Practise evaluating stakeholder conflicts, their causes and consequences, and recommending ways businesses can manage competing interests for IB Business Management HL.
Oktopus Air (OA) is an airline targeting both business and economy class passengers. Customers have praised OA for its ethical objectives, its commitment to below market prices for both market segments and its mission statement: “In the air, we care for everyone!”. Employees have praised OA’s Chief Executive Officer (CEO), Eythor Karlsson, for his situational leadership style. OA’s flights are usually full and customer feedback is excellent.
Oktopus Air (OA)
Oktopus Air ( OA ) is an airline targeting both business and economy class passengers. Customers have praised OA for its ethical objectives, its commitment to below market prices for both market segments and its mission statement: "In the air, we care for everyone!".
Employees have praised OA's Chief Executive Officer (CEO), Eythor Karlsson, for his situational leadership style. OA's flights are usually full and customer feedback is excellent.
Two social changes are affecting OA :
- Obesity is increasing. Very obese passengers are finding difficulty fitting into seats. On full flights, some passengers sitting next to a very obese passenger have complained about a lack of space. OA has decided to charge very obese passengers for two seats. A refund of one seat will be given if the flight is not full. Pressure groups representing very obese people have argued that OA is acting unethically. Eythor defended the decision, arguing that competitors were already carrying out the same practices. He added that very obese passengers can create safety problems during an emergency evacuation of the airplane.
- The second change is the increasing number of families with young children travelling in business class. Business passengers are complaining that young children are too noisy and are threatening to fly with competitor airlines. Eythor has suggested to OA's Board of Directors that a market gap could be filled if OA offered a family-only service, once a day, with additional play areas for young children and hence fewer passenger seats. Eythor has indicated that OA will need to raise prices for this service, change its promotional method for this service and create a new marketing mix. Some consumer groups recognize the good intentions of a family-only service; however they fear it could actually increase the hostility towards families with young children on other flights that OA offers.
Explain three stakeholder conflicts at OA.
There are a number of stakeholder conflicts present at OA :
- Obese passengers versus other passengers. The issue is a lack of space impacting on emergency evacuation procedures if the very obese passenger does not purchase an additional seat.
- Business passengers versus families travelling in business class (from the stimulus).
- Pressure groups and OA's Board of Directors or Eythor (directly), over the issue of the credibility of OA's ethical objectives.
Accept any other relevant stakeholder conflict with an explanation.
Mark as 2+2+2.
Award [1 mark] for correctly identifying a relevant stakeholder conflict and [1 mark] for an explanation of the nature of that conflict with application to OA.