Qantas Management Lockout: Applying Theories and Recommendations

This report provides a comprehensive analysis of the Qantas management lockout case from 2011, where the company faced disputes with trade unions and implemented a management lockout. The analysis applies several key management theories, including Elton Mayo's Human Relations Theory, Theory X and Y, and Bureaucratic Theory, to understand the company's actions and their implications. Additionally, the report examines the ethical dimensions of the lockout using Utilitarianism Theory of Ethics. The report concludes by offering recommendations for Qantas to improve its management practices and employee relations to achieve greater success in the market, emphasizing the importance of clear communication, employee satisfaction, and compliance with both internal and external regulations.

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Foundations of Management Thoughts 1
Executive Summary
In the year 2011 management of Qantas faced disputes with three trade unions related to the
company due to which they took the decision of management lock-out till the time employees do
not lower down their expectations from the company. The below mentioned report is review of
the Qantas management lock-out case on the basis of different theories. Three theories of
management are explained in the case and one theory of ethics. Lastly, conclusion and
recommendations derived explained the ways in which the company can attain success in the
market. More details about the report are discussed below:

Foundations of Management Thoughts 2
Contents
Introduction......................................................................................................................................3
Qantas Management Lock-Out Case Analysis................................................................................3
Elton Mayo’s Human Relations Theory of Management................................................................4
X and Y Theory of Management.....................................................................................................5
Bureaucratic Theory of Management..............................................................................................6
Utilitarianism Theory of Ethics.......................................................................................................7
Conclusion.......................................................................................................................................8
Recommendation.............................................................................................................................8
References........................................................................................................................................9

Foundations of Management Thoughts 3
Introduction
The purpose of this report is to enlighten the reader about the case analysis of the company
Qantas and the relation of management theories with the case. The report evaluates details about
the management lock out issue of the company Qantas and problems faced by the company due
to this issue in the market. It further evaluates the case on the basis of three theories of
management and one theory of ethics related to the case. Qantas is a multinational organization
that is present in the airlines industry. In the year 2011, the company faced the problem with
trade unions. The employees of the company started demanding things that very heavy for the
company to pay (Briskin, 2016). Resulting to which, they initiated the management lockout
system until the time the employees do not lower down their expectations. More details about the
report are discussed below:
Qantas Management Lock-Out Case Analysis
A news article posted in the Sydney Morning Herald on 29th October 2011 stated that the
company Qantas is aiming to lock out the employees that are currently in dispute and are covered
with the agreement. The company aimed to ground all the domestic as well as the international
fleets indefinitely. Alan Joyce, the CEO of Qantas stated that airline company will lock out the
employees until the unions reduce or revokes their extreme claim and reach to a positive
agreement with the company. The lock out of management started on Monday 31st of October till
the day the employee agree on the terms of the company (ABC.net, 2011).
Many people like Julia Gillard resisted to the action initiated by the company stated that it is not
right to deal with the issues with trade union in the society. However, Alan Joyce stated that his
hands had been tipped by looking at the most impossible demands of the three unions present in
the working environment of the company. The company further added that such demands and
actions of the employees are also criticizing the brand image and business strategy of the
company. The ground staff, pilots and the engineers are ruining the well maintained image of the
company in target market (Sarina, & Wright, 2015). The top level of management stated that
such deliberate actions of the employees destabilising the image of the company and there is no
end sign of this activity. Further, if such actions are initiated in the environment then Qantas at

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the end would have no choice but to shut down the business functions step by step. The
increasing demand of the employees is making the company hollow from inside resulting to
which it might break the company part by part and end it soon (SMH, 2011).
The CEO of the company said that lock out, grounding of the fleet was one, and only effective
way according to him that can effectively bring a solution for the dispute present with the
company. The leader of the company sincerely understood the inconvenience of the customers
that were affected with the decision of the company. For the people who had booked the tickets,
the company returned the money to them and the people who were in the mid journey were
transferred to another flights and accommodations as well. The company made sure that not
much people were affected the decision of the company. Alan Joyce stated that, as the decision
has now went in the union’s court, so it is now their chance to decide how badly they want to
hurt the travellers and members and the company on a whole. From the event, the Fair Wage Act
decided to make ALAEA and Qantas come into an agreement to initiate actions with each
other’s consent in the society. The ALAEA (Australian Licenced Aircraft Engineers Association)
was left with not enough bargaining goals and the company had to forego the lock out in order to
come at mutual understanding (Forsyth, & Stewart, 2012).
Elton Mayo’s Human Relations Theory of Management
Human relations theory refers to the theory that explains the behaviour of people in a group.
With the help of this theory, the management gains knowledge about the behaviour of people in
a particular workplace environment. It helps in evaluating the industrial and organizational
psychology of the employees working in an organization (Forsyth, & Stewart, 2012). This theory
was proposed by Elton Mayo that expressed his concentration on three things that are mentioned
below:
 The power of groups under which, social aspects takes place over the functional
organizational structure.
 The need of reciprocal communication in order to initiate two way communication, this is
from top management to lower level and vice versa.
 Development of high quality of leadership to circulate the information about the goals
and develop effective decision-making process as well (Armstrong, & Taylor, 2014).

Foundations of Management Thoughts 5
It is important for most of the company to improve the interpersonal skills of the employees that
are related to the job. Teaching these types of skills to the employees is known as soft skill
training. Further, according to this theory, the companies need to successfully communicate such
skills to their employees in order to attain satisfaction in the target market. Further, under this
theory, it is important for companies to become more employee centred than machine centred.
According to this theory, the employees are the biggest resource of the company and they should
be satisfied to the maximum level. So, according to the given case of Qantas management lock-
out, it can be seen that it is important for the company to communicate the functions clearly to
the employees and the union as well (Dalton, 2017).
As the global aviation industry has low profit margin due to which the company faces problems
in increasing labour cost. The company is unable to match the labour cost of the employees with
the profits that they receive in the environment. Along with this, increasing demand of the
employees significantly acted in oppose to the activities of the company in response to which
they were left with no other option other than locking out the employees of the company. The
company thought that in this way, they might lower down the level of expectations in the market.
It is important for the company to convey the organizational activities and the objectives of the
company to their employees so that they do not demand for something that the company is not
capable of giving. According to this theory, the organization was unable to create good relations
with the employees (Bratton, & Gold, 2017).
X and Y Theory of Management
Theory X and Theory Y is another popular theory of the process of management. According to
this theory there are different workforce models of motivation applied by the human resource
managers in the society. These theories are related to the theory of motivation as it understands
different levels of needs of employees present in the society. The theory X is based on the
assumption that there are typical workers present in the society who has little level of
expectations in the society (Barkema, Chen, George, Luo, & Tsui, 2015). This type of workers
are considerably less ambitious, tries to avoid responsibilities and is individual goal oriented.
The managers having this type of style believes that the employees of the company are less
intelligent, lazy and work only to earn their share from the market. Self-interest is what derives

Foundations of Management Thoughts 6
the work from this type of employees. Further, according to the theory Y, the managers assume
that the employees are internally motivated in the society. They believes that they employees
enjoy their job, work only get better and earn organizational objective apart from personal
monetary goals (Khorasani, & Almasifard, 2017).
The employees under such scenarios do not need additional supervision of the leaders and take
full responsibility of the work that they do in the society. It depends upon the internal and
external aspect along with the preference of the manager to choose a specific management style
to act in the society. Relating it to the given case, it can be said that as the managers of the
company Qantas did not perform adequate actions in the target market that certainly resulted in
employee related issue (Deng, 2015). It is important for all the companies to fully satisfy the
employees with their management styles so as to attain their contribution in the market as well.
The management of the company opted for Theory X due to which they lacked to maintain
relationship with the employees that ultimately resulted in the disturbance in the relations
between the human resource and the management of the company Qantas. Thus, it can be said
that according to this theory, it is important for the company Qantas to succeed in the market by
applying adequate theories of management and leadership in the environment (Prottas, &
Nummelin, 2018).
Bureaucratic Theory of Management
According to Bureaucratic Management Theory, there are two important aspects that affects the
decision-making process and activities of the business. The first element explains that the
process of structuring in an organization should be in the form of its hierarchy. Another element
explains that the organization and its members are governed by differential rational and legal
rules and regulations. Both of the elements helps the companies in achieving success in the target
market. The organization hierarchy refers to the process of arranging the organization on the
basis of hierarchy. This element of the theory states that companies should hire and promote the
employees on the basis of existing hierarchical structure and they should not change the structure
at any cost (Vittikh, 2015).
Further, the second element says that the system of an organization is also government by a set
of rational and legal decision-making rules and regulations present in the external environment.

Foundations of Management Thoughts 7
These rules are present in the external environment butt holds the capacity to change the internal
systems of the company as well. It is important for the companies to lie under the internal as well
as external systems and regulations in order to successfully initiate the efficiency and
effectiveness in the company (Niskanen, 2017). In the given case of Qantas, the company was
government by both the systems in the environment. The internal systems of the organizations
were working well but due to external rule governing bodies like TWU (Transport Worker’s
Union), AIPA (Australian and International Pilots Association) and ALAEA (Australian
Licenced Aircraft Engineers Association), FWA (Fair Work Act) etc. the company started facing
issues in the environment. This resulted in displacement in the internal as well as external
functions of the company (Waring, 2016). Further, relating it to the given case of Qantas
Airlines, it should be noted that the company it is important for an organization to satisfy and
comply with both the elements in order to be viable in the environment. But the company failed
to comply with the external rules and bodies present due to which they faced such problems in
the environment. Thus, it can be said that the company Qantas initiated the process of
management lock out because it was unable to manage the external changing environment
(Bratton, & Gold, 2017).
Utilitarianism Theory of Ethics
Utilitarianism is a theory of normative ethics that states an act that is initiated in the environment
is good if it bring positive outcomes for the society and its people on a whole. An activity that
produce greatest amount of good for the people is regarded as a good action in the environment
irrespective of the rules or laws defined in the environment. This theory of ethics is a part of the
normative theory of ethics that explains whether a specific action is good or bad in the society
(Paulraj, Chen, & Blome, 2017). According to the theory of utilitarianism, an act initiated by a
person is good in the society if it bring positive outcomes for the people affected with that action.
Irrespective of the rules and regulations present in the environment if the actions implemented
provide satisfaction to the people then they are good otherwise (Bell, Dyck, & Neubert, 2017).
Further, relating this theory of ethics to the case of Qantas management lock out, it should be
noted that the company did not perform actions according to people present in the society.
Initially the company was upset with the employees due to which they initiated this process,

Foundations of Management Thoughts 8
secondly the company harmed the satisfaction level of the customers as well. As the process lock
out shut down the business functions of company due to which the travellers faced difficulty in
reaching to the specific location not (McMahon, 2017). Although the company arranged for the
people, still the customers faced high degree of problems while travelling. Thus, it can be said
that according to the theory of utilitarianism the company performed actions that reduced the
trust level of people on the company and increased the level of problems as well. Thus, this act
of management lock out cannot be seen as an ethical action in the environment (Jones, et. al.,
2016).
Conclusion
Thus in the limelight of above mentioned events, the fact should be noted that the above
mentioned report acknowledged the issue of management lock out initiated by the company
Qantas against the increasing demand of the employees in the target market. The report evaluates
the details about the company on the basis of four theories among which three theories are a part
of management theory while utilitarianism theory of ethics is also discussed in the paper. The
company Qantas initiated management lock out system because it was unable to handle the
demands of the trade unions connected with the company. However, it was regarded as a wrong
action as it increased the level of dissatisfaction for many people in the society.
Recommendation
Below-mentioned are some of the recommendations given to the company Qantas:
Find Alternative Solutions: Against the increasing demand of the employees of the company, the
management decided to initiate management lock out so as to cool down the increasing temper
of unions. However, the FCA stated that the company should have looked for other alternatives
in order to achieve a saturation point in the environment. Further, the should have used various
other ways to make the union understand their condition and ask them for support.
Increasing Satisfaction of Employees: It was important for the company to state clearly to the
employees about their condition as well as expectation from the employees. Along with this, it
was important for important for them to motivate the employees so that they can stick to the

Foundations of Management Thoughts 9
organizational guidelines. Employee motivation and satisfaction will surely reduce the human
resource management issues in the internal environment of the company.
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Armstrong, M., & Taylor, S. (2014). Armstrong's handbook of human resource management
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Barkema, H. G., Chen, X. P., George, G., Luo, Y., & Tsui, A. S. (2015). West meets East: New
concepts and theories. Academy of Management Journal, 58(2), 460.
Bell, G. G., Dyck, B., & Neubert, M. J. (2017). Ethical Leadership, Virtue Theory, and Generic
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Bratton, J., & Gold, J. (2017). Human resource management: theory and practice. UK: Palgrave.
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Foundations of Management Thoughts 10
Jones, T. M., Donaldson, T., Freeman, R. E., Harrison, J. S., Leana, C. R., Mahoney, J. T., &
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