As a result of this, image of the company gets tarnished
in the eyes of the customers (Dittmar and Mahrt-Smith, 2007). Stringent rules and regulations
help the management of an organization in ensuring full transparency. This also helps in
preventing irregularities in an organization. Hence, corporate governance plays a significant role
in growth of an organization. Company has many stakeholders and it has to maintain a balance
between these entities. Many a times an organization due to poor corporate governance fails to
satisfy interests of all its stakeholders. In such a situation, company requires good corporate
governance (Black, Jang and Kim, 2006). Hence, corporate governance is an important part of
the organization and by practicing it in a proper manner, a firm can treat its stakeholders
effectually..
Today, large corporate are also involved in the corruption and due to this reason, people
rely less in them. As a result, people are losing confidence in these firms and they are also not
loyal towards single company’s product. Moreover, any bad news about company’s product
creates a fear among public. Hence firm’s customer base gets reduced to large extent. This is
observed several times. On the other hand, this strengthen the corporate governance in an
organization inevitable (Carney, 2005). Strong rules and regulation helps in preventing
origination from involving in any irregularities in the company’s operations or accounts. This in
turn results in increasing efficiency and trustworthiness of procedure of performance. . Today,
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corporate governance is a term which is considered by large sized investors before making
investment in a single or multiple firms. Many large and medium sized firms are manipulating
their accounts and bribe is given to auditors in order to conceal real facts that are relevant to
stakeholders and regulatory authorities (Bhagat and Bolton, 2008). But, many firms are involved
in such kinds of illegal practices. As a result, corporate governance is an important issue in
business and investment streets.
1.4 Significance of research
There is a great deal of benefits of making the corporate governance stronger. This
research will help the companies in understanding the importance of corporate governance for
business. Good corporate governance acts as a symbol of company’s reliability and its loyalty
towards fulfillment of interests of its stakeholders (Masulis, Wang and Xie, 2007). This research
will help the Emirates in understanding importance of corporate governance deeply. Further,
results of research will also assist the organization in improving its corporate governance.
Research on corporate governance is also helping researcher in understanding broad
understanding on importance of corporate governance.
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CHAPTER 2: LITERATURE REVIEW
2.1 Introduction
Literature review is an integral component of dissertation. In this part of dissertation,
opinions of research scholar and intellectual people are discussed in detail and their opinions are
correlated and contradicted with each other’s statements. Secondary data is collected with an
objective of understanding the topic of dissertation effectually. This creates a base which is used
for conducting a primary research. By doing the review of literature, gap between current and
past scenario can be easily identified. In this part of literature review, critical evaluation of
various scholars’ opinions is done. Literature review would encompass the significance of
corporate governance and other issues related to the corporate governance. In today’s age
companies are increasingly expanding their operations on foreign land and they are consistently
increasing their business in the multiple nations. As a result, their social responsibility is also
increasing because firms are using resources which belong to foreign nations. Hence, it is the
company’s responsibility to perform CSR activities in all those nations in which it is operating
its business. Thus, in literature review, impact of globalization and internationalisation on CSR
activities of the companies is discussed in detail. Moreover, in this section of dissertation ways in
which globalization and internationalization affects CSR of the company is also discussed in
detail.
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Illustration 1: Carools pyramid
(Source: Brealey. and et.al., 2012

As per this model, it is the responsibility of Emirate to fulfill its first objective to be
profitable because if it will earn good revenue then to pay salary and serve employees in the best
way would be easily possible. After fulfilling this responsibility, the second main responsibility
of firm is to follow all the rules and regulations that are determined by the regulatory authorities
of respective countries in which Emirate is operating its airplanes (Brealey and et.al., 2012).
After this, the third and most important responsibility of firm is to become ethical and provide
services to the travelers at fair price and of best quality. After this, the last and main
responsibility of firm is to become good corporate citizen and to conduct the activities that
provide social benefits to the general public. In this regard, Emirate can open hospitals that will
provide free medical service to the poor people. It can be said that these are the steps that
Emirate needs to follow in order to fulfill its responsibility.
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