Boeing & Airbus & ASALAM Aircraft Social Responsibility Essay Examples & Outline
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Boeing and Airbus Case study analysis
Case study analysis
Boeing and Airbus, both airline companies, made an approach to the Iberia Airlines targeting a new market in Spain (Pandey, 2010). These companies are the sole massive producers of commercial airlines. While on an approach to the Ireland Airlines, a couple of negotiations strategies revealed themselves. Mr. Dupuy, who was the chief financial officer and leading officer in the search of a suitable airline supply for Ireland, significantly contributed to the decision on the airline company to supply planes to the nation. Additionally, Leahy Airbus’s salesperson and Bright (Boeing top sales representative), participated in an interactive negotiation with Ireland’s chief financial officer Newhouse,.
The case involving the two companies reveals a variety of negotiation strategies and tactics used by Dupuy while determining the best offer between the airlines suppliers. The case presents Dupuy as a well competent financial officer willing to negotiate on the airline proposals presented by the companies (Pandey, 2010). Despite Airbus winning the bid earlier on 1995, he is willing to shift the tender to another company based on the value of their offer. Additionally, despite presentation of top sales representatives from the two companies, he takes a step farther where he meets the managers to the companies on enquiries based on the best offer from the airline organizations.
Surprisingly, despite Dupuy waiting for the best offer from the companies, he places his bid value after the airline companies (Pandey, 2010). It is a strategic approach presented in the case aimed at ensuring that he does not negotiate with ‘himself.’ On the other hand, availability of second-hand planes as an alternative to Dupuy aids in ensuring that these airline companies enhance competition between themselves thus presenting a favorable bid for the plane supply.
The case presents some crucial sales strategies applied by the airline companies aimed at winning the bid for the supply. Discounts revealed by continued reduction of price, indicating that the two airline companies had the urge of cutting down their prices aimed at winning the bid. Similarly, additional guarantee of more seats that prompts an increased revenue for the Ireland Airlines is another sales strategy used in the case (Newhouse, 2007).
Fair competition, as presented, is an essential practice in business. Fair competition has a dependence on consumer education. Consumer awareness depends on information presented by sellers (Pandey, 2010). However, in the case, despite the airline companies presenting their offers with additional guarantees to the Ireland Airlines, Boeing, as highlighted Leahy, did not maintain honesty in presenting information to Mr. Dupuy. Initially, Bright postulated that 777 had a capacity of 30 more seats while compared to the Airbus plane. However, Leahy reports that Boeing carriers have at most five more seats than their Airbus. Seemingly, Boeing appeared desperate for the bid than Airbus. Unlike the latter, the former was not willing to give up on the bid as they continued pressuring Dupuy on his final decision regarding his offer. Lastly, the case presents a challenge to Ireland Airlines on the suitable company to offer a bid. Availability of alternatives grants Ireland a bargaining power that suitably sees them landing for the Airbus Newhouse,.
In conclusion, based on the observations made from the case, there are a couple of recommendations to the challenges presented. Bright as a sales representative should ensure he maintains his honesty to his clients. In addition, as seen in Leahy, he should give the clients time to make their decision without pressuring them (Pandey, 2010).
Newhouse, J. (2007). Boeing versus Airbus: The inside story of the greatest international competition in business. New York: A.A. Knopf.
Pandey, M. R. (2010). How Boeing defied the Airbus challenge: An insider's account.
ASALAM Aircraft Corporate Social Responsibility
ASALAM aircraft began in 1988 aiming to be the leader in maintenance, technical support and modification of aircraft parts in Saudi Arabia. It was developed through efforts from the Ministry of State and defense in line with the kingdom’s goals in increasing self-sufficiency and reliability in the aviation industry (Company, Alsalam Aircraft, 2013). Apart from offering services to the civilians, the company also deals with civil and military aircrafts in offering technical advice, support and maintenance options.
It is the leading repair in maintenance, repair, and overhaul (MRO) of avionic systems. The company has several aircraft hangers with three of them being the largest and capable of housing huge aircrafts. It has three B747-400 size aircraft hangers used for MRO services and housing of large aircrafts (Company, Press Releases). The hangars are fully equipped with offices and workshops in-built to facilitate the delivery of MRO services (Company, Alsalam Aircraft, 2013).
The Company has grown from 1988 and expanded its services with each year. This is because of the funding and support the company acquires from the royal institutions. The company AHS also incorporated different technologies into its MRO services, which have seen it, double up on the services. This is because it has increased the number of aircraft that it is capable of handling. In the current capacity, the aircraft company can handle Boeing, Airbus, Lock-head martin, Bell and Gulfstream IV, all of which require a vibrant and superior technology.
The company has been on the forefront in developing technological equipment and hiring skilled professionals that can handle aircraft of different sizes and specifications. This has increased its market share both in Saudi Arabia and in the international arena. Apart from offering services on MRO, the company also has a varied client base. This is because it deals with both civilian air crafts and military air crafts (Company, Alsalam Aircraft, 2013).
The diversity in the application operations increases the resources and proximity to advanced technology. For instance, during MRO services for military planes the company must acquire superior and first-class quality technology. This does not only work to the benefit of the serviced military air crafts, but it also boosts the resources available for the company to deal with other air crafts.
AlSalam began from humble endeavors where it pioneered its operations through the support of Boeing Company in 1989. Factually, the first MRO service was in 1993(Company, Press Releases). Since then, the company has been on augmented investment procedure with key focus on meeting international standards. Fortunately, the developmental trend in the company has paid off with the universal recognition, charters and approvals offered due its excellent MRO services.
AlSalam Company has different state-of-the art technology equipped to deal with different services in the aircraft industry. The company has support shops with diverse equipment and technology that conforms to contemporary standards in the aviation industry. This makes it possible for the company to customize the interior design of an aircraft to suit client demands. The aircraft company leads in the design; implementation and finishing of customized aircrafts with classy interior design meant for high profile individuals.
The support shops are not only equipped with equipment that can facilitate customization, but they also have metal forming sections, lavatory shops, welding and thermoforming sections (Company, Alsalam Aircraft, 2013). This support shops offer additional technological services in MRO services. They serve to steer the company’s status to w excellent aviation company. The company appreciates the fact that some laboratory tests may be destructive, yet essential in the aviation industry. In order to carry out the sensitive operations, the company has a modernized non-destructive laboratory. Through the non-destructive laboratory, the company is able to conduct tests on sensitive materials that would otherwise self-destruct under ordinary tests.
They also offer composite services that are used in repair of wing blades. The composite services compliment the work done by the support shops in ensuring end-user satisfaction. The company is on the verge of expanding its facilities with an aim of increasing the support services offered on daily services. Moreover, the changing technology in the avionic industry requires that the company change its tactic in dealing with aircrafts. In order to conform to the change, the company introduced other services like; specialized military aircraft capabilities, avionics and radios, flight controls, hydraulics and miscellaneous services. These are meant to depict the excellent service delivery and superior quality in aircraft design from the company.
AlSalam commands the largest market share in the Kingdom of Saudi Arabia when it comes to offering maintenance, repair and overhaul services in aircrafts. Operating in an economy that is strongly influenced by Islamic beliefs and doctrines, the pricing of the services are not capitalist in nature. This implies that the company only charges services to acquire modest amount of profits. This contributes to minimal charges being offered for services. Unlike capitalist structure where the desire is to maximize on the amount of profits, the company focuses more on service delivery.
Extra returns are considered as incentives for the company and a reflection of the huge market share commanded by the company. In lieu of this, the company has attracted customers from different parts of the world. This is because of its cost-friendly prices that focus on quality and stands as opposed to service delivery. Consequently, the international aircraft market looking for cost friendly modification and technical support for aircrafts opt for AlSalam Company. This is because it offers quality and standards with minimal cost. Furthermore, the current market dominance is attributed to the unanimous support the company receives from the military wing of the Kingdom of Saudi Arabia.
Most of the military aircrafts are designed, maintained, and repaired at the company. This fact gives the company an edge as it has the military as its loyal customers. This implies that the company is assured of progression irrespective of the financial hitches among private clients. When private clients do not seek services, the company thrives through military support services. The regional dominance of the company within the region has made most airlines prefer to service their aircrafts at the company. Moreover, the company conducts repair services of loyal clients. The international recognition depicted through certification, charters and approvals elevate the company to an international status. This has broadened the market share for the company beyond the kingdom. Te market share for the company is controlled and influenced by the royal family.
Corporate social responsibility
Modern business is built on corporate social responsibility (CSR) which is one of the most fundamental principles in the business activities of organizations (SMITH, n.d). By definition, CSR refers to the ways in which companies manage their business operations with a sense of responsibility that goes beyond their main objective of making profits for their investors and shareholders to address issues affecting societal stakeholders. The societal stakeholders include consumers, employees, government, natural environment and the community at large.
There are four part model of corporate social responsibility, they include philanthropic, ethical, legal, and economic responsibility (SMITH, n.d). There are different societal expectation within the four part model. Philanthropic responsibility involves what the community desires about the business, ethical responsibility involves what is expected of the business by the society, legal involves what is required by the business by the society and finally economic responsibility is what is required by the business by the society.
CSR is central to the success of a company as it protects its goodwill, reputation as well as brand names (Boermeester, 2010). Companies which embrace CSR promote their capacity to attract capital in addition to improving the relations between employees, customers and the community at large. Such companies also benefit from improved financial performance and increased sales due to customer loyalty. In labor markets faced by shortage of skilled workers, companies perceived to be committed to CSR attract employees easily and have a high chance of retaining them (SMITH, n.d). Such companies also benefit from the reduced regulatory oversight by local and national governing bodies.
Evaluation of application by of the four-part model
The company has built several roads and infrastructure in the neighborhood, this has been of immense help to the community. Further, the company is also credited for the creation of King Abdul-Aziz airport primary school and hospital. These are notable philanthropic operations that the company has taken in order to return back to the society. The company has also opened up a foundation that helps students in receiving their studies abroad as well as the local education for pilots and other persons. This is an important factor as it has increased the number of Gulf pilots in the country and in the local airlines therefore, improving the lives of the local persons.
Technological research on new methods is one of the factors that the company has been working on. The most notable measure that has been taken is on the development of research on technology. This has been aimed at developing machines that do not rely on fossil fuels for energy. Ideally, this process has received tremendous growth from the period of the 2008. However, the problem is on availability, efficiency of energy, consistency and reliability. For instance, there were pump stations that were introduced to recharge automobiles that recharged the airplanes that did not require using fossil fuels. However, the output that was acquired and the amount of money invested by the company rendered the process of unfeasible. In the long run, people opted to use gasoline. Machines that do not require fossil fuels are yet to be produced in large scale for adoption by the majority of the operations by the airline. Technology has failed to offer an option that can lead to wide scale production of green machines. Nonetheless, these efforts are still under research with the aim of ensuring that future developments will be fruitful.
Reduction of chemical components. Another vital move is the elimination of alcohol and reduction of chlorofluorocarbons in cosmetic products like deodorants, colognes and perfumes used in cleaning the planes. The manufacturing companies are being advised to reduce the content of ingredients that lead to greenhouse gas emission. This venture has been developing at a snail slow pace. This is because most cosmetic product sprays that lack alcohol tend to fetch high market prices and this has led to increased costs for the airline. Nonetheless, there is a significant stride to face off sprays with alcohol content and ingredients that lead to environmental degradation.
Damping techniques to reduce noise pollution. In an attempt to reduce the levels of noise production occurring from the taking and landing of planes, the adoption of damping techniques on noise reduction becomes significant. Damping proof membranes are being used to lower the levels of noise to the required decibel limits. The airplane is also focusing on the reduction of greenhouse gas emissions by controlling and channeling the end products to other places. A significant technology that is being adopted is the directing of the emissions to mix with cleaning and water used by the airlines; instead of releasing it into the atmosphere. The water is then recycled for the use in cleaning and maintenance process in the other planes. Since the emissions are biodegradable, they combine with soil and do not cause environmental effects. However, such settings require a considerable amount of capital and deviation from the focal objective of the organization.
The company has guaranteed privacy in regards to the passenger's information. Today, the issue of internet privacy has become such a major point of discussion since it can no longer be fully guaranteed. The situation has become so bad that millions of Airline customers have been forced to sit back and watch as their credit card numbers are sold on the internet for a few dollars apiece. On other frontiers such as social networking sites, the identities of unsuspecting individuals are traded without any regard for privacy (Boermeester, 2010). The reason why this situation has escalated so much is due to the fact that online privacy is full of varying and conflicting interest Overall, airline companies and individuals advocating for privacy are at an impasse since the internet sites require all of an individual’s information while the consumers in general are unwilling to share too much information. The issue is further complicated by cyber criminals, whose sole aim is to hack into the websites that hold important information and proceed to use the information in order to gain personally. ASALAM aircraft has decided to ensure that it guarantees privacy by using advanced systems to ensure utmost security for its passengers. It has been described as one of the best airlines in terms of online security next to El Al airlines of Israel.
The company hires local staff as well as trains them. It has therefore, brought a lot of economic development to the constituents of Saudi Arabia. The company also signed another partnership with Armco, which is a Saudi based company dealing with avionic systems. This partnership would contribute to an increase in the maintenance operations of Boeing 737NG. The partnership with Aramco diversifies the MRO services offered by the company to include delivery of services to the Boeing type of aircrafts. The company will enjoy from the partnership, as it will be able to conjure new ways and methods of modifying, offering technical support, and repairing Boeing aircrafts.
This implies that there will be a diversification in the support shops and service rooms. It also means that the company ill be in a position to handle MRO service for huge aircrafts with satisfaction and conformity to international standards. The overall effect is that the competency of the company in the avionic industry will receive a boost. This venture continues to reiterate the position of AlSalam Aircraft Company as leading service provider in the region.
The partnership makes AlSalam to become the only company within the MENA region that is designated to work on the Boeing business jets (BBJ). Apart from addition of service delivery and superiority, the partnership gives AlSalam Aircraft company a competitive advantage other market entrants and existing companies.
It eliminates any form of competition. The partnership saw the company designated to be the sole provider for head-of state and very important person aircraft in the MENA region. This is another milestone edging out competitors in the region. The partnership with Aramco played a vital role in the acquisition of the three certifications and approvals formed as part of the 145 organization. These additional services acquired through partnership and innovations serve to increase the value of the company.
Business ethics and CSR
Ethics has acquired a different dimension in the 21st century that includes organizational culture and it became enshrined in the laws. Organizational culture forms part of ethics in business, coupled with the corporate social responsibility (Fernando, 2009). Rather than being optional, corporate social responsibility became constitute of ethics. Studies involving ethnographical factors and human behavioral patterns became core in determining ethics in business (Fernando, 2009).
Ethical business culture has developed into part of the strategic objectives of ASALAM airline. Unlike, in the past, contemporary practices require that both senior and junior managers share ethical dilemmas in an open and transparent manner. This is not viewed as an intimidation, but progress towards achievement of strategic objectives. Ethics in the contemporary society is part of the organizational culture. The aim is changing the employees’ attitude in terms of their relationship to each other and the external environment.
The major event leading to the creation of business, as discussed earlier, was shift to contemporary business practices and increasing competition? With technological; factors becoming constant for most companies, managers decided to opt for an edge in their organizations by focusing on ethical patterns of the people ((SMITH, n.d)).
Another factor was leading to change was the change in human rights law. It was required that discrimination should not be evident in the workplace. There ethics was inculcated into the company operations to control employee attitude and behaviors.
Changes in ethical behavior have influenced positively the business environment. For instance, junior employees can point out ethical dilemmas making top management without fear of discrimination. It has led to the development of organizational culture as part of company principles. Reporting was altered to portray factual data and information since ethical behavior upheld credibility (SMITH, n.d). Ethical practice required that officers be accountable for information reported by ensuring due diligence in the company.
In conclusion, businesses are built on corporate social responsibility (CSR) which is one of the most fundamental principles in the business activities of organizations (SMITH, n.d). By definition, CSR refers to the ways in which companies manage their business operations with a sense of responsibility that goes beyond their main objective of making profits for their investors and shareholders to address issues affecting societal stakeholders. The company uses different theoretical and practical approaches to improve service and product quality in relation to its economic responsibility. It hires skilled professionals, thereby, reducing the margin for err from human intelligence. This also eliminates professional negligence. The company focuses on the system using six-sigma analysis, which seeks to check and evaluate the performance of the processes. In order to diversify on operations, the company has entered into different partnerships with the community by building roads, hospitals, schools and educating the locals on piloting and other courses.
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