12/7/2017 Ethics and Airbus

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Case Summary

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12/7/2017 Ethics and Airbus
April 2013 (422) Airbus being one of the two known global aircraft manufacturing companies has engaged in Essay Writing Tips (873
March 2013 (163) unethical practices. The airbus management had engaged in practices that were not ethical items)

to a point they were caught with ethical lapses on taking bribes from customers. It has been Nursing (76 items)
discovered that the company has been cheating customers convincing them to purchase Literature and Languages
aircrafts from its company. On the same, the same management had inflated some (139 items)
companys order that makes the company less competitive simply because the customers Education (186 items)
have the entire information. This is where the competitor of Airbus Boeing gets into the Sociology (201 items)
market with full force. After a serious analysis of the situation, findings were based on the
Psychology (30 items)
current aircraft industry. Having placed the same in the current setting, it has been
Philosophy (11 items)
discovered that the two major aircraft manufacturing industries have engaged in ethics
issues. History (69 items)

Accounting (11 items)

Management (145 items)
#1. In each of the cases who benefits and who suffers from the alleged ethical and legal
lapses of Airbus?

According to the case, it is clear that politics plays a major role on how the company
operates. This is according to the influence of the politics on placing orders of aircrafts direct
from the manufactures. Politicians and manufactures encourage kickbacks in the process of
placing order and buying of aircrafts from the manufactures. In case 1, initially Sabena had
placed an order of 17 airbus planes. Out of the politics, the company increased its order
from 17 airbus planes up to 34 airbus planes. After a serious investigation, it was discovered
that the company was not in need of all those airbus planes but the order was increased
simply because of the influence by the management of Airbus Company. After an interview
by a reporter with the former manager of Sabena, he agreed that the purchase was fatal
and it played a major role in the company collapse, (Schulz, 2008. p. 79). In this case
Airbus Company benefited simply because Sabena increased its order and on the other
hand, Sabena Company suffered due to unplanned purchase that led to the collapse of the
company. On the case Kuwaiti Kickbacks, Airbus Company suffered simply because Kuwait
Airways Corporation did not honor the order that it had planed to place with the company.
The reason as to why the company suffered was due to the $ 450, 000 it had chipped in to
the operations of the company, (Schulz, 2008).

#2. How should the public relations staff at Airbus respond to the articles appearing in The
Economist and The Guardian?

According to the case it is true that both companies have political influence on how they
make their sale. This is serious to the customers simply because they might decide not to
make their purchase from those companies. Both companies must do something in order to
secure their market share for future growth. Due to the placed article in The Economist and
The Guardian, Staff at Airbus Company had to respond in order to maintain its public
relation to the market as well as to the general public. In responding to public relation
press, the company must ensure that it has developed a strategy that shows how the
company is improving in respect to management aspects, (Mayer, 2008. p. 301).

Since the public people are there to show how the companies operate with political
influence, the company should ensure that the picture has been cleaned. In order to have
the image of the company changed, the company should ensure that they have managed to
show the public relation people that management has changed. It should let the public
relation know that the entire management that was influenced by political thoughts has
been changed and that it operates under new management that is dedicated to work in the
right direction, (Mayer, 2008).

# 3. What steps might Boeing take to defend itself from this sort of competition?

With such competition in the aircraft industry, Boeing is at risk simply because political
influence plays a major role in the sales the company makes. In order to secure its market
share, Boeing Company is required to develop a strategy on how to deal with the
competition. The first approach the company should employ is lowering its cost. Since other
companies prices are higher Boeing should focus on working with minimum cost such as
making its manufacturing orders from suppliers who are cheaper. In line with that, it will
manage to lower the prices of its products thus it will have managed to fight the issue of
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12/7/2017 Ethics and Airbus
competition. Jennings says, A fair competition is one that an organization enters into a
market and applies strategies without fearing the other competitor, (Jennings, 2011. p.
124). On the same, the company may merge with big companies from other fields. This is to
assure the market segment has been secured, (Jennings, 2011).

# 4. Do you think that Boeing and Airbus behave differently in marketing their aircraft
around the globe? How and why?

I believe that the two aircraft companies behave differently in marketing their products
around the globe. For Airbus Company it does use political influence in marketing its
aircrafts. This is to attract more customers for they will get some discounts on the quantity
they will purchase from the company. The company does this in order to increase its sales
so as to develop its market share. On contrary to Airbus Company, Boeing uses another
method in marketing its aircrafts to the consumers. The use of another strategy is to ensure
that areas that the other company has not touched have been provided with whatever they
want. According to Cateora & Graham, Lowering the price level of the products attracts
more customers and give the manufacture a room for expanding the market segment of the
company (Cateora & Graham, 2007. p. 254).

Reference:

Cateora, P. R. & Graham, J. L. (2007). International marketing: McGraw-Hill/Irwin,

Jennings, M. M. (2011). Business Ethics: Case Studies and Selected Readings: Cengage
Learning

Mayer, S. (2008). Airbus versus Boeing- Strategic Management Report: GRIN Verlag

Schulz, P. (2008). Ethics and Airbus: GRIN Verlag

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