The Situation
James Hardie’s strategic decision and Qantas Airlines’ actions regarding unethical behaviors.
This paper will discuss the strategic issue faced by James Hardie and its implications on one selected organization that is Qantas Airlines.
The following paper will discuss the sacking of the CEO of James Hardie and the implications of this step on the chosen organization, Qantas Airlines.
The Board of James Hardie decided to sack Jack Truong from the position of Chief Executive Officer. This incident also made Qantas Airlines pay back its employees the entire amount that was underpaid for several years. Qantas airlines have also faced a similar situation in which the staff, especially the female staff, have stated they are dissatisfied with the behavior of their superiors. Just like the CEO of James Hardie had been discovered to be not a decent person and many such employees had stated their dissatisfaction, in the same way, Qantas staff have also said that they are not pleased with the behavior patterns of the behavior. Therefore they wish the senior staff members to be changed. Many of the employees have also gone underpaid, not considering the number of hours they have worked. Therefore, the case of the sacking of the CEO of James Hardie made Qantas airlines pay back the unpaid amount to the employees such that the initial behavior could be stopped in the company.
James Hardie’s CEO Jack Truong was fired by the organizational committees only three years later after joining the company. The Board took this decision after getting several cases of the unprofessional, unethical, intimidating, and bullying nature of Mr. Truong. The disrespectful working behavior in the workplace created a hostile working environment for the employees, which included complaints from the staff members. The company also made a significant decision to strip Mr. Truong from his entitlements, including his long-term bonuses.
A contemporary issue of work culture and ethics. This paper contains an analysis of the ill impacts, threats, opportunities, and possible threats that might arise due to this issue. As per the information from James, Hardie’s CEO has started destructive behavior with their employees. He has done the most unethical behavior with their employees and has a nasty attitude which makes an inferior working culture. The CEO also does sexual harassment, the worst job culture, and does not provide their employees’ salaries on time. It’s also come to know that the CEO also has the worst moral ethics, which is held or carried very the threatening and disrespectful ambiance in the office culture. It came to know from the external stakeholders business franchises that the same scenario will also happen with them.
Similarly, in Qantas Airlines, the senior officials also started disrespectful behavior with their staff and other office members. It came to know that, the externally the customers also reported against the same culture going to be held here. On a prolific note, the reviews for both the companies are pretty pessimistic and with a very down working culture.
Workplace culture is essential for an organization to maintain the balance amongst the employees and employers. James Hardie recognized the urgency of the situation and took proper actions to ensure workplace safety and a legitimate working environment by firing the aggressive chief executive of his position. Some particular risks and threats can arise in such types of situations. Companies can face serious issues of employees resigning from their jobs, and it also affects the company’s market value when the officials create this type of scenario.
James Hardie’s Sacking of CEO and Its Implications on Qantas Airlines
Qantas airways have not paid their staff the amount which they are due. They have left them underpaid for years while the senior staff members have enjoyed the fruits of the profits. Many of the staff, including the female e pilots, work for longer hours without proper remunerations. Just like the CEO of James Hardie was exploiting the resources and treating the staff very unethically and poorly, in the same way, Qantas is suffering the same. This scenario has been stated as unethical and immoral, which is also mentioned in the system. From the perspective of Qantas Airways, the described method has resulted in reputation damage and employee’s unproductivity. If the situation arose for Qantas Airways, it would most probably result in substantial retarding deployment of employees and the reduction in the economic growth of the airlines. The intimidating behavior of the company’s officials can increase miscommunication between employees and employers, thereby decreasing the quality of the company’s standards. Any situation like this can very easily disturb the financial and economic balance. PESTLE analysis has been done in the form of strategic formation caused by the simple portfolio. It also states the political scenario and economic scenario in which the strategic construction of the company is created. In the strategic analysis, it is also said that immoral behavior and unethical behavior are also mentioned simply. Therefore, the PESTLE analysis is used to conclude the sacking of the CEO.
To recommend from a CEO’s perspective, James Hardie must keep track of the behavior of its officials. To prevent these situations from arising in the future, the company must hold personal counseling sessions for its employees where they can talk freely about the behavior of other colleagues and the governing officials. Qantas Airlines can also follow these recommendations to openly discuss their wages and work life. This can help in handling the underpayment issues. It can be recommended that Qantas airlines conduct proper discussion and counseling sessions. The counseling sessions help the employees state their problems to the management and therefore use this chance to improve the situation. This would also help the employees communicate their issues in Qantas, which would allow them accordingly. If conducted earlier in James Hardie, the sessions would have helped them solve their problems and therefore use this chance to develop the employee management programs. If this system had been developed earlier, it would save them accordingly and improve the working conditions.
The Board members of James Hardie have enacted the rules and regulations by keeping
in mind about Political, Economic, Social, Technological, Legal and Environmental
(PESTEL) analysis of the company and how it can help improve its employees’ overall performance. Below is the PESTEL analysis of James Hardie:
P: Political factors play a particularly significant role in determining those factors that can impact the long-term profitability of the company. Political stability, military invasion’s risk, corruption level, and cement-related anti-trust laws are all political factors that can affect a company. The political impact is shallow, and the government’s guidelines only state the employee’s behavior and how they should be managed. The private company only follows the rules accordingly, and this does not cause any changes in their management development.
A Contemporary Issue of Work Culture and Ethics
E: Economic systems and their types in a country and their proven stability are the
major economic factors that affect the growth level. The company’s economic development will be improved much further when the overpaid amounts will be given back to the employees. Qantas withheld any number of remunerations of the employee. It prevented them from being paid, and therefore they must know the situation and get them delivered accordingly.
S: Socially, the company can be affected by the level of skills of its employees, and demographics and power structure in a society are also essential factors. The social rules would be the immoral behavior seen in the company and therefore needs to develop further. It has been seen that society is unwilling to accept the bad behavior seen in the JH sicario. And thus, Qantas should adopt measures to take care of their employees and prevent such behavior patterns.
SWOT analysis is one of the most profound sturcture in any business industry. It always helps the organization in impacting the functionality planning in the long run. As per the SWOT analysis , the organization is having threats to the company , the staffs are having issues , implementing files reports against the officials which bring a demotivated work culture as well as a very bad working ethics. The threats are also coming through that the officials are over going with the sexual analysis to the female staffs that brings a very bad review and reputation in the concerned organization
T: Technological advancements in modern-day society and growing competitiveness affect the growth level of companies. The technical impact is shallow as unethical behavior has nothing to do with the specialized equipment being used in the company.
E: Environmental factors like weather, laws regarding environmental pollution, recycling, and managing waste in an efficient way are all environmental challenges James Hardie goes through. The ecological impact is also shallow and has nothing to do two the immoral behavior which the two companies and the CEO have shown their employees.
L: Legally, laws regarding anti-trust norms, property laws, discrimination, and data protection laws affect the overall growth of James Hardie. The legal rules state the standards of employees which need to be maintained in their workplace. However, it was seen the employees were harassed by James, the CEO of JH, which had been seen earlier. The sacking was done based on this wrong behavior. The Qantas airlines also went against the legal rights as they kept the staff underpaid even though they made them work long hours.
The experts reported that the employees and companies are losing their tolerance due to workplace bullies. After Mr. Truong was sacked, the company triggered a fall of $1 million in its market value. This incident was followed by the resignation of CEOs from the listed groups of the Australian Securities Exchange, namely Oil Search and Cleanaway, after the raised concerns regarding the management styles and organizational behavior (Hatch, 2022).
Due to the unethical and unprofessional behavior of the officials in Qantas Airlines, employees remained underpaid. They faced several financial problems due to the inappropriate behavior of the company’s managing structure.
Qantas Airlines’ Issues with Underpayment and Unsafe Workplace Culture
The company will fight the allegations in the Federal Circuit Court after being accused by the engineers’ union of intentionally skimping $325,000 from its
Employees (ABC News, 2020).
James kept many of these employees underpaid and enjoyed the company’s fruits. He misbehaved with the employees, as the management and external sources saw. The mistreatment of the employees and the withholding of their financial assets made the employees complain against the CEO and finally led to him getting fired. At the same time, Qantas is doing the same to their employees, keeping them dissatisfied and withholding financial resources from them. Therefore, the financial implications state the profits that the corrupt senior members face, the displeasure of the staff and employees, and how they would fight for their rights and satisfaction against this lousy behavior.
The Fair Work Ombudsman reported that the airlines are paying back millions of dollars to the workers and employees they have kept underpaid for the last eight years. So far, the airlines have spent almost $7.1m to 638 of their staff members at their head office as they were found to be underpaid from June 2011 to June 2019 (Hatch, 2019).
SWOT analysis has proved the weakness and threats of the company. The major drawback of the company is that they are not able to handle the employee turnover as many of the employees are leaving the Organisation due to the poor behavior of the CEO in JH and the senior members in the company Qantas. SWOT analysis threats that many legal rights are being stated in the company. The legal accusations have noted the problems they have faced and accordingly.
As said by chairman Michael Hames the company also gave Mr. Truong a chance to change his behavior and management style, but he failed in doing so (Hatch, 2022). As reported by Mr. Michael, his actions materialistically breached the Code of Ethics of James Hardie. The Board of the company gave clear feedback and counseling sessions on the effects of Mr. Truong’s behavior on the colleagues on various occasions. As said by the spokesman of James Hardie, even after giving him a chance to improve his behavior, the company finally had to take the difficult decision to terminate Jack Truong’s employment (Lannin, 2022). This decision taken by the company was for its own best interests, the employees, and the delivery of their strategies.
The Federal Court also rejected the airlines’ arguments of using workers’ earnings paid in arrears for reducing the top-amount it is supposed to make to reach their pay at a minimum of $1500 as required by a fortnight under JobKeeper. The Airline Unions bought a case, and from its landmark judgment, it is sure that Qantas will have to pay back to hundreds of airline workers engaged in the pandemic times. All the other companies who receive JobKeeper will also face ramifications as they pay their staff arrears. Experts have also said that this step could disturb their bottom line. The National Secretary of Transport Workers’ Union Michael Kaine had also noted that the airlines had been caught taking the taxpayers’ money. At the same time, it ripped off its workers by underpaying them for several years.
Potential Risks and Threats Arising from Unethical Behavior
James Hardie appointed Jack Truong as International Operations president in May 2017. In 2019, he was promoted to the CEO post when he accomplished his task of the global transformation of this building materials company. The Board reported that they received reports in recent months from their employees about the work-related interactions of Mr. Truong (Fisher, 2022). The company also hired a third party for helping them to investigate the claims and also worked with Mr
Truong to help him try to change his behavior. However, Mr. Truong failed to mend his behavior with employees and threatened executives to leave. As a result, the company decided to remove him from his position. It was also said by James Hardie’s executive chairman Michael Hames that his behavior was not termed as discriminatory. Still, the management cited this as intimidating, threatening, and particularly disrespectful towards the employees (Roddan, 2022). He violated the organization’s code of ethics and refused to abide by the organizational behavior that is the essential requirement of any type of organization or company. Organizational behavior is known to improve job satisfaction, enhance the performance level of its employees, promote the ideas of innovation and development, and foster good and effective leadership qualities.
The workers at Qantas owe thousands of dollars as back pay after being held by a court about its misuse of JobKeeper in such a way that it meant the airline is pocketing parts of wage funding. The Federal Court also rejected the airlines’ arguments of using workers’ earnings which are paid in arrears, for reducing the top-amount it is supposed to make to reach their pay at a minimum of $1500 as required by a fortnight under JobKeeper (Biard, 2019). The Airline Unions bought a case, and from its landmark judgment, it is sure that Qantas will have to pay back to hundreds of airline workers engaged in the pandemic times. All the other companies who receive JobKeeper will also face ramifications as they pay their staff arrears. The National Secretary of Transport Workers’ Union Michael Kaine had also said that the Airlines had been caught taking the taxpayers’ money. At the same time, it ripped off its workers by underpaying them for several years. This decision
The Federal Court is being taken as a massive success for workers of Qantas Airlines. These workers have had their pay wages illegally raided by senior management officials by disgracefully abusing the scheme of JobKeeper. The workers have suffered theft in their systematic wages at the hands of uncontrollable management. This behavior is also the definition of unethical and ill-treated behavior that affects the employees. This only happens because the authorities misuse their power and position (Australian Associated Press, 2020). As per the decision of the Federal Court, the Airlines have constantly been paying the penalty rates as they owed to members of cabin crew, the other staff members, which include baggage holders and staff at the airport in fortnights who did not work following requirements in enterprises contract.
An organization’s decision to underpay its employees can be difficult. Financial considerations and budget limitations always play an essential part in compensating the employees. There are several consequences to underpaying employees for an extended period. The following points below state the dissatisfaction of the employees when they remain underpaid and therefore led to the asking of the CEO for JH and the dissatisfied employees in the Qantas airlines. Some of them are mentioned below:
- When underpaid, the employees can lack engagement, their performance becomes less efficient, and several other factors can affect the company and its bottom line. Salary is always the reason why employees decide to leave the organization. Underpaid workers are often made to feel unappreciated. When employees feel that they are not fairly compensated for their value to an organization, they begin to lose their loyalty. They look for better opportunities and leave when the right time arrives(Macdonald et al., 2018). This is why many of the employees from JH and QA started going to the companies.
- If the organization does not offer reasonable compensation to its employees, it will lose the leverage of competing with other companies. When a company willingly pays more petite, the chances to find great and better talent will be reduced. The deserved compensation was not mentioned in the employee management.
- It will create a poor employer brand reputation if the company does not pay appropriately to its employees. Lesser people will then be willing to work with
The company is considered as a part of the trickle-down effect.
- The amount of money a company pays its employees has a more significant impact on morale. With low confidence, motivation level for people or employees gets reduced. They can develop a bad attitude towards the company and be less engaged in working for it (Cavanough & Blain, 2019). This also affects the performance level. Poor work culture will result in more employees leaving the organization and thus leave a negative impact on the company’s employer brand.
- Even though underpaying is considered a short-term decision, this can leave a long-term impact on the company’s value.
- As described earlier about poor performance, the pay scale directly affects employability and productivity. Only those employees who work effectively and efficiently are appreciated and paid appropriately in their organizations. As employers underpay their employees, it raises a question of their worth.
- Lower morale is also one of the impacts of underpaying the employees. The dissatisfaction of one employee can spread throughout the entire organization, which creates a negative engagement or disengagement amongst employees. As per the Gallup Organisation, around 22 million employees in America are disengaged, resulting in the loss of $350 billion due to lost productivity(Weidema, 2019).
- When companies underpay their employees, they are making the assurance of the employees leaving the office. The only reason that fits here is that if employees genuinely are spending their time working and still not being appreciated or paid accordingly, they tend to leave the organization once and for all. This leaves the organization with receiving negative feedback.
The PESTEL analysis and SWOT analysis have been sued to understand the weaknesses and threats the companies face. It is also mentioned that the strategic tools mentioned above have been used to state the losses that they have faced in the given scenario. It is also said in the given system that the company cannot create the given state, and therefore the weakness and threats of the company are created. The strategy analysis tools also state the losses they have suffered, so they cannot be changed. The summary also says the employees’ problems and accordingly it can be solved. Both strategic analysis tools have been used, and the solution has been proved to the staff
Figure 1: James Hardie dumps CEO Jack Truong
Figure 1 James Hardie dumps CEO Jack Truong for lousy conduct, shares slump – Day to News (Day To News, 2022)
References
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Australian Associated Press, 2020. Qantas repays more than $7m to staff it underpaid for up to eight years. [Online]
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[Accessed January 2022].
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[Accessed January 2022].
Hatch, P., 2022. James Hardie CEO says he was ‘blindsided’ by bullying claims, sacking. [Online]
Available at: https://www.smh.com.au/business/companies/james-hardie-ceo-says-he-was-blindsided-by-bullying-claims-sacking-20220110-p59n1w.html
[Accessed January 2022].
Lannin, S., 2022. James Hardie sacks chief executive over threatening behaviour and ASX recoups some losses. [Online]
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[Accessed January 2022].
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