Management Practices Of Air New Zealand: Analysis Of Corporate Social Responsibility, Finance And Budgeting, And Organizational Technology

Goals of the Organization

Air New Zealand was first founded in the year 1940 in the name of Tasman Empire Airways Limited (TEAL) in order to provide flight services in the Australia-New Zealand region until it was merged with New Zealand National Airways Corporation in 1978 and renamed into Air New Zealand. In 1999, Air New Zealand joined the Star Alliance and since, it has won numerous awards including several Airline of the Year recognitions (Hopkins et al., 2016). Air New Zealand is also popular among the people owing to its numerous facilities that assist the tourists and businessmen alike and also cheap fares compared to other airlines operating in the same area. This company operates over 21 domestic and 31 international destinations that include the Pacific Islands regions and United Kingdom.

Organization Structure

The organizational structure of Air New Zealand consists of several board members and executives under the chairmanship of Antony “Tony” Carter since 2010. He is also assisted by Deputy Chair Janice “Jan” Dawson and other board members and executives. The detailed organization structure of Air New Zealand is shown in the following picture.

Air New Zealand is extremely popular in its service region due to its varieties of reliable and cheap services that are always accepted in the highest priority in order to satisfy the needs of the customers. Air New Zealand provides both passenger and cargo services in several domestic as well as international regions. Air New Zealand currently serves 21 domestic and 31 international destination for passenger transport. For cargo transport, Air New Zealand has different schemes depending on the type and priority of cargo. These schemes are shown in the following table.

The goals of the organization include providing cheap and comfortable services to passengers across its main operational area as well as deliver cargo for the clients at the topmost priorities. Moreover, the organization also aims to create a global network for both passenger and cargo services.

The aim of this project is to analyze three main management practices of Air New Zealand that play a major role in deciding the success of their business. The objectives of the project are as follows.

• To analyze the organizational corporate social responsibility of Air New Zealand
• To analyze the financial and budgeting strategies of Air New Zealand
• To analyze the organizational technology used by the company including its social media access

The scope of this project includes study and analysis of the company’s data from its official website as well as some other websites and opinions of the regular passengers of the company. However, analysis of confidential information like internal administration strategies, details of current financial details and others is out of scope of the project.

Management Practices of the Company

Air New Zealand is very much involved in maintaining its corporate social responsibility and has several policies that are strictly followed in its operations. Some its major corporate social responsibilities are as follows.

Intolerance – Air New Zealand is strictly intolerant to common criminal offenses like bribery, corruption, slavery, human trafficking and others. The company takes special care to ensure these incidents do not occur anytime by enforcing strict rules and guidelines on its employees. Any offenders are subject to strict punishments and may also lead to termination from employment (Howie, 2015). In case a passenger commits some of the mentioned crimes, Air New Zealand takes immediate steps to hand over the offender to the responsible authorities from trial and punishment. The company also ensures all the employees abide by various compliance policies that are set on them.

Audit Independence – Air New Zealand values the importance of auditor independence in order to earn best possible outcome from the audit. Hence, the company allows full independence to its external auditor who takes care of all the company audits including stock operations in the share market. However, even the auditor needs to comply with certain board listing rules and operation guidelines of the company to perform his part of duties.

Palm Oil – Air New Zealand uses palm oil for various purposes including cooking food for passengers and fleet personnel. However, the company has also emphasized on the deforestation issue that has been caused due to unsustainable cultivation of palm trees and considers this as an environment and human rights abuse. Hence, while procuring palm oil, the company ensures the source of the oil is not unsustainably cultivated palm farm.

Risk Management – The company considers risk management as a factor that must be done at the topmost priority. According to the general analysis, there are several risks associated including legal, operational, regulatory and others that may hamper the company’s operations (Francis & Lyon, 2016). However, the company ensures there is a risk-aware environment so that all employees avoid any risky activities. The main idea is to develop a sustainable environment inside the company.

Finance and budgeting are two important management practices of any business organization as it decides the outcome of future business ventures. Without balanced investment and profit, the entire balance of a business can be disrupted. Hence, Air New Zealand has taken suitable steps to ensure the annual investments are balanced by the annual profits and revenues. Based on the profit of a financial year, the company prepares its finance and budgeting strategies accordingly. According to the official statement released by the company, “Air New Zealand prepares its financial statements in accordance with New Zealand Generally Accepted Accounting Practice (“NZ GAAP”). NZ GAAP consists of New Zealand equivalents to International Financial Reporting Standards (“NZ IFRS”) and other applicable financial reporting standards as appropriate to profit-oriented entities. These financial statements comply with NZ IFRS and International Financial Reporting Standards (“IFRS”).” The budgeting strategy also plays an important role in the companies strategies for fixing ticket prices as well as release new schemes and offers that the customers can use based on certain conditions and occasions (Walker, 2015). Air New Zealand has also joined in partnerships with various tour companies and hotel chains in order to release some joint schemes where the customers will be able to receive discounts on the partner hotels’ prices if they use the Air New Zealand flights. For instance, currently, Air New Zealand has a special Asia tour offer (valid only till a certain date) that will allow customers to buy flight tickets to Asian destinations like Shanghai, Ho Chi Minh City, Tokyo and Hong Kong at discounted prices ranging from $459 to $549. The main objective of these schemes is to increase the overall customer base that will boost the revenues of the company so that they are able to boost their global expansion policy. However, the company also ensures the finances are well managed throughout the year by appointing independent external auditors.

Organizational Technology

Air New Zealand emphasizes on using the latest technology for providing services to the passengers as well as enhancing overall travel experience inside the flights. Hence, the company makes considerable investment for developing better technologies each year. The most technical development in the company includes development of new robots that have the ability to climb walls, carry cameras and others (Brodie, Benson-Rea & Medlin, 2016). Air New Zealand plans to deploy these robots for remote inspections of the aircrafts without having to risk the lives of maintenance staffs. In addition, the company also invests in software technology and social media platform. Air New Zealand has its own big data server when it stores and manages all types of business data. Social media platform is used by Air New Zealand in order to promote services including ticketing schemes, offers, recruitment information and others. Three years back, Air New Zealand has also signed a technology agreement with Sabre for global distribution of products and services.

For the purpose of this research, data has been collected mainly from the official website of Air New Zealand (https://www.airnewzealand.com/). However, in order get a better and verified view, data has also been collected from other sources as well as surveys that were conducted among the regular passengers of Air New Zealand. The research process was mainly based on the analysis of primary and secondary data collected from the above mentioned sources. In addition, a survey has been conducted on some regular customers of Air New Zealand who use the services for transportation frequently or on a regular basis. The sample size for the survey is 50 and the participants were asked to rate the airline’s services and fill the accompanying questionnaire. The main points that the participants were needed to rate are shown in the following picture.

References

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Brodie, R. J., Benson-Rea, M., & Medlin, C. J. (2016, February). Diagnosing the Success of Brand New Zealand Wine. In 9th Academy of Wine Business Research Conference (p. 332).

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