Corporate Governance and Business Ethics of Air France/KLM

Résumé du document

Global warming, water pollution, child labor, and human rights: All international firms now have to cope with many social problems. It is becoming common practice for multinational companies to make a report in order to clarify, to explain and to justify the company's actions and the way they manage their challenge through responses. The aim of this essay is to analyze the social report of Air France / KLM and look for responses from the group in order to point out an evaluation of their Corporate Social Responsibility. Corporate Social Responsibility is the way firms allocate the responsibility of the result of their action on the different stakeholders. This is done while assuming that the impact of their activity is a key point, but they also have to cope with the Corporate Governance and the Business Ethics. According to A. Cadbury (1992), corporate governance is "the system by which organizations are controlled and directed". The system of management affects the company's behavior in terms of decision-making such as social, environmental or marketing decision

Extraits

[...] The price is in relation with the pollution which is done by the company. To finish, the sustainable development is key priority for the group and the company has published a specific report in order to highlight their different actions in order to cope with the global warming. Critical approach According to the website, Air France/Klm is doing its best in order to slow down the global warming through reducing the emission of gas by every possibility. But the question is not here. [...]

[...] Trade unions are quite active in the company and this is why there are often strikes, particularly in France. Employees are protected by laws and company's regulations. The challenge is evident: to offer the best in order to avoid internal conflicts because, in case of problem, the image of the group will be very affected, mainly in France because of the media and the importance of the social aspect. Furthermore, the group is also implicated in helping people in the work through partnership with associations. [...]

[...] More the company will be rich, more it will be able to pay for increasing its emission of gas. The current trend is oriented to the care about the environment and, consequently, it appears very strategic to go on the way of customer's behaviour. Conclusion Air France/Klm, even being the world leader in its activity seems to be careful about its stakeholder. The care of its stakeholders involves a good strategic management. According to the company and to the current situation, the group has to take into consideration so many challenges and we have observed the group focus on four main areas: shareholders, social, communities and environment. [...]

[...] The impact of the group to its shareholders is quite easy to understand. Shareholders own the main part of the company and, the development of Air France/Klm in terms of profit and image is a priority. More the group is profitable; more the share price will be high as well as dividends. Being the world leader, it is very interesting to possess share prices. It is of importance to underline the fact that a great financial situation and an efficient management will benefit to the image of the company. [...]

[...] During the 5 past years, the Group has invested billion in order to renew its planes. Then, the group has decided to improve their operational procedures by reducing the weight of equipment on board, doing a specific maintenance and using clean vehicles. The main purpose is the reduction of noise and pollution. After, Air France/Klm has organised their flight in order to create powerful hubs (Paris CDG, Amsterdam Schiphol and Lyon). A hub allows companies to better manage their flights and the frequency of their flights. [...]