Corporate Social Responsibility at British Airways

integrated cordial obligation at British AirwaysIntroductionThis opus concerns with an investigation of transmission line ethics in British Airways (BA) and in concomitant an event that happened in August 2005 with its catering annunciationor inlet bon vivant.The main(prenominal) objectives of this write up ar-To examine BAs tone-beginning towards embodied loving Responsibility.To reform whether door bon vivants employees ar part of BAs s analyseholder or not.To explain the negative upshotTo explore ethical issues tangled in the practice of outsourcing.The objective of the report go out be achieved by using theories and concepts of business ethics. This report will make possible a look of informative conclusions on how BA handles Corporate Social Responsibility and the particular problem with ingress Gourmet. scallywag 3BAs approach towards corporate favorable responsibilityCorporate amicable responsibility (CSR) CSR is a type of corporate self regulation in corporated into a business model. Superlatively, CSR policy would function as integrated, self-g everyplacening craft whereby business would observe and make sure that its adherence to law, ethical measures, and internationalistic norms. Business would accept responsibility for the allure of their activities on the environment, consumers, employees, communities, stakeholders and all other(a) members of the public.In order to weigh up the approach of Corporate Social Responsibility a well known framework has been used which was devised by Elkington (1999) called the triple-bottom line. According to triple bottom line a corporate doesnt take a leak and one purpose that is to add economic value to their peck un little to a fault to add environmental and well- throw outd values too. triad bottom line gives a clearer picture of what the components of sustainability actually represents in price of a inclination for business ethics by examining them separately.SocialsurroundEco nomicviableSustainablebearableEquitableJohn Elkington (1998) scalawag 4Economic perspective The economic perspective recognizes that continued product in population, industrial performance, resource use and population could mean that standard of living would in the long run decline. A narrow judgment of economic sustainability focuses on the economic performances of the corporation itself the responsibility of concern is to develop, build up and market those products that assure long call economic performance for the corporation. This includes a focus on strategies that set in motion long term rise in share price, revenue and share market quite a than short term explosions of profits at the expense of long term possibility. A broader concept of sustainability would take account of the keep ships companys attitude towards bribes and construction cartels. They could be regarded as economically unsustainable they are not willing to fund the semipolitical institutional system (schools, hospitals, police and justice system) then they eat remote at the key institutional basis of corporate success.From 2000 the airway industries cosmopolitan had been suffering from less number of passenger wanting to fly which was receivable to 9/11 incident, Sars epidemic and rise in the provide costs fol minoring the war in Iraq. BAs approach towards Corporate Social Responsibility on economic is that to maintain its economic system BA has been outsourcing its renovations and reducing cost of personnel through redundancies and various other resources.Social perspective This is a recent breakment in the Corporate Social Responsibility. It has come to pass from apprehension much or less the effect of business activities on native communities in less developed countries and regions. The addition of social contemplation has marked a move in the way ideas about sustainability were put onwards. The major issue in the social perspective of sustainability is that of s ocial justice. In spite of the remarkable advances in standards of living that many of us puddle enjoyed, thither are growing lack of correspondence of income and wealthiness within many countries. In a to a greater extent just an just world, living standards will lead to more economic affluence.BAs approach towards Corporate Social Responsibility on social is that it has clear-cut to enable up to 500 applicants a year to realize their dreams through the London 2012 big Britons Programme. paginate 5It is aiming to raise 1.5 one million million million for Change for Good to table service vulnerable children around the world by 2009/10. BA has plans to gain the number of collogue who donate to affordroll giving by 50 percent by 2012. It will continue to work with Comic Relief and Children in Need. BA has aims to increase the number of young people participating in educational activities to 8000 per year.Environmental perspective The notion of sustainability came into sight mainly from environmental trepidation. The fundamental principles of sustainability in the environmental perspective alarm the effective management of physical resources so that they are preserved for the future. All bio systems are regarded as having limited resources and finite capacity and hence sustainable human activity must maneuver at a level that does not threaten the health of those systems. Even at the most crucial point these melancholy a need to dispatch a number of significant problems deal greenhouse gases from industrial plants and consumer products.BAs approach towards Corporate Social Responsibility on environmental is that it is planning to reduce Co2 emission by 50 percent by 2050.it is aiming to reduce noise per flight by 15 percent. BA has plans to recycle its waste up to 50 percent by 2010 and aims to send zero waste to landfill by 2010 across Heathrow and Gatwick.Reference Elkington, J. (1997)http//www.britishairways.com/ choke/csr-corporate-responsibility /public/en_gbIt is can be concluded that BA uses or has an approach to Corporate Social Responsibilities put forward by Elkingtons Triple tin Line. Those can be divided into Economic, Social and Environmental.Weather Gate Gourmets employees are part of BAs stakeholderIt has been made a case that withdrawors are not legitimatize stakeholders for a client. On the other hand in order to take on out whether this is the case the concept of salience of stakeholders will be used. thither are three factors that consider the salience of stakeholder and they are Power, Legitimacy and Urgency. knave 6Power it is the apparent capacity of a stakeholder to sour organisational action.Legitimacy whether the organization perceives the stakeholders actions as desirable, proper, or appropriate.Urgency The extent to which stakeholder submit are professed to call for immediate attention.Reference Mitchell, R.K, Agle, B.R., and Wood, D.J. (1997)Gate Gourmet had been losing 1.5 million a daytime delinquent to the new contract put forward by BA which had very tough terms. Because of this Gate Gourmet refractory to employ new ply on humbleder wages. So, on 10 August 2005 when 120 new employees were brought in the company the existing workers decided to go on yarn-dye while the trade union representatives went to speak to the management. But after three minutes the management of the Gate Gourmet plundered 700 staff without negotiating with the employees. The very following day BAs baggage treatment staff at Heathrow airport went on one day smooth grounding 700 flights and more than 100,000 passengers in BAs global network. It was nothing to do with BA just now the reason of the select was because BAs suppliers of in-flight meal Gate Gourmet had sacked 600 of its employee who had relatives in the BAs baggage handling staff. BA termed this walkout technically illegal and refused to pay the strikers wages and workers went back to their duty sole(prenominal) after only a one day strike. On the other hand this incident brought adult reputation to BAs global operation and also lost cost of more than 60 million. After a lengthy and controversial talks and negotiations BA decided to revise its supply contract with Gate Gourmet on better terms.Gate Gourmet had been losing 1.5 million a day due to the tough terms put forward by BA but they could do nothing to make BA revise its terms. It shows that Gate Gourmet slang no ability to enamour the action of BA.(Power)BA didnt take any recreate to the Gate Gourmets case and refused to pay its workers on strike and thought stakeholders actions as undesirable, improper and inappropriate. (legitimacy) Page 7BA didnt exploit to solve its stakeholders (Gate Gourmet) immediately but took lengthy and controversial talks to revise its terms. BA didnt show any urgency to solve its stakeholders problem. (urgency)Reference WWW.guardian .co.uk then I conclude that BA is not a legitimate stakeholder gibe to the conc ept of Salience of stakeholder.The negative outcomeMendelow created a stakeholder analysis map for mapping stakeholders origin over the corporate and the interest the corporate has over his stakeholder.STAKEHOLDER ANALYSISLow Interest exaltedMinimum safari assert informedA BKeep satisfied key doersC DLowPower interest matrixPOWERHighMendelow (1991) Chart of Stakeholder Analysis Page 8 element A represents that the stakeholder has low power which means that the stakeholder has less ability to influence organizational goal and the corporate has less interest in the stakeholder. That is why the corporate puts borderline effort to satisfy the stakeholder.Segment B represents that the stakeholder has low power and cannot influence the corporate goal but the corporate has extravagantly interest on the stakeholder because the stakeholder in segment B can be important ally in influencing the attitude of more powerful stakeholder through lobbying. Thus the corporate keep informed abo ut its shareholder.Segment C represents that the stakeholder has senior high power and can influence the corporate goal but the corporate has less interest in the stakeholder. As the stakeholder is powerful the corporate tries to keep the shareholders satisfied.Segment D represent that the stakeholder has high power and can easily influence the goal of the corporate and the chart also shows that the corporate also has high interest on its stakeholder. The stakeholder has high power and the corporate also has high interest in them so they are a key p social class to the corporate.Reference Mendelow, A. (1991) in Johnson, G., Scholes, K. and Whittington, R. (2005)Gate Gourmet had been losing 1.5 million a day due to the new contract put forward by BA which had very tough terms. As Gate Gourmet couldnt make BA revise its term we can say that Gate Gourmet has low power. Because of this Gate Gourmet decided to employ new staff on discredit wages and the existing employee of Gate Gourme t went on strike opposing the decision made by the management. The management sacked 700 staff without negotiating but BA remained quiet during this course of event. It shows that BA has low interest in Gate Gourmet and thus had put no effort in getting involved in the Gate Gourmet situation. Page 9When 600 employees were sacked by Gate Gourmet the relatives of the sacked employee who were in the BAs baggage handling in the Heathrow went on strike on embody of their colleague. Due to this strike 700 flights and more than 100,000 passengers were grounded. This compelled BA to revise its supply contract with Gate Gourmet on better terms. Hence, in this way Gate Gourmet became a key player from minimum effort.Referencecorporatw www.guardian.co.ukEthical issues involved in the practice of outsourcing.Problems with Outsourcing According to Sheffi (2005) companies should never rely on only one contractor and in case of BA, it should have used more than one caterer or the relationship sho uld have been closer so that it could have known more about what the contractor is doing. Some organization, like banks have been disapproved of for poor customer support from outsourced Indian call centers. Also Nike and flutter have been bothered over the sweat shops allegedly operated by virtually of their suppliers. Outsourcing an activity does not mean it is no longer an organizations problem. And according to Emmelhainz and Adams (1999), there is a shift towards global supply and competition and individual firms have the appearance _or_ semblance to be faced with the outlook of an extended chain of responsibility. Once it was dead satisfactory to argue that the ethics of an organizations suppliers, or a firm influence on its competitors, was simply not any of its business, this no longer seems to be the case. Hence, corporations have to take their ethical responsibilities much more largely as a result, the supply chain has to be used as a means of expression for ethics man agement and regulation. Page 10Carolls determine (1991)Economic responsibilities Companies have shareholders who require a reasonable return on their investments, they have employees who want safe and fairly paid jobs, they have customers who maintain good quality products at a fair price, etc. This is by definition the motivation why businesses are set up in society and so the first task of business is to be correctly functioning economic unit and to stay in business. This first layer of Carrolss model is the basis for all the successive responsibilities, which rest on this firm basis. According to Carroll (1991), the satisfaction of economic responsibilities is thus required of all corporations.From 2000 the airline industries worldwide had been suffering from less number of passenger wanting to fly which was due to 9/11 incident, Sars epidemic and rise in the fuel costs following the war in Iraq. So, BA outsourced its service (in flight meal served by Gate Gourmet) to reduce its cost and to increase its profitability. The ethical issue of outsourcing regarding economical responsibilities is that it helps to give shareholders a reasonable return, its employees a safe and fairly paid job and satisfy the customers needs.Legal responsibilities Laws are the codification of societys moral views. For example Microsoft has had to face an antitrust case for abusing its monopolistic position. Page 11To outsource cheap labour if a company brings illegal immigrants than it is illegal. Every firm has to follow societys moral view.Ethical Responsibility These responsibilities compel corporations to do what is right, just and fair even when they are not compelled to do so by the legal framework. For example it was legal to dispose of an oil rig in the sea but was it ethical?Gate Gourmet had been losing 1.5 million a day due to the new contract put forward by BA which had very tough terms. Because of this Gate Gourmet decided to outsource new staff on lower wages. So, on 10 August 2005 120 new employees were brought in the company which made the existing employees insecure. So they went on a strike but they sacked 700 staff without negotiating with them. Outsourcing must not be use only to carry through the economic responsibilities of a firm but also hear to think ethically by not being unfair and foul to its employees as the Gate Gourmet.Philanthropic Responsibility The word Philanthropic is derived from the classical word which means love of the fellow human. According to this proposal in a business context, the mock-up incorporates activities that are within the corporations judgment to improve the quality of life of employees, local communities and ultimately society in general. This lark of CSR addresses a great range of topic, including things such as charitable donations, the building of recreation facilities for employees and their families, support for local schools or subsidizing of art and sports events. According to Carrolls (19 91), eleemosynary responsibilities are consequently purely preferred of corporations without being estimated or required, devising them less important than the other three categories.References Emmelhainz, M.A and Adams R.J(1999)A. Crane and D.Matten (2007)www.guardian.co.ukPage 12By outsourcing its services BA has increased its profitability but it is also involved with many non profitable organizations which helps the society. In this way outsourcing can fulfill firms Philanthropic Responsibility.So I conclude that ethical issues involved in the modern practice of outsourcing are economic responsibilities, legal responsibilities, ethical responsibilities and kindly responsibilities.