British Airways

Introduction British Airways was started in 1974 as a result of merger between two airlines, British Overseas Airways Corporation (BOAC) and British European Airways (BEA). BA is known to be one of the Leading Airlines in the world.Advertising We will write a custom essay sample on British Airways specifically for you for only $16.05 $11/page Learn More By the year 2001, the company had approximately 360 aircrafts and operates in ninety seven countries covering 270 destinations. BA owns stakes in other airline companies such as Australia’s Qantas and Iberia from Spain. Business within the global market demands a great change within the operational and management practices of international business companies. Management team should ensure maintenance of excellent working conditions within companies. They should have the ability of creating new business models for the purposes of satisfying current human needs and at the same time for profitability purposes. Implementation of up-to-date business plan and appropriate business models ensures change in image of business companies. Great level of confidence and creativity is required for the purposes of achieving the expected financial goals. SWOT analysis of British Airways Company British Airways Company Strengths Asset of 360 aircrafts Skillful and Professional workforce Strong brand name Use of modern IT, fleet and ground facilities Stable financial base Weaknesses Poor customer services Downsizing Highly hierarchical bureaucratic structure Serious communication gaps Absence of clear market orientation Opportunities Wide customer base in 97 countries Joint ventures Threats Internal politics External political instability in crucial destinations Global recession Terrorism Problem definition British Airways was faced with the threat of terrorism, since there was plan to shoot down any aircraft in space. The company was also faced with financial prob lems with the prediction of low revenue growth within successive years. This would be as a result of political instability within the Gulf and economic downturn which would affect international traveling. These shortcomings gave the management of the airline very hectic time leading to loss of working esteem amongst workers.Advertising Looking for essay on air transport? Let's see if we can help you! Get your first paper with 15% OFF Learn More British Airways Company was previously known to comprise of highly motivated staff. The merger of BOAC and BEA created some administrative and operational conflict amongst the staff leading to poor service provision. The two different cultures from the two airline companies could not merge easily. This is since each of the airlines served different class of passengers jeopardizing the culture of working as a team. There was pronounced blame-game amongst workers since no one was accountable for the poor services rendered (Vedpuri swar 1). There was sign of intense internal politics caused by the presence of massive workforce. Reward system also involved lots of politics since employees were rewarded based on political affiliations instead of performance measures. Justification The management team within BA Company kept on changing CEOs due to reform issues. This signified instability on corporate culture from within the company. The CEOs barely served for five years, Bob Ayling served for four years but failed to achieve on the implementation of the reform agenda. This was especially on cutting costs and creating conducive working environment for workers. Rod Eddington on the other hand concentrated on empowering the staff and maximizing costs on premium travels. The existing war within the Middle East threatened BA operations in 2003. Politics were as a result of serious communication gaps existing across the organization and the authoritarian kind of management.Advertising We will write a custom essay sample on British Airways specifically for you for only $16.05 $11/page Learn More At the same time the structure of the airline Industry within Europe tends to offer high priced services to consumers, ignoring the plight of the middle and low income earners. There’s need to consider consumers from all market segments through offering of affordable, cost-effective and quality services to various destinations covered by BA. Such like considerations requires thorough restructuring of the various companies within the airline industry. Customer services within viable market niches needs to go beyond consumer expectations and cover wide population segment. Critical Analysis The British Airline industry suffered a lot due to its unfairness in dealing with work force and consumer prices. Expansion and success of BA is basically based on comprehensive business plans and financial models. Part of the success also lies on BA’s ability to spend higher pe rcentage of its operations on air which automatically results into profitability based on the level of efficiency. The nature of BA’s organizational structure was of prime importance since it determined the nature of communication, delegation of duties ensuring good social and interactive environment. (Vedpuriswar 13). British Airways at some point implemented the strategy of sharing its profits amongst all the employees which provided a good incentive for motivation.Advertising Looking for essay on air transport? Let's see if we can help you! Get your first paper with 15% OFF Learn More However, the previous strategy provided by ‘Survival plan’ on cutting down on employee salary increment and any other leisure activities could have easily led to demotivation (Vedpuriswar 7). The major challenges within the airline industry are high competition and high operation costs. The other challenge as outlined was availability of massive workforce that the company was unable to support efficiently. However, BA ensured that all employees receive quality training enabling professional execution of duties. Previously all employees including pilots were considered to operate within the same level as any other employee including managers. Such consideration at some point led to unrest situations amongst the pilots (Vedpuriswar 9). Installation of modern technology facilities enabled easier communication and also encouraged freedom of expression amongst employees. The new management structure encouraged bottom-up style of management, where junior employees executed th eir duties with minimum interference from the top management team (Vedpuriswar 10). The management team ensured existence of cooperate culture which encouraged team work and integrity within workplace. The kind of positive attitude created within the work environment focused on customer-oriented services is capable of ensuring high productivity levels. The issue of reducing the workforce occurred on several occasions during recession periods. However, this was a good initiative capable of cutting the cost on operations. The idea of giving more attention on prime class of service within the flights and inclusion of on-line services assisted BA in improving the customer base. Other measures undertaken to cut the costs included reduction in coordination activities with other airline companies. As portrayed from their management strategies British Airways prefers strengthening of good employee relationships rather than forming unions. However, recruitment should be done based on profess ional qualifications and integrity of character. This enables easier implementation of training programs and also ensures maintenance of discipline work environment. The company’s integral culture has been maintained through organization of behavioral trainings and team building outings. Employees are considered crucial part of the company, hence recruitment and promotion activities done based on credentials and not political affiliations as previously experienced. Alternative Courses of Action In order to save BA from the spiraling losses and bankruptcy, King introduced ‘survival plan’ which was stemmed with tough immediate measures. One of the actions was downsizing the workforce, freezing salary increment, reducing the number of destinations as well as closing two engineering bases within a year. The plan also aimed at causing massive cuts on administrative duties (Vedpuriswar 5). Setting of an aggressive marketing team, assisted on the issues of marketing and customer services. The change in the management structure necessitated efficiency in communication across departments and coherence between operational activities and services rendered. Profit sharing program was also introduced for the purposes of motivating employees. Besides, the staff had to undergo thorough training in order to boost corporate culture and management practices (Vedpuriswar 5). Taking employees through trainings such as Putting People First (PPF) and Managing People First helped improving the corporate culture since employees were able to work with positive attitude and treat fellow workers with respect. This action also helped in building new leadership skills and stable managerial behavior (Vedpuriswar 7). Team building workshops were organized, installation of feedback programs undertaken. BA through the leadership of Ayling worked on creation of new image brand for the airline company which replaces the traditional designs. Expansion and renovation plans inc luded renovation of terminal at JFK airport, improved of entertainment services, offering on-line services and entering into partnerships with other airlines (Vedpuriswar 9). In place of workers union within the Company, efficient channels of communication were created. This was provided by proactive communication team acting as a voice between management and subordinates. The team was endowed with the responsibility of setting salary scales and also putting personnel management into check. On the other hand diversification of skills is necessary and leadership tactics of the management team. Various means can be invented for the purposes of dealing with economic downturn; this includes forming joint ventures with discount airlines. Evaluation of Alternatives The operations of British Airline to different destinations of the world market including Middle East brought to consumers affordable alternative means of travel. Stiff competition from other established airlines requires thoro ugh review of BA’s structure for the purposes of capturing both high and low market segments. In addition to sharing of profits, the management should think of granting employees the opportunity of buying shares from BA’s stock. This would ensure high level of employee satisfaction and hence help in improving the nature of the social environment within the workplace. Such culture of rewarding employees’ inputs based on their innovative and creativity offers conducive environment for invention. Transacting business with single plane manufacturer for long periods of time and reducing fuel consumption levels assist in cutting down expenses. Solution The management should adhere to the proposals on recruiting based on individual’s professional qualifications. At the same time the art removing bureaucratic hierarchy helps in efficient management practices. The company requires installation of modern and sophisticated equipment to assist in operational practice s. The issue on cost of fuel can be tackled by hedging and sealing contracts from the various suppliers. Lots of emphasis should be placed on enriching internal culture in order to counter the wave on economic crumbles and other external pressures. Reports reveal that Airline companies stand as some of the multi-million companies providing their shareholders with reasonable returns originating from massive asset background. Airline companies especially British Airways is identified as one with strong and liquid balance sheet. Most of the achievements can be attributed to the nature of their facility expansion, increasing trend in customer base and the company’s policy and strategy concerning acquisition of properties. The aggressive nature of BA management team and acquisition policy remains a threat to the rest of the companies within the airline industry. However, environmental threat presents one of the potential operation risks the company since they have to regulate thei r level of carbon emissions based on different policies laid by companies. British Airways can as well utilize the long-term growth strategy based on its strong operational performance as well as potential acquisitions. The company’s growth profile and assets makes it outstand as one of the leaders within the industry. Conclusions and recommendations The culture within the workplace determines the level of success of the Company. Emphasis should always be placed on marketing activities and customer care services. Success of BA as a Company could be attributed to excellent management tactics derived from frequent trainings and also professional marketing principles. The growth was evident after implementation of reasonable organizational structure and reinforcing the communication channels including marketing strategies. Such programs ensured increased earnings per share on an annual basis. Maintenance of a corporate culture encouraged mutual co-operation amongst employees hen ce providing avenues to high performance levels. Airline industry despite being capital intensive venture is also considered to be highly risky. This shows that efficient operation within the industry requires higher margins for proper running and maintenance of equipment. The rising demand for airline services, calls for quality and efficiency in management and marketing strategies. Conclusively, even though there seems to be significant increase in profitability of BA Company, improved customer-oriented services is constitutes big percentage of the margins. The lucrative margins makes the stocks of Airline companies more appealing to investors, hence call for high productivity levels. Works Cited Vedpuriswar, AV. British Airways: Leadership and Change, ECCH Collection, Hydershad: ICFAI Knowledge Centre, 2003. This essay on British Airways was written and submitted by user Sebastian Berg to help you with your own studies. You are free to use it for research and reference purposes in order to write your own paper; however, you must cite it accordingly. You can donate your paper here. British Airways Introduction This report gives a comprehensive overview of the business organization processes of British Airways (BA). Several aspects of the organization’s structure, including the structural style, management style, leadership style, motivation style, organizational design, organizational control structures, and the organizational culture constitute this analogy.Advertising We will write a custom report sample on British Airways specifically for you for only $16.05 $11/page Learn More This assessment will be an interesting analogy of British Airways because the company experienced managerial and leadership changes in the recent past. For a long time, British Airways has been the national flag bearer of the United Kingdom (UK). The airline is the largest airline in the country, based on its fleet size and international presence. It operates in 160 destinations around the globe and has a market presence in more than 70 countries (Ganesh 1999, p. 269). BA’s inception occurred after four small and large airline companies (BOAC, BEA, Cambrian Airways, and Northeast airlines) merged (Meyer 2007). Before 1987, the government ran British Airways, but in the same year, it was privatized as part of the British government’s efforts to seize control of most of its national corporations (McGowan 2011, p. 3). After the privatization, British Airways was able to expand its operations to new locations and new market segments. Currently, the airline is part of the one world alliance, which is an association of several airline companies including American Airlines, Cathay Pacific, Qantas and Canadian airlines (Meyer 2007). British Airways also operates under the International Airlines Group (IAG) and its association with this business outfit marks its participation in the London Stock exchange. Company Structure British Airways is a public limited company with three subsidiaries: British Airways city flyer, open skies and Bri tish Airways World cargo (Plunkett 2009). The BA city flyer is a franchise of BA and operates a domestic fleet of airlines in the European market (from the London city airport) (Plunkett 2009).Advertising Looking for report on air transport? Let's see if we can help you! Get your first paper with 15% OFF Learn More The subsidiary carries passengers, cargo and mail. Open skies is also a fully owned subsidiary of British Airways with operations in France and America. The subsidiary started operations in 2008. Though Open skies was rumored to offer only business class services (during its inception), it also offers economy class (which later upgraded to premium economy class in 2009) (Plunkett 2009). The subsidiary is however not part of the one world alliance (which its parent company (BA) is a member of). Since the aviation market is a competitive industry, BA was motivated by internal changes in the business environment (changes in consumer tastes and preferences) and external forces (competition) to transition its ownership from a government-run corporation to a private-run corporation (Raktabutr 2007). For example, since BA was a government-run company, it was difficult to change its travel fares according to the market environment. In this regard, it was difficult for BA to compete with its rivals. This transition (from government to private ownership) marked the main legal change for BA but it also set-forth a series of other organizational changes such as organizational culture changes, corporate culture changes, mission statement changes as so on.. Model Application Lewin’s change model is widely applicable in BA’s company transition from a government-run organization to a private-run entity. As noted in previous sections of this paper, the transition from a government outfit to a private organization marked significant changes in the company’s structure. Lewins model explains that, organizations often undergo three sta ges of transition: â€Å"unfreezing, movement and refreezing† (Cummings 2008, p. 23). These stages have different effects on the organization and their employees. British Airways underwent the three stages.Advertising We will write a custom report sample on British Airways specifically for you for only $16.05 $11/page Learn More In the unfreezing stage (as a response to market changes), BA had to unfreeze its operation patterns which were characterized by strong government control. This was a strategy formulated by the organization’s management to manage change. The second stage of Lewin’s model (movement stage) also occurred in BA’s transition because the organization’s management was determined to disseminate its ideas to lower-level employees. To support this transition, BA introduced a new set of programs such as the employee bonus system and the opening of a new airport terminal at the company’s main operat ing hub (Heathrow) to synchronize employee tasks with the management’s vision. The company also invested a lot of money in purchasing a new training facility at Chartridge house to improve the synergy between the company’s management and its employees (Raktabutr 2007). The last stage of Lewin’s model is the refreezing stage. BA transition is characteristic of this stage because it tried to cement its new organizational changes by creating a new behavioral system to support the changes. For instance, a new performance appraisal system, which was designed to recognize employee excellence (concerning customer service and marketing), was established (Raktabutr 2007, p. 12). By implementing these changes, it was expected that the company’s employees were going to be motivated to implement the new organizational changes to receive monetary rewards. To complement these changes, BA introduced new symbols that were printed on employee uniforms, company aircrafts, and other public places of display to symbolize the company’s new commitment (customer service). The motto â€Å"we fly to serve† was part of the new changes adopted by the company during this transition (Raktabutr 2007).Advertising Looking for report on air transport? Let's see if we can help you! Get your first paper with 15% OFF Learn More Leadership Control Styles Due to the sheer size and extent of BA’s operations, BA’s leadership has often practiced the autocratic leadership style (Northouse 2009). This autocratic leadership style is the main reason for BA’s poor performance between the year 1996 and the year 2000 (Raktabutr 2007). In fact, BA’s shares plunged by close to 40% during this period (Raktabutr 2007). Basic company values such as customer quality and service excellence eroded because of this leadership style as well. However, with the overhaul of BA’s operations, the company is now synonymous with the transformational leadership style. The company’s CEO, Willie Walsh, first introduced this leadership style because previous systems and procedures were not effective (Rivers 2010, p. 2). Some of the operational changes mentioned in previous sections of this study highlight the changes made by Willie Walsh after he took over the leadership of the company. The rigid h ierarchical leadership structure reduced to reflect the CEO’s vision of operating an efficient company. BA’s hierarchical structure is now very simple. It only has one level of distinction between the top-level management and the bottom-level management (Raktabutr 2007). This management structure supports the company’s transformational leadership style because it has made it easy to pass down the CEO’s enthusiasm of the organization to bottom-level employees. This management framework has also made it easy for the company’s CEO to have a â€Å"detail team† to help him realize the organization’s vision. After evaluating the transition from the autocratic leadership style to the transformational leadership style, we see that BA’s leadership transition is explained by the contingency theory of leadership. The contingency theory explains that prevailing environmental factors determine the type of leadership style to be adopted. Acc ording to the contingency theory, there is no leadership style, which is suitable for one organization (Rivers 2010, p. 2). Different situations demand different leadership styles. It is also from this basis that the contingency theory explains that organizational success does not only depend on the leadership qualities but also the loyalty and performance of the followers (plus the environmental support). BA was initially operating in a highly rigid environment dictated by little or no competition and a lot of government control. This situation supported the autocratic leadership style. However, when the market liberalized and the company was privatized, the company’s leadership style changed to transformational leadership (Rivers 2010, p. 2). This transition is explained by the contingency theory as described above. How Management and Leadership Styles Affect the Direction of the Business BA’s management and leadership styles are bound to affect the direction of the company because they are the main wheels behind the efficiency and productivity of the company. Furthermore, the realization of BA’s organizational goals highly depends on the leadership and management styles of the company (Management Study Guide 2008, p. 1). Considering BA operates in a highly competitive industry, there needs to be constant innovation and improvement of customer service. These elements require a constant change of operational processes but considering BA is a large organization, initiating change may be difficult. It is at this point, where management and effective leadership need exercising to ensure the company implements such changes. This analogy presents a guiding role for management and leadership styles because managers and leaders show the rest of the employees where the company is heading (Management Study Guide 2008, p. 1). Through effective management and leadership, employees are bound to get the confidence to undertake their tasks and ultimate ly realize the organization’s goals. This confidence materializes best if leaders and managers show the subordinates that their roles are crucial for the organization. Furthermore, optimum productivity occurs if management shows the lower-level employees how they can achieve such goals. Complementary to this role is the role of leadership and management to build morale among employees (Management Study Guide 2008, p. 1). A high morale materializes if a sense of cooperation develops between the employees and the management. Leadership styles and management styles create this synergy. Comprehensively, an organization’s direction is outlined by its leadership or management styles because both aspects determine the productive levels of the organization. In addition, an organization’s leadership style is likely to improve an organization’s level of competitiveness because it defines the blueprint of where the organization should be (viz-a-viz its competitors). Company Culture Types of organizational Culture Depending on the nature of organization, different companies adopt different organizational cultures. Tharp (2009) observes that there are four main types of organizational culture: collaborative, creative (adhocracy), control and competitive (market) cultures. The collaborative culture is a friendly and open type of culture. This type of organizational culture is very inclusionary and it perceives leaders as mentors or parents of one big extended family. In this type of culture, group cohesion is paramount and relationships are forged for long-term benefits (Tharp 2009, p. 7). Teamwork, participation and cohesiveness are also highly emphasized in this type of culture because there is a strong concern for people. The creative culture lays a lot of emphasis on innovation and risk taking because the philosophy of â€Å"thinking out of the box† is highly emphasized. Individualism is also encouraged and success is measured by being a leader among many (Tharp 2009, p. 7). The control culture is different from the creative and collaborative cultures because it defines a highly structured form of interaction between employees and their bosses. There is also a lot of emphasis on rules and procedures because stability is perceived to be the ultimate goal of organizations that adopt this culture (Tharp 2009, p. 7). Finally, the competitive culture focuses on job completion. There is a lot of push from leaders that run organizations that adopt this culture because the ultimate goal of such organizations is job accomplishment. The idea of winning is a major unifying factor for employees and managers (Tharp, 2009, p. 7). BA’s Organizational Culture After understanding the above leadership styles, it is important to note that, BA applies the competitive organizational culture. The competitive organizational culture was adopted after the company was privatized. BA’s emphasis now lies on being the best airl ine company in the region. For instance, after privatization, BA changed its corporate mission objective from â€Å"safety† to â€Å"competition†. This is a response to the competition in the aviation industry. Now the company focuses on being effective and high performing. Similarities between BA and Secondary Data Concerning the competitive organizational culture, BA’s organizational culture bears many similarities with secondary research information (regarding the competitive culture). In books, it is mentioned that the competitive organizational culture emphasizes a lot on success and accomplishments while British Airways also strives to show that it is succeeding. For instance, the company now focuses on posting good profits (De-Witte 2000, p. 501). This push to post good profits is part of a move to keep the company afloat, amid growing employee tensions and increased shareholder demands. Furthermore, existing literature outline that, leaders in organizati ons that adopt the competitive culture are hard-driving and demanding. BA’s leadership exudes these traits because it puts a lot of pressure on its employees to show results. Part of the pressure emanates from past periods of failure, which have seen BA suffer significant losses in revenue. Motivational Framework BA uses financial rewards to motivate its employees. This motivational framework is mentioned in earlier sections of this paper where BA’s bonus program was introduced to cement the company’s operational changes by focusing on customer service and quality. This motivational framework defines the scientific management theory, which was advanced by Frederick Taylor (Waring 1994, p. 1). The theory proposes that, people are mainly motivated by financial reward. The theory also maintains that, people are not naturally motivated to work, and they need rewards to boost their productivity. Complementarily, Maslow theory of motivation also outlines BA’s m otivational framework because it explains that workers strive to satisfy basic needs before they satisfy higher-level needs such as safety needs and self-actualization needs. Maslow’s theory categorizes worker needs on five levels as outlined below: (Waring 1994, p. 94) Incidentally, these needs are often satisfied through financial upgrades. For instance, if a worker has already satisfied basic needs such as food, shelter and clothing, they need more money to satisfy the next level of need (safety needs). This motivational dynamic therefore supports BA’s motivational framework because workers strive to improve their productivity to get more bonuses, and consequently satisfy higher-level needs. BA and the workers benefit here. Conclusion Weighing the findings of this report, we can see that BA’s organizational culture and processes are influenced by its transition from a government entity to a private entity. However, BA’s new organizational culture (bas ed on competition), is expected to increase the company’s odds of being an industry leader, as it was before. The competitive organizational culture (coupled with the company’s motivational framework) is set to increase the company’s profitability. The scientific management theory seems to affirm this success because it lays a lot of emphasis on guaranteeing company success if an employee reward scheme is employed. BA’s organizational structures therefore outline the blueprint for its future success. BA can improve its future profitability if it focuses on product innovation strategies to meet varying customer group demands. Most of BA’s competitors (such as Emirates airlines) are reaping huge profits from such strategic shifts. The product innovation strategy has also worked in other industries where a company understands its different customer groups and develops new products to meet these needs. Finally, to improve the company’s profitabi lity, BA needs to adopt more hedging practices. For instance, the unstable price of crude oil may significantly affect the company’s bottom-line. Hedging such a cost is likely to improve the company’s prospects of posting good returns. Such a strategy has worked with other airline companies such as Southwest airlines. BA’s success will be guaranteed in this manner. References Cummings, T. (2008).  Organization Development Change. London, Cengage Learning. De-Witte, K. (2000).  Organizational Culture. Michigan, Psychology Press. Ganesh, G. (1999).  Privatisation Competition And Regulation In The United Kingdom:  Case Studies. London, Mittal Publications. Management Study Guide. (2008).  Importance of Leadership. Web McGowan, R. (2011).  Privatize This?: Assessing the Opportunities and Costs of  Privatization. London, ABC-CLIO. Meyer, S. (2007).  Acquisition of EasyJet Plc. by British Airways Plc. London, GRIN Verlag. Northouse, P. (2009).  Lead ership: Theory and Practice. London, SAGE. Plunkett, J. (2009). Plunkett’s Transportation, Supply Chain and Logistics Industry. Almanac 2009 (E-Book): Transportation, Supply Chain and Logistics Industry Market Research, Statistics, Trends and Leading Companies. London, Plunkett Research, Ltd. Raktabutr, T. (2007).  Analysis of Organization: British Airways. Web. Rivers, M. (2010).  British Airways Strike Can Be Averted. Web. Tharp, B. (2009).  Four Organizational Culture Types. Web. Waring, S. (1994).  Taylorism Transformed: Scientific Management Theory Since 1945. London, UNC Press Books. This report on British Airways was written and submitted by user Aria N. to help you with your own studies. You are free to use it for research and reference purposes in order to write your own paper; however, you must cite it accordingly. You can donate your paper here.