Corporate Social Responsibility Alters Airway Company's Reputation - Case Study Example

Corporate Social Responsibility at British Airways Introduction Corporate social responsibility in the aviation industry is essential for survival; many entities are now pushed into it not because they want to but in order to realise operational efficiency. This came about owing to green house emissions restrictions as well as pressure for the entire airline industry to become sustainable. Environmental conservationists and other stakeholders in the sustainability world have identified this mode of transport as a key threat to the environment. Therefore, British Airways and other companies in the sector have a legitimacy problem that they have to rectify or at least minimise though CSR (Bueble, 2008). Certain challenges are also plaguing the industry, and these could have an impact on how corporate social responsibility is implemented; jet fuel prices have doubled over the past decade. Therefore, airlines now need to consider sustainable fuels over the long haul; some organisations are already considering this alternative but are to implement it fully. Low cost airlines are driving up competition because of the need for faster and less costly aviation transport, so bigger organisations need to find a way of adding quality in service provision. Rising customer expectations as many of them have now become more informed through the internet also couples this need. Buyers are demanding more sustainable business from organisations, so aviation stakeholders need to rise to challenge and meet this need (Esty and Winston, 2006). Some entities believe that environmental sustainability is an oxymoron in the aviation/ airline sector because carbon emissions are appallingly high. Some travellers are responding to this fact by using other means of transport, selecting direct flights, or using companies that are the most sustainable. CSR is an important factor for most Britons as they care about how well businesses take care of their environment or their community (Werther & Chandler, 2006). Reporting is expected for several businesses in the UK as the public demands accountability from major service providers like British Airways. Role of CSR in the company’s business How CSR has contributed to the core activities BA’s three core statements on sustainability are: mitigating environmental impact, becoming a responsible employer or business and enriching community livelihoods. In 2013, the company did plenty of things to show how far it is willing to go in the sustainability journey. In business operations, the company introduced seven new Boeing and Airbus planes because they are more efficient and quieter than the conventional models. The firm also wants to reduce environmental impact in noise, so it implemented a fly quiet program at Heathrow; its short haul fleet is now at the top in terms of its noise emissions. In operations, it has lowered its carbon impact by 5,565 tonnes owing to electricity and gas conservation; likewise, the company used 12% in 2013 compared to the previous year (British Airways, 2014). Community impact has been realised through its charity efforts including a community learning centre as well as a revenue generating partnership between Flying Start and Comic Relief. The company now has 6.75 million pounds that it intends on using in various projects in the country and around the world; the organisation has an employee scheme that allows employees to donate to charity (British Airways, 2014). How CSR is used The company’s commitment to CSR can be seen through its sustainability report that is released every year; something new is always happening at its respective locations. The organization has changed the way it does business with its suppliers as it conveys its social and environmental expectations to them and then convinces them to adopt their policies. Therefore, not only is BA environmentally conscious, but its business associates also follow suit; this conveys their commitment to the matter. The presence of a plan for future CSR illustrates that the company is not reactive in its approach; it often seeks new opportunities to impact its community. In 2008, the organisation made a decision to become the most responsible airline, and to do this it set a series of long-term targets for climate change and its community (British Airways, 2014). The firm has been an advocate for environmental trading schemes and other realistic alternatives that can assist in meeting the full environmental cost of flying. How CSR is offering new ways of engaging with people The organisation is changing the way it engages with consumers by getting input from them concerning their requirements on flying; Manage My Booking is one such example where persons with disabilities include their input (British Airways, 2014). For employees, the organisation now works with its employees in order to improve health and wellbeing experiences for them. Volunteering opportunities and apprenticeships in the organisation are also other ways in which employees engage with the company. It is altering the way it engages with communities by meeting their needs in the UK and elsewhere- registered charities engage in education and health improvements. How the company includes stakeholder input BA has online programs called Real time Plus and Customer Voice, which ask customers how the company can improve on services and hence their social responsibility (British Airways, 2014). Additionally, the firm wants to know how it can improve employee health through a new technology platform, and this is a proactive approach. Its suppliers are also not left out of the equation as a number of them usually get challenged by the organisation to work with them in order to create great outcomes. How the company positions itself with regard to their future business The organisation has a roadmap for sustainable aviation practices that it intends on implementing in the future (British Airways, 2014). Clearly, this is not business as usual; some of the major problems surrounding aviation cover dwindling fuel resources and an increased number of passengers. Even though experts claim that no single company is likely to reduce their carbon footprint in the aviation industry over the next decade; BA is still finding ways of paying the price for its environmental effects. Whether company disclosures contribute to beneficial perceptions Company disclosures have worked very well for British Airways because the organisation has even received awards for its program. In 2011, it was the recipient of the Business Travel Awards for the best corporate social responsibility programme. This occurred despite facing immense competition from firms like Virgin Atlantic who have also been at the forefront of CSR. The presence of disclosures led to this outcome because the company documents its journey on a continual basis through media releases, the sustainability reports and other communication channels. These regular communications testify to the organisation’s attitude and acceptance of its community and environmental responsibilities (Crane and Matten, 2007). Conclusion CSR for this organisation has contributed to better financial performance as it has led to more sustainable operational decisions; reductions in costs have translated into higher profit margins. Furthermore, British Airways has built a reputation as a sustainable company in an industry where it is perceived that the reverse is actually true. Owing to the awards and recognitions received by the company, the organisation has reduced need for regulatory oversight. The business has shown that having a commitment to CSR ought not to be dependent on the financial conditions of the organisation as this is a long-term strategy (British Airways, 2014). Some customers are loyal to BA simply because of the choices it has made with regard to its community or the environment. In the future, it is likely that CSR will lead to greater stakeholder involvement in the company; the growth of social media is likely to elicit two-way communication between organisations and the people affected by the CSR efforts. Furthermore, once carbon emissions start going down, the company may engage even more seriously with alternative fuels. The most problematic aspect of the CSR report is in the area of employee management; the company is not doing enough to meet these stakeholders’ needs. Its handling of striking workers shows that it still has a gap that it must fill in this area of management (Carroll & Buchholtz, 2003). Recommendations The report has shown that corporate social responsibility has the ability to alter perceptions and reputations even when it operates in an industry that seems to do the opposite. British Airways embarked on an ambitious journey in which it decided to become the most sustainable airline in 2008; it has religiously documented its achievements and shown that one can challenge convention and reap the rewards through CSR. This organisation has proven that there is more to companies than mere profit-making; since firms belongs to communities, it is incumbent on them to take responsibility for their effects on communities. Although BA already has a series of charities that it manages, it could be more effective for the company to work personally with certain groups of people. This way, the community will identify with the company and thus feel the impact more strongly; donations to external charities seem like a short cut (Banerjee, 2007). Furthermore, the organisation ought to safeguard its employees’ welfare even more; currently it appears like it is only offering them superficial options like volunteering for charity and health input. It needs to address the work conditions that led to the strike in order to prevent these occurrences in the future, as they are the firm’s greatest asset. References Banerjee, B., 2007. Corporate Social Responsibility: the good, the bad and the ugly. Cheltenham: Edward Elgar Publishing Limited. British Airways, 2014. 2013 Sustainability report. Available at: responsibleflying.ba.com/wp-content/uploads/British-Airways-Sustainability-Report-2013.pdf [Accessed 30 October 2014] Bueble, E. 2008. Corporate Social Responsibility: CSR communication as an instrument to Consumer- Relationship- Marketing. London: GRIN Verlag Carroll, A. & Buchholtz, A., 2003. Business and society: ethics and stakeholder management. London: Cengage Learning. Crane, A. and Matten, D., 2007. Business ethics: managing corporate citizenship and sustainability in the age of globalization. Oxford: Oxford University Press. Esty, D.C. and Winston A.S., 2006. Green to Gold – how smart companies use environmental strategy to innovate, create value, and build competitive advantage. Yale: Yale University Press. Werther, W. & Chandler, D. 2006. Strategic corporate social responsibility: stakeholders in a global environment. London: Sage. Read More