• Internal Code :
  • Subject Code : BMO 3332
  • University : Victoria University
  • Subject Name :

Assessment 2: Group Report

Introduction (200):

Research on your chosen organisation (1000):

Qantas is the largest Australia airline, Queensland and North Territory Aerial Services. The airline industry holds the aviation business as well as Qantas airways (stock limited liability company, operation international and Australia routes), QantasLink, Jetstar airlines (low – cost carrier), Jet connect, and Jet star Asia and other different aircraft associated (Xian, W 2018).

Qantas airways, collectively alongside its offshoots QantasLink and Jet star, privatize their route career casing Oceania Regions and stretching to Southeast Asia, East Asia and India, the United Kingdom, Germany, the United States, Canada South Asia’s and different locations. Main reasons for achievement of Qantas are sufficiently and correctly exercising approaches to deal   with possibilities and issues to proceed success. From 1990 – 1995 Australian governments lifted the regulation restrictions which gave the opportunity to provide domestic and international services in the Australia contest. In 1992 end, Qantas airline industry was bought by British airline industry by 24.9 % for $665 million. Soon after, the Australian government injected $1.35 billion support for Qantas airline industry which is that Qantas had a complete competitive chance opposed to Ansett on the Australian economies (Xian, W 2018).

Economic challenges were a serious heat impact for Qantas, such as the up and downs oil market prices. The impact of fluctuation was a hard issue for the business to control on their cost as other airlines had. Global financial crisis of 2007 had astonished the industry significantly and had frustrated the business strengths, for instance, the transportation needs reduced significantly, reduced subsidy volume and fuel insufficiency (Xian, W 2018).   The airline industry has been enhanced and came into two members, which are, Qantas and Virgin Blue, at this moment of time the industry has been changed in the interior of revolution from development and age of decrease (Xian, W 2018).

As the financial year of report showed for 2018 – 2019, the business is a very highly successful operation. In 2018, the industry earned 22 % of returned on invested capitals, $1.6b underlying profit before tax which is the highest record in Qantas history , 56 cents earnings per shares and  $3,413m operating cash flow , and for 2019 , Qantas earned 18.4% returned on invested capital , $1.30b underlying profit before tax , 55 cents earnings per share and $2.81b operating cash flow( Qantas Annual report 2018 and 2019 Qantas Annual report ) . In contrast, the financial year performance for 2019 is under performed than 2018 , however , the company recorded positive returns in general . 

Organizational changes are inevitable for better outcomes for organizations. Without the changes within organizations, businesses would lose their competitive sides and lose customers over their competitors as a result of the failure to meet ever-changing customers satisfactory. Organizations perform and implement over several changes such as crisis, performance gaps, new technology, identification of new opportunities and reaction to internal and external pressure and so on. Qantas also implemented a lot of changes over the years to make sure to keep up with their main competitor, Virgin Australia, as well as to serve better services for customers. 2012, 2013, 2014 were the worst years for Qantas as it had to struggle with lots of pressure from internal and external. Qantas was facing several issues within the organization during those years and they made one of the biggest changes for the organization in 2012. Days after cutting 500 jobs from the organization, they announced that the organization splitted into two organizations; domestic and international. In other way, this change evaluates that the organization changed their mission and vision statement in order to keep up with the main competitor in the market. This change means the change in the organizational structure so that they can focus better on two seperate areas of business. Qantas had lots of success with domestic flights resulting in $552 million dollars profits before tax but $216 million dollars loss in international flights. These changes allowed them to create better opportunities for the airline in both areas of business and resulted in a good outcome as nowadays Qantas is one of the biggest airlines in the world. Another change Qantas implemented was technological change. Qantas has enabled all managers including, customer service managers and front-line managers to use iPads. They have to use these iPads at the airports and as well as on the aircrafts. There is an application called ‘red app’ and it allows them to communicate with other employees and as well as to connect customer feedback and the performance of communicating and also keeps in touch with the front-line workers. Qantas also implemented a reward based system for their employees as if one of the front-line workers excels at their job, they get lounge access and invitation to leadership development programs. Qantas also provided training within the organization to implement changes such as human resource management and technological changes. These transnational changes allowed Qantas to succeed in long term.
 

Research on your organisation's industry (500)

Australian Airline industry is split into 3 general categories. Which includes domestic trunk route airlines, regional airlines and international airlines and two major players Qantas and Virgin Blue controls all of them as of today. However , this wasn’t always the case. Thomas (2020) stated that there were more than four hundred airlines since 1921 in Australia though not many airlines make it as of today. Australian airlines have undertaken several major structural development and changes.

There was an announcement of deregulation made by the government in 1987 which immediately took place and was implemented in 1990. The result of this action has caused the governments to ease the ownership rules and regulation regarding domestic airlines. This gave Virgin blue the opportunity to emerge and transpire in 2001 Thomas (2020). Which as a result, had a huge impact on Qantas as it had to battle and compete with a new airline to maintain its position as a leader in the market. According to Kain and Webb (2003) there were four major domestic truck route airlines in Australia. However, due to the deregulation, collapse of Ansett airline in 2001 and Qantas taking over Impulse Airline there are only two major airlines left in Australia. The result of Ansett closing down in 2001 created a far more discrete and restrained form of competition between Virgin Blue and Qantas to occur Kain and Webb (2003). It also left a big gap and space in services, as Ansett loyal customers and passengers were left stranded. Therefore, as a result Qantas started adopting and acquiring further terminal spaces to deal with the gap and its rapid and express growth in market share. Qantas also began expanding its low-cost carriers fleet and focussed on domestic routes instead of international fleet in response to the gap left by Ansett. The fall of Ansett was in favour of Qantas as the biggest competition to Qantas in regional was Ansett and as a result Qantas began controlling most of the regional airlines Kain and Webb (2003).

Moreover, A significant universal movement that is beginning to impact Australia Airline industry is the appearance of low-cost international transporters. The very first low-cost airline that was successful in the world was Pacific Southwest Airline that operated from northern and southern California in 1949 Bailey (2019).  The success of low-cost carriers that started with Pacific Southwest Airline influenced many other Airlines including Qantas and Virgin Blue which is now called Virgin Australia. Virgin Australia is a part of a bigger organisation known as Virgin group and was founded in 1970 by Richard Brandon (Virgin. n.d). Virgin Blue was established in 2001 as a low-cost carrier which operated between Brisbane and Sydney in a single route (Virgin. n.d). Virgin Blue quickly became a threat to Qantas as the low-cost carrier model was extremely successful and was growing at a very fast pace with stock exchange estimation of 2.3 billion by 2004. Therefore, the chief executive and managers of Qantas began a project  which involved critical development and implementation of innovation and adoption of the low-cost transporters. Qantas launched its very own low-cost carriers known as Jet start in 2003 as a domestic subsidiary with Alan Joyce as chief executive.  and have been very successful as of today (SeatMaestro n.d.). 

Assessment and Evaluation (500):

Today's business environment requires companies to undergo changes almost constantly if they want to remain competitive. Factors such as globalization of markets, innovative changes and rapidly evolving technologies have forced businesses to respond in order to survive in the market. Furthermore, research findings indicate that using a model and structured approach to assess change contributes to successful outcomes of adaptations. The use of models in organisational change has been widely encouraged by the organisational change community. In effect, the most influential change step model is that presented by John Kotter. In 1995, Kotter published an article in the Harvard Business Review that outlined an eight-step model of change, commonly referred to as Kotter’s Model for Change. In some instances developing a method of strategy in achieving the best outcome for change is vital (Troshani et al. 2011). 

An interesting framework that explores the integrative theory of change is explained by Michael Beer and Nitin Nohria as Theory E and O. Theory E aims to focus on formal structures and systems, it deploys planning and programming and is driven mostly from the top with the help of consultant and financial incentives. 

Let incentives reinforce change, not drive it. Any synthesis of E and O must recognize that compensation is a double-edged sword. Money can focus and motivate managers, but it can also hamper teamwork, commitment, and learning. The way to resolve this dilemma is to apply Theory E incentives in an O way. Employees’ high involvement is encouraged to develop their commitment to change, and variable pay is used to reward that commitment. A

But changing work practices and increasing efficiency will only come if Qantas can change its culture and that is a far bigger task. Charles Darwin wrote that “it is not the strongest of the species that survive, nor the most intelligent, but the one most responsive to change.” 

Conclusion (300):

To conclude, the organizational changes when applied with Qantas Airways would be a positive impact on the organization. The organization's changes would lose their competitive sides and would bring in more customers to increase the market share and would constitute the failure to meet the ever-changing customer satisfaction.  Policies and practices which Qantas that organization change and development that would strategically constitute the repositioning. Due to the Qantas process the realign its business strategies and organizational system and innovate that would achieve a sleeker along with the leaner company; which can help to bring the address external and internal disruptions. As per the Qantas, the consequent organizational change would bring in the improvements. To reconsider the hard-line approach for the employees with retrenchment exercises can consequent with the company falls into difficult times. The relation of the organization's performance and implementation to the several changes that would capitalize on the crisis, performance gaps,  and advocate new technology, identification of new opportunities along with the prospective reaction to internal along with the external pressure. Qantas has also integrated a lot of changes to accustom to the main competitor, Virgin Australia, which has best delivered with better services for customers. The organization change has helped to note out how the company can experience in response to stabilizing and sustaining the business activity which can make it part of the corporate, organizational, and personal levels. The organizational change would include the consequent planning, initiating, realizing, and controlling. The change initiative would help to control to establish a unique positioning in the market, controlling threats, and even can integrate the revealing opportunities. The Qantas Airline Company needs to integrate the changes initiatives with the changing times to handle the new entrant competition. The change initiatives would bring in higher competitive strategies which can help to maximize the ability of the company to achieve the highest average returns.

Reference:

Xian, W 2018. Case Study on Qantas of ITS Strategic Management: The Highflyer of the Airline Industry.

Qantas Annual report 2018, Qantas annual report, annual report, viewed 14 June 2020,

https://investor.qantas.com/FormBuilder/_Resource/_module/doLLG5ufYkCyEPjF1tpgyw/file/annual-reports/2018-Annual-Report-ASX.pdf.

2019 Qantas Annual report, Qantas annual report, annual report, viewed 14 June 2020,

https://investor.qantas.com/FormBuilder/_Resource/_module/doLLG5ufYkCyEPjF1tpgyw/file/annual-reports/2019-Annual-Report-ASX.pdf.

Thomas, G., 2020. Australia's Turbulent Airline Industry - Airline Ratings. [online] Airline Ratings. Available at: <https://www.airlineratings.com/news/australias-turbulent-airline-industry/> [Accessed 12 June 2020].

Kain, J. and Webb, R., 2003. Australian Airline Industry. [online] Aph.gov.au. Available at: <https://www.aph.gov.au/About_Parliament/Parliamentary_Departments/Parliamentary_Library/pubs/rp/rp0203/03RP10#aair> [Accessed 12 June 2020].

Bailey, J., 2019. How Southwest Pioneered The Low Cost Carrier Model - Simple Flying. [online] Simple Flying. Available at: <https://simpleflying.com/southwest-lcc-model/> [Accessed 14 June 2020].

SeatMaestro. n.d. Jetstar Airways | Seatmaestro. [online] Available at: <https://www.seatmaestro.com/airlines-seating-maps/jetstar-airways/history/> [Accessed 14 June 2020].

Virgin. n.d. Virgin Australia: The Fastest Growing Virgin Company In History. [online] Available at: <https://www.virgin.com/virgingroup/virgin-australia-fastest-growing-virgin-company-history> [Accessed 14 June 2020].

Myriam, R., 2012. What’s behind Qantas’ restructuring decision?. Available at: <https://www.smartcompany.com.au/people-human-resources/leadership/why-is-qantas-splitting-up-its-domestic-and-international-business/> [Accessed 14 June 2020].

Bianca, H.,2016. How did Qantas improve its Human Resources Management?. Available at: < https://www.hrmonline.com.au/section/strategic-hr/qantas-improve-human-resources-management/ > [Accessed 14 June 2020].

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