BUSINESS MANAGEMENT UNIT 3
Qantas case study:
Outcome 1 assessment task
Angela Diamantopoulos
Gladstone Park Secondary College
This assessment task for Outcome 1 in Unit 3 has been designed as a closedbook test to be completed in a single lesson. It has a mark allocation of 20
marks. Suggested answers are provided.
Task details
Assessment task
Case study and test
Unit/area of study
Unit 3: Corporate Management
Area of Study 1: ‘Large-scale organisations in context’
Outcome 1
Discuss and analyse the context in which large-scale organisations operate.
Instructions and conditions
In completing the following test you should demonstrate an understanding of the key knowledge for
Outcome 1 and your ability to plan, organise and undertake written communication.
Answer all questions in this answer book. The marks for each question are indicated after each
question.
Conditions: Closed book
Time allowed: 50 minutes
Marks allocated: 20 marks
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BUSINESS MANAGEMENT UNIT 3
Questions
Read the information below and answer the questions that follow.
Qantas vision statement
‘All Qantas Group businesses—from Frequent Flyer to Freight—depend upon the core strength of our
two airlines, Qantas and Jetstar.
The Qantas Group’s long-term vision is to operate both the world’s best premium airline and the
world’s best low fares carrier.
The Group’s future will be determined by its capacity to reward shareholders who provide it with the
capital to grow and invest. In February 2009, shareholders demonstrated their confidence in the
Group by providing more than $500 million to strengthen the balance sheet and support fleet renewal.
Source: Qantas Annual Report 2009
Source: Qantas Annual Report 2009
Qantas expects $50m – $150m profit
‘“As a result, Qantas expects to achieve, subject to AASB139 volatility, a profit before tax in the range
of $50 –150 million for the first half of the 2009/10 financial year,” Qantas said in a statement lodged
with the ASX. Qantas booked profit after tax of $210 million for the first half of fiscal 2009, to
December 31, 2008.The airline reported a net profit of $117 million for the full year to June 30, 2009,
down 88 per cent from the prior corresponding period.’
Source: ‘Different, but both world beaters’, Terry McCrann, Herald Sun, 20 August 2009
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BUSINESS MANAGEMENT UNIT 3
Question 1
Identify the two characteristics from the above information that indicate that Qantas is a large-scale
organisation and discuss how this is indicated.
2 marks
Question 2
The Qantas Group’s long-term vision is to operate both the ‘world’s best premium airline and the
world’s best low fares carrier’. Distinguish between a mission and a vision statement. Explain why the
two need to be aligned.
3 marks
Question 3
Discuss two strategies that Qantas could use to implement its vision statement.
2 marks
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BUSINESS MANAGEMENT UNIT 3
Question 4
Explain two contributions—one positive and one negative—that Qantas makes to the Australian
economy.
2 marks
Read the following information and answer the questions that follow.
QANTAS has confirmed its position as one of the world's strongest airlines, surprising the market with
an upbeat half-year profit forecast.
Despite key international routes to the US and Britain remaining in the doldrums, the airline said
overall passenger numbers have rebounded and it expects a half-year profit of up to $150 million.
The airline also cautioned investors that ‘high levels of volatility in the economic outlook, industry
capacity, passenger demand, fuel prices and exchange rates are likely to continue’.
Qantas domestic reported 2.3 per cent growth in ticket sales last month, with regional offshoot
QantasLink disclosing a 1.5 per cent improvement. Jetstar domestic sales were up 4.9 per cent.
Jetstar International reinforced its star rating, increasing its passenger numbers 129.8 per cent—from
146,000 in November last year to 335,000 last month.
Source: ‘Qantas profits, shares take off’, Geoff Easdown, Herald Sun, 22 December 2009
Question 5
Qantas has many stakeholders. Identify two potential stakeholders and explain one possible interest
in, and one possible conflict with, Qantas’ recent financial growth.
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BUSINESS MANAGEMENT UNIT 3
3 marks
Question 6
Distinguish between one internal and one external factor that may affect Qantas’ environments.
Identify the environment—internal or external (operating or macro)—that each factor belongs to.
3 marks
Question 7
State two performance indicators that Qantas could use to confirm its position as one of the world's
strongest airlines. Justify your choice of indicators.
2 marks
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BUSINESS MANAGEMENT UNIT 3
Read the following information and answer the questions that follow.
In 1990 the Australian Government ended the regulation of domestic aviation through the abolition of
the long-standing ‘Two-Airlines Policy’. Prior to this, the Government had regulated capacity, service
levels, fares and routes flown on all interstate services.
The stated aims of deregulating the domestic aviation industry were to encourage:
•
increased responsiveness to consumer needs by airlines;
•
a wider range of fares and types of services to provide greater opportunities to travel;
•
increased competition and flexible pricing, leading to greater economic efficiency in the
industry; and
•
the continuation of Australia’s world-renowned safety record.
In 1992, the Government ended the separation between the domestic and international aviation
sectors. At the same time, it privatised the Government-owned airlines, allowed them to merge and
eased restrictions on foreign ownership of domestic airlines.
The objectives of deregulation have largely been met, with a more efficient industry providing greater
responsiveness to consumer needs, a greater range of services, lower fares and a high record of
safety.
Source: National Aviation Policy Green Paper: Flight Path to the Future, Department of Infrastructure, Transport,
Regional Development and Local Government, December 2008, page 121, copyright Commonwealth of
Australia, reproduced by permission
Question 8
Define the term ‘deregulation’.
1 mark
Question 9
Explain one advantage and one disadvantage of deregulating the airline industry.
2 marks
Total: 20 marks
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BUSINESS MANAGEMENT UNIT 3
Suggested answers
Question 1
Identify the two characteristics from the above information that indicate that Qantas is a largescale organisation and discuss how this is indicated. (2 marks)
The characteristics that identify large-scale organisations are:

more than 200 employees

substantial assets

substantial revenue or sales or gross income/earnings

substantial profits/net profit after tax

numerous business locations; local regional state national global

large percentage of market share

size of operations; single, multiple factories, branches and stores
In the information provided:

Qantas has 35 000 employees

a profit before tax in the range of $50–150 million for the first part of 2009–2010

Qantas booked profit after tax of $210 million for the first half of fiscal 2009, to 31 December
2008

Qantas had net profit of $117 million for the full year to 30 June 2009.
Question 2
The Qantas Group’s long-term vision is to operate both the ‘world’s best premium airline and
the world’s best low fares carrier’. Distinguish between a mission and a vision statement.
Explain why the two need to be aligned. (3 marks)
A mission statement is a global statement that reflects the organisation’s reason or purpose for
existing. It is a very immediate statement compared with a vision statement (which outlines the
aspirations of an organisation); that is, it is expressed in terms of what it wants to become and its
long-term future.
The vision statement and vision statement need to be aligned (in agreement), that is, the mission
statement needs to align with the vision statement (as it is an extension of the latter) in order to
achieve the organisation’s goals.
Question 3
Discuss two strategies that Qantas could use to implement its vision statement. (2 marks)

Further expansion in global markets

Continue to implement world’s best practices and reporting

Continue fleet renewal plans and operating an optimal routes network

Projects that continued to provide a high, consistent level of customer service

Continued activities that promote efficient operations and major projects that improve
productivity

Activities that promote the ‘brand’ name

Maintaining a committed group of employees who are skilled and motivated to do their best.
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Question 4
Explain two contributions—one positive and one negative—that Qantas makes to the
Australian economy. (2 marks)
The contributions large-scale organisations make to the Australian economy include contributions to:

Australia’s gross domestic product (GDP)

economies of scale

earning income from exports—contributing to Australia’s balance of payments

research and innovation

infrastructure growth such as housing, roads, railways, transport networks

employment: large-scale organisations employ 30% of population

improvements in skill base
Contributions, both positive and negative, that Qantas makes to the Australian economy:
Positive:

Australian-owned and controlled company—profits stay in Australia

Earns export income

Contributes to Australia's gross domestic product (GDP), hence to our standard of living—net
profit of $117 million for the full year to 30 June 2009

Employs 37 000 people (93% of them in Australia)

Purchases billions of dollars of goods and services from local suppliers every year

Carries a third of all international tourists to Australia

Provides a transport network linking metropolitan, regional and rural Australia to the world
Negative:

Downsizing of workforce during global downturn (around 1500 in Australia in 2009)

Offshoring of maintenance operations to Asia (reducing the number of jobs in Australia)

Capital outflow due to expenditure on overseas-made aircraft

Carries Australian tourists to overseas locations (as well as to local tourist locations), thereby
reducing the potential for Australian tourist to spend money in Australia

Climate change effects (externalities) of producing greenhouse gases from burning fossil fuels
Note that students will need to indicate whether it is a positive or negative contribution to gain full
marks.
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BUSINESS MANAGEMENT UNIT 3
Question 5
Qantas has many stakeholders. Identify two potential stakeholders and explain one possible
interest in, and one possible conflict with, Qantas’ recent financial growth. (3 marks)
Stakeholders are individuals or groups of people who have an interest or a stake in an organisation.
Examples of stakeholders are:

shareholders: want profits to increase so the value of their shares increase

directors: want profits to increase as they have to report to shareholders

competitors: may want Qantas to reduce the number of routes and increase fares in order to be
more competitive themselves

environment groups: want Qantas to introduce strategies to reduce its carbon emissions

employees: want better working conditions and higher rates of pay

trade unions: represent workers

suppliers: want better terms for supplying goods and services, or higher value contracts

creditors: want bills paid as soon as possible

government: want large organisations to act ethically and responsibly and to comply with the law

public/community: want large-scale organisations to be ethical and contribute to the community
in some way

customers: may want new routes, lower fares and better on-board service

management: wants employees to implement company policies and strategies in order to meet
the goals of the organisation.
Possible interests include financial ones, in the case of shareholders and directors. A possible conflict
is the community being concerned about safety standards following a move to transfer maintenance
operations overseas.
Question 6
Distinguish between one internal and one external factor that may affect Qantas’
environments. Identify the environment—internal or external (operating or macro) that each
factor belongs to. (3 marks)
Factors that may affect the environment of a large-scale organisation include:
Macro environment
Operating environment
External
Internal environment
Social and cultural
Customers
Workers
Technological
Consumers
Management/board of directors
Environmental
Competitors
Organisational structure
Economic
Suppliers
Corporate culture
Legal
Trade unions
Policy and procedures
Government
Lobby/pressure groups
Owners/shareholders
Globalisation
Financial institutions
Political
Regulatory bodies
Note any of the stakeholders above could be used as an external and internal factor.
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To gain full marks students must relate these factors back to Qantas.
Examples from the case study include:

competition from other carriers

passenger demand

volatility in the economic outlook

industry capacity

fuel prices

exchange rates

new industrial relations legislation.
Question 7
Identify two performance indicators that Qantas could use to confirm its position as one of the
world's strongest airlines. Justify your choice of indicators. (2 marks)
The VCE Business Management Study Design (page 22) requires that students should know:

percentage of market share (Qantas confirmed its position as one of the world's strongest
airlines)

net profit figures (level of profits is up to $150 million; a profit before tax in the range of $50–150
million for the first part of the 2009–2010 period; Qantas booked profit after tax of $210 million
for the first half of fiscal 2009, to 31 December 2008; net profit of $117 million for the full year to
30 June 2009

the rate of productivity growth

the number of sales (2.3% growth in ticket sales; Jetstar domestic sales were up 4.9%;
QantasLink disclosing a 1.5 per cent improvement)

results of a staff and/or customer satisfaction survey

the level of staff turnover

level of wastage

number of customer complaints

number of workplace accidents.
Question 8
Define the term ‘deregulation’. (1 mark)
Deregulation is the process of removing government regulations from an industry in pursuit of greater
efficiency and creating an improved competitive environment.
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Question 9
Explain one advantage and one disadvantage of deregulating the airline industry. (2 marks)
For
Against

More carriers, therefore greater choice for consumers


A wider range of fares and types of services to
provide greater opportunities for travel
Government-regulated prices encourages greater
consistency in fare prices across airlines

Government needs to privatise their carriers

Increased competition and flexible pricing, leading to
greater economic efficiency in the industry

Small carriers may find it harder to compete with
larger more established ones

The continuation of Australia’s world-renowned safety
record


Efficient industry providing greater responsiveness to
consumer needs, a greater range of services, lower
fares and a good safety record
Increased competition leads to cost cutting, which
may impact on safety standards, age of fleets, and
customer service including quality of on-board
service, check-in service and baggage handling and
performance relating to departures
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