Qantas Management Lock-Out Case Analysis
The purpose of this report is to enlighten the reader about the case analysis of the company Qantas and the relation of management theories with the case. The report evaluates details about the management lock out issue of the company Qantas and problems faced by the company due to this issue in the market. It further evaluates the case on the basis of three theories of management and one theory of ethics related to the case. Qantas is a multinational organization that is present in the airlines industry. In the year 2011, the company faced the problem with trade unions. The employees of the company started demanding things that very heavy for the company to pay (Briskin, 2016). Resulting to which, they initiated the management lockout system until the time the employees do not lower down their expectations. More details about the report are discussed below:
A news article posted in the Sydney Morning Herald on 29th October 2011 stated that the company Qantas is aiming to lock out the employees that are currently in dispute and are covered with the agreement. The company aimed to ground all the domestic as well as the international fleets indefinitely. Alan Joyce, the CEO of Qantas stated that airline company will lock out the employees until the unions reduce or revokes their extreme claim and reach to a positive agreement with the company. The lock out of management started on Monday 31st of October till the day the employee agree on the terms of the company (ABC.net, 2011).
Many people like Julia Gillard resisted to the action initiated by the company stated that it is not right to deal with the issues with trade union in the society. However, Alan Joyce stated that his hands had been tipped by looking at the most impossible demands of the three unions present in the working environment of the company. The company further added that such demands and actions of the employees are also criticizing the brand image and business strategy of the company. The ground staff, pilots and the engineers are ruining the well maintained image of the company in target market (Sarina, & Wright, 2015). The top level of management stated that such deliberate actions of the employees destabilising the image of the company and there is no end sign of this activity. Further, if such actions are initiated in the environment then Qantas at the end would have no choice but to shut down the business functions step by step. The increasing demand of the employees is making the company hollow from inside resulting to which it might break the company part by part and end it soon (SMH, 2011).
Elton Mayo’s Human Relations Theory of Management
The CEO of the company said that lock out, grounding of the fleet was one, and only effective way according to him that can effectively bring a solution for the dispute present with the company. The leader of the company sincerely understood the inconvenience of the customers that were affected with the decision of the company. For the people who had booked the tickets, the company returned the money to them and the people who were in the mid journey were transferred to another flights and accommodations as well. The company made sure that not much people were affected the decision of the company. Alan Joyce stated that, as the decision has now went in the union’s court, so it is now their chance to decide how badly they want to hurt the travellers and members and the company on a whole. From the event, the Fair Wage Act decided to make ALAEA and Qantas come into an agreement to initiate actions with each other’s consent in the society. The ALAEA (Australian Licenced Aircraft Engineers Association) was left with not enough bargaining goals and the company had to forego the lock out in order to come at mutual understanding (Forsyth, & Stewart, 2012).
Human relations theory refers to the theory that explains the behaviour of people in a group. With the help of this theory, the management gains knowledge about the behaviour of people in a particular workplace environment. It helps in evaluating the industrial and organizational psychology of the employees working in an organization (Forsyth, & Stewart, 2012). This theory was proposed by Elton Mayo that expressed his concentration on three things that are mentioned below:
- The power of groups under which, social aspects takes place over the functional organizational structure.
- The need of reciprocal communication in order to initiate two way communication, this is from top management to lower level and vice versa.
- Development of high quality of leadership to circulate the information about the goals and develop effective decision-making process as well (Armstrong, & Taylor, 2014).
It is important for most of the company to improve the interpersonal skills of the employees that are related to the job. Teaching these types of skills to the employees is known as soft skill training. Further, according to this theory, the companies need to successfully communicate such skills to their employees in order to attain satisfaction in the target market. Further, under this theory, it is important for companies to become more employee centred than machine centred. According to this theory, the employees are the biggest resource of the company and they should be satisfied to the maximum level. So, according to the given case of Qantas management lock-out, it can be seen that it is important for the company to communicate the functions clearly to the employees and the union as well (Dalton, 2017).
X and Y Theory of Management
As the global aviation industry has low profit margin due to which the company faces problems in increasing labour cost. The company is unable to match the labour cost of the employees with the profits that they receive in the environment. Along with this, increasing demand of the employees significantly acted in oppose to the activities of the company in response to which they were left with no other option other than locking out the employees of the company. The company thought that in this way, they might lower down the level of expectations in the market. It is important for the company to convey the organizational activities and the objectives of the company to their employees so that they do not demand for something that the company is not capable of giving. According to this theory, the organization was unable to create good relations with the employees (Bratton, & Gold, 2017).
Theory X and Theory Y is another popular theory of the process of management. According to this theory there are different workforce models of motivation applied by the human resource managers in the society. These theories are related to the theory of motivation as it understands different levels of needs of employees present in the society. The theory X is based on the assumption that there are typical workers present in the society who has little level of expectations in the society (Barkema, Chen, George, Luo, & Tsui, 2015). This type of workers are considerably less ambitious, tries to avoid responsibilities and is individual goal oriented. The managers having this type of style believes that the employees of the company are less intelligent, lazy and work only to earn their share from the market. Self-interest is what derives the work from this type of employees. Further, according to the theory Y, the managers assume that the employees are internally motivated in the society. They believes that they employees enjoy their job, work only get better and earn organizational objective apart from personal monetary goals (Khorasani, & Almasifard, 2017).
The employees under such scenarios do not need additional supervision of the leaders and take full responsibility of the work that they do in the society. It depends upon the internal and external aspect along with the preference of the manager to choose a specific management style to act in the society. Relating it to the given case, it can be said that as the managers of the company Qantas did not perform adequate actions in the target market that certainly resulted in employee related issue (Deng, 2015). It is important for all the companies to fully satisfy the employees with their management styles so as to attain their contribution in the market as well. The management of the company opted for Theory X due to which they lacked to maintain relationship with the employees that ultimately resulted in the disturbance in the relations between the human resource and the management of the company Qantas. Thus, it can be said that according to this theory, it is important for the company Qantas to succeed in the market by applying adequate theories of management and leadership in the environment (Prottas, & Nummelin, 2018).
According to Bureaucratic Management Theory, there are two important aspects that affects the decision-making process and activities of the business. The first element explains that the process of structuring in an organization should be in the form of its hierarchy. Another element explains that the organization and its members are governed by differential rational and legal rules and regulations. Both of the elements helps the companies in achieving success in the target market. The organization hierarchy refers to the process of arranging the organization on the basis of hierarchy. This element of the theory states that companies should hire and promote the employees on the basis of existing hierarchical structure and they should not change the structure at any cost (Vittikh, 2015).
Further, the second element says that the system of an organization is also government by a set of rational and legal decision-making rules and regulations present in the external environment. These rules are present in the external environment butt holds the capacity to change the internal systems of the company as well. It is important for the companies to lie under the internal as well as external systems and regulations in order to successfully initiate the efficiency and effectiveness in the company (Niskanen, 2017). In the given case of Qantas, the company was government by both the systems in the environment. The internal systems of the organizations were working well but due to external rule governing bodies like TWU (Transport Worker’s Union), AIPA (Australian and International Pilots Association) and ALAEA (Australian Licenced Aircraft Engineers Association), FWA (Fair Work Act) etc. the company started facing issues in the environment. This resulted in displacement in the internal as well as external functions of the company (Waring, 2016). Further, relating it to the given case of Qantas Airlines, it should be noted that the company it is important for an organization to satisfy and comply with both the elements in order to be viable in the environment. But the company failed to comply with the external rules and bodies present due to which they faced such problems in the environment. Thus, it can be said that the company Qantas initiated the process of management lock out because it was unable to manage the external changing environment (Bratton, & Gold, 2017).
Utilitarianism is a theory of normative ethics that states an act that is initiated in the environment is good if it bring positive outcomes for the society and its people on a whole. An activity that produce greatest amount of good for the people is regarded as a good action in the environment irrespective of the rules or laws defined in the environment. This theory of ethics is a part of the normative theory of ethics that explains whether a specific action is good or bad in the society (Paulraj, Chen, & Blome, 2017). According to the theory of utilitarianism, an act initiated by a person is good in the society if it bring positive outcomes for the people affected with that action. Irrespective of the rules and regulations present in the environment if the actions implemented provide satisfaction to the people then they are good otherwise (Bell, Dyck, & Neubert, 2017).
Further, relating this theory of ethics to the case of Qantas management lock out, it should be noted that the company did not perform actions according to people present in the society. Initially the company was upset with the employees due to which they initiated this process, secondly the company harmed the satisfaction level of the customers as well. As the process lock out shut down the business functions of company due to which the travellers faced difficulty in reaching to the specific location not (McMahon, 2017). Although the company arranged for the people, still the customers faced high degree of problems while travelling. Thus, it can be said that according to the theory of utilitarianism the company performed actions that reduced the trust level of people on the company and increased the level of problems as well. Thus, this act of management lock out cannot be seen as an ethical action in the environment (Jones, et. al., 2016).
Conclusion
Thus in the limelight of above mentioned events, the fact should be noted that the above mentioned report acknowledged the issue of management lock out initiated by the company Qantas against the increasing demand of the employees in the target market. The report evaluates the details about the company on the basis of four theories among which three theories are a part of management theory while utilitarianism theory of ethics is also discussed in the paper. The company Qantas initiated management lock out system because it was unable to handle the demands of the trade unions connected with the company. However, it was regarded as a wrong action as it increased the level of dissatisfaction for many people in the society.
Below-mentioned are some of the recommendations given to the company Qantas:
Find Alternative Solutions: Against the increasing demand of the employees of the company, the management decided to initiate management lock out so as to cool down the increasing temper of unions. However, the FCA stated that the company should have looked for other alternatives in order to achieve a saturation point in the environment. Further, the should have used various other ways to make the union understand their condition and ask them for support.
Increasing Satisfaction of Employees: It was important for the company to state clearly to the employees about their condition as well as expectation from the employees. Along with this, it was important for important for them to motivate the employees so that they can stick to the organizational guidelines. Employee motivation and satisfaction will surely reduce the human resource management issues in the internal environment of the company.
References
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Sarina, T., & Wright, C. F. (2015). Mutual gains or mutual losses? Organisational fragmentation and employment relations outcomes at Qantas Group. Journal of Industrial Relations, 57(5), 686-706.
SMH, (2011). Qantas to lock out employees. Retrieved from: https://www.smh.com.au/national/qantas-to-lock-out-employees-20111029-1mpar.html
Vittikh, V. A. (2015). Introduction to the theory of intersubjective management. Group Decision and Negotiation, 24(1), 67-95.
Waring, S. P. (2016). Taylorism transformed: Scientific management theory since 1945. North Caroline: UNC Press Books.
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