Description of Selected Companies

Give a brief description on Air India – Malaysian Airline.

This report focuses on the official reporting of the corporate social responsibility and sustainability activities that has taken a significant part in every organization. In today’s world, companies that are making profits from their respective markets feels that it is their duty to contribute towards the improvement and betterment of the society they are gaining such profits. However,  companies who indulge themselves in such activities or use these activities as for the means of publicity and try to capture the attention of media and public words their company and creating a brand name through these activities (Sen & Das, 2013).

This report focuses on the critical evaluation of the social reporting of the sustainable activity of two airlines- Air India and Malaysian Airlines. Both the companies are from aviation industry but are heading from different countries. Broadly CSR policies and initiatives are based on the foundation of the market place, community, environment and workplace. 

Air India is a government-owned airline which was incorporated as a government airline in 1946.  Approximately 18,700 employees work for the airline. The principle divisions in which they provide services are Ground Services, engine overhaul and engineering and maintenance (Hankins, 2016).

Malaysian Airline is the national carrier of Malaysia that covers more than 1000 destinations in more than 150 countries around the world. It has been rated as the best airline in Malaysia and awarded with the world’s best cabin crew award. It has been acquired by the Malaysian Airlines Berhad in September 2015 (Hankins, 2016).

Air India Limited has imbibed its corporate social responsibility and is all set to acknowledge all the environment issues with the conviction to protect the environment. It is working with the determination to develop which would also benefit the stakeholders at all the levels of the operations as well as the customers. The company intends to mark a positive contribution to the society that is the den where the company operates.

1. What differences are evident between two companies regarding the range of issues depth within the reports and the depth coverage on specific issues?

Both the airlines are globally dominant. Malaysian airlines produce its sustainability report along with their annual report. However, Air India does not have any separate sustainability report; they include it in their annual and have adopted a “corporate environment policy initiated in the year 2015, but no such activity has been officially taken place by the airlines as of now.  Malaysia Airlines clearly state its visions and the achievement of this vision on their annual sustainability report. In their annual sustainability report, it is clearly stated that the policy of the company applies to Malaysia airline system Berhad, and all the relatable subsidiaries. They should abide by the policy of prevention of pollution and minimization of the environmental footprint by the improvement of the performance and the compliance with the environment related legislations and considerations of the other requirements of the environment (Abdelfatah, 2015).

1. To what extent can these differences be explained by the country or the industry differences? What other explanations might be there?

Major Differences in the Companies

India alone accounts for 2.4 % of the land reserve of the world and holds 16 %of the world population. India faces rapid and widespread environmental degradation at an alarming rate. India’s air pollution is among the worst in the world; the garbage heap in streets remains uncollected for long; pollution of the largest river in the country is heading towards beyond use. Recently the government policies have been revised to give this critical issue priority. Malaysia is also facing severe environmental issues but not as severe as India. The issues related to Malaysia are waste material management, industrial and commercial operations and the harmful emissions from these sectors. According to reports, the reluctance of the government is harming the countries environment sustainability policies (Motwani, 2012).

It is clear that the pressure adopting sustainability policies for the countries is high, and the governments have to work with the private industry to achieve the sustainability goals. In the case of the Air India, it has recently announced to adopt environment-friendly fuel to reduce the massive harmful emission. On the other hand, Malaysia Airlines have already been working on adopting the measures to reduce harmful emission and have been successful according to the annual reports.

• Assess the apparent quality of the social accounting approach utilized by each company according to Zadek et al.’s (1997) criteria

Zadek proposed eight key standards that are practiced to evaluate and test the activities of an organization towards the building of a cleaner and better environment. This idea is vital in measuring the level of standards followed by the companies. These standards are crucial in the evaluation of the reporting of company claims in their annual statements.

Contribution towards better environment: one of the factors that rule the policy making of the airlines is the fuel consumption and carbon emission by the fleets. Both the companies are moving towards the adoption of the environment-friendly fuel to reduce the carbon emission. This way the airlines indicate towards their concern and contribution towards the minimization of the air pollution. Both the airlines promise rigorous efforts towards the sustainability of the environment.

Contribution towards a better society: Malaysia Airlines operates to more than 50 destinations and serves more than 40000 passengers daily thus has a huge responsibility of the safety of the passengers (Grayson & Nelson, 2013).

A good relationship with the stakeholders: Air India has been recurring losses for a very long time and thus has faced many protests from the employees as Air India was unable to give the salaries to the staff. Air India also faced issues with bad services to the customers and has a lot of grievances from the customer regarding food, inappropriate management of baggage and inappropriate behavior from the staff (Punjab, 2016)

Difference between their Countries

1. Discuss the extent to which the social reports reflect the values of the selected companies.

In the annual sustainability report of the Malaysia Airlines, they clearly state the amount of carbon footprint they leave 546,164,000 kgs of carbon dioxide and consumed 1,680,000 kgs of fuel in the year 2014 (Tiwari & Kainth, 2014).

Air India has engaged an environment management system/fuel management information system which followed the recommendations of Fuel Efficiency Gap Analysis and reduced 316,121,673 kgs of fuel and reduced 995,783,274 kgs of carbon dioxide emission in the year 2014.

This clearly indicates the concern of the airlines towards environment sustenance, yet they both faces issues regarding security and customer service respectively that has majorly hampered the image of the airlines and adversely affected the profitability of the airlines.

1. Briefly, reflect on the group discussion of these companies. In what ways did the ideas presented by the group confirm the conclusion or present another perspective?

During the group discussion, the activities revolving the airlines were discussed in details. Various points of views came up regarding the reporting of the environment sustainability and CRS activities by the airlines. One of the opinions stated that the positive reporting regarding the CSR activities has become a trend to boost the business of the airlines. However, another group argued that the false reporting is unethical practice, and thus that should stop as it gives a favorable impression of the airline but in reality are false. Both the groups agreed on the fact that the reporting regarding the environment sustainability was genuine and that the contributions claimed by the airlines in their reports have been achieved. The reports both the airlines that claim their CSR activities are not completely true. They are working on the building of their brand names as they have suffered huge losses due to different issues in the recent past. It has been evident that the heart-wrenching crashes of the two Malaysia Airlines fleet resulted in desperate times for the aviation company. On the other hand, the various issues are prevalent in Air India has been instrumental in the recurring of the huge losses that the airline has been going through. These desperate times have compelled the airlines to re-build the brand image of the respective airlines.

Conclusion

Every company in different markets is trying to benefit out of their sustainability reports and thus offer much focus on it. However, the false claims made by the company might adversely affect the company name as the true colors of false claims are bound to come into the limelight. A detailed evaluation and analysis of the reporting and accounting regarding the CSR activities are bound to indicate the true colors of the report. In this report, a detailed analysis of the CSR activities and environment sustainability has been done, and it is found that both the companies abide by the claims they have made. They have extensively worked on the environment sustainability though they majorly fall short on the claims of their CSR activities as they have been dealing with critical issues. 

References 

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Grayson, D., & Nelson, J. (2013). Corporate responsibility coalitions: The past, present, and future of alliances for sustainable capitalism. Stanford University Press.

Haji, A. A., & Ghazali, N. A. M. (2012). The influence of the financial crisis on corporate voluntary disclosure: Some Malaysian evidence. International Journal of Disclosure and Governance, 9(2), 101-125.

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Motwani, S. (2012). Communicating CSR is More Challenging than Paying CSR. International Journal of Research and Development-A Management Review, 1(1), 41-45.

Nel, P. (2014). The two Malaysia Airlines disasters in 2014: Lessons for airline management in a global context.

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Punjab, H. (2016). CSR in Indian Tourism and Hospitality Industry: A Special Reference to Aviation and. Corporate Social Responsibility in the Hospitality and Tourism Industry, 106.

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Selvarajh, T., Munusamy, J., Chelliah, S., & Pandian, S. (2012). An empirical study on corporate social responsibility in Malaysian aviation industry: A case study. African Journal of Business Management, 6(8), 2919.

Sen, M., & Das, N. (2013). Corporate sustainability reporting: a review of initiatives and trends. IUP Journal of Accounting Research & Audit Practices, 12(2), 7.

Tan, B. S., & Yap, E. H. (2015). Sustainable Growth of the Commercial Aviation Industry in Malaysia Using a System Dynamics Approach. Journal of Engineering, Science and Technology, 10(9).

Tiwari, S. R., & Kainth, J. (2014). Malaysia Airlines: in search of a sustainable business model. Emerald Emerging Markets Case Studies, 4(7), 1-22.