Advanced management accounting Essay Example
Job Cut Decision (Qantas Airline)
The decision by Qantas airline to cut down 5,000 jobs would be a decision with the short term effect of bringing down the operating cost by the airline. This decision is an indication by the management that the airline is unable to maintain its labor cost. This is the most likely decision that any manager would take to bring back the company to the winning ways. The strategy by the management to get back the company to making profits will be given a boost once the workers have been laid. Qantas also was considering withdrawing from some routes it considered unprofitable, contrary to its strategy of opening gateways to the world.
The job cut is a difficult decision that managers take. This decision can be evaluated using the metaphors in Morgan’s (1988) article:
Accounting and Corporate Culture: the decision is normal in the corporate circles to maintain the company in the profit-making line. The workforce as maintained by the company must be sustainable at all times.
Accounting and Technological Change: advancement in technology implies that more machines will be used to replace human labor. This also has a positive effect on cost as the company will have saved immensely.
Accounting and Social and Economic Policy: companies must keep up to date with the prevailing economic policies of the world and of the country of operation. The social factors also have the effect that as the company considers cutting down on jobs, then they should consider this as the main income of their employees.
Accounting and the Shareholder view: the job cuts had to be done so as to preserve the interest of the shareholders considering that they invested in the shares of the company expecting that they would get returns on their investment.
When making the decision on job cuts, the management is faced with the difficult task of explaining this to the government, the employees and the investors alike on why the job cuts is necessary. The job cuts will mean loss of employment and thus livelihood of thousands of families. The government will particularly get interested in the issue since the government also depends on the employees who submit revenues in form of tax. This will mean loss of revenue to the government. The decision related to job cuts is allowed as long as it is done as per the laid down procedures.
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