Qantas Ceo Alan Joyce Managing Critque During Industrial Action

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MGT5000 MANAGING ORGANISATIONAL BEHAVIOUR
Faculty of Business & Law University of Southern Queensland Toowoomba, Queensland

Assignment 3

Prepared for

Dr Retha Wiesner

By Student name: Matthew Caughley Student number: w0093045

Due Date: 1st June, 2012

Matthew Caughley w0093045

MGT5000 Managing Organisational Behaviour

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The following essay critiques the performance of management at Qantas during the industrial action of 2012, and the power and conflict issues that arose during the dispute. In particular, the essay focuses on the management style of CEO Alan Joyce, and whether or not Qantas can recover from the crisis with Joyce at the helm.

Task 1.1
Alan Joyce, CEO of Qantas, made use of his position as CEO and the legitimate power given to that position during the Qantas industrial disputes, which peaked when he chose to ground all Qantas flights, both domestic and international. Due to the ongoing strikes and industrial disputes with three different unions, Joyce felt he and the rest of Qantas management were backed into a corner. According to Joyce, “This was the only solution we had. This was an amazing decision for us (Qantas management) to make and it wasn’t made lightly. It was only made when every single alternative was exhausted to us and there was nowhere for management to go” (Bamber, 2011). The power tactic used by Joyce was the sanctioning of use of organisationally derived punishment. He chose to make use of his legitimate power by grounding the fleet ‘indefinitely’, thereby suspending all Qantas employment. Of course, ‘indefinitely’ meant until Fair Work Australia (FWA), operating on behalf of the federal government intervened. His use of legitimate power ensured all parties were forced back to the negotiating table and the involvement of FWA meant a solution to the industrial dispute was inevitable, by either mutual agreement between Qantas management and unions, or by binding arbitration. Mr Joyce made use of the legitimate power given to him by his title as Chief Executive Officer. It could be argued that his decision to ground the Qantas fleet was also a use of coercive power. According to Wood (et al. 2010), coercive power is the power one has over someone else if they can dismiss, suspend or demote that person. In this case, Joyce had the power to ground the entire Qantas fleet, thereby suspending all employment. By forcing the employees to stop work indefinitely, he effectively put them out of a job. Joyce also made use of informational power by choosing not to warn the federal government and passengers. This put tremendous strain on the government to act, due to Australian citizens being stranded around the world, and to force the waring parties back into negotiations, which is probably the reaction Joyce wanted to invoke. Continuous industrial action, stalled mediation and ongoing media coverage put consistent pressure on Joyce to act in the stockholders best interests in the short term. Unfortunately, the ultimate losers in the decision were the passengers; the paying customers that were unable to make their way home, or to their holiday and work destinations. The power bases used by Joyce and how he manipulated them may have solved the industrial disputes, but the trust lost by the flying public may prove to be a bigger issue.

Matthew Caughley w0093045

MGT5000 Managing Organisational Behaviour

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Task 1.2
The conflict at Qantas in 2011 was the straw that broke the camels back in an ongoing dispute between workers and management which began with the deregulation by the Australian government in 1990. Since then, the cost base for Qantas has always been high when compared to other non-government funded airlines, including its labours structures and labour costs. Its previous monopoly on flight paths to the US and UK was no longer protected by federal government and is now in direct competition with other carriers. With the need for dramatic restructure...
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