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id=RBWE8ZezrboC&redir_esc=y Introduction: This report examines Airbus, one of two major players in the global aircraft manufacturing industry. Recent findings indicate that Airbus might have showed unethical business behavior in convincing customers to purchase its aircraft. After presenting and analyzing these allegations and updating potentially unethical conduct by Airbus to the present day, this report continues to discuss the topic of ethics in general. It is then elaborated how ethics are applied within the aircraft manufacturing industry by its two main players Boeing and Airbus. Following this, tools such as a PESTLE analysis and a SWOT analysis of Airbus are presented. Based on the findings of these analyses, recommendations for Airbus are formulated and examined with regard to practicability and feasibility aspects. Recommendations will be divided into short-, medium- and long-term strategies. Finally, this report will conclude by summarizing the findings and giving an outlook to Airbus position in the global marketplace. Airbus-company profile: Airbus is the worlds largest commercial aircraft manufacturer and, according to the companys website, is at the forefront of the industry and consistently captures about half of all commercial airline orders (Airbus, 2007). Originally, Airbus was formed in 1970 when four major European aerospace companies created a consortium to build commercial aircraft. Until 2000, planes were manufactured by allied yet independent companies, with marketing being performed by Airbus. In 2000, the consortium structure was abandoned in favor of a French-registered company, raising 3.5 billion Euros with the initial public offering of EADS, European Aeronautic Defense & Space Company, of which Airbus is a subsidiary (). Today, Airbus operates globally and employs approximately 57,000 people. Airbus operates fully-owned subsidiaries in the United States, China, Japan and in the Middle East and has a network of 1,500 suppliers in 30 countries. Manufacturing aircraft models with capacities ranging from 107 to 800 passengers, Airbus has sold over 7,000 aircraft and its planes form part of the fleet of more than 200 airlines (Airbus, 2007).

Since its inception, Airbus has developed well and today is an important player in the global commercial aircraft industry, having steadily gained market share from its main rival Boeing. Case Study: Business ethics is the study of business situations, activities, and decisions where issues are right or wrong are addressed. How do you differentiate between "Doing what is right" and "Doing the right thing the right way"? International politics and socio-cultural plays a big role in the International business. The International unethical The International unethical leadership management issues leadership management issues due to the impacts of socio-culture due to the impacts of socio-cultureAirbus and politics in International and politics in InternationalStarted in 1970. Airbus is an unwieldy confederation market. market.of four European (France, UK, Spain, Germany)aerospace firms. Airbus is 80 percent owned by the The challenges of business topublicly traded European Aeronautic Defence and sustain in a competitive unethicalSpace Company, and 20 percent by British international market dominated by socio cultural politics.Aerospace. The final assembly lines used by Airbus TRADE WARare in France, Germany, Spain, for the Airbus A400 and China for the A320 series. 3

Who benefits from Airbus lapses in ethics Competitor like Boeing, Bombardier and Embraer may benefit in short term due to Airbus lapses Kuwaiti Kickbacks-Benefitted ALAFCOs El Fekih and KACs Al Mishari & Airbus for the first few planes purchased. Suffered by Airbus because they lost the deal / orders when Mallah provided the watchdogs and Ministry of Finance full details of ALAFCOs orders.for the cargo planes. Why? Because Misharis plans to bypass formal deal when the Indian Government has declined thegovernment approval by forming ALAFCO has purchase of 43 Airbus planes worth $2 billion.failed and when the Ministry of Finance knew he full - Why? This is mainly due to the noncompliance anddetails they cancelled the orders. . unwillingness of Airbus and the French government to cooperate to answer the CBI (Central Bureau

Investigation) questions.Syrian Scandal- Benefitted Airbus because the purchase were Mounties and Banksmade for $240 million. - Benefitted Karlheinz Schreiber, Airbus Senior-Why? Because Airbus denied paying off the VP in France, some people in Shell companySyrian officials. subsidiary International Aircraft Leasing (IAL) and- Suffered by Syrian Air as it has incurred big the Canadian PM Brian Mulroney and Airbus Ind.financial lost. The three men (former minister of - Suffered by Air Canada as it took a long time forforeign affair, former transport minister and the investigation took place.middlemen Munir Abu Khaddur) also had to pay a - Why? Because for a long time no has come frontfine of $268 million and sentenced to prison for 10 to expose the corruption they found. This is mainlyyears. because it involved the Canadian prime Minster. 4 Who suffers from Airbus lapses in ethics First airbus suffers because after this scandal customers will make deals very carefully with airbus , and also it made bad reputation in international marketing for itself. Second the Canadian government because the people loosed their trust to them. Third the middleman (s), after that they couldnt easily work in international marketing. Other airlines and state government for purchases and large payments made to Airbus ie lost of Sabena Air. Response from Public Relation on Airbus lapses The Public Relation staffs should make -proper researches on the truth of the criticism and make corrective statement in the same articles to protect save the image of Airbus. -provide press releases including comments clear and enforceable guidelines for the way in to defend itself from this sort of competition with Boeing. Providing Damage Control assistance. -Promote Airbus CSR activities to create a better image of Airbus, develop biofuel that could be used by 2030. This flight and the companys long term efforts are considered big strides towards environmentally friendly aero planes. -Other CSR activities such as Airbus should have build new Aerospace & aeronautical design Engineering schools and provide free tuition fees to boost its image. Students of this school can be bonded for some years with Airbus and given jobs in Airbus later.

How Boeing Deal with Competition

Building Boeing reputation as Bribery Free Company. Ensure All the Aircraft is build with quality and value for price .Transparent in all the business deal and prevent unfair dealing .Develop more advance aircraft which is more efficient, faster and reliable. Boeing use US Government to coercive influence decision making of buyers (purchases of aircraft for exchange of US services) Uses spy intelligence methods to obtain information of Airbus lapses and use the info to threaten the purchaser of disclosing the unethical deals .Boeing used GATT to come up with the OECD convention on anti-bribery.

Difference between Boeing and Airbus Marketing Boeing -Competitive price and quality & Influence power of US Government Reason -Long history in the market -Big customer based, achieve Cost efficiency -A lot of country relied on US Government on the economy and security Airbus -Offer high commission to middleman & politicians Reason -Middleman able to influence or even make decision for the state politicians.

The OECD convention on bribery

The OECD convention on combating bribery, would HAVE AGREED AS FOLLOWS: Article 1 - The Offence of Bribery of Foreign Public Officials 1. Each Party shall take such measures as may be necessary to establish that it is a criminal offence under its law for any person intentionally to offer, promise or give any undue pecuniary or other advantage, whether directly or through intermediaries, to a

foreign public official, for that official or for a third party, in order that the official act or refrain from acting in relation to the performance of official duties, in order to obtain or retain business or other improper advantage in the conduct of intl business. 2. Each Party shall take any measures necessary to establish that complicity in, including incitement, aiding and abetting, or authorization of an act of bribery of a foreign public official shall be a criminal offence. Attempt and conspiracy to bribe a foreign public official shall be criminal offences to the same extent as attempt and conspiracy to bribe a public official of that Party. 3. The offences set out in paragraphs 1 and 2 above are hereinafter referred to as bribery of foreign public official.

How would that be different for Airbus if France adopted OECD convention on anti-bribery

Airbus will have to toe the line in all its international business dealing if France adopted OECD convention on anti-bribery. Airbuss reputation and scandal in the Air Canada could have been avoided. Airbus would have to report to their ethnic committee in all international dealing and the move result in good corporate governance. The competition would have no reason to attack Airbuss business practices of using middlemen and lobbyist to secure new overseas Governments contract Airbus sales would have dropped badly and lost millions of dollars. Most of the countries would have purchased Boeing in order to get US Government favors. Due to the lost in business Airbus would have to retrench its workers. Airbus would not have produced its latests A380. .Airbus will always be the number two successful airlines after Boeing.

Suggestions A good leadership in Airbus Industrie will make the company more stronger, although the involvement of socio-cultural to politics is prominent to obtain big orders Elimination of middleman is a must to cut down on unnecessary paying of kickbacks and bribes to the politicians and top level management people. There will be no more seaside villas in Mexico or big shopping plazas in Kuwait for corrupted men. Instead establish agents with standardized minimal commission payments to the appointed agents. Agents who will abide with standard agents and suppliers manufactures rules.

Improve the technology quality and performance in order to cut down on turnaround time will bring more profits to Airbus. Promote Go green environment clean air and less carbon emission bio-fuels. Create a good image and brand building.

Conclusion Companies need to continuously maintain integrity and transparency when expanding their international business to new geographic market if they want their business to sustain for a long term. Bribery and corruption have a very detrimental effect on an economy and the World Bank has estimated that 0.5% of GDP is lost through corruption each year. Engaging in corrupt practices also creates a very unfavorable business environment by encouraging unfair advantage and anti-competitive practices. As well as allowing organized crime to flourish, corruption is one of the primary obstacles to the economic development of a country; it undermines the rule of law, weakens trust in public institutions and challenges democratic principles.

Thoughts To Ponder! The Boeing and Airbus quests for dominance have been quite a roller-coaster ride for both with no end in sight. The history of their competition provides a good case study for best-practices in strategic planning. Although businesses must compete fairly and honestly but again it is a question of doing the right thing the right way, so what is the right thing and the right way? Bribing and receiving kickback are a norm life style & culture in many countries. So are we to follow their socio-culture? Some country men want business to be as If you go to Rome do as the Romans do. So if you want to do Business and survive the roller coaster ride, there are times you have to do what the Roman do in their country. Follow the ride and their political socio-culture???.