Change Management

British
Airways

Group 4
 Content
 Introduction

 Context of Change

 Cultural Change at BA

 HR Role in Change at BA

 HR Models for Change

 Change in Leadership

 Managing Resistance

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 Introduction
 British Airways, the UK's major international airline, is one of the
world's top airlines, having one of the most comprehensive
international route networks (British Airways, 2010).
 British Airways, like many other companies in the industry, has had its
share of challenges throughout the years. The collapse of the housing
market in 2007 triggered a financial catastrophe in the United States.
The global economic crisis of 2008, sometimes known as the Great
Recession, began on this date.
 The UK airline business, like any other, suffered a huge setback, with
British Airways being one of the corporations affected, and
adjustments were required to ensure the company's long-term viability.
 We examine the changes made by British Airways between 2009 and
2011, as well as the obstacles that staff and management experienced
during the transition.
 Additionally we also explore the Cultural Changes implemented at
British Airways

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 Context of Change
• An examination of British Airways company’s financial statements on the company’s website shows that it made a
profit of £875 million that was quickly followed by a loss of £401 million in 2009
• It was after the company’s midyear loss that it became apparent that change was indeed needed. Although the
shortcomings faced by the company may have been because of a mix of both internal and external factors, change
was still a necessary undertaking if the company was to survive.
• A rise in oil prices, for example, needed to be countered by cost reduction within the company’s operation, which
could only be achieved through measures such as staff retrenchment or freezing any more pay rises.
• To put it another way, the company's decision to adapt was driven by a desire to stay afloat. Since its inception in
the early twentieth century, the airline business has experienced constant expansion, which has brought with it new
obstacles. Traditional airlines, such as British Airways, have had to compete with low-cost carriers that offer cheap
tickets over time.

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 Evaluation of the nature of such
changes
• Mr. Willie Walsh, the CEO of British Airways, proposed improvements centred on cost reduction. He requested that
employees take unpaid leave and undertake unpaid work for a month. Willie Walsh went without his £61,000 monthly
pay to set a positive example for the workforce.
• The first move made by the corporation was to reduce the number of employees. According to BBC (2009), the
corporation began with a retrenchment strategy that resulted in the layoff of 4900 people. The company's reasoning for
retrenchment was that it was overstaffed and that the large number of employees did not correspond to the expenses.
• Apart from the layoffs, British Airways attempted to save money by freezing future pay raises for at least two years.
The company's Chief Executive defended the pay restrictions and redeployment plan by claiming that the company's
operations were unsustainable at the time due to a jump in global oil prices and the transatlantic recession. As a result,
he cautioned, any opposition to the planned modifications will result in even more serious repercussions, such as the
company's collapse.
• Engineers at British Airways agreed to a more efficient working system, while management agreed to lower wages. To
save even more money, the cabin crew's hours were extended, lunches were eliminated, and just breakfast remained.
Despite the fact that British Airways management was prepared for the move, the cabin staff resisted it.

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 The change management strategy
• The CEO of British Airways, Willie Walsh realized that with the economic crisis, there was a need to reduce the
business cost from top to bottom.
• For successful management of change, a leader leads in the establishment of a vision that is clear for the process of
managing change. This helps in creating a picture of the outcomes which are anticipated and where this leads the
organization
• For new realities to be adopted effectively and to ensure the organization benefits from these changes, monitoring and
evaluation is needed. This helps in the determination of how effectively the change has been managed and the benefits
that it has brought into the organization.It is also through this way that the organization realizes areas that need to be
improved or even changed.
• Willie Walsh identified the problems that British Airways was facing and identified the necessary cost cutting strategies
to assist the business in the recovery process.

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 The challenges and difficulties in
implementing such changes
• Willie Walsh earned understanding from certain employees while trying to turn around the British Airways company's
performance, but he faced resistance from others. Walsh also faced a fair deal of change implementation challenges.
• The cabin crew created one of the most significant problems, since they were opposed to cutbacks and the expansion of
working hours. The cabin personnel put up a vigorous fight, resulting in strikes.
• Willie Walsh needed to ensure that the strategies were implemented and reviewed in order for the organization's
performance to improve.
• While Willie Walsh was busy developing change initiatives, the cabin crew unified union was busy arranging a strike
as a counter-action. They announced a 12-day strike, which would begin on December 22nd and finish on January 2nd,
2010. This was going to be a Christmas-time strike that would result in even greater losses for the corporation that was
seeking to cut costs. In response to this challenge, British Airways went to court and obtained an injunction to put an
end to the strike.
• Willie Walsh adopted an autocratic management style and did not give employees an opportunity to voice their
concerns about the changes (Dyer, 2010). The majority of the disagreement and resistance encountered during the
transformation process stemmed from a lack of transparency from the corporation to the employees about the impact
of the economic downturn on their employment and compensation. As a result, the firm needed to strengthen
communication between management and employees to guarantee that their voices were heard and that the
organization was prepared to tackle any future issues.

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 The challenges and difficulties in
implementing such changes
• British Airways is has faced many operational and managerial challenges. The management has to deal with staffing
issues, strategic issues, and manage the costs effectively.
• One of the problems that the management has to deal with is staff resistance to change and strikes. Staff form a crucial
element in enhancing the success of an organization. As a result, the management has to treat employees in a fair and
motivating manner, in order to enhance performance.

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 Change Management Model
• An organization can be seen as a family, where everyone has a different role to carry or as a mechanical system with
different components, that enables performance
• British Airways stakeholders who are equitable to a family and need sound management and leadership, in order to
operate effectively. Systemic leadership style model has various components and these are structural component,
human resource component, and the political component. The structural component implies that the organization is
taken from the point of view of being a machine or factory.
• For the machine model or the family to be sustained, the right form of leadership is required. British Airways
stakeholders who are equitable to a family and need sound management and leadership, in order to operate effectively
• Systemic leadership style model has various components and these are structural component, human resource
component, and the political component. The structural component implies that the organization is taken from the point
of view of being a machine or factory.
• As a family, people carry out different things together and so does an organization. The political component is that
component that shows the jungle nature of the organization. This means that the organization strives to ensure its
adaptation of new realities. For the organization management to determine the importance of leadership in developing
organizational components, it is important to understand that these components need thoughtfulness as well as an
imagination that is beyond seeing the problems that the organization faces.
• The organization is required to be ready to take hold on new opportunities, which are presented by change
management. This means that the people need to be ready to accept change and further understand that the changes,
which are effected in the organization, are for the benefit of the entire organization and these include the individual
benefits as well
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 Change Management Model
• By taking these components together, a manager who is at the same time a leader gains a feeling for the organizational
architecture, the needs of the people, and the competitive attributes of the organizational culture. This guides the
thinking of the leaders and helps them in seeing the existent multiple realities in the organization.
• Additionally, the leaders get options and new insights that help, when they are dealing with challenges that come with
change and strategic solving of problems. To exercise leadership, this model gives the managers ability of reframing
problems; something, which is a great asset to them. To solve problems in an organization may require changes and this
implies that effective change management is required to ensure that individual as well as overall organizational needs
are met.

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Time
Line Let’s dive in
 Growth by sector

5
4.5
4.4
4.3

3.5

2.8
3
2.5
2.4

1.8
2

2
Q1 Q2 Q3 Q4

Series 1 Series 2 Series 3

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Contoso was great to work
with. Patrice was my
representative and she
anticipated my needs and
worked diligently to fix
my issue.

A satisfied customer
 Team

Ana Roman Federico Jim Larissa

Sales Manager Sales Representative Sales Representative Support Representative Support Representative

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 Timeline
Q1 Q2 Q3 Q4
Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun

Product launch Product launch Product launch Product launch

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Goals for Q1
Employee opportunities Business priorities
 End of fiscal celebration on July 15th  Increase customer satisfaction by 2%

 Employee day of learning on August 14th  Maintain growth

 Employee Yoga on September 3rd  Diversify investment in sector 2

 Seminar series begins September 10th  Initiative partnership with 3rd party
organizations

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Goals for Q2
Business opportunities Added priorities Employee priorities
 Increase customer  Decrease the number of  Interns begin
satisfaction by 2% rotations by at least 2
 Indoor rec leagues
 Maintain growth  Ensure the cost of
development stays below  Chess tournaments
budget

 Big Game watching party

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Summary
We’re delivering for our customers Our business is good
Last year we supported thousands of Profits are up in the last quarter by 3%
customers and sold 60,000 units

Our customers keep coming back We’re getting our work done
We increased customer retention by 4% We finished the consolidation project

Our team is growing We’re leaders

We welcomed 3 new team members We are top leaders in the industry across
last quarter the board

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Conclusion
Thanks to your commitment and
strong work ethic, we know next year
will be even better than the last.
We look forward to working together.

Ana
Sales@contoso.com

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