Introduction
As suggested by Teeple, 2000 globalization is thought of as various mechanisms or processes that aim at creating and consolidating a unified world in terms of economy and culture characterized by a complex link of information sharing that is world wide.
With this concept, the world has experienced free movement of people, goods and services and capital between and among countries made possible by the advent in technology information. As a result the world has no doubt turned into a global village fashioned by interconnectedness and interdependence.
It is evident that through globalization cultures are being exported throughout the world as various societies are compelled to evolve and co-exist with the changes brought about by globalization. It is worth remembering that globalization has impact not only in terms of economy but culture, politics as well as environmentally.
All these have brought about contemporary issues when doing business in the international arena. Having in mind that businesses need to stay competitive, there is thus need to adequately and timely address the emerging contemporary issues (Swanson, 1993).
For the sake of this assignment, Qantas airlines will be used in providing insights on issues facing airline industries when doing business beyond borders. The airline was founded back in 1920 and is the flag carrier of Australia. The airline is Sydney where it has its main hub.
The airline has been deemed to be a four star airline according to Skytrax. Globally, it has been voted to be the 7th best airline although this is a drop from previous years. It also trades in the Australian stock exchange markets. Being the second oldest airline in the world, it started going international back in 1935. Currently, the airline operates both domestic as well as international flights.
Among the international destination include; Africa (South Africa), East Asia (China and Japan), south Asia (India), southeast Asia (Indonesia, Philippines, Singapore and Thailand), Europe (Germany and UK), North America (U.S), South America (Argentina). Domestic destinations include Queensland, northern territory, and New South Wales among others.
This thus shows clearly that the airline operates internally since its flights are destined to all continents. The essay will thus elucidate on the major contemporary issues facing the airlines, the available alternatives and finally one best alternative is selected for recommendation (Chesterton & Markson, 2008).
Key contemporary issues facing Qantas airlines
One major issue facing the airline is with regards to safety and security. Considering the happenings of September 2001 in United States of Americas and in the recent past where individuals have been intercepted carrying detonators and bombs, there customers have raised concern and are scared on who to trust when travelling to other countries.
With such a case customers have already shifted to other airlines that have been deemed to be more secure inn terms of screening. It is worth noting that all these issues concerning terrorism have been heightened by technological advancement. Terrorists need not to travel to be given instructions on how to execute the evil act; this can be comfortably accomplished through various means such as e-mails despite the geographical distance.
Additionally, it is worth to note that the recent happenings especially in Middle East countries and some countries in Africa particularly Egypt, Libya and Tunisia have threatened the airline business expansion strategy. The political instability which has seen to it that the various infrastructures and security issues have been negatively affected jeopardizes the airlines plans of expanding its business.
According to Joshi, 2009 stiff competition in the airline industry is another contemporary issue facing Qantas airlines. It is worth noting that while carrying out international business; it finds itself fighting with other giant companies such as British Airways, Virgin Atlantic which is new in business among others.
It has been shown that when a firm does not have a sound plan on how to tackle competition, it can easily find it self in trouble and even close its business operations. Just like any other organization whether for profit or non profit ethical issues when failed to be adequately addressed or prevented from happening can negatively impact on an organization.
Although the airline has not yet been reported to have violated the rules of business to gain enormous profits at the expense of the relevant stakeholders, there is need to have plans in place to ensure this does not happen. Similarly, the world has come to realize that to save the environment; individuals to corporate have been called upon to cut down on their carbon footprints.
This is one area that the airline has found it rough (Daniels et al., 2007). Cutting down on carbon footprint will enhance a cleaner environment. Having in mind that the only constant is change, the recent technological advancement is one issue that has proved to be a challenge to each and every organization Qantas airlines not being an exception.
A number of organizations that have mastered how to manage technological adoption have used the same as a competitive advantage. The airline in the wake of early 2000 was lagging behind in adopting technology (Chesterton & Markson, 2008). However, when it did, the strategy was not well crafted to be successfully utilized in marketing, training workers as well as attaining the demands of customers.
Another serious contemporary issue that was and still proves to be a challenge to the airline is with regards to customers issues. It has been noted that the firm has lost control over the customers. This has been attributed to technological advancement and competition.
Additionally, there is need to note the demographic changes in the customers that need the airlines services (Chesterton & Markson, 2008). The younger generation needs latest entertainment equipment among other sophisticated things. On the same note due to technology and better education the expectations of customers have tremendously change as majority demand for high quality and sophisticated services.
Operating cost creep and financial crisis not only have a domestic impact but also a global impact. Interestingly, when there is a financial crisis for instance the one that happened between 2008 and 2010, majority of the potential travelers opted to tighten the zips of their wallet and only spend their money on necessary goods and services.
At such times the currency tremendously loss value (Kaplan, 2005). For that matter the industry failed to enjoy enormous revenues and profits forcing it to lay off some employees. On the same note, uncontrollable costs such as government taxes and tariffs, insurance as well as utilities have tremendously risen.
This coupled with the unpredictable jet fuel prices has negatively impacted on the airlines business. Additionally, there are a number of global uncertainties apart from terrorism. For instance diseases outbreaks such as SARS have negatively impacted to the industry.
It is worth mention also that bird flu also brought a considerable loss tot eh firm. Although no one has control over natural disasters, the volcanic eruption in Europe as well as bad whether in countries of destination brushes the industry the wrong way (Joshi, 2009).
Alternative actions
According to Daniel, et al, 2007 there are several options that the firm can take to address the raised issue before things go beyond hand. In business, one option is to do nothing and leave nature takes its course. Secondly adopting a culture of a learning organization has been brought forth by numerous scholars to be another alternative that can be adopted in solving a myriad of issues facing an organization.
Thirdly, it will also be rational if the airline sought to form alliances with other similar organization. This can be done by forming partnerships, merging as well as acquiring other firms. Similarly reengineering and restructuring will call for the organization to fully change everything with regards to how it does business.
To successfully tackle the issue of competition, the airline can resort to gain competitive advantage through offering customers high quality in-service, improved security and safety measures among others. The service can include comfortable seats that are well spaced, sophisticated entertainment services similarly the variety of food served need to be further expanded to include endless list of bites drinks and other foodstuffs (Kaplan, 2005).
Alternatively, the airline can actively engage in adopting a promotional strategy that will help show case Australia. This will help enhance international tourism hence increasing customers or passengers’ numbers. To meet the demand of increased number of passengers, it might be rational for the firm to increase the number of flights.
Lastly and more importantly, I propose that the firm need to come up with policies and code of conducts that will be inline with the host country to help curb ethical issues (Chesterton & Markson, 2008).
Evaluation of the alternatives
All the proposed alternatives have their stronger and weaker sides. Not doing anything is a reactive strategy that will make the firm loss the trust of all its stakeholders starting from passengers. The only advantage with this alternative is that it requires no financial budget, however if the worse happens then the whole organization will be brought to its knees.
Adopting culture of an organizational learning has numerous advantages but one major one is that it will make the organization be an environment where its workforce are open minded and willing to adopt change (Travis, 2007). The major problem with the strategy is that it will take time and resources for it to be realized.
Reengineering and restructuring will mean that the company changes almost everything ranging from its vision and mission statement. The new picture created may be appealing to some of the existing customers as well as new ones. However, the alternative calls for allocation of huge resources and might results to losing loyal customers.
Merging, alliances as well as acquisition helps organization pull together resources hence have a sound when it comes to negotiating for a number of issues in business. It also helps cut down running costs there by increasing profit margin (Laurie, 2001).
However there are higher chances of conflict of interest when organizations merge or form a partnership. Offering of high quality in-service will definitely attract customers but only for a short term. On the other hand, the venture is too expensive and it can be easily copied by the competitors eventually making the whole initiative obsolete.
Developing policies and code of conducts that are in line with the laws and regulations of host country will help in upholding higher standards of ethics. Nonetheless, this limits individuals not to think outside the box hens inhibiting innovation and creativity (Travis, 2007).
Conclusion and Recommendations
From the analysis of the proposed alternative, I suggest the airlines adopt the one with regards to a learning organization. It is worth mentioning that a learning organization has a number of benefits. For instance it will help the airline maintain higher levels of innovation and creativity hence being competitive.
Similarly, a learning organization will better place Qantas airlines in responding to external factors hence maintaining competitive advantage (Senge et. al. 1994). Similarly, learning organization when it comes to the issue pertaining to changes, the firm will be at an advantage as it can adopt change quickly and successfully.
In situations where the relationship between the organization and their relevant stakeholders are analyzed, a learning organization through the five characteristics of a learning organization (team learning, system thinking, mental models, and personal mastery and shared vision) makes it to be people-centered firm. This brings with it a number of advantages such as improved corporate image.
References
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Chesterton, A. & Markson, S. (2008). “Qantas QF30 drama potentially threatens jumbos’ future”. The Sunday Telegraph. July 27 2008.
Daniels, J., Radebaugh, L., Sullivan, D. 2007. International business: Environment and operations. New York: Prentice Hall.
Joshi, R. 2009. International business. Oxford University: Oxford University Press.
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Senge, P. et. Al.1994. The fifth discipline fieldbook: Strategies and tools for building a learning organization. London: Sage.
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