Jet Airways Crisis Analysis and CSR Recommendations Assignment Sample

Discover how theories like Corporate Social Responsibility (CSR), Stakeholder, and Contingency Theory can help address these challenges and build responsible leadership for achieving organizational objectives.

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Ethics, Governance And Responsible Leadership at Jet Airways Assignment 

The following essay has discussed the corporate failure of Jet Airways. Jet Airways is an airline organisation that was founded in the years of 1993 that flew over 65 destinations in Europe the Middle East and Southeast Asia. The company headquarter is located at 27 old Gloucester Street, London, UK. The company also have employees 18,015 with net revenue of 251 billion and profits of over 6.2 billion. Thus, to generate revenues and profits the organisation face various corporate governance failure like unfettered power being given to promoters, working capital to total assets, discrimination and harassment, transparency and supply chain which effective the company activities.

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The company also face problems of corporate governance failure, as customers are less attracted to their goods and services which may impact a loss. The essay also discusses the corporate social responsibility (CSR) theory and two leadership theories like contingency theory and stakeholder theory that assist to solve the problems of Jet Airways' corporate governance failure for achieving the organisational objectives. The essay also provides a recommendation about how Jet Airways implement the CSR theory for building effective leadership in the company to achieving the organisational objectives.

The Problem of Jet Airways

Ethics and corporate governance failure are considered to be irregularities and mismanagement if the organisation does not focus on the advice of their expert and the members of the board's company (Arora and Ravi, 2019). In the case of Jet Airways, the promoter-led board of the company did not have independence of its own due which consist to different bad decisions for practising the organisational activities. The following are the various ethical and governance failure in Jet Airways that affect the organisation's events and activities.

  • Unfettered Power Given to Promoters: It is a most essential aspect of ethics and corporate governance failure for Jet Airways, as the board of directors are formed to monitor the day-to-day activity in the organization. But many times, the board of directors' independence is questioned as the board is acting in the interest of the promoter-led boards (Hope Sr, 2021). On the hand, the ethical and governance failure of Jet Airways consists of the organisation board having more than 50% of shareholding power which dominate the power of decision-making in implementing any strategies that are used by the sub-ordinates. Thus, promoters also disregard the interest of outside shareholders of the board for making any decision in the company which creates conflict in the organisation as per violated regulation 4(2) (c). Having conflict among the shareholders, the employees of the company become inefficient in their work (Akech, 2022). As if employees become inefficient in their work the organisation will not able to increase its productivity which may also reduce the company revenues and sales for practice efficient work in their activities for achieving objectives.
  • Working Capital to Total Assets: The working capital to total assets ratio represents the appearance of corporate and ethical failure in the company. As the working capital size is considered the number of assets which is used by the organisation to run the day-to-day operation of the business (Silaban, 2020). Thus, Jet Airways is an organisation that experiences consistent operation losses in the current assets in comparison to total assets. It has been observed that the working capital to total asset ratio of Jet Airways is 0.052 to -0.271 which is a negative ratio that implies the unhealthy condition of the company. Having a negative ratio in working capital to total assets the organisation decreases its production activity in the company which distracts the customer's attention from buying their goods and services. Thus, with less attention from customers, the organisation also get impacted their revenues and sales, as customers buy less of their goods and products (Gantino et al., 2018). However, to increase the company's productivity and attract the customer's attention the organisation has to set working capital to total assets of 0.69 and 0.084 with an average growth of 6.212.
  • Discrimination and Harassment: It is a significant ethical issue that Jet Airways face to manage the activity, as having discrimination and harassment in the company build a negative impact on their finance and the reputation of the business (Hu et al., 2019). Thus, the main failure of the company is discrimination, as the company discriminate the employees of their age, equal pay, race, religion, sex and gender which demotivated the employees to work efficiently to complete the work within the given timeframe. Not completing the work in the given timeframe by employees, the organisation is not able to satisfy the customer's demand in the market which may consider a company failure or loss.
  • Transparency: It is an aspect of the corporate governance failure of Jet Airways, as transparency is part of becoming efficient in audit and operation which give external and internal stakeholder a true feeling of trust in the company operations. Thus, enforcement of regular independent audits, reporting and total accuracy of corporate disclosure assist the board of directors to gain knowledge (Astill, et al., 2019). Having the extra knowledge about the operation the board of directors can make a better decision in developing the strategy for achieving the set goals. But as compared to Jet Airways, the organisation does not discuss anything with their shareholders for practicing the operational activities which may create conflict among them while making any decision related to the operation (Bhatt et al., 2021). Having an inefficient decision in their operation, the employees become less productive in their activities which decrease the company's productivity in producing goods and services to satisfy the market demands.
  • Supply Chain: The major drawback of Jet Airways is a supply chain that is used by the company to save the cost of business operations in order to produce goods and services. Jet Airways face this problem as the company has inefficient supply chain strategies which decrease the company's productivity. Thus, having less productivity the organisation will be able to attract fewer customers in the market which may reduce the company revenues and sales for achieving the organisational objectives (Remko, 2020). Having an inefficient supply chain the organisation is not able to implement an effective cost-cutting strategy which takes huge costs for producing goods and services. However, if the organisation is not able to cut the cost of producing goods and services it assists Jet Airways to set a high price for their goods and services that decreases the customer's attention for buying their items in order to achieve the objectives.

Theoretical Framework and Application

In order to solve the corporate failure of Jet Airways, the organisation uses the CSR theory, stakeholder theory and contingency theory. The following are theories that are used by Jet Airways to solve corporate failure.

Corporate Social Responsibility (CSR) Theory

Corporate social responsibility (CSR) is a business practice that is used by the organisation to focus on company accountability where business implements self-regulation to acknowledge environmental and social concerns in their operational activities. Jet Airways uses this theory for implementing creative initiatives for a better place of work which impacts the board members for developing the environment in the company (Nguyen et al., 2018). Thus, by having a better environment in the organisation the member can build effective relationships with outside shareholders for using their ideas to build effective operational activities. An organisation that has effective operation strategy can direct their employees in the right direction to work efficiently to achieve personal and professional objectives which solves the problems of corporate failure. CSR is also used by Jet Airways for solving corporate failure, as the theory guide organisation to improve public relationships which tends to organisations to grow better reputations for the public that the company gives in order to achieve the organisational objectives.

Jet Airways implement CSR, as it assists to satisfy the customers and stakeholders by giving them the power of making the decision for increasing the business's continuous growth to increase the company's revenues and sales. The company uses the theory to increase financial performance by asking customers to give feedback about their goods and services. After getting the feedback the organisation uses the correct feedback and develops their goods and services to attract the attention of customers to increase the company sales and revenues in order to increase the company's financial performance (Kim et al., 2020).

However, with the help of CSR the organisation can increase the ability to attract and retain talent in the company by making it clear about the company's work and activities which makes employees a clear idea to innovate their skills in doing the activities. Thus, by having innovative ideas the employees become more effective to produce goods and services which help the organisation to increase productivity for solving corporate failure. The next thing that tends to Jet Airways uses corporate social responsibility (CSR) is that the theory focuses on low cost in productivity by preparing effective strategies for how to use raw materials. Having an effective strategy, the organisation cut the cost of producing goods and services which assist the company to set flexible price for their goods and services in order to attract the attention of customers to generate more profits.

Stakeholder Theory

Stakeholder theory is an organisational management method that is tended by an organisation to address the company values, ethics, morals and goals by focusing the social responsibility rather the profits. The strategy assists to identify the stakeholder by their interest in the company's success, though traditionally not the financial investment and fulfilling employees and customers by giving them a priority. The theory provides an assumption for addressing long-term activity which assists to make effective discussion making in their operational activity to achieve the organisational objectives. Jet Airways use this theory to solve corporate failure by increasing productivity by hiring skilled employees in the company who can work efficiently to address the company objectives (Hörisch et al., 2020). The company focus on increasing productivity for volume and quality that assist the business to achieve loyal customers in the market for increasing the company revenues and sale. Thus, having loyal customers in the market, Jet Airways build larger brand images which address to enjoy more market share for the company to earn profits. However, the company uses the stakeholder theory for building high-quality work with a minimum price to increase the customer base in the market which assists the company to solve corporate failure and practice effective operational activities.

Excellent quality of goods and services also helps to promote brand awareness in the market which helps the company to increase brand equity and values to attract more stakeholders to invest in the company. The stakeholder theory is implemented by Jet Airways for satisfying the customer's needs and wants by motivating workers to produce more goods and services of higher quality that offer a high experience for customers' satisfaction rates. Thus, satisfying the customers does not mean that to provide high-quality goods and services but also delivering products at the right time which helps to solve the problems of conflict and build effective relationships to geranaratei8ng more revenues and sales (Freeman et al., 2020). The company also uses the stakeholder theory for identifying the clear purpose and mission for the organisational activities, having a clear mission and vision the organisation can set effective strategies for competing with various rivalries in the market.

Contingency Theory

Contingency theory is a principle base theory that is used by an organisation to focus on the business firms, engaging in transactions with other actors and companies in its environment in order to achieve resources to increase the company productivity. Jet Airways implement the contingency theory to be effective leadership in order to solve corporate failure by performing the continuous working activity in their operational activities. Thus, using this contingency theory the organisation can build an effective leadership style that assists the organisation to build an effective team who can work efficiently to increase the company's productivity to satisfy the customers in the market (McAdam et al., 2019). Thus, by satisfying the customer's demand in the market the organisation can build effective brand awareness for their goods and services which helps to generate more revenues and sales.

The theory is implemented by the organisation to become a successful leadership style to solve corporate failure, as the theory guide company to be ready for any challenges that can affect the operational activities of the company. The theory also assists the organisation to act according to the different situations which help the organisation to build effective decision-making for solving the challenges and achieving the object. Jet Airways implement this strategy for building a relationship with their co-workers by identifying their needs and wants which makes them motivated for practicing the activity in the most effective ways for achieving the objectives (Yu et al., 2020). The company also implement the theory to build effective leadership for solving corporate failure, as with the help of the theory the company will build an effective workplace environment which assists employees to work efficiently to achieve personal and professional objectives. Thus, the theory also assists to maintain the company's policies for training employees by providing seminars and programs which increase the employee's efficiency in producing goods and services.

Recommendation to Solve the Issue

The theory that is used by Jet Airways to solve the failure in corporate governance is the CSR theory which addresses the company a competitive edge while competing in the market. Thus, to build an effective competitive edge the CSR theory helps a company to set a flexible strategy to set the price of goods and services which helps to attract the attention of the customers in the market for competing with various rivalries. The CSR theory is also recommended to Jet Airways, as it assists to make a business attractive to investors who can invest in the company to earn some interest from the profits. Thus, to make an attractive business the organisation has to commit to social activity and stop practising an unethical activity that can hamper the social environment. Having more shareholders, the organisation can pay their liability in the most effective ways which makes them free to operate their activities. Jet Airways uses the CSR theory for improving business culture which motivates employees to work efficiently for achieving the company mission and vision.

The company must use the CSR initiative to provide time for employees to support their social initiatives by satisfying their opinion, culture and religions. The theory is also responsible for social as it refers to individual and corporate accountability which assists to fulfil the civic duty of the company by taking action that benefits society. The CSR theory also guides management to make decisions to build effective strategies which maximize profits and protect the interest of society and the community. Jet Airways implement the CSR theory to develop leadership in the company, as the theory help to improve labour policies and embrace fair trade that strikes the brand to attract the attention of the customers for generating sales. However, to build effective leadership in Jet Airways, the CSR approach is the most essential theory that changes the company policies to develop the environment for employees to have healthy lifestyles in order to work efficiently. The company can also use the CSR strategies to improve profitability and values of the company by using natural resources to produce goods and services which make a brand image in the eyes of customers for buying their goods and services.

Conclusion

The above essay has analysed the various corporate governance failure of Jet Airways like unfettered power being given to promoters, working capital to total assets, discrimination and harassment, transparency and supply chain that affect the company to practice the organisational activities. Having this corporate governance failure, the organisation will become less effective in attracting the attention of customers for buying their products and services which may decrease the company's profits. The essay discusses the various theories like corporate social responsibility (CSR) theory, contingency theory and stakeholder theory that help Jet Airways to build an effective strategy for the company to compete with the various competitors in the market. Thus, having an effective strategy the organisation will build effective brand images in the market which assist to attract more customers to buy their goods and services in order to generate more revenues and sales. The essay also provides recommendation for corporate social responsibility (CSR) theory that can use by the organisation to solve problems and achieve the organisational missions and vision.

References

Akech, M., 2022. The Basic Structure'Doctrine'and the Politics of Constitutional Change in Kenya: A Case of Judicial Adventurism?. Available at SSRN 4270138.

Arora, D. and Ravi, S., 2019. Issues and Challenges of Indian Aviation Industry: A Case of Jet Airways. Review of Management, 9.

Astill, J., Dara, R.A., Campbell, M., Farber, J.M., Fraser, E.D., Sharif, S. and Yada, R.Y., 2019. Transparency in food supply chains: A review of enabling technology solutions. Trends in Food Science & Technology, 91, pp.240-247.

Bhatt, U., Antorán, J., Zhang, Y., Liao, Q.V., Sattigeri, P., Fogliato, R., Melançon, G., Krishnan, R., Stanley, J., Tickoo, O. and Nachman, L., 2021, July. Uncertainty as a form of transparency: Measuring, communicating, and using uncertainty. In Proceedings of the 2021 AAAI/ACM Conference on AI, Ethics, and Society (pp. 401-413).

Freeman, R.E., Phillips, R. and Sisodia, R., 2020. Tensions in stakeholder theory. Business & Society, 59(2), pp.213-231.

Gantino, R., Ruswanti, E. and Taufiqurrahman, T., 2018. Influence of Working capital to total asset, EBIT to total asset, EBT to current liabilities, Sales to total asset and Springate Indeks on Stock Return Comparison from two Property & Real Estate and Food & Beverage Sectors Listed on Indonesia Stock Exc. Asia Proceedings of Social Sciences, 2(3), pp.29-33.

Hope Sr, K.R., 2021. Civilian oversight for democratic policing and its challenges: Overcoming obstacles for improved police accountability. Journal of Applied Security Research, 16(4), pp.423-455.

Hörisch, J., Schaltegger, S. and Freeman, R.E., 2020. Integrating stakeholder theory and sustainability accounting: A conceptual synthesis. Journal of Cleaner Production, 275, p.124097.

Hu, Y.Y., Ellis, R.J., Hewitt, D.B., Yang, A.D., Cheung, E.O., Moskowitz, J.T., Potts III, J.R., Buyske, J., Hoyt, D.B., Nasca, T.J. and Bilimoria, K.Y., 2019. Discrimination, abuse, harassment, and burnout in surgical residency training. New England Journal of Medicine, 381(18), pp.1741-1752.

Kim, H., Rhou, Y., Topcuoglu, E. and Kim, Y.G., 2020. Why hotel employees care about Corporate Social Responsibility (CSR): Using need satisfaction theory. International Journal of Hospitality Management, 87, p.102505.

McAdam, R., Miller, K. and McSorley, C., 2019. Towards a contingency theory perspective of quality management in enabling strategic alignment. International Journal of Production Economics, 207, pp.195-209.

Nguyen, M., Bensemann, J. and Kelly, S., 2018. Corporate social responsibility (CSR) in Vietnam: a conceptual framework. International Journal of Corporate Social Responsibility, 3(1), pp.1-12.

Remko, V.H., 2020. Research opportunities for a more resilient post-COVID-19 supply chain–closing the gap between research findings and industry practice. International Journal of Operations & Production Management, 40(4), pp.341-355.

Silaban, B., 2020. Pengaruh Working Capital To Total Asset, Inventory Turnover, Debt To Equity Ratio Dan Return On Asset Terhadap Pertumbuhan Laba Pada Perusahaan Manufaktur Sektor Industri Dasar Kimia Yang Terdaftar Di Bursa Efek Indonesia Periode 2013–2017. Jurnal Ilmiah Akuntansi dan Teknologi, 12(1).

Yu, W., Chavez, R., Feng, M., Wong, C.Y. and Fynes, B., 2020. Green human resource management and environmental cooperation: An ability-motivation-opportunity and contingency perspective. International Journal of Production Economics, 219, pp.224-235.

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