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id=RBWE8ZezrboC&redir_esc=y Introduction: This report examines Airbus, one of two major players in the global aircraft manufacturing industry. Recent findings indicate that Airbus might have showed unethical business behavior in convincing customers to purchase its aircraft. After presenting and analyzing these allegations and updating potentially unethical conduct by Airbus to the present day, this report continues to discuss the topic of ethics in general. It is then elaborated how ethics are applied within the aircraft manufacturing industry by its two main players Boeing and Airbus. Following this, tools such as a PESTLE analysis and a SWOT analysis of Airbus are presented. Based on the findings of these analyses, recommendations for Airbus are formulated and examined with regard to practicability and feasibility aspects. Recommendations will be divided into short-, medium- and long-term strategies. Finally, this report will conclude by summarizing the findings and giving an outlook to Airbus’ position in the global marketplace. Airbus-company profile: Airbus is the world’s largest commercial aircraft manufacturer and, according to the company’s website, is at the forefront of the industry and consistently captures about half of all commercial airline orders (Airbus, 2007). Originally, Airbus was formed in 1970 when four major European aerospace companies created a consortium to build commercial aircraft. Until 2000, planes were manufactured by allied yet independent companies, with marketing being performed by Airbus. In 2000, the consortium structure was abandoned in favor of a French-registered company, raising 3.5 billion Euros with the initial public offering of EADS, European Aeronautic Defense & Space Company, of which Airbus is a subsidiary (). Today, Airbus operates globally and employs approximately 57,000 people. Airbus operates fully-owned subsidiaries in the United States, China, Japan and in the Middle East and has a network of 1,500 suppliers in 30 countries. Manufacturing aircraft models with capacities ranging from 107 to 800 passengers, Airbus has sold over 7,000 aircraft and its planes form part of the fleet of more than 200 airlines (Airbus, 2007).
failed and when the Ministry of Finance knew he full .Why? This is mainly due to the noncompliance anddetails they cancelled the orders. How do you differentiate between "Doing what is right" and "Doing the right thing the right way"? International politics and socio-cultural plays a big role in the International business. activities.Aerospace. Bombardier and Embraer may benefit in short term due to Airbus lapses Kuwaiti Kickbacks-Benefitted ALAFCO’s El Fekih and KAC’s Al Mishari & Airbus for the first few planes purchased. Suffered by Airbus because they lost the deal / orders when Mallah provided the watchdog’s and Ministry of Finance full details of ALAFCO’s orders. Spain. The final assembly lines used by Airbus “TRADE WAR”are in France.for the cargo planes. Case Study: Business ethics is the study of business situations. for the Airbus A400 and China for the A320 series. UK. unwillingness of Airbus and the French government to cooperate to answer the CBI (Central Bureau . Germany. Airbus is an unwieldy confederation market. Why? Because Mishari’s plans to bypass formal deal when the Indian Government has declined thegovernment approval by forming ALAFCO has purchase of 43 Airbus planes worth $2 billion. Airbus has developed well and today is an important player in the global commercial aircraft industry. Germany)aerospace firms. market. 3 Who benefits from Airbus lapses in ethics Competitor like Boeing. Airbus is 80 percent owned by the The challenges of business topublicly traded European Aeronautic Defence and sustain in a competitive unethicalSpace Company. and 20 percent by British international market dominated by socio cultural politics. Spain. The International unethical The International unethical leadership management issues leadership management issues due to the impacts of socio-culture due to the impacts of socio-culture•Airbus and politics in International and politics in InternationalStarted in 1970. . and decisions where issues are right or wrong are addressed. having steadily gained market share from its main rival Boeing.Since its inception.of four European (France.
subsidiary International Aircraft Leasing (IAL) and.Why? Because for a long time no has come frontfine of $268 million and sentenced to prison for 10 to expose the corruption they found. Students of this school can be bonded for some years with Airbus and given jobs in Airbus later.Benefitted Karlheinz Schreiber. How Boeing Deal with Competition . after that they couldn’t easily work in international marketing. -provide press releases including comments clear and enforceable guidelines for the way in to defend itself from this sort of competition with Boeing. Response from Public Relation on Airbus lapses The Public Relation staffs should make -proper researches on the truth of the criticism and make corrective statement in the same articles to protect save the image of Airbus. former transport minister and the investigation took place.Syrian Scandal. because it involved the Canadian prime Minster.Suffered by Air Canada as it took a long time forforeign affair. .middlemen Munir Abu Khaddur) also had to pay a . This flight and the company’s long term efforts are considered big strides towards environmentally friendly aero planes. Providing Damage Control assistance. Airbus Senior-Why? – Because Airbus denied paying off the VP in France. •Third the middleman (s). -Other CSR activities such as Airbus should have build new Aerospace & aeronautical design Engineering schools and provide free tuition fees to boost its image. This is mainlyyears. some people in Shell companySyrian officials. 4 Who suffers from Airbus lapses in ethics •First airbus suffers because after this scandal customers will make deals very carefully with airbus . and also it made bad reputation in international marketing for itself. The three men (former minister of .Investigation) questions.financial lost. develop biofuel that could be used by 2030.Benefitted Airbus because the purchase were Mounties and Banksmade for $240 million. •Second the Canadian government because the people loosed their trust to them.Suffered by Syrian Air as it has incurred big the Canadian PM Brian Mulroney and Airbus Ind. -Promote Airbus CSR activities to create a better image of Airbus. •Other airlines and state government for purchases and large payments made to Airbus ie lost of Sabena Air.
•Boeing used GATT to come up with the OECD convention on anti-bribery. achieve Cost efficiency -A lot of country relied on US Government on the economy and security Airbus -Offer high “commission” to middleman & politicians Reason -Middleman able to influence or even make decision for the state politicians. Each Party shall take such measures as may be necessary to establish that it is a criminal offence under its law for any person intentionally to offer. faster and reliable.•Develop more advance aircraft which is more efficient.•Building Boeing reputation as Bribery Free Company.The Offence of Bribery of Foreign Public Officials 1. •Boeing use US Government to coercive influence decision making of buyers (purchases of aircraft for exchange of US services) •Uses spy intelligence methods to obtain information of Airbus lapses and use the info to threaten the purchaser of disclosing the unethical deals . promise or give any undue pecuniary or other advantage. Difference between Boeing and Airbus Marketing Boeing -Competitive price and quality & Influence power of US Government Reason -Long history in the market -Big customer based. would HAVE AGREED AS FOLLOWS: Article 1 .•Transparent in all the business deal and prevent unfair dealing . • The OECD convention on bribery The OECD convention on combating bribery. whether directly or through intermediaries. •Ensure All the Aircraft is build with quality and value for price . to a .
Attempt and conspiracy to bribe a foreign public official shall be criminal offences to the same extent as attempt and conspiracy to bribe a public official of that Party. although the involvement of socio-cultural to politics is prominent to obtain big orders Elimination of middleman is a must to cut down on unnecessary paying of kickbacks and bribes to the politicians and top level management people.foreign public official. Instead establish agents with standardized minimal commission payments to the appointed agents. There will be no more seaside villas in Mexico or big shopping plaza’s in Kuwait for corrupted men. aiding and abetting. or authorization of an act of bribery of a foreign public official shall be a criminal offence. including incitement. •Airbus would not have produced its latest’s A380. •Due to the lost in business Airbus would have to retrench its workers.•Airbus will always be the number two successful airlines after Boeing. . for that official or for a third party. The offences set out in paragraphs 1 and 2 above are hereinafter referred to as “bribery of foreign public official”. Each Party shall take any measures necessary to establish that complicity in. • • • Suggestions A good leadership in Airbus Industrie will make the company more stronger. • How would that be different for Airbus if France adopted OECD convention on anti-bribery •Airbus will have to toe the line in all its international business dealing if France adopted OECD convention on anti-bribery. Agents who will abide with standard agents and suppliers manufactures’ rules. •Airbus’s reputation and scandal in the Air Canada could have been avoided. Most of the countries would have purchased Boeing in order to get US Government favors. 3. •Airbus would have to report to their ethnic committee in all international dealing and the move result in good corporate governance. . •The competition would have no reason to attack Airbus’s business practices of using middlemen and lobbyist to secure new overseas Government’s contract •Airbus sales would have dropped badly and lost millions of dollars. in order that the official act or refrain from acting in relation to the performance of official duties. 2. in order to obtain or retain business or other improper advantage in the conduct of intl business.
weakens trust in public institutions and challenges democratic principles. Create a good image and brand building.• • Improve the technology quality and performance in order to cut down on turnaround time will bring more profits to Airbus. Bribery and corruption have a very detrimental effect on an economy and the World Bank has estimated that 0.5% of GDP is lost through corruption each year. . Promote Go green environment clean air and less carbon emission bio-fuels. it undermines the rule of law. The history of their competition provides a good case study for best-practices in strategic planning. So are we to follow their socio-culture? Some country men want business to be as “If you go to Rome do as the Romans do”. Engaging in corrupt practices also creates a very unfavorable business environment by encouraging unfair advantage and anti-competitive practices. So if you want to do Business and survive the roller coaster ride. Although businesses must compete fairly and honestly but again it is a question of doing the right thing the right way. so what is the right thing and the right way? Bribing and receiving kickback are a norm life style & culture in many countries. • • • Thoughts To Ponder! The Boeing and Airbus quests for dominance have been quite a roller-coaster ride for both with no end in sight. Follow the ride and their political socio-culture???. corruption is one of the primary obstacles to the economic development of a country. • • • Conclusion Companies need to continuously maintain integrity and transparency when expanding their international business to new geographic market if they want their business to sustain for a long term. there are times you have to do what the Roman do in their country. As well as allowing organized crime to flourish.