Mixed Questions and Answers

Question 1

Benefits of corporate social responsibility to the company

Answer 1

• CSR: this concept applies to those businesses that consider the interests of society by taking responsibility for the impact of their decisions and activities on customers, employees, communities and the environment.
• Application
  • Responding to pressure group activity regarding carbon emissions. Can it afford to ignore
  these pressures?
  • Encourages decision making that reduces impact on environment e.g. new fleet of fuel efficient aircraft
• Analysis
  • Potential impact on revenues due to improved public image and branding
  • Impact on market share
  • Impact on profits
  • Impact on costs – fuel efficiency will save money and lead to increased profits
  • Could it be a USP?
  • Will this help recruit and retain employees?
  • May be necessary as competitors may also have adopted CSR reporting

Question 2

Discuss whether should outsource in other

countries

Answer 2

Outsourcing: using another business (a ‘third party’) to undertake a part of the production process rather than doing it within the business using the firm’s own employees
- Application
• Significance of safety in airline industry
• Reduction in maintenance costs of 10%
• Cost competitiveness of the industry due to low cost carriers
• Impact of redundancies
• Issue of lighter regulation in other country
- Analysis
• Reductions in cost will help remain competitive in the industry and boost profits or enable price reductions
• Impact on reputation in domestic economy as jobs being exported abroad? Could there be a
consumer backlash?
• Limited focus on costs was probable cause of losses in the past
• Reaction of employees. Could there be disputes over change – already possible problems connected with changes in HR
- Evaluation
• Will it impact on CSR reputation?
• Will it impact safety? Is this most important factor?
• Can BAS afford not to pursue all possible measures to reduce costs?

Question 3

Evaluate the usefulness of the sales forecasting methods, such as moving averages, for marketing decisions

Answer 3

• Definition: allows the identification of underlying factors (trend, seasonal/ random/ cyclical fluctuations) that aare expected to influence future sales.
• Analysis and application
  • Scientific approach rather than relying on guess work
  • Importance of forecasts to help make decisions and plan for the future in terms of aircraft and other resources
  • May highlight that BAS needs to consider making changes to strategies if trend in sales is downward.
  • Cannot account for unexpected external shocks such as new competitors
  • Consideration of other factors influencing sales and other forecasting techniques
• Evaluation
  • Does BAS really need to conduct TSA for each route? How useful is a figure for overall sales?
  • Potentially accurate within relatively short time frame. Longer term accuracy depends on volatility of market and other factors
  • Has to be used alongside other techniques for forecasting future sales

Question 4

Discuss how BAS should respond to the threat of industrial action over proposed reforms to human resources

Answer 4

• Definition of industrial action: measures taken by the workforce or trade union to put pressure on management to settle an industrial dispute in favour of employees.
  • Analysis and application
  • Possible options for BAS:
  • Offer to negotiate with unions and delay any decision
  • Offer to consult with trade unions
  • Press ahead with changes without involving unions – but CSR an issue
  • Arbitration is a possible solution but will unions accept and what are the risks
  • Consideration of potential impact of such industrial action on BAS and its reputation –
  competitive market, loss of customers due to disruption to their plans
• Evaluation
  Balance of likely impact of action versus need to reduce costs in the long term. Is it better to see
  off dispute now rather than later on?