Teesside Business School

Assignment on (Management of Change for µBritish Airways¶) Course (MSc in Accounting & Finance)
Module Title (Management of Change)

Submitted to Carolyn Ward Submitted by M MOHSIN

Introduction:
The ai writi the report to understand the concept of organizational change is in regard to organization-wide change, as opposed to smaller changes such as adding a new person, change of structure and management processes, innovation of new products, new techniques and mergers (cross border) or etc.., change should not be brought up for the sake of change in system it is a strategy to accomplish goals. British Airways is a well known world fourth biggest airline: There are lots of changes occur in the British Airways:
y y y y y

Downsizing in Cabin Crew Leadership change Organisational change Strategy and structure changes Radical change Although, British airways has achieved some of the goals from the change. To change the organization strategies and the affects of change and the problems of change. This assignment has been described there are influenced by the relations of major organizational variables. To overcome the most recent happenings in British Airways ³19 Mar 2010: Unite union complains airline bosses tabled worse offer, crushing optimism that three-day walkout would be suspended´ (http://www.guardian.co.uk).

The vision of British Airways is ³One Destination seeks to ensure our customers fly confident that, together, we are acting responsibly to take care of the world we live in´. Our aim is to be benefiting the customers, employees and shareholders, and to fulfil our commitments to the society.

Background of British Airways
British airways is the UK¶s largest international scheduled airline started its journey towards

responsible air travel on 25 August 1919, British Airways¶ forerunner company, Aircraft Transport and Travel Limited (AT&T), launched the world¶s first daily international scheduled air service between London and Paris. That initial proving flight, operated by a single-engine de Havilland DH4A biplane taking off from Hounslow Heath, close to its successor company's current Heathrow base, carried a single passenger and cargo that included newspapers, Devonshire cream and grouse. BA is providing many attractive offers to its customers do not matter whether it is a local flight or worldwide they providing packages including hotel reservation car rental or much more and fast cargo service all over the world with Executive club offers ³The Executive Club is British Airways' frequent flyer programme. It is designed to recognise and reward you - with the aim of making your travel even more enjoyable´.

British Airways - A Snap shot
Founded Hubs Airport Frequent Flyer Programme Key People Member Lounge - Executive Club Premier (Invitation) - Willie Walsh (CEO) - Galleries First Galleries Arrivals Terraces Lounge Arrivals Lounge Concorde Room (LHR& JFK) British Airways Group Tense Relationships - Formed in 1972 ± BEA+ BOAC - Virgin Atlantic, Formed 1984 - 1924 as Imperial Airways - London Heathrow & London Gatwick

Richard Branson Privati ation HQ Website - BA Privati ed in 1987 - Waterside, Harmondsworth England, U.K - http://www.britishairways.com

Federal or self-important Structure of British air wa s
British air ways was based on centrali ed function. The group of the chairman and board of directories are involved to make company polices or strategy. They are also involved to any change in the organisation.
 

Chief Executive Willie Walsh

Customer and Operations Executive

Management Board

Reporting to the Chief Executive

Communications Julia Simpson Customer Silla Maize

Customer Silla Maize Engineering Garr Copeland

Investments Roger Ma nard Legal and government and industry affairs Maria Da Cunha Safety and security Tim Steeds

Engineering Garr Copeland Flight operations Stephen Rile

Finance and performance Keith Williams People and organisational effectiveness Ton McCarth Sales and marketing Andrew Crawle

Operations And Lord

These are the people who involved in making in making strategies and responsible to implement the policies in the organisation and introduce the new development in aviation industry (new air busses, bringing new ideas, downsizing in a large scale etc..) in British airways in the age of competition and the challenges BA facing internal and external over the last years which is still continue and BA is still hot topic in Britain media. Group repute

Company Internal and External Challenges:
Political Influences 
Government Legislation Influences      Government Ideology International Law Human Rights Taxation Trades union activities      Competitors Suppliers Employment rates Wage rates and employee benefit Change from public to private ownership

Economical

Internal Environment Administration Plan Goals Structure Machinery Procedure Casual Subsystem Culture Politics Management Administrator Subsystem 

  

Lifestyle change Skills availability Attitudes to work and employment Business ethics 

 

New line of product Computerisation of Processes Change in Technology

Socio-cultural Influences

Technological Influences

Competitors of British Airways:

Ch ng s in British Airw ys:
The change in the top management of BA brought a huge change in the era of 2005 till
date:
y BA won SKYTRAX and OAG airline of the year 2006 & 2007 award y Best airline based in western Europe Awad-2007 y Best Trans- Atlantic Airline Award in 2007 By announcing changes in management of BA Heathrow Terminal -5 was built e clusively for use of BA at a cost of 403 Billion Pound & Officially opened by Queen Elizabeth on 14-03-2008.and open for the passengers in 27/03/2008.

Probl ms

Staffs unable to find car parks, not enough space Available, confusion, delays in getting to work, long que ues for security checks, belts carrying bags clogged, Baggage Handling system Malfunctioned.

L v l of British Airw ys Ch ng
Typ of Ch ng
¥ ¤ ¤

Revolutionary change Str t gic L v l
¥ ¤ ¤ ¤

Dominantly Strategic

¢

¡

£

Ch r ct ristics
Change involves shifting or redefining e isting parameters. Organizational structure and technology are likely to change
¨ §

Reason of Change The British Airways chairman and board of director decided to downsizing in the organization to improve the organization future and reputation against its competitors. For the last few decades the BA made remarkable place in the market but for the last few years they place in the market on 15 percent because of fiercely competing other international airlines that is why they have huge pressure to take serious change in British Airways.
The main focus to change variable are followed: 
Reduction in cabin crew  Internal and e ternal change.  Financial losses.  Drop in profit.  Increased Competition.  Loss of Market Share.  Technological Development.  Cultural change.
©

Vision of change
³One Destination´ seeks to ensure our customers fly confident that, together, we are acting responsibly to take care of the world we live in and future growth.

Mission to ch ng

In its words: British Airways is aiming to set new industry standards in customer service and innovation, deliver the best financial performance and evolve from being an airline to a world travel business with the fle ibility to stretch i ts brand in new business areas .
(http://www.britishairways.com) 

Objectives of change 

To spark new and innovative ideas in the individuals so that they are competitive enough to face the global economic and market atmosphere 

Provide good services to the passengers  

¦ ¦ 

  

To change the internal and e ternal culture of the organisation. To increase sell and introduce continental food Introduce new technology and packages according to market conditions. To equip BA individuals with a thorough understanding of managerial and technological skills in a manner that has a profound effect on their personality and character. 

To build leadership qualities in individuals so that they can make use of it efficiently and effectively in order to make every unit productive. 

To help to bring about a paradigm shift by creating a dynamic and positive learning environment and changing our corporate culture. 



To help BA to cope with knowledge-based economy. To provide BA staff with basic conceptual training and impart latest managerial concepts / skills, so as to make them "knowledge workers" and on-line to deal with the challenges of modern business. 

The core of BA training MBA programme is that the concepts and training that are imparted should be thoroughly applied and further growth and development of an individual should be related through training and development.

Factors Forcing chang

British Airways face a huge pressure over the last few years from both internal and external sources, which changes have been taken by group of chairman and Board of director which are following. On June 10, 1997, BA introduced a new dimension. Instead of standing still, a new corporate identity was launched, heralding a £6 billion improvement programme and a new strategic direction:
y y y y y

Change internal and external culture Cost cutting (downsizing) Change the Technology (new interior design, Wi-Fi, comfortable seats) Increased competition Changing market

Inner Factors Forcing Change

The internal factors that compel change in organization are recognized through a formal analysis.  

Strength
The strength in the organization is the power to overcome the difficulties which help to get boost in the competitive market and when decide on changing the focus of the company.

Weakness
An organisation weakness is a real motivation to change. Weaknesses identified internally in company¶s product or services to required immediate attention and changing especially in automobile industry. They weaknesses can be resolved by culture change and technology change. Threats Threats to an organisation, usually in the form of competitors and substitution product force a company to react.

External Forcing change
The factor external to an organisation that forces change can be identified.

Economic
Global economic crisis influence the possible reduction in the amount of business travel as companies cutting cost and the pound weaknesses against the euro, fluctuation in oil prices which causes the UK consumer spending reduced for 13 years in the age of more intense competition market and the BA cuts capacity slightly during 2008 on a recession plans by considering not to damage the long-term business. http://news.bbc.co.uk

Political
British airways need to take sufficient security measures to gain the passengers confidence and competitive advantage due to the past terrorist threats.

Social
Changes in organization but cultural level for potential opportunity for growth as elder generations have more time to spend on international travel.

Environmental/Air quality The improving air quality and noise impact on local communities around the airport are important issues (Implementation of climate change bill).

Legal The legal issues like cabin crew strikes in (December 2009), tax issues, working time (parttime, unpaid work) and their impacts on organizations.

Types of change

Engineering, design, structure, new aircraft and new technology equipment .
Change in Technology

The change in the technology require in the organization to develop both aspects of organic and mechanic conditions to achieve equally innovations and effectiveness.
Strategy and Implementation of Technology Change
y

Management of British airways before introducing new aircraft and construction of Terminal 5 they conduct a research about passengers, to meet the international standard of facilities in Terminal 5 and reliability of seats and inside atmosphere of aircrafts.

y y

Training of new staff is the key factor to achieve success Significant environment improvements by replacement of Airbuses

Planning and Standards In order to introduce new technology Policy, Planning is playing a controversial role. After identify the created Problem Objective should be clear. Planning must contain Task Planning:Premises should be suitable for fulfilling the requirement of Organisation

Layout Planning:There is a consideration of work place, equipment, workflow, staff, process as well as Health and Safety requirement in Organisation.

Op rator Suitability:Operators of British Airways should be properly trained about technology, hazards and emergence condition as well as safety equipments.
Standards for Health and Safety:To maintain the Health and Safety Standards is been the core concentration of Employee. It is recommended by Organisation that all the instruction written under Operating and maintenance instruction must fulfilled by Employee

Maintenance Standard:In reputed organisation where health and safety is concerned equipment and work place must be maintained in efficient working order.

Setting safe Procedure
The setting up safe working procedure use of chemicals, equipments and use of personal protective equipment are particularly important.

Safe Operation
Safe operation depends on instructions, information¶s, training and competence.

Supervision
Adequate supervision should be organized to make sure the safe procedure is fallowed.

Objective of the Training
Management must have a thorough working knowledge of the units in which employee has to work. They must know about their operations and about people.

Training and Development
Training is most powerful tool to achieve the organisation goals, change the organisational culture, attitude and behaviour. Training function can be divided into three different ways.
y y y

BA designs the training system to get knowledge about new technology. This system provides a model a training operation that can full fill its function under the organizational goal. The system provides a structure for identifying training needs and for creating, de veloping, presenting, and evaluating specific training section. These are all employees got training 6 months about technology 

Change of skill Change of Knowledge Change of attitude.

of BMW , car design ,working on production line .The management aim was to sending the employees to Germany to get these task.
y y y

Cost estimation Trouble shooting Train to the others.

Change in Work Force
Second big challenge for BA management to reduce the labour cost, increase work force productivity, skilled employee according to the new technology or training for permanent employee.

BA is making a lot of essential decisions to reduce labour costs and increase work force productivity. They decided to downsize the company from top level to bottom level. Pressure to cut the labour cost:

Downsi ing
Downsizing was implemented because it involves variable that are under the direct control of the organisation
y y y y

Cutting Labour cost Generating more Revenues Growing Market shares Short term profitability

Resistance against Change
British Airways had to be faced immense resistance from Union, Government department of labour and development, local and Environmental NGO Because of internal and external pressure was very high. Union wasn¶t agreed on downsizing. Union threatening for the strike. Typically there are strong resistances to change. People are afraid of the unknown. Many people think things are already just fine and don't understand the need for change. Many are naturally distrustful about change, particularly from reading about the idea of change. Many suspicions there are effective means to accomplish major organizational change. Often there are disagreeing goals in the organization, to increase resources to achieve the change yet concurrently cut costs to remain possible. Organization change often goes against the very values held valued by members in the organization; the change may go against how members believe things should be done. That's why much of organizational-change literature discusses

needed changes in the culture of the organization, including changes in member¶s values and beliefs and in the way they pass these values and beliefs.

Control the Resistance.
Every company has human problems to overcome. In the eye of management MBO (Management by Objective) is power fool tool to control the human resistance.

Human Resource Management Strategy
Human Resource Management underlying issue is how to ultimately reduce jobs and labour cost without sacrificing quality, service, and market share. According to the study by Cameron 1991 identified three downsizing strategies that are profoundly utilized in an organization.

Workforce Reduction
1. Reduced employment through early retirement ,buyout or other incentive 2. Reduce employment through discharge 3. Reduce the employment through the transfer to other business units in British Airways group

Organisation Redesign
1. Eliminated unnecessary job 2. Eliminated management levels 3. Eliminated functions or department. 4. Reanalyzed and redesigned jobs or task

Systematic Change

1.

Implemented changes in employee performance appraisal system

2. Implemented changes in reward and recognition system

Implementation
Human Resource Management reduces the employment through retirement by incentive. Company gave the options to the employees to the all level of hierarchy. 

Golden Handshakes.  Transfer to other business unit in lower position.  Introduce 8 points appraisal system to qualifying for job.

Eight Points Appraisal System to Qualifying for Job
1. Excellent performance record 2. Your communication skills 3. Your interpersonal skills 4. Personality
5. Your technical skills and ability 6. Significant work experiences and assignments obtained both inside and outside the organization. 7. Your ability to stay withstand stress and pressure 8. Your ability to make difficult organizational decision

Strengthens and Weaknesses of the Change.
There are many strengthens and weaknesses of the change in British Airways.

Strengthens of Change
y y y y

There are clear and set objectives before change Planning and involvement was focused on specific issues and problem. Marketing survey and collect the data before introducing new technology. Downsizing strategy was excellent because every employee get incentive in the shape of Golden handshakes and transfer in other units of group.

y

Introduce new technology according to the market demand.

Weaknesses of Change
y

To identify clearly the causes and consequences of the problems that were surfacing within the organisation, such as lack of clear policy direction in some areas, and lack of cross functional communication.

y

Communication chains between the decision ±making unit and the primary sources of information are long.

y y

An Excessive workload on senior Executives. Top management t too distance.

y y y y

Weak power structure Decentralized structure Lack of communication between top levels to bottom level. Lack of sufficient training.

Recommendation
y

The various ways of training programmes can contribute to a company¶s success as it adopts new technology.

y

Structure of company must be decentralized that people may be communicating to each other without difficulty.

y y y

Powers must be distributed in hierarchy level must be break bureaucratic system. The highly experienced consultant could be used in organization change. Get as much feedback as practical from employees, including what they think are the problems and what should be done to resolve them. If possible, work with a team of employees to manage the change.

Conclusion:In a nut shell I have explore on my assignment that how Organisation can be made effective changes in supporting local communities in the countries where British Airways Operate effectively. The changes are quiet effective not only changes the technology but also in raising the Performance of Airline. The effects of the changes can go considerably beyond the
improvement of new market culture; these changes can be used to highlight areas in which marketing strategy need reappraising, particularly in design range and distribution channels.

The Local Communities in the countries in which British Airways operate supporting more than 100 community and conservation focussed charities as well as many smaller programmes working both in UK and in the countries we fly to. Literature is reviewed on the theory of CRM (customer relationship management), the role of CRM in gaining competitive advantage, CRM strategic capability, etc. Critical incident technique (CIT) is used as a core research methodology; the methods of the BA case study include primary research based on the data obtained from questionnaires. Conclusions are made about the value of the extrinsic and intrinsic aspects of CRM in the strategy of British Airways towards a sustainable competitive advantage within the airline industry.

References:³Formation and Inauguration of Civil Aviation Authority and British Airways Board´.Keesing¶s. 1972-05-01. "BA and Iberia agree merger deal". BBC News. 2009-11-12. http://news.bbc.co.uk/1/hi/business/8356780.stm. Retrieved 2010-01-02 ^ "Britain is merging BOAC and BEA as giant airline". New York Times. 1973-01-24. http://select.nytimes.com/gst/abstract.html?res=F00D1EFA3E551A7493C6AB178AD85F47 8785F9 ^ "Concorde starts regular service". Eugene Register-Guard. 1976-01-26. http://news.google.com/newspapers?id=inkRAAAAIBAJ&sjid=PeADAAAAIBAJ&pg=547 9,5052446&dq=concorde. ^ "Concorde goes home in high-flying triumph". Sydney Morning Herald. 1976-01-23 1. "British Airways cuts jobs". USA Today. 2001-09-20. http://www.usatoday.com/money/biztravel/2001-09-20-ba-layoffs.htm. ^ "British Airways cuts 7,000 jobs and reduces flights". Airline Industry Information. 200109-20. http://www.accessmylibrary.com/coms2/summary_0286-6769254_ITM. FindArticles.com, "British Airways to sell its Qantas stake" Airline Industry Information. 2004-09-08. Retrieved 2009-05-25. Jemima Bokaie (9 January 2008). "BA brands new airline "Open Skies"". Brand Republic. http://www.brandrepublic.com/Discipline/Advertising/News/775685/BA-brands-new-airlineOpenSkies/. Brothers, Caroline (2008-07-30). "British Airways in Merger Talks". The New York Times. http://www.nytimes.com/2008/07/30/business/worldbusiness/30air.html?ref=todayspaper. Retrieved 2008-07-30. "British Airways has announced an agreement with trade unions concerning its pension scheme.". New Statesman. 16 March 2010. http://www.newstatesman.com/economy/2010/03/pension-british-unions. Retrieved 17 March 2010.

"About British Airways." British Airways. Retrieved on 27 February 2010 McKellar, Susie and Penny Sparke. "The Contemporary Office." Interior Design and Identity. Manchester University Press, 2004. 200. Retrieved from Google Books on 12 February 2010. ISBN 0719067294, 9780719067297. Willcock, John. "People and Business: Toy story is just a fable." The Independent. Wednesday 7 October 1998. Retrieved on 27 February 2010. "This is a lot more complimentary than the nickname for BA's old head office, Speedbird House, universally known as "Birdseed House". How cheap." BA Shares British Airways shareholder 'Reports & Accounts' Archive

Sign up to vote on this title
UsefulNot useful