BX2072 Change Management Assessment 2 Case Study Report

In this assessment, you are required to consider the case study relating to organisational change at Qantas and prepare a report in response to three (3) questions.

The case study and questions are on pages 2-6.

Word count

Report            2500 words (+/-10% permitted)

Executive Summary        250 words maximum (not included in the word count)

References

You should have a minimum of 8 sources in addition to the prescribed textbook for this subject. Four (4) of these sources must be of an academic nature (see note below).

Articles from these publications, or with the following characteristics, are often NOT academic:

• Newspapers
• Magazines and trade journals (with the exception of Harvard Business Review)
• Newsletters
• Journals published weekly or more frequently (although significant exceptions include Nature and Science)
• Very short articles (eg one or two pages)
• Articles that have no list of references or bibliography
• Blogs, websites for consulting firms and other businesses

BUT, there are no absolute rules. You should exercise your own critical judgment. It is often appropriate and necessary to also refer to non-academic publications in an assignment , and you may do so in this report. However, you must have a minimum of four (4) references (in addition to the textbook) that meet the academic standard.

Plagiarism

Please ensure you read and pay careful attention to the information in your subject outline.

Check the similarity report on Learn JCU and make alterations as necessary before you submit your final report.

There is a generic guide to help you prepare this report on pages 7-9.

Qantas

Qantas is Australia’s largest domestic and international airline. Although Qantas is primarily a passenger airline, air freight is also an integral part of its core business. Other Qantas operations include catering, tourism and E-commerce devoted to transport and travel.

Qantas is the second oldest airline and the oldest airline in the English speaking world. It was founded in the Queensland outback in 1920 as the Queensland and Northern Territory Aerial Service (QANTAS) Limited. The company began operations with one aircraft providing joyrides and air taxi services with regular scheduled mail and passenger services commencing in November 1922.

Qantas bought the British share of Qantas Empire Airways in 1947 and made its first Sydney to London flight in its own right. Qantas was later nationalised when the Commonwealth Government purchased it in 1947.

By 1950 Qantas served most major cities in the Pacific Rim and in 1958 offered the first complete round the world air service. In 1959 Qantas entered the jet age when it became the first airline outside the United States to operate the Boeing 707.

The Australian airline industry was deregulated in early the 1990s, and in 1993 the Australian government sold British Airways a 25% stake in Qantas. Qantas was privatised in 1995 when shares in the company were floated on the Australian Stock Exchange (ASX) for the first time.

The terrorist attacks in the USA on 11 September 2001 had a major impact on Qantas and all carriers by reducing demand for international travel. Qantas initially reduced its international flying capacity by 11% and was spared a financial loss because of the collapse of Ansett Australia on 12 September 2001. This event instantly increased Qantas’ domestic market share from 56% to more than 80% and enabled it to move capacity to Australia from depressed international routes.

The war in Iraq and SARS combined to decimate Qantas profitability in 2003. International operations were hit particularly badly, with the number of inbound visitors to Australia falling by more than 20% in some months and up to 45% on some Asian routes. Qantas responded by reducing flights, using accumulated leave to reduce the number of staff, increasing redundancies to 2,000 and reducing capital expenditure including the retirement of some aircraft and deferring the delivery of new aircraft.

With a gradual improvement in international tourism and a successful cost reduction programme, Qantas recorded an 89% lift in net profit in 2004. Qantas also introduced two new airlines in 2004 Jet star, a low-cost airline to compete with Virgin Blue for leisure travelers and Jet star Asia, a low-cost airline based in Singapore. The relationship between Qantas and British Airways ended in September 2004 after British Airways sold its stake in Qantas to institutional investors.

Qantas recorded another net profit, up 17.8%, in 2005. The main drivers of this result were the successful introduction of Jet star and cost savings.

Qantas had a much tougher year in 2006 due to the soaring price of fuel. The fuel bill jumped from $1.5 billion in 2003 to nearly $3 billion in 2006. The escalation in fuel prices poses a greater commercial challenge to Qantas than terrorism and SARS. Qantas believes that it must continue to change and survive and in 2006 axed Australian Airlines, launched Jetstar International, expanded freight and restructured catering. In 2007 Qantas reported a boomer year in which net profit jumped to a record $673 million despite fierce competition, aircraft delivery delays and record fuel prices.

In 2008 Qantas capitalised on a very positive operating environment to post another net profit record of $970 million. Qantas finally saw the arrival of the first of its A380s and Geoff Dixon retired as CEO, replaced by Alan Joyce (former head of Jet star). The severe economic downturn saw Qantas posting an 88% fall in profit in 2009, despite Qantas’ efforts of grounding planes, delaying and cancelling orders of new aircraft, and raising $500 million from investors.

In 2010 global operating conditions improved with recovery in demand in both passenger and freight markets. Qantas recorded a strong profit result; all segments were profitable with Jetstar’s results again the highlight. CEO Alan Joyce lauded the success of its 2 brand strategy which gave the airline the flexibility to ride out the economic cycle.

In 2011 Qantas’ underlying profit before tax increased by 46% over the previous year. There were several natural disasters and weather events which adversely impacted on Qantas profitability, including Cyclone Yasi in Queensland, Christchurch earthquake and the tsunami in Japan. Increased outsourcing put Qantas on a collision course with many of its unions including the pilots, engineers and baggage handlers. Industrial action during 2011 caused flight cancellations, delays for Qantas customers and resulted in the unprecedented grounding of the entire Qantas fleet on 29 October 2011.

Qantas reported a profit of $95 million in 2012, hampered by big losses from its international operations, industrial disputes and intense competition especially from Virgin Australia on its domestic routes. In response, Qantas was forced to revamp and restructure its international arm, cancel orders for new planes and further downsize jobs.

In 2013 Qantas’ underlying earnings more than doubled to $192 million. This was despite tough competition on international and domestic routes and high fuel prices. However, in 2014 Qantas reported a loss of $646 million and announced that it would axe 5000 jobs. In 2015 Alan Joyce reported a $975 million profit. All sectors were profitable and several posted record results. Alan Joyce was named CAPA – Centre for Aviation airline chief of the year.

In 2016, Qantas reported a $1.53 billion profit confirming it had fully recovered from its nasty loss 2 years earlier. In 2017, Qantas reported a $1.4 billion profit due to strong domestic business, a recovery in its international business and cost cuts. Despite higher oil prices, Qantas reported a massive $1.6 billion profit in 2018, the best in the history of the airline.

Qantas timeline 1920 – 2018

1920 Qantas founded in Queensland.		1947 The Australian Government purchase Qantas.		1991 The Australian domestic airline industry is deregulated.		1995 Qantas is privatised.		2001 Terrorist attacks (September 11) reduce international travel, but this is offset by Ansett’s collapse on 12 September.
2003 The war in Iraq and SARS virus reduce travel and impact adversely on Qantas’ profits.		2004 Qantas achieves a record net profit and launches two new discount airlines: Jetstar and Jetstar Asia. British Airways sells its stake in Qantas.		2007 Net profit jumps due to the success of Jetstar, the strong economy and continued cost improvements.		2008 Qantas posts a record net profit but moderates its growth plans as it expects economic conditions to deteriorate. Alan Joyce replaces Geoff Dixon as CEO.		2009 Qantas posts a worse than expected 88% fall in net profit. The global financial crisis, competitor growth an swine flu are the main culprits.
2010 Qantas profit strengthens as it takes advantage of improved economic conditions.		2011 Strong profit result despite rising fuel prices, continued global uncertainty, industrial disputes, natural disasters and weather events.		2012 Qantas reports a full year net loss. Qantas pins recovery on revamping its loss making international arm and an alliance with Emirates.		2013 Qantas is back in the black posting a modest net profit. Qantas continues to build Jetstar in Asia.		2014 Qantas records a massive loss and flags further cost cuts including big job losses.
2015 Qantas reports their best profit since the GFC.		2016 Qantas records its second highest profit in history		2017 Qantas reports another year of stellar profits and gets its first Dreamliner names Great Southern Land		2018 Qantas posts a massive profit. It’s highest ever.		2019…?

 

Resistance to change

There is a range of factors which encourage, precipitate or even force necessary changes in a business operation. In recent times, the aviation industry has faced the 11 September 2011 terrorist attacks, the SARS epidemic in 2003, rapid increases in fuel prices, the GFC, changes in customer requirements and the rapid emergence of low cost international and domestic carriers. The response must be to review the current business model and find greater efficiencies.

It is one thing to identify and plan for the necessary change, but quite another of achieve implementation. There are significant restraints and restrictions to implementing change at Qantas; they fall into two categories.

Financial restrictions

Resistance to change can arise because of the direct and immediate cost of those changes such as;

• New equipment, technology, systems and aircraft
• New and upgraded engineering facilities
• Redundancy costs
• Retraining costs

Human restrictions

Resistance to change at Qantas can arise because of the impact, real or imaginary on the individual and on the established working groups such as;

• Inertia, lack of enthusiasm and active blocking of change by staff at all levels
• Change in skill set
• Fear of job losses and redundancies

 

Sarina and Lansbury (2013, p. 437) refer to Qantas as both a “full-cost legacy airline and [a] low-cost carrier”. Their research questions “whether the Qantas group can survive…turbulence in the airline industry” and “identifies the strategic role that employment relations plays in establishing a sustainable business model for airlines that are comprised of both a legacy and low-cost airline.” (Sarina and Lansbury, 2013. P. 437).

Wider community considerations

The ‘flying kangaroo’ has been described as part of the Australian national psyche and one of Australia’s most recognisable icons. Marketing material and planes carry the tagline, “Spirit of Australia”. Jon Scriven, retired group Executive HR & Office of the CEO at Qantas is said to have stated that “everyone has an opinion about Qantas, even though 35% of [Australians] chose not to fly with us”.

Adapted from: Broadbridge, D. 2016. QANTAS a business case study. Get Smart Education. Mona Vale, NSW. Other references:

Sarina, T. & Lansbury, R, 2013. Flying high and low? Strategic choice and employment relations in

Qantas and Jetstar. Asia Pacific Journal of Human Resources (2013) 51, 437-453.

 

Case Study: Qantas

Questions:

1. Conduct a PESTEL analysis and briefly outline the features of Qantas’ external environment that impact the business and bring about the need for change (10 marks)
2. Identify the critical points in the case study that triggered the need for change at different points in Qantas’s history (10 marks)
3. What are the key reasons people resist change and how do they apply to the Qantas case study?(10 marks)

Generic Report Writing Guide

Sources:

• Benckendorff, P.(2008). endeavour,Townsville:JamesCookUniversity,pp79-83.
• Summers, J., & Smith, B. (2010). Communication skills handbook (3rd ed.). Milton, Qld: John Wiley & Sons Australia, Ltd, pp. 47-55.

There are two basic kinds of report.

Informational reports present information without analysis or recommendations. The report writer’s task is to select and emphasize the relevant facts clearly and concisely.

Analytical reports analyze and interpret data and make recommendations. The report writer’s task is to select and emphasize the facts and arguments that support the recommendations.

You should carefully read the assessment instructions and the marking rubric to determine which kind of report you are required to write.

Report presentation and layout

Formal reports are usually divided into sections with numbered headings. Although the structure of a report can vary, business and academic reports usually contain the following sections, in the given order:

• Title page
• Professional design and visually appealing
• Acknowledges the purpose of the report
• Table of contents
• Executive summary
• Introduction
• Report body
• Conclusions
• Recommendations
• Reference list
• Appendices

Make sure your student number appears in the footer of each page and that each page is numbered.

Title page

Unless otherwise stated the title page of your report should include the following details:

• Title of the report
• Your name and student number
• Name of the tutor or lecturer for whom the report was written (see notes above in ‘Title Page’ dot point
• The name of the subject (including the subject code) and study period

Table of contents

This page(s) is used to outline the sections and sub-sections of the report. The contents page should list the main section headings and sub-headings of the report and their corresponding page numbers.

Executive summary

The executive summary provides the reader with the report’s major purpose, analysis of ‘findings’, and recommendations. Executives traditionally do not have sufficient time to read complete reports, yet need to extract sufficient information to make informed decisions. The executive summary should encourage the reader to go on to read the full report. The executive summary is an extremely important component of any formal report and should be prepared carefully, rather than as an afterthought. Several drafts will be necessary to get it ‘right’.

The executive summary should contain a brief statement of the following:

• The purpose (objectives) and scope of the report
• The most important and significant findings, in summary, form
• The most important and significant recommendations (if required).

It should be a ‘stand-alone’ document that encompasses the important points of the report it accompanies. As a general rule, your executive summary should be about 10% of the length of the full report.

Avoid providing an executive summary that reads like a table of contents or an introduction. Do not just list the things you did in the order you did them; it should really be more of a summary of the main activities and findings of the report.

Introduction

The introduction explains the background to the report, its purpose and the points covered. It should provide a brief overview of the argument, framework or logical structure that the reader should expect to read in the rest of the report. A good introduction will be short and will help to guide the reader.

Body

This is a significant part of your report and provides you with the opportunity to consider discuss and respond to the set questions. You should divide the body of your report into sections with headings that relate to the focus of each question. Please do not use the questions as your headings.

If relevant, you may include tables and figures; however, they must contribute to the information you want to convey.

Conclusions

This contains the conclusions you draw from the information presented in the main body of the report. These are logical deductions drawn from the findings in the previous section. Sum up the main points and refers to any underlying themes. If any questions or issues remain unread solved, mention the min the conclusion. Conclusions should be firmly and briefly stated. You should not introduce new information.

Recommendations

Recommendations are suggested options for solving the problem or problems as required in the instructions. Recommendations should be brief statements outlining a specific course of action suggested by your consideration of the case and analysis against the theories relating to change management.

When making these recommendations, you should consider the following:

• Are the recommendations realistic in the light of current environmental conditions (economic times, likely competitor reactions, government policy, and consumer reactions)?
• Has sufficient thought been given to timing and priorities? When do the recommendations need to be implemented and in what order?
• Are the proposals feasible? Are there the financial, physical and human resources to support them?

Reference list

The reference list should give information about all sources cited in the report. Full publication details must be included using the APA format. The reference list should be arranged in alphabetical order according to an author.

Appendices

Include in an appendix any relevant supporting evidence that could not be incorporated into the main part of the report. Appendicesmayincludetables,texts,graphs,diagrams,photographs,questionnaires,etc.You should put these in an appendix when placing them in the main body of the report would interrupt the process of reading. Items in appendices should be referred to somewhere in the main body. If you do not need to refer to the min the main body, you might think about whether you need to include them at all.

Please note: do not use the appendices as a way to ‘get around’ the word count. Appendix material generally will not be read unless the reader is seeking further information to points made in the body of the report.