Akio Morita, SONY's ex-CEO once quipped that the CEO and executive, not the workers, should be the ones losing their jobs when a company under-performs, because it is they that drive all major decisions, like when the Qantas CEO, Alan Joyce with the board support, opted for closing down the airline in November 2011. It was his decision because he believed that it was the 'ideologically' right decision. Naturally, one cannot blame him and his board, for doing exactly what other CEOs and boards are doing elsewhere: believing, blindly I might add, in the idea of the free-market and attempting, with the support of like-minded politicians, to free it from all constraints, especially the costly labor regulations. To them, markets are thought to be correcting government malfunctions rather than vice versa. No matter, that, in so many instances of infrastructure privatization, such as: electricity and water, the most convoluted socio-economic re-engineering can only produce 'a market which is artificial, rigged, imperfect and imperfectable'. Qantas like any other 'brand owning' business operating in the 21st century has been, and continue to be, seduced by the promise of untold riches if it would follow the 'magical' mix of efficiency prescriptions extrapolated from the Tillinghast efficiency maxim: automation of the demand and supply chains, decapitalization of the capital resources, and the offshoring of the operations. Charles C. Tillinghast Jr., TWA Chairman (1961-1976) may have defined the future of airline business, when he was reportedly to have said, 'We're gonna' shrink this airline 'til it's profitable', but his efficiency maxim had unwittingly brought on TWA’s demise, when it starved the airline of capital needed to respond to the rapid growth in domestic demand and airline deregulation years later. Not surprisingly, U.S. airlines which showcase the power and glory of 'American Capitalism', exemplify the Tillinghast efficiency maxim in being on pretty much a similar course and probably a similar fate to TWA, given that all top five US airlines had already filed for Chapter 11 bankruptcy protection over the past decade, and continue to experience financial difficulties. The paradox of the Tillinghast efficiency maxim is that it continues to live on as some absolute truth, where everyone in the private, public and not-for-profit sectors are not only attempting to surpass themselves, by being incessantly ultra-efficient in their performance to meet the predatory nature of market expectations. However, the financial markets reward those value creation prescriptions in the short-term, but not necessarily so in the long term, especially, when companies are unable to attain the same level of efficiency gains year in and year out. For the uncritical mind that dwells with fervor for intelligent design, the market is seen as a ‘pseudo-natural’ phenomenon, which substitutes for the exercise of collectively rational choice. The elevation of the market to almost divine, omnipotent, omniscient status has been at the expense of the downgrading of rational choice based on analysis. It comes as no surprise, then, that Qantas increased levels of efficiency did not deliver the untold riches as expected. This may help us understand why Qantas lost 80% of its share price value over the past 5 years ($5.70 in June 2007), and its share price was not even marginally better recently ($1.12 on 23 June 2012 losing 41% of its nominal value since 1995, notwithstanding the cumulative loss to investors, due to share price swinging movements over that period) than the time when it was sold in July 1995 at $1.9 to individual investors and at $2 to institutional investors. Alan Joyce and his board are prisoners of their own predilections, with their preference to systematically making decisions to break down the 'high-cost' airline, so as to 'reorganize' it, which often means major staff cuts, then rehiring the staff that were made redundant on far inferior working conditions and employment contracts. His recent warnings (threats) about the possible failure of the airline to Members of Parliament on June 22, 2012, were only the prelude to restructuring. This may explain why there is nothing extraordinary, or novel for that matter, with the Qantas CEO Alan Joyce and his board in running the company to the ground, by comparison to most 'non-government-supported' airlines.
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