Virgin Australia Collapses: Unseen Cause of Troubles Revealed - Essay Sample

Introduction

The context of this write up concerns the fall of Virgin Australia, which has collapsed due to the losses that the company has been suffering. Thus it decides to file a voluntary administration. CEO Paul Scurrah highly recommends the decision to file for voluntary administration.

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What could be a potential problem within the case?

The problem with this case is that the leading cause of the problem, which has resulted in the collapse of Virgin Australia, is not evident but is tied to COVID 19, which has broken out lately.

Why?

Through the leadership of CEO, John VA suffered a lot of financial losses before he resigned from office. Regardless of the airline being owned by Australian shareholders, it suffered huge losses to the point of borrowing money to cover the debts owed as well as restructuring the organization.

What are the two theories relating to leadership in this case?

The leadership theories relating to this case is transformational leadership and servant leadership. The leaders who use this style usually encourage, motivate, and inspire employers. They have a corporate culture. John Borghetti, as the new CEO, championed the development of these airlines up to 2018 with new strategies. During his reign, he established a new brand in Virgin Australia, such as a menu and new uniforms.

What are the significant elements of an organization's general environment in this case?

This case of Virgin Australia contains nonspecific components of organization surroundings that affect its operations. First, it has an economic element, which includes income levels—secondly, it is a technological element that entails advancement in technology.

Name five stakeholders that may influence the specific environment in this case?

The stakeholders that influence a specific environment, in this case, are the customers who have been using the airlines for traveling, for example, flying between Hong Kong and Melbourne. The government and society are also other stakeholders in this case. Suppliers of resources that are used in Virgin Australia are part of the stakeholders, such as the new uniforms.

Why is it important to consider diversity in this organization?

Diversity is an essential element in an organization because it has helped in connecting various unique talents to achieve a common goal using different skills, which will aid in increasing productivity. Diversity in the company helps in establishing stronger relations within the workers and employers. Through variety, there has been the establishment of innovation as well as improvement in employee performance.

What is a minority? Give 2 examples of minority groups in this case.

A minority is racially, culturally, and ethically different cohort that exists but is subordinate to a more dominant group. In this case, the minority groups are Air New Zealand and Singapore Airlines, announced as new codes by VA in 2016.

Define and describe the key concepts in the expectancy theory of motivation. How do these concepts explain the level of motivation that a person may display at work?

The expectancy theory of motivation posits that people are motivated to do something because they think their actions will result in a desirable outcome. The theory points out that people have a unique set of objectives and can be encouraged if they believe that the reward will satisfy an essential need, excellent performance will lead to a reward that is desirable also, efforts and performance have a positive correlation. The motivation that a person can display at work will depend on the outcome which the workers intend to get and how they are motivated at work.

Describe and compare two incentive compensation systems that can be used to influence work motivation? What are some examples of these incentive systems?

Workers can be motivated to work through an incentive compensation system. Employees need to be paid their salary in a portion of their compensation monthly or bi-monthly. To motivate the workers, they need to be paid an incentive portion of their compensation after meeting the set goals.

What is the difference between ethics and social responsibility?

Ethics is the moral principle that governs the behavior of an individual .while Social responsibility is a theory of ethics where people are accountable for fulfilling their civic obligation. The actions which an individual is undertaking should be of benefit to the entire society. Social responsibility results in a balance between the welfare of the community and economic development.

Why is it important to consider cultural differences when discussing ethics in this case?

When addressing ethical issues, it is essential to consider the cultural difference because what seems to be ethical in one culture may not be the same as the other culture. When discussing ethics in VA, it is essential to consider various cultures where the airlines are serving society to avoid cultural conflicts.

Explain change leadership in this case

In this case, John Borghetti brought about change leadership. Change leadership is the ability to influence and enthuse other people through vision and drive, as well as personal advocacy to establish a more influential platform for transformation. For the nine years that he worked as the CEO, there was a tremendous transformation in VA.

How to manage change and resistance to change in this case

Change and resistance are common aspects of a business. From changing new CEOs, workers as well as management. The evolution of CEO from John Borghetti to Paul Scurrah it may result to resistance from employees due to diversity of the work introduced, but this can be managed through prior knowledge about the change, highlighting the necessity of the difference as well as increasing the payment for the workers so that they cannot resist the change.

How do ethical dilemmas complicate the workplace in this case?

The ethical dilemma, in this case, was when CEO John Borgehetti announced his resignation and the company net loss was approximated to be $ 426.8 million, this complicates the workplace since the new CEO would find it challenging to adjust working hard to pay off the debt which was not realized during his leadership.

What is organizational social responsibility, and how does it affect the organization in this case?

Organizational social responsibility refers to an ethical framework that points out that an entity, either an individual or an organization's act needs to be benefiting the entire society. In this case, organizational social responsibility has helped in positive business reputation, brand recognition, and corporate growth. VA has won several global awards for service cabin crew as well as general excellence.

What is the process of motivation and why it is so important in this case?

The process of motivation ca be highlighted through five steps, which are the identification of unsatisfied needs, tension, actions for the satisfaction of needs, accomplishing the goal, then giving feedback. Motivation is essential because it increases the productivity of the workers in an organization hence creating the drive to work at the best skills of an individual.

What role does reinforcement play motivation in this case?

Reinforcement helps in motivating workers and clients to work extra harder. In this case, support is used as a way of retaining employees as well as the clients in the airline to achieve maximum profit from the organization.

Explain the challenges of globalization and international business in this case

Globalization has dramatically affected VA because it results in increased competition. Other airline companies are on the watch out to provide the best to the clients, which results in a competitive environment. Globalization and international business have resulted in a transformation in marketing and commination in VA organizations.

Define the company culture in this case

The company culture of VA is transparent because employees and customers tend to hold high transparency. The organization has dedicated, ambitious, innovative, and talented employees who offer the best to the organization and its clients. Thus through the transparent culture, it has been in a position to get global winner awards.

How may management practices apply across cultures in this case?

Management practices may apply through cultures in VA through fostering more durable and lasting relationships among workers since the workers are from different communities and serve diverse communities. Also, it may apply through the promotion of open communication as well as embracing diversity.

Describe the external environment of this organization in this case?

Virgin Australia's external environment consists of demographic and social-cultural transformations. Demographic changes are as a result of the population transformation of the country. Concerning Social-cultural transformation, consumers are becoming concerned about the environment in their process of consumption. Lastly, the technological aspect where the upcoming airlines end to use modernized planes as compared to the ones used by VA.

Describe the internal environment in this case?

The internal environment of VA consist of the strength and weaknesses of this organization. Foremost it has a good relationship with its customers, a high reputation in the globe bad sound communication systems. On the contrary, it has been experiencing bed debts, laying off of workers who may ruin its well-established reputation.

What are the essential leadership traits in this case?

In this case, the leadership traits, as evident in Paul Scurrah, is that he is determined, focused, and hardworking because when he accepted this post, the company was suffering a loss of $ 444.1 million. Still, he did not give up but undertook the duty of the CEO.

What is the contingency plan in this case?

The contingency plan that VA has in this time of COVID 19 crisis is to close as many underperforming leisure shops across Australia. Also, the organization has a contingency plan of identifying the areas under which they operate, which are less affected by this pandemic and continue with their operations. It has a contingency plan of managing diversions to allocate equal priority as other tarmac delays.

What are the current issues in leadership in this case?

The current issues in leadership are the management of funds in the airline with the emergence of the new CEO. Mr. John resigned when the organization had suffered an enormous loss, introduced business class, lounges, and various aircraft lines such as Boeing 777s, A320s to mention a few which tend to be expensive in terms of management and operations. VA has been suffering losses, which has resulted in extensive borrowing.

What control system is used in this organization?

The control system used in VA includes foremost billing there; it is used in controlling the flow of the company’s cash before the appointment of CEO Paul Scurrah VA had recorded a loss of $444 million. Secondly, the customer service control system where CEO Paul reformed the focus of the company to optimize the ability to provide a unique client experience while continuing to focus on safety and timely performance.

Define the organization structure in this case

The owners can define the organizational structure of Virgin Australia. It is owned by the virgin cohort, which comprises almost 300 companies that operate separately. This organization is led by Paul Scurrah, who is the managing director. Under his leadership, he has other officials, such as financial managers, human resources managers, and employees.

Explain the type of plans management use in this case

VA has been making use of several types of...