Cancellation of Orders and Reduced Investor Faith Being Experienced by Airbus

Executive Summary

Airbus has been facing the problem of cancellation on the orders of the A380 jumbo jets and this has been attributed to many reasons. The company also has been facing a declining investor trust and hence their share prices are plummeting. The company is also facing a lot of problems in terms of the company having to handle a lot of cancellation then the actual sales they are making. In the month of January 2009, the company handled a number of twelve cancellations and at the same month, the company only sold four jumbo jets. This is alarming and is giving their main competitors, Boeing an inch of advantage in the industry. Apart from that the company faces an inevitable collapse if their current problems are not addressed in a professional way.

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The purpose of this report is to see to what extent lack of proper communication on the part of Airbus to its publics, that is the clients, investors and suppliers have contributed to these sympathetic state of affairs to the company. The report will also address how proper business communication skills would have salvaged the company from its woes and how these skills can be used to improve on the financial outlook of the company now. The purpose of this report is also to look into how their form of business communication has been instrumental in bringing the company to its current situation and how this can be changed to foster the growth of the company and its financial outlook especially at this time of global financial crisis.

The purpose of this report is to show how instrumental business communication is to the success of any company. Lack of proper communication to the company’s public which includes the company’s clients, suppliers and investor have led to the downfall of many formidable companies in the world and this have been witnessed even in the modern times. This trend of bad business communication has also brought Airbus to the current situation it is facing and hence this has brought about a lot of issues in the way the companies is handling its business. This is made worse by the fact that the company is recognized internationally and hence it communication is very vital to its success.

Summary of the Report

The objective of the report was to find out whether bad communication on the part of the company Airbus. The problem that the report is to address it the reasons why the company is faring so badly in its communication to the publics.

Results of the investigation

The investigation found out the company is facing its current financial problems because it was not conducting its communication in the right manner. The investigation found out that the company faced such problems as gross cancellation of orders and lack of investor faith thus jeopardizing its current financial status.

Conclusion and recommendation

  1. The company needs to invest in the training of their personnel so that it can have competent employees who are good at meeting targets. This will enhance the company’s outlook and also help very much in the company’s communication to its clients.
  2. The management should also enhance the positive outlook of the company so that it is possible for the relevant personnel to communicate effectively to the company’s publics.
  3. The company should also implement policies which seek to motivate all the personnel as well as the management. This will greatly improve the company’s outlook as well as ensuring that accurate communication is sent to the publics.
  4. The human resources department of the company also has a task in ensuring that all employees are competent and the necessary policies implement to ensure that the employees are competent and qualify to hold the positions they hold in the company.
  5. The management of the company must ensure that they are competent and this will enhance the company’s public outlook. This will play a great role in ensuring that the company is communicating effectively to the investors and publics. This will be enhanced by all parties being accountable in their performance.
  6. The management of the company must also ensure that they are transparent to the publics and this is mainly towards the clients and investors. This will help greatly in ensuring that the country remains a company that the investors and clients can have faith and hence the cancellations and financial problems will cease.
  7. The company has not been using the most effective means of communication to pass information internally. The information between different departments within the corporation has not been very effective and this has contributed immensely to the current situation where the company’s communication is failing the company.

On the grounds of these findings, the report recommends that the company has to be a fully implemented policy that will ensure that its communication to relevant parties improves. These policies must be carefully planned so that the company does continue to further its problems which are already having an impact to a significant number of parties involved in the operations of the company.

Introduction

Airbus an internationally recognized aerospace company has for the recent couple of years been facing difficulties in its operations throughout Europe. One of the problems the company is facing right now is the resigning of top management which has been deemed by analysts as a shake-up in the industry. There has been a number of resigning in the past few years and this has been attributed to the fact that the company is not doing very well in the past few years. One of the notable resigning was that of Noel Forgeard who was a chief executive of EADS and this was seen by many analysts as this was taken as a measure by the company’s management to increase the investor confidence as their share prices are plummeting at an amazing rate (Coe, 17).

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The problems that are being faced by the company can be attributed to lack of proper communication to the company’s publics. This has been elevated to a new level by the fact that the company is facing many cancellations to their A380 model. The situation is so bad that the company is handling more cancellations than actual sales. In the month of January, 2009 the company handled twelve cases of cancellation when they only sold four airplanes of the A380 model (Hackos, 98).

Airbus is a subsidiary of EADS an aerospace company based in Europe. Airbus is involved in the manufacturing of aircraft and it is headquartered in Toulouse, France. It is a highly influential company with a number of high standard activities in Europe and it is also responsible for the manufacturing of half of the world’s airliners. It began its operation as a consortium for manufacturers who were involved in the industry of aerospace. Around the beginning of the century, a consolidation of the defense of European companies in the industry of aerospace initiated a company with joint stock and this saw the birth of Airbus. Initially, Airbus was started with EADS owning controlling shares with an eighty percent of the Airbus shares owned by EADS. The other partner was BAE systems which owned twenty percent of the company’s shares. However, in the year 2006, BAE systems sold its shares to EADS. The employing records of Airbus have been estimated to over fifty seven thousand employees who are employed at the company’s sixteen stations which are found in four countries in Europe. These countries include France, Germany, Spain and Britain but the company’s final production and assembly are done in France in the city of Toulouse, Germany in the city of Hamburg, Spain in the city of Seville and China in the city of Tianjin. Airbus also possesses subsidiaries around the world and these are found in China, United States and Japan (Nakanishi, 320).

Objective

The objective of this report is to analyze the extent of which bad communication on the part of the company has contributed to the company’s current status in financial terms. The report also intends to focus on the key issues that have brought the company to the current position it is in and how these problems can be resolved. The report will also right a number of recommendations that will see the improvement of the company being enhanced.

Method

The report was writing through research and analysis of the financial situation of the Airbus Company. The company has been facing financial problems. These problems are mainly cancellation of orders of the Jumbo Jet model A380 and also the declining faith of the investors. These problems have been rooted to poor information on the part of the company to the clients and the investors. The current method the company is employing in its communication efforts have come under scrutiny and the report is going to research and analyze the shortcomings of the company’s communication.

Background

The Airbus Corporation has for the recent past been not performing to the public expectations. This is witnessed by the fact that there have been numerous cancellations on the orders of the A380 jumbo jet model and also declining faith on the part of investors. At this period of financial crisis on the world economy, the company has to be very particular in addressing its problems so that it can be salvaged from the eventual collapse that it’s heading for and that other companies have already fallen into. This will only be achieved by the company getting hold of its finances are back in order. However, these cannot be achieved when the company is not making enough sales and also when the company does not have the backing of investors. The lack of making enough sales has been attributed to the fact that the company does not communicate very well to its clients (Andrews, 25).

The lack of proper communication to its clients has seen to it that the company has been facing order cancellations. This is because the company has been given incorrect information on the dates due for the completion of a particular product in this case the A380 jumbo jet. This has been very inconvenient to the clients and they have been forced to cancel their orders. This is because the orders have been delayed in various forms and hence the clients canceling the orders when the delivery cannot be made at a given time frame (Crystal, 102).

On the part of investors, the company for one is not given the correct information to the investors and hence some of them have quit backing the company. This means that the investors have not had full information on the manner in which the company is handling its business. This means that the company has had to do without some of its most important investors and hence the accruing losses. The investors are also discouraged by the fact that the company is handling fewer sales than the actual orders that have been made. This is brought about by the fact that the company is making more cancellations than sales. All this can be countered if the company takes a more effective approach to its clients as well as its investors (Hackos, 112).

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The report will be based on the analysis and research that have been conducted to find where the company’s communication is at fault and how this will eliminated from the operations of the company. This means that the research will look into the flaws of the company’s communication and come up with conclusions and recommendations to the purpose of redeeming the company from its current problems and also the recommendations of how the company can rejuvenate itself and be the formidable force it was once in the world market and the aerospace industry around the globe.

Findings

Training

It has been found that the company has trained individuals who are not very familiar with current business trends that have emerged in the world today. These have seen to it that the personnel of the company are not competent in handling some of the company’s operations. One of the most affected by this is the public relations department and this have seen to it that the department cannot be able to handle some of the vital information that have to be relayed to the investors and the clients as well (Crystal, 102).

Management

The management has also been cited as one of the courses of the current financial situation of the company. The management has not been efficiently relaying the information to the relevant people in order for the company to excel in its field. This has contributed significantly in the current situation of the company because it has resulted in the negative outlook of the company to the public. The management has failed in sending the right information or has not been using the right channels to convey their communication (Andrews, 39).

Motivation

The company has also failed in its policy implementation which should be implemented in relation of the personnel motivation. Motivation plays a very important role in any company’s success and hence the Airbus Company has overlooked the importance of implementing policies which will boost the company’s motivation. This can be evidenced by the fact that the communication of the company is not appealing to the clients and the investors as well. This can rooted to the fact that the company’s staffs who are employed to perform the tasks of the company’s communication are not motivated in doing their tasks. This can be attributed to the management of the company have a traditional way of conducting business and being overtaken by the current trends in business communication (Coe, 18).

Employee qualification

In such a company, the personnel picking is very vital to the success of the company. This means that the company must pick personnel which is very competent and has qualified for the various tasks in which they are to be helpful to the company. However, the company personnel responsible for overseeing the company’s communication to the investors and clients have failed and thus are not competent. This can be evidenced by the fact that due to bad business communication being employed by the company, the company is running on low sales, facing numerous cancellations of orders and experiencing a declining investors’ faith. This has brought in the fact that the company if not fully rejuvenated will face an eventual collapse (Katzner, 136).

Accountability

On the part of the management, there is need to be very accountable so that the company can communicate easily with the publics easily and in a more accountable manner. This means that the company needs to come up with policies that enhance the company’s accountability to the clients and the investors. The management has not been accountable enough and hence this has brought about a complication in the way the information to be handled out to the publics. This means that the communication between the clients and investors is flawed.

Transparency

The employees and the management have not been transparent enough and this has been negatively affecting the communication within the company and also external communication. This has led to a situation where the company is sending the wrong signals to the clients and the investors. This has also led to the current situation because it does not have the trust that comes from both the clients and the investors (Katzner, 136).

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Internal communication

The means of communication that the company applies in its passage of messages within the organization is also flawed and there are many loose ends. The communication between the departments is also not very effective and this can be said to be one of the major cause of the company performing so badly. This is because there needs to be a good communication channel within the organization and this can only result in a much disorganized company. This means that the company is failing because of its internal communication incompetence.

Conclusions and recommendations

  1. The company should embark on a rigorous training which will see to it that the employees are fully competent in the manner in which they perform their tasks (Coe, 19).
  2. The management of the company should rely information that is correct and that has no fault of any nature. This means that timely relaying of information should be enhanced by the management and this means that the company will need to come up with new policies to enhance this (Crystal, 102).
  3. The company should also come up with policies which ensure that the personnel and staff are motivated and this will enhance the company’s general outlook. One of the most important things in the performance of any company is the motivation of all parties involved (Huckin, 72).
  4. The human resource department should also ensure that they hire the best employees that can be found. This will enhance the communication from the company towards the clients and investors (12).
  5. All involved parties in the running of the company must be accountable and this will also boost the accountability of the company to the clients and the investors. However, if the company is not accountable from the lowest employee, then the entire company gets a negative outlook to its clients and investors (Andrews, 23).
  6. The management and the personnel must perform their duties in a more transparent manner so as to counter the trend that has caught many companies in this period of global financial crisis.
  7. The internal communication within the company must also be greatly improved. This is one of the reasons why the company is doing so badly in the recent past. There is not proper coordination and this has resulted in the cancellation of orders as well as the company loosing the faith of the investors. This has to be amended with an urgency so as to salvage the company (Hoft, 18).

Works Cited

Andrews, Deborah C., ed. International Dimensions of Technical Communication. Arlington, VA: Society for Technical Communication, 1996.

Coe, Marlana. “Writing for Other Cultures: Ten Problem Areas.” Intercom (1997): 17-19.

Crystal, David. The Cambridge Encyclopedia of Language. New York: Cambridge University Press, 1997.

Hackos, JoAnn T. Managing Your Documentation Projects. New York: John Wiley & Sons, 1994.

Hoft, Nancy L. International Technical Communication: How to Export Information about High Technology. New York: John Wiley & Sons, 1995.

Huckin, Thomas N. and Leslie A. Olsen. Technical and Professional Communication for Nonnative speakers of English. 2nd Ed. Boston: McGraw-Hill, 1991.

Katzner, Kenneth. The Languages of the World. New York: Routledge & Kegan Paul Ltd., 1995.

Nakanishi, Akira. Writing Systems of the World. Rutland: Charles E. Tuttle Company, 1994.

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