Easyjet S Response To Social Responsibility Needs Commerce Essay

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Introduction

Since corporations have to draw on the community in which they operate for resources, they also have obligations to their multiple stakeholders, namely, those who get affected by corporate policies and practices who may affect the corporation in turn. This means that businesses don't just have financial accountability but also social and environmental responsibility (Aga, 2004; pg 13). Corporate social responsibility (CSR) is a doctrine which means that a business, apart from making profits, has a responsibility towards the society and its people. Holme (2006) defines social responsibility as the continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as of the local community and society at large. It is about achieving commercial success in ways that honor ethical values and respect people, communities and the natural environment (Aga, 2004; pg 13). The fundamental idea of CSR is that business corporations have an obligation to work towards meeting the needs of a wider array of stakeholders (Clarkson, 1995; Waddock et al., 2002). More generally, CSR is a set of management practices that ensures the company maximizes the positive impacts of its operations on society or ''operating in a manner that meets and even exceeds the legal, ethical, commercial and public expectations that society has of business'' (BSR, 2001, cited in Jamali & Mirshak, 2006 ; pg 251).

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Traditionally, it has been the governments which have assumed the responsibility of improving people's living conditions but societal needs, now, have exceeded the capabilities of the governments to fulfill them. (Jamali & Mirshak, 2006; pg 243) This has turned the spotlight to businesses to play a more responsible and societal role. CSR has really taken off in the last few years, so much so, that businesses seek to differentiate themselves through their CSR engagement. Good examples of that would be Tesco's green marketing campaign, Nestle and Kraft's fair trade coffee campaign, Experian's (Credit Reference Agency) announcement of switching over to renewable energy and making its UK sites run on electricity from green sources.

With the climate change issue taking front stage at global conferences, CSR has become a key strategic issue for the aviation industry. Low cost airliners in particular have faced the flak for polluting the environment; they are continuously being blamed by environmentalists for violating the emission norms and are held responsible for bringing about a climate change. Tony Pilcher (2007; pg 25), head of global business travel management at HSBC, pointed out that those who believe climate change is just a "passing fad" must change their attitude quickly. As a result of all this, economy carriers like easyJet are being driven to change their business process to contribute to tackling the issue of climate change. The study analyzes the proactive and reactive measures easyJet is taking or has taken to make air travel more efficient and environment friendly.

Discussion and Analysis

Views on socially responsible practices within the aviation sector range from one extreme to the other. Skeptics and other aviation experts believe that Social Responsibility tends to dilute business focus on growth and profitability. Proponents of CSR however believe that CSR gives the aviation businesses an opportunity to look beyond economic returns and take the wider social concerns into consideration. (Jackson and Nelson, 2004; Rudolph, 2005). At the core of the Social Responsibility debate is the idea that aviation industry should undergo a transition from a state of mere compliance to a mode of engagement, from harm minimization to value creation (Luetkenhorst, 2004; Novak, 1996).

Major changes have taken place in the European airline industry during the last decade. Although the top players are still full-service carriers (FSC), LCCs like easyJet have achieved strong market positions in the last few years. easyJet, with 29mn passengers in 2005, is in the same league as FSCs like Lufthansa, Air France etc. easyJet was founded by entrepreneur Stelio Haji-Ioannou in 1995 and now operates in 218 routes in Europe, across 65 airports and 62 cities. (easy Jet Company Reports, 2006). Because of the shift in environmental spotlight to the low cost carriers and the aviation sector in general, airliners are being driven to take steps to manage and control the adverse affects on climate change. There has been a renewed focus on social responsibility (especially towards the environment). easyJet is in the process of tackling the issue in its own way.

While some changes have been explicitly embarked upon by easyJet, other are embedded in its business model. easyJet's business model make sure that some of the environmental benefits are inherently embedded in it. Some of the social and environmental benefits of its business model are discussed below

Traditional carriers normally work on a 'hub and spoke' system where passengers have to take two or more flights to get to their destination. EasyJet provides direct short-haul point-to-point services without any connecting services between two locations. This helps cutting down on emissions automatically. Since 2000, easyJet's CO2 emissions per passenger per kilometre has reduced by 18%. (easyJet Corporate and Social Responsibility Report, 2007)

Another aspect of easyJet's business model is to use smaller and less congested airports to avoid high congestion charges and landing fees. Larger airports tend to require aircraft to fly longer holding patterns and longer taxi times to and from the runway leading to higher fuel emissions (easyJet Plc, Annual Report and Accounts, 2006). EasyJet, therefore, has comparably lower emissions as compared to full scale carriers.

Waste minimization - Easy Jet's distribution is purely internet based. The virtue of being a ticket less airline helps minimize waste in the form of paper documents. On board waste is reduced by not offering free food service.

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Emission per passenger - EasyJet claims to have more spacious and bigger aircrafts than other low cost carriers. Eg. The typical seating configuration of an Airbus A319 is 124 seats (source: Airbus). easyJet's no-frills service allows them to reduce the space and weight inside the plane devoted to galleys, lavatories and storage. Their Airbus A319s fly with 156 seats which mean they typically carry more passengers per flight thereby reducing emissions per passenger. Each of easyJet's A319s carries 26% more seats than the norm and carries up to 57% more passengers per flight than the European norm meaning that the "typical" European airline operating an Airbus A319 would burn 27% more fuel per passenger. (easyJet Plc, Annual Report and Accounts, 2006).

Efficient on the ground - easyJet's business model is centered on high aircraft utilization which tends to minimize the turnaround time. It makes minimal use of ground equipment, has shorter dwelling time on the ramp and keeps surface journey to a minimum. All this seems to minimize waste and have minimal adverse affect on the environment.

Apart from the social benefits, easyJet draws from its business model; it is also taking major steps in becoming a more socially responsible organization. As an employer, it is committed to play a leading role in the future environmental performance of the aviation industry. The steps that it has taken so far include:

Changing its business model in wake of rising environmental concerns. Up till now, its business model centered on cost reduction. easyJet is now planning to embark on an advertising strategy focusing on social responsibility. With its latest campaign, it will try to differentiate itself against other carriers through its environment friendly activities. It is repositioning itself to give it a new image and has planned a major shift in its advertising strategy away from price-driven offers to promoting its green credentials through its new campaign highlighting its efficiency in reducing carbon emissions.

Reforming of the air traffic system to reduce congestion.

Technological up gradation of aircrafts. easyJet is working to reduce emission per aircraft through new generation aircrafts. It is actively engaging with airframe and engine manufacturers on the application of new technologies for the next generation of short-haul aircraft. Its Chief Executive Andy Harrison points out that in 2006, easyJet removed 22 older aircraft at a cost of over £275 million as part of their drive for efficiency and in the coming four years they plan to buy 100 brand-new Airbus A319s to lead the "Green growth" in the aviation sector. (easyJet Corporate and Social Responsibility Report 2007)

Giving customers the most comprehensive range of environmental information available for travel to a particular destination, and helping them to offset the carbon emissions of their flight. (easyJet corporate and social responsibility Report, 2007)

Paying renewed attention to cleanliness of aircrafts for waste minimization and adding more efficiency to its recycling and waste disposal system

Leading the way in shaping a greener future for aviation with its campaign for inclusion of aviation in the European Union's Emissions Trading Scheme and EU's Single European Skies programme. It is forecasted that if the EU's Single European Skies programme gets implemented, it could lead to a 12% reduction in flying distances by reducing the patchwork of European traffic control centres. (easyJet Corporate and Social Responsibility Report 2007)

Trying to make its fleet compliant to latest international noise and emission standards to tackle the issue of pollution and reduce CO2 emissions. For achieving this environmental efficiency, easyJet has established an environmental code to monitor progress towards its targets. It has a strategy of being environmental friendly both in the air and on the ground. It strives to do this with the help of technological up gradation as new technology aircrafts are more fuel efficient. Its policy is to grow its fleet using the latest technological aircraft, whilst retiring older aircraft usually within seven to ten years of delivery (easyJet Plc, Annual Report and Accounts, 2006).

easyJet's socially responsible activities also extend to its employees. It is committed to equality and diversity and is an equal opportunities employer. It also complies with age discrimination laws.

Attitude and Motives

There has been a debate over easyJet's response to social responsibility. Friedman (1983) pointed out, 'Business of business is business', by which he meant that the only motive of a business is wealth creation. With easyJet's social responsibility activities, it looks as if; it has taken up CSR activities because of wealth creation rather than social, ethical and environmental concerns. Theorists like Fisher and Lovell (2003) have debated whether organization's CSR activities reflect their genuine concern for the society or whether they embark on CSR activities for business growth and profitability. CSR is slowly becoming a niche segment in itself, which provides organizations with new business opportunities and new segment of customers to cater to. Researchers identify two types of CSR behavior. One, which adopt CSR practices purely because of business reasons and where ethics and the concern for stakeholders other than the promoters do not matter. The other kind is more responsible where profit maximization is subject to ethical restraints, appropriate discharge of the company's social responsibility, and a balanced concern for the needs of all the stakeholders, not just the promoters. It is very difficult to classify easyJet's social responsibility activities.

Conclusions

While CSR movements have definitely picked up over the last few years, the motives behind easyJet's CSR activities remains open to debate, as most companies like easyjet seem to embark on CSR activities more for business and profitability reasons rather than ethical and social reasons. As highlighted in the text, easyJet is using mainstream marketing to propagate their CSR practices to help redefine their brand image from a low cost carrier to a low-cost 'ethical' carrier. This definitely has an impact on the consumers because the greatly increased profile of CSR activities in general suggests that the concept has a potential to attract environment friendly consumers who can also become a potential advocate for the brand. Organizations like easyJet might be highlighting their CSR operations to market their products but as Fisher & Lovell (2003) point out, most organizations social responsibility efforts are little more than Public Relations campaigns designed to promote corporate brands by creating the appearance of being good corporate citizens. But, under the present environmental concerns, Easy Jet, as an organization, is doing what it is supposed to do; making money for the owners by obeying relevant environmental and social rules. While easyJet efforts in responding to environmental change efforts cannot be belittled, the motive behind the efforts still remains unclear. Whether easyJet sees social responsibility as a narrow conception entailing economic and legal responsibilities or a broader concept entailing a wider range of economic, legal, ethical, moral, and philanthropic responsibilities is unclear.

References

Aga, A (2004) Management Paradigms Beyond Profit Maximization, vol 29, no 3, p 13

Choueke,M (2006),EasyJet abandons price-led campaigns for green focus, Marketing Week (01419285), Vol. 29 Issue 45, p3-3,

Clarkson, M (1995), A Stakeholder Framework For Analyzing and Evaluating Corporate Social Responsibility , The Academy of Management Review 20(1), 92- 118.

easyJet: Annual Report and Accounts (2006) Corporate and Social responsibility Report http://www.easyjet.com/common/img/easyJet_CRS.pdf, Date accessed 01/06/2007

easyJet Corporate and Social Responsibility Report (2007) easyJet promises action on environmental-efficiency http://www.easier.com/view/Travel/Flights/easyJet/article-99999.html Date accessed 02/06/2007

Fisher, C. and Lovell, A. (2003) Business Ethics and Values,London, FT/Prentice Hall;

Holme (2006) CSR- Introduction http://www.tutor2u.net/business/strategy/corporate-social-responsibility-introduction.html Date accessed 09/05/2007

Jackson, I. and J. Nelson (2004), Values-Driven Performance: Seven Strategies For Delivering Profits With Principles, Ivey Business Journal 69(2), 1-8.

Jamali, D& Mirshak, R (2005) Corporate Social Responsibility (CSR): Theory and Practice in a Developing Country Context Journal of Business Ethics (2007) 72:243-262

Luetkenhorst, W, (2004), Corporate Social Responsibility and the Development Agenda_, Inter economics 39(3), 157-168.

Pitcher, T (2007) ITM Conference, Climate Concerns us all, Travel Trade Gazette UK & Ireland, Issue 2760, p25-25

Rudolph, P. Letters To The Editor (2005), An Adam Smith Look At Green Regulations, The Wall Street Journal June 6.