Qantas Airline Limited has gained a reputation as the biggest airline in Australia. It is regarded the largest airline based on the fleet size and the number of international flights and destinations it makes. It is also known for its longevity given that it is the third oldest airline only behind Avianca and KLM. Formed in 1920, it is based in Mascot, Sydney and the central hub is located at the Sydney Airport. The company enjoys a strong market share compared to its rivals in the industry. Based on research by Ross, (2014), Qantas enjoys up to 65% of the domestic market in Australia. It is also responsible for carrying up to 14.9% of Australia’s passengers traveling in and out of the country. Despite the humongous market share, the company faces a host of challenges including the slow economy and the high fuel costs which have forced it to lose money. The chief executive officer of Qantas is known as Alan Joyce. She is locked in a conundrum whether or not to sell the company’s frequent flyer program. She is also aware that selling the program could cause a controversy given that the flyer program has more value compared to the airline reward program. On the one hand, the sale of the program would assist Qantas to better manage its financial future. By doing so, Qantas risks losing its loyal customers to its rival companies (ironside, 2014).
Decision making is an integral part of any management process. Decision making can be defined as a cognitive process involving the choice of one course of action from several alternatives. Through decision making, an individual can come up with an outcome that can exist in the form of recommendation, action, or opinion which eventually solves a problem. Therefore, decision making in any organization is an invaluable process that should be accorded the much-needed input (Buhler, 2001). Throughout the existence of an organization, it is bound to make a host of decisions that can be classified as routine versus strategic, programmed versus non-programmed, operational versus tactical, and personal versus organizational decisions among others. The CEO, Alan Joyce, is faced with an imminent decision to sell the company’s frequent flyer programs in a bid to solve the long-standing financial troubles faced by Qantas. This would be an example of a strategic decision-making process. A strategic decision is crucial because it has an impact on the goals, objectives, and policy matters concerning the company. Kourdi (2003) argues that in most circumstances, the strategic decisions taken by a company are non-repetitive, multidimensional, and complex in nature. Other than having a long-term impact on the company, they are taken after a careful analysis of all the variables including the alternatives.
Delegate your assignment to our experts and they will do the rest.
It is thus crucial to note that the decision to sell or not to sell the Qantas frequent flyer program will have an impact on the organization’s policies and goals that determine its operations in the industry. Some of the factors that will be affected based on the decision taken include the competitors, customers, abilities, incomes, employees, and the economies of scale, among others. The decision will emanate from the company’s top managers. Alan Joyce will have made a non-repetitive decision that carries enormous risks and long-term implications. Other than the long-term performance, the decision will have far-reaching consequences on the objectives, values, mission, and goals of Qantas. The best decision-making model that the CEO can come with is known as the rational approach. It involves the use of facts, data analytics, and a step by step process to develop a decision. The rational approach begins with the identification of the problem. It then follows a multi-stepped procedure aimed at coming up with a logical and sound decision. It is crucial to note that the rational approach makes several assumptions. As a concept, it assumes that the person making the decision has full knowledge regarding the alternatives including the much-needed cognitive ability to appraise the other options and come up with the best option. Alan Joyce will also need to follow certain steps to come up with the best choice out of the alternatives.
She will begin by identifying the problem facing Qantas Airline. The next step will revolve around the gathering of necessary information. She will then assess the situations and come up with alternatives and options. After thoroughly evaluating the alternatives, she will select the most preferred option that will best benefit the organization. Based on the case study, the main problem faced by Qantas is financial instability. The financial problems have emerged as a result of high cost of fuel and the slow global economy. As such, the company has been forced to lose a lot of revenue in the recent past. Next, Alan Joyce will embark on the process of gathering information. Here, the information needed can be classified into two. First, Alan Joyce will need to assess pros and cons of managing the company’s frequent flyer program. Secondly, he will assess the advantages and disadvantages associated with selling the program. In this regard, special attention should be placed on the customers, employees, competitors, and other stakeholders. The third step will involve the analysis of the situation. Here, the main emphasis should be placed on assessing the alternative courses of action that are available at the company’s disposal. The most appropriate way to complete this step is through the development of structured questions which will facilitate a broadened analysis of the Qantas situation.
Other than developing the questions, a criterion can be designed to assess trends. For instance, a criterion can be established to evaluate the impact that selling the frequent flyers program will have on the company. Also, it is essential to highlight that dimensions of the company will be affected once such as a decision has been taken into consideration. The goal here would be to generate as many alternatives as possible. The next step that follows is known as the evaluation of the alternatives. The importance of this step includes determining the feasibility of the alternatives, desirability, and the acceptability of particular decisions. Most importantly, it will cross check the alternative that will be most important in solving the financial problems faced by Qantas. The process will then end by picking the best alternative out of the set followed by the process of implementation where each stakeholder appreciates it as a way of mitigating the financial issues affecting the company.
Due to her vast experience, I would recommend that Alan Joyce apply the rational approach in decision making. Kourdi (2003) asserts that the rational model comes after a thorough assessment of facts and analytics. Such a model will provide the CEO with a systematic model that will begin with the identification of the problem and end with the achievement of the solution. However, this would be different for a CEO who has lacks the much-needed experience working at the highest level of aviation management. A new CEO will be required to employ an intuitive decision-making model. An intuitive decision-making model is applied in certain circumstances where rapid responses are required, and change is needed at a fast pace (Kourdi, 2003).
References
Buhler, P. M. (2001). Decision-making: A key to successful management. SuperVision, 62(2), 13-15. [Proquest]
Kourdi, J. (2003). Chapter 4: Rational or intuitive? Frameworks for decision-making. Business Strategy: A Guide to Effective Decision Making. Princeton, NJ, USA: Bloomberg Press.
Ross, K. (2014, Aug 27). Qantas CEO faces tough choices. Wall Street Journal [Proquest]
