In following essay we will discuss the benefits of corporate social responsibility of the airline companies. The essay will look into the corporate social responsibilities that airline companies engage in as well as the benefits of these activities.
It will look into how these responsibilities contribute to the profits of the business even though the main aim of such responsibilities is not to make profit.
Corporate social responsibility refers to a set of activities that companies engage in as citizens of a given nation. It is where a company takes responsibility and participates in the community by engaging in activities that are beneficial to the community.
The beneficiary of such activities may not necessarily be direct clients of the organization. Due to globalization and advent of technology all over the world, airline industry has become very competitive. Consumers are also aware of the company’s need to be socially and ethically responsible and therefore buy services from companies that have corporate social responsibilities.
However, there are ethical standards to be observed in the execution of such responsibilities. The corporate social responsibility should be beneficial to the community.
CSR should not be intended to bring profit but should be the way the company acknowledge and appreciate the society and institutions within the society for the role they have played towards the existence of the organization.
The aim of corporate social responsibility should not make the organization profitable but help the community as well as stakeholders whose role is critical to the company.
Even though the aim of corporate social responsibility is giving back to the community, there are responsibilities that bring profit to the organization (Davis, 2005).
The corporate social responsibility has become an important aspect, which is crucial for the profit of any company. It helps the company to ensure that the costs incurred are lower that the revenue to be generated in order to avoid making loss.
This is because the company cannot exist in isolation but within a community where people live together in harmony. The community is what makes any airline company thrive as many of the customers are very loyal and use it all the time.
The society has three aspects that influence the existence and profit margin of the organization. They include all the employees, as they are part of the community. The way the company behaves with their employees determines its profitability.
The second social entity involves the customers who influence the demand through the willingness and ability to utilize the products as well as services provided by the company.
The customers are crucial to any business and determine its profit margin. The company must develop programs that target the existing customers in order to attract and retain them.
The company must also give services to the society through community-based projects that benefit members of the society who may not even have interest in the company.
It may target people who live near the company premises as its services affect them in general. The community-based programs may affect the businesspersons, institutions, and civic societies in that organization. The other entity that has to be included in the corporate social responsibility is the government.
Sponsoring or collaborating with the government in any project positively affects the company and ensures that it is considered as a critical partner of the government.
This ensures that there is good relationship between the government and the company. The company’s employees and government officials work together to ensure that the business is successful (Epstein, 2008).
Airline CSR activities
The following are some of the social corporate responsibilities that airline companies engage in with the first one being environmental conservation. This entails conserving the natural environment as well as measures to minimize air pollution, water pollution, land pollution and noise pollution.
Environmental conservation is critical to the airline companies. Environment conservation has become a matter of concern to the companies that operate airlines as they emit large volume of green house gases.
The huge volume of non-renewable energy consumed by the airline companies make the industry a source of air pollution and emitter of carbon. Across the globe, there is a widespread need to conserve the environment and the natural resources.
It leads to the creation of policies that regulate matters of conserving the environment and climate control (Werbach, 2009). Airline companies such as British Airways, Virgin Airlines and KLM have come up with social corporate responsibility programs that aim at conserving the environment.
For instance, British Airways has a carbon-offset program where the company provides resources to organizations that advocate for environmental conservation through activities such as tree planting, forest rehabilitation and development of green house projects.
The American airlines on the other hand aim at reducing their carbon emission by fifteen per cent by the end of the year 2020.
This is an ambitious project to conserve the environment and there should be benefits linked it, which motivates the companies to engage in such projects (Griffiths, 2003).
The environmentally oriented social corporate responsibilities aim at achieving three major objectives that influence the profit of the company. The first one is that it makes the company look positive in the eyes of the customers.
This means that the customers and the public view the company in positive light because it is concerned with the sustainability of the welfare. Such positive attitude gives the company a good reputation (Werbach, 2009).
Secondly, the environment oriented corporate social activities provide the company with an opportunity to save resources through the green house projects.
For instance, an Etihad airline from Abu Dhabi hopes to save one billion U.S dollars within five years by developing bio fuel projects that will provide bio fuel to the company.
This project although it initially started as corporate social responsibility activity has slowly made profit for the airline company by saving many airline expenses that would have been used to purchase fossil oils.
Thirdly, the environment related corporate social responsibilities lead to the creation and development of resources and activities that minimize the waste through projects such as the green projects, recycling of waste materials and minimized use of energy within the offices during working hours (Wood, 1991).
In the year 2010 plan of Abu Dhabi, the Etihad Airways played the role of driving the diversification and growth of the economy in the country.
Through the study conducted in Abu Dhabi it was noted that the company has played a major role in collaboration with the government of Abu Dhabi by providing data that is used to assess 210 companies within the country.
The airways company plays other important roles in the economic sector like trade, labor supply and productivity, tourism and local investments. The company has contributed a lot in generating money that helps in employing workers in the non-oil industry.
This has been beneficial to the company in the sense that it has gained positive press coverage, which creat positive image to the public hence being in a position to attract many customers (Wheeler, 1997).
Many airways companies engage in supporting travel and tourism sectors within the country as a way of attracting more clients to the country and being at a better position to influence the movement of tourists.
For instance, Etihad is one of the airways companies that have engaged in supporting the tourism industry as a way of attracting more tourists to the country. In the year 2010, the company became a destination manager.
The company offers business opportunities as well as leisure to the clients. It therefore provides a range of products and services that are non-competitive to its clients. This helps to attract and retain customers due to the high quality products as well as services.
The company launched a marketing campaign in the year 2011 campaigning for Abu Dhabi as the best tourist country. It was therefore an opportunity for all the tourist stakeholders to display the best that the country can offer to the tourists.
Through the company’s engagement in supporting the sector of travel and tourism, it has been able to improve the business since there are many tourists in the country (Wheeler, 1997).
Training and development
Airline companies engage in the development of training academies as a way of training and developing the graduates to acquire the necessary knowledge and skills to handle the technical job in the aviation industry.
Airline companies like Etihad has art training academies, which offer positive learning environment for providing technical training.
This helps learners to gain technical competency and necessary skills in handling business operations in the aviation industry as well as the safety measures and knowledge in delivery (Epstein, 2008).
The company has therefore devised a way of training and developing its new employees such that after the interview process the employees acquire new skills other than those learnt in school.
This started in the year 2010 with an aim of providing all the necessary tools and information to the recruits to ensure that the members become oriented to the operating system of the company.
After the second stage of training and development, the company engages its employees in the succession planning where the employees’ talents are identified and developed accordingly.
In this stage, the training and development team of the company identifies the talents of each employee with an aim of developing internal talents in relation to the critical roles of the organization.
This kind of involvement is of great benefit to the company as it helps to improve the productivity of the company since each employee works in a section where he or she performs best (Habisch, 2005).
Remuneration and performance appraisal
Airways companies like any other company offer both financial and non-financial benefits such as supplementary flight tickets to friends, family members and home ownership schemes.
The company engages in such activities as a way of motivating its employees and this increases productivity as well the profit. (Epstein, 2008).
Companies like Etihad reward their employees based on individual performance. This kind of reward improves the performance of the employees.
This aims at motivating the employees who strive to attain their best at work place. This benefit the company as its employees will always work hard to achieve best results, which in return increases the productivity of the company.
This has therefore helped most airline companies to achieve the expected results because without such kind of motivation productivity might be of poor quality since most of the operations in the aviation industry are technical (Griffiths, 2003).
Crisis and humanitarian aid
Airways companies engage in crisis and humanitarian activities as a way of improving public image. For instance, Etihad Airways has always assisted the public in cases of natural disasters.
In the year 2010, Etihad offered donations to countries like Australia, Pakistan and Haiti. In Haiti, the company offered medical assistance to citizens and other humanitarian supplies.
In Pakistan, the company had to assist during the floods by supplying relief clothing, food and medication to the citizens. The company offers care by air services as another form of humanitarian aid from Abu Dhabi.
This initiative provides space for carrying relief food and other facilities to other countries free of charge.
The company has air links where it provides free web-based portal, which helps non-governmental organizations to come together with the aim of settling humanitarian crisis (Habisch, 2005).
Engaging in such activities is one way of participating in the corporate social responsibility. The company has always enjoyed the opportunity of recognition by its stakeholders in the UAE as well as the members of the community in which it operates.
This has therefore assisted in attaining the expectations of the stakeholders since it proves how responsible the company is (Epstein, 2008).
The engagement in Corporate Social Responsibility involves the community support activities. These activities aim at ensuring that the airline company meets the community needs.
They help the community to connect with the local people by providing services that are needed by the people in the local community. For instance, Etihad has a project of helping the disabled people in the Abu Dhabi.
Such projects improve relationship of the airline with the locals who feel that the company has played a role in providing solutions to problems within the society (Werbach, 2009). The company also has Mosaic awards that recognize the local community or people who have harnessed their intercultural skills.
The company does this for instance by being hospitable to the tourists or having knowledge on local and cultural issues that they are willing to share with the members of the society. Such activities make the airline a service provider of choice for the local community (Griffiths, 2003).
Some of the corporate social responsibility activities aim appreciating the government for its role in regulating the industry. For instance, Etihad airlines have special seats for the government delegations.
They also provide free air transport to government officials of the foreign ministry twice a year. The aim of this activity is to position the company positively in the mind of the government.
This may result in profitability of the company, as the airline may not be subjected to discriminatory regulation that may affect the company. It also places the airline in a position to lobby for policy changes in issues that affect the airline industry, this ability to influence the government and regulatory bodies are critical.
Although ethically the activity may be wrong, the initial intention of giving to the community makes it right. The intention is not to influence the government but the influence is the result of the social corporate responsibility.
This has seen the airline companies having advantage due to reduced taxation and favorable government policies that guarantee high profit margin (Werbach, 2009). Payment of taxes is no longer a business expense but a corporate social responsibility in the sense that the taxes help the community.
Airline companies that provide faulty tax returns yet they sponsor other activities default one of the most important Corporate Social Responsibility.
This is because Corporate Social Responsibilities are based on the premise that the companies are citizens and as responsible citizens pay taxes, responsible companies should pay taxes (Wartick, 2005).
The other community Corporate Social Responsibility that is common among airline companies is that of sports sponsorships. Sports draw a huge number of spectators for entertainment.
When the airline company sponsors a sports event it gets an opportunity to present its brand to the public. For instance, British Airways is a sponsor of the Olympics event.
This gives the company a chance to market itself to the athletes and Olympic enthusiasts who have to travel to the venue by air.
By sponsoring the event through giving ticket to the sports fanatics or providing free services, the company is known by many people. Through such sponsorships, the company benefits from free press coverage that serves as a marketing opportunity for the airline company (Wartick, 2005).
Another company that benefits from community support program is the American Airline that sponsors Run for the Zoo event where the community participates by running for the wildlife conservation. Through the publicity that the event receives, the company receives positive press coverage.
Other than having free press coverage, community support activities provide the community with a sense of ownership where the community feels that they are part of the company and they work towards mutual co existence with the airline company.
This mutual coexistence leads to increased customers implying increased sales volume and high profit margin (Habisch, 2005).
The other corporate social responsibility involves the development of activities that aim at helping other businesses that relate to the airline industry. For instance, a country may develop resources or training programs that target businesses where its employees have to travel by air frequently.
The company may prepare a free seminar for such businesses on how they can save on transport expenses. By sponsoring such activity that aims at helping other businesses, the company creates good relationship with potential clients who may benefit the business in future.
For instance, KLM Airlines holds seminars where they train business executives on how to make easy travel arrangements urgently and places to travel for business that makes the company excel in corporate sales (Griffiths, 2003).
Corporate social responsibility is an imperative part of an organization. Any company that is guided by business ethics must have corporate social responsibilities that it engages in as a member of the society.
Putting the society ahead before the profit margin by delivering quality services and then giving back to society is the foundation of corporate social responsibility.
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