China Southern Airlines is a reputable air travel company that always tries to deliver the best for all stakeholders. It is worth appreciating that the company is one of the big three companies in China and the world’s sixth airline company measured by the number of passengers carried. Corporate social responsibility (CSR) has been improving over time to adapt to the changing needs of stakeholders in the company. Need identification is crucial for any company wishing to have a successful and fulfilling relationship with its stakeholders. Need refers to the changing demands of the different groups of stakeholders in the company. It is proposed that China Southern Airline embraces the direct effect model. The latter is a modern program that focuses on the wider impact of its activities on all stakeholders instead of continuing with the traditional approach that tends to give a narrow focus on the interests of stakeholders and short-term profitability. The direct effect model considers the attitudes and actions of management and their relationships with stakeholders together with the overall performance of the company. This proposed program would have a long-term effect on stakeholders compared to the current one that is short-term because of its narrow focus on the immediate needs of stakeholders. The new approach would be guided by the three key significant perspectives including the descriptive perspective, the instrumental perspective, and the normative perspective. It would also ensure that stakeholders are classified into internal and external stakeholders for effective address of their needs. Internal stakeholders should include employees, management, customers, shareholders, investors, and sky team. On the other hand, external stakeholders should involve government, communities, media, competitors, experts, financial institutions, and suppliers.
The Approaches of the Direct Effect Model of Stakeholder Engagement at the China Southern Airlines
The proposed modern program of stakeholder engagement for the China Southern Airlines in China should be guided by three significant principles to enable the company leverage its resources and expertise in addressing the existing social issues among its stakeholders. These approaches would offer the company an effective direction when it comes to engaging with both internal and external stakeholders. The company would be in a better position to fulfill the needs of its key stakeholders using the following approaches under the modern program of stakeholder engagement.
The first significant approach that should be taken into consideration in the modern program is the descriptive perspective. The latter deals with the interaction between the company and its stakeholders. It is worth noting that the descriptive perspective focuses on the nature of stakeholders and their primary effect on the decisions and overall functions of the organization (Crowther and Aras 56). It would be effective in leveraging the use of resources and expertise within the company as it gives the opportunity to respond to the needs of stakeholder groups that control the critical resources within the organization, such as shareholders, employees, and investors. All the decisions made would focus largely on the needs of these stakeholders.
The second approach that should be taken into consideration should be the instrumental perspective. It would play a significant role in ensuring that the company utilizes its resources in the best manner possible to meet the needs of its stakeholders. This perspective focuses on the financial effects of the stakeholder on the firm. The intention of this perspective is to ensure that the company achieves the desired level of success in the marketplace by meeting the needs of the stakeholders such as customers. Apart from enhancing the company’s engagement with its stakeholders, the instrumental perspective would give the company the opportunity to gain a competitive advantage in the airline industry.
The third approach that would be effective in guiding the company’s engagement with its stakeholders is the normative perspective (Liang, Marquis, Renneboog, and Sun 22). This perspective entails the treatment of all stakeholders in line with the underlying moral standards. It would underline the company’s moral obligation to its stakeholders in such matters as environmental protection and the payment of taxes within the best time possible.
Working with Stakeholders under the Direct Effect Model
As noted earlier, this model would be instrumental in ensuring that the company leverages its resources and expertise when addressing the social needs of the diverse stakeholders effectively and efficiently. It is crucial to identify the manner in which the direct effect model would enable the company to work with both internal and external stakeholders in the best possible way.
Working with Internal Stakeholders
According to this model, the internal stakeholders include employees, management, shareholders, customers, and innovators.
Employees are one of the most significant parts of the internal stakeholders at China Southern Airlines. They perform the core duties and responsibilities at the organization to ensure that the services offered are of the highest quality. The company would be in a better position to leverage its resources and expertise in addressing their needs in instances where it utilizes the descriptive approach. The roles played by employees have a direct effect on the performance of the company, and the management should be quick to accommodate them in the process of decision-making (Drienikova and Sakal 169). The communication channel should be made in a direct manner that gives them easy time while addressing their issues in the organization. The combination of the descriptive approach and the direct communication channel would save the resources of the organization by ensuring that it relates directly to employees. Therefore, it would be easier to meet their needs relating to job security, salaries, and workplace security in the most effective and efficient way.
Customers also represent an effective group of internal stakeholders within the company. In line with the direct effect model, customers’ needs should be satisfied utilizing the instrumental approach. The reason is that the customers have a direct effect on the financial resources of the company. They have the capacity to determine the competitive position of the company hence its profitability in the airline industry. The needs of the customers are always focused on the quality of the services offered by the company. The direct effect model would give the company the opportunity to fully address the need for quality services with minimal resources. It would have a lasting impact on the customers unlike the traditional approach that has a narrow and shorter focus on their needs. The communication channel would also be more open where customers would be able to place their complaints hence ensuring the company resolves them in the best manner possible. These needs would be met efficiently eliminating any instances of resources wastage in the short-term. The program could only be reviewed in instances where there is a strong need to meet other customer’s demands.
Shareholders would also be engaged effectively in the direct effect model. The latter recognizes shareholders as the key internal stakeholders. The descriptive approach would play an assistive role in addressing the needs of stakeholders as the key providers of the company’s capital. The management would make the long-term decisions that would ensure shareholders get their fair share in the company in a truthful manner to enable them supply capital for the running of the company (Mahoney 17). Their withdrawal would lead to the insolvency of the company. Therefore, the company should be able to come up with communication channels that keep updating each of these shareholders on the progress that has been made so far. It would affirm their faith in the company and they would be able to provide more capital with the assurance of a better share in the profits of the company.
The key external stakeholder groups should also be taken into consideration in the best way possible to ensure the company leverages its resources and expertise in meeting their social issues. External stakeholders include communities, suppliers, government, and competitors.
The community is a key stakeholder in the company. However, their social needs should be addressed in the best manner possible to leverage the resources of the company. The needs of the community are numerous and they could include environmental conservation as well as the development of social amenities that would enable them to operate effectively. In tandem with the direct effect model, the company would be able to leverage its resources by moving directly into the community utilizing the normative perspective. Consequently, it has a moral obligation to protect the environment and supply the community with social amenities required for effective operations. The aim of the company is to become a good neighbor by reducing environmental pollution using biofuels. It would also leverage its resources and avoid negative attitudes of the community by giving back to the society through the development of social amenities such as schools, hospitals, and other community projects.
The government is also a significant group of external stakeholders at the China Southern Airline Company. In dealing with the government, the company would leverage its resources using the normative approach (Servaes and Tamayo 1053). The firm has a moral obligation to disclose all the required documents to the government and to pay the required levels of taxes within the appropriate time. The company could open up accountable and transparent channels that help address the government need of disclosure in the easiest manner possible. The normative approach would be effective in guiding the company in a direction that would leverage its resources and give it the opportunity to operate in line with the required laws and regulations asserted by the government.
Competitors would also be accommodated in this program as key stakeholders. China Southern Airlines has the moral obligation to ensure that it competes fairly. It would be led by the normative approach that is a core part of the proposed model. The company should communicate to its competitors and avoid charging prices. The main concern connected with the competitors is to ensure that they are treated well. The role of dealing with the competitors should not only be left to the suppliers of the company. The company should take the direct role of meeting the needs of the competitors, which include fair competition and ethical practice in the airline market.
Principles that Should Guide the Implementation of the Direct Effect Model of Stakeholder Engagement
One of the key principles that should guide the implementation of the direct effect model is the acknowledgment and monitoring of the needs of all key stakeholders in the company. It would be vital to consider their various needs in the process of making decisions within the firm.
Another significant principle should be the development of open channels of communication that recognizes all stakeholders and accommodates them in the decision-making process where necessary. Open channels of communication would leverage the resources of the company and help it fulfill these needs (Drienikova and Sakal 170).
The last principle should be the recognition of the interdependence of all the company’s stakeholders and reward them justly. They should not be necessarily treated as separate groups. Their efforts to contribute to the company should be recognized and rewarded fairly.
In conclusion, China Southern Airlines should embrace the direct effect model that is modern and recognizes the wider effects of the company on the key stakeholders of the company. The latter should establish the needs of all stakeholders and classify them appropriately to ensure that it is able to leverage its resources and expertise to satisfy their needs in the best manner possible. The direct effect model works in line with the descriptive, instrumental, and normative approaches. The company should be able to recognize the position of each stakeholder to address their needs utilizing the relevant approach. Internal stakeholders would be served efficiently in instances where the company utilizes the descriptive and instrumental approach to fulfill their needs. The channels of communication should be more open rather than being kept at a low profile. On the other hand, it should take the normative approach when dealing with external stakeholders such as the government and the community. It would be vital in making the overall model successful leveraging the company’s resources and ensuring that all the needs of stakeholders are addressed efficiently and effectively.