Module Code: UGB247
Module Title: Responsible Business
Responsibility Audit Report
Module Leader: Mark Winter
Module Tutor: Mark Winter
Student Number: 1067051204
Date of Submission: 17/12/2012
Ryanair’s responsible practices
Responsibility Audit Report- Ryanair
Ryanair was founded in 1985 by the Ryan family in Waterford, Ireland (Wangkanai, 2011). Ryanair is a low cost airline that operates over 1,500 flights per day from 51 bases on 1,500 low fare routes across 28 countries (History of Ryanair, n.d). The public limited company originally began as a full-service conventional airline, however in 1990 when Michael O’Leary took over the Chief Executive position, the company changed its business model dramatically by implementing a cost-leadership strategy (Wangkanai, 2011).
The purpose of this responsibility audit is to illustrate Ryanair’s business practices and to ascertain whether these activities demonstrate responsible corporate behaviour. Corporate responsibility comprises the responsibilities of a business in the context of wider society, how those responsibilities are defined and negotiated and how they are managed and organised (Blowfield and Murray, 2011).
2.0 Environmental Scanning
Ryanair is known as the leading low-cost carrier in Europe and therefore implements an operations strategy to provide air travel at a minimal cost, whilst maximizing its operations margin. For Ryanair to maintain this they adopt a lean structure and reduce costs on operations, service and overheads. These strategic decisions have a significant impact on the operational structure and infrastructure (Ryanair- Operations Strategy and Capacity Management, 2010). Other strategic decisions include, using secondary airports, outsourcing some operations and keeping wages, maintenance and other operating costs to a minimum. Ryanair’s responsibility to produce a service that society wants at a profit fits in with economic responsibility in Carroll’s typology of corporate responsibilities as shown in appendix A. The airline offers low-cost fares, which produces a profit to continually fund their service to society. Company profits increased by +25% from €440.7m in 2011 to €502.6m in 2012 (Annual report, 2012).
The company competes with all other airlines including, EasyJet and Virgin Atlantic. Ryanair responsibly conforms to all competition and antitrust laws enacted to prevent interference with a competitive market system (Ryanair Holdings PLC, 2012). This relates to the legal responsibility in Carroll’s typology (see appendix A). Legal responsibility refers to the obligation of business to fulfil its economic mission within the confines of the law (Blowfield and Murray, 2011). Ryanair’s performance during the recession contrasted with that of its long established competitors, which felt the sting of the financial crisis (Recession good for Ryanair: CEO, 2008). This forced many rivals to cut routes and flights, benefiting Ryanair, which opened 223 new routes and six new bases. The recession forces customers to focus on price, including demand from business travellers who already constitute 45 percent of the airline’s clientele (Recession good for Ryanair: CEO, 2008). Ryanair offered more competitive prices than its rivals, as it is the lowest cost provider in the European airline industry (Ryanair reports ‘recession-beating’ growth, 2009). By 2009 Ryanair’s traffic grew by 15% to 59 million passengers (Annual report...
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