This report will discuss the research detail program about the British Airways (BA) change program, the factors which has been influenced the strategic changes in BA, the detail about these strategies, the challenges which have been faced by BA management team while managing these strategic. (British Airways, 2010)
The BAs (British Airways) related with airlines work based on United Kingdom (UK), BA is the largest airline of UK in fleet size and providing its facility through international flights and international destination. To run any business the organization needs some strategy so that it can easily execute its operation. But in executing all the strategies in a proper way the organizations management team requires to focus all the factors which can be create difficulties. This report will discuss the changes which have been faced by management team of BA. (Tosti & Jackson, 2006)
As per the current market situation the organization has many opportunities and challenges for the success of its business. The environmental changes, the increase GDP growth of developing countries etc provide a significant impact on the organization. The airlines industries need to adopt many strategy to sustain them self in the current dynamic world. In 2008 due to the economic crisis or recession, the BA needs to think about its strategy. There are some internal and external factors which are influencing the strategic changes at BA. (British Airways, 2011)
There are some internal factors which influenced the strategy changes at BA. They are as follows:
Increase in living of cost: the cost of living was suddenly change because of crisis done in 2008, the employee need more money to sustain their life. The crisis impacted on the airline industry changes as well. The BA organization also request to its employee to work without basic pay for one month as the crises impacted more to the industry. Also it request to employee to for one year without pay leave. These factors impacted the current running strategy. (Buchanan & Huczynski, 2004)
Miss management: as the BA was working in a very good situation before the crisis the management come to frame. These show the miss management of the company so that it was not ready for the future crises at that time.
Strike by the crew cabin: the strike by the crew cabin is the most internal factor due to which the change management needs to acquire.
All these internal factors influenced the strategy changes on the BA. (British Airways, 2006)
Rise in the oil price: as the crises done in 2008 the price of oil increase suddenly, which impact the operating unit of the industry. The profit suddenly down from up to bottom. The rising in oil price influenced the changes in current going strategy.
Lower demand of international flights: the demand for international flight down. The passengers were not investing their saving for international tour and all. Due this reason the BA need to change their strategy as per the situation.
Fall in growth: in 2008 when crisis done the growth chart of BA down from up to bottom and the profit margin capacity of the BA suddenly decrease. Due to low profit it was not able to provide the compensation to the employs.
All these internal and external factors influenced the changes in strategy. (Crawford, 2013)
As the strategic changes require sustaining any organization growth, in 2008 after the crisis the BA need to change its strategic and implemented the same. The CEO of the British Airways Mr. Willie Walsh, asked employs and works to do work without salary for four weeks also provide an another option to take leave for one year without pay, also the CEO himself did not take monthly salary as well. The management took the decision to cut 1700 cabin crew jobs and freeze pay. The cabin crew members reacted on this matter and decision and announce a 12 day strike. But as the High court the strike was not go ahead. At this time the BA won the legal challenges, after all this matter the talks between the BA and Unite collapse and the BA CEO Mr. Willie Walsh confirm that if any worker of BA will join the strike will loss the travel perks, for further strikes the Unite announces to plan for a 20 days action. In revert of this announcement the BA also announce that it will take legal action to prevent this strike. After all this argument the conciliation service Acas asked to both the parties to talk in a manner which includes the peace. After all the conversations and argument the Units announce that the strike will take back. Due to these entire scenario the BA post an annual loss of euro 531 million. (Salama, et.al, 2014)
BA incurred loss at the time of crisis, the low profit margin, high pricing of the oil and other material, fight between the organization and the workers all these factors impacted a lot to the industry. There were a agreement between the BA and the Unite trade, which includes to return the travel perks for all the crew member who were a part of the strike. The BA engineers agreed to work more efficient manner and also accepted the reduction on the salary. To cut more operating cost the work timing of cabin crew workers extended. When a dispute occurred between any organization and its member then it also affect the brand image and the goodwill of the industry. (Bhardwaj, 2003)
Due to this entire dispute and the crisis the BA lost its profit ration as well, so the CEO of the BA realised that in crisis situation for reducing the cost from top to bottom they should changes the strategy and implemented the same. For this there should be a vision so that the organization can lead. So that through the vision a clear picture can be created. Change management strategy is very necessary to adopt when an industry go through these types of situation, where the requirement of changes are require. There is no guarantee of situation so management need to change their strategy according to the situation but for that they have to create a vision because vision is a base for the strategy changes. (Flyertalk.com, 2014)
A successful leader leads through the vision, for the success the monitoring and evaluating is necessary. By doing so the management can understand and see that how effectively the changes are occurred. The leader needs to work according to the situation. As the BA occurred the huge loss due to crisis and the crew cabin members also were doing strike then it’s very important for the management view to rework on the current strategy of the organization and use the change management strategy to implement its strategy changes. The management should understand the importance of the change management strategy and also understand the impact of the change management strategy. Through this way organization will search the area for which the management need to work to improve the area. (Mullins, 2009)
When the changes done in any organization the challenges occurred like the individuals who don’t want to adopt these strategy. In BA the CEO while working on the change management strategy faced that some individual understand the criticality of the situation but some are not responding the same. (Poole, 2011)
The challenges faced by the BA were mainly rising by the cabin crew members of the organization, as they were against the long working hours, against the retrenchment. The cabin crew also did the strike on the issue, but the CEO of BA need to make sure that new strategies must apply and implemented so that organization can improve their performance. When the CEO of BA was busy on changes in strategy at the same time the cabin crew members was busy to take a reaction through strike. They were announce to do a strike for 12 days and also to do their strike as the Christmas period and through this resulted will be the more loss to the BA. Against this strike the BA went to the court and takes an injunction to stop the strike. The leader should communicate the change strategy process to the employee so that they can create a better understanding, but BA CEO used the authoritarian system of the BA organization leadership and did not any chance to the worker to express their feelings.
The BA had many challenges which were related to staffing issue, strategise issue, cost reduction issue. The major challenge in front of BA was to stop the strike, because staffs are very critical part of the organization, so they have to treat the staff in a very motivating manner. (Wilkinson & Grugulis, 2002)
For implementing the change strategy the management needs to communicate the right matter to the employs so that management can changes its strategy in a manner which will help to the organization for its success. (The national learning consortium, 2013)
This academic report will discuss the evaluating of the implementation and resistance of the change management approach in British Airways and from the perspectives of: BA management team, BA cabin crew or the British public/Government. This report will also discuss the issues which are related to the strategies changes and change management strategy of the BA with theoretical explanation and practical events of the BA. The British Airways is one of the largest Airlines which are situated in United Kingdom (UK). The fundamental or primary work of the BA is to provide service as international flight system. In 2009-2010 the scenario suddenly changed in the BA prospectus, its staff and the stakeholder’s point of view, in 2008 due to the crisis all the industry lost their profit margin and the utilization. This report will also discuss the scenario which has been created due to crisis and also the impact of it in the BA. (Hoovers, 2006)
The issue which are related to the strategic changes are mainly organizational function, development, effectiveness, and employs. In current scenario it is very important to improve all the above to sustain in the current dynamic environment of competition. The BA is one of the largest airlines in the UK. In 2008 due to the crisis happened in the world the economic power of each country and mainly the GDP growth of the industry go down from top to bottom. The airlines industry was the major affected industry in the world, because their primary work is to take passengers from one destination to another destination. But in the crisis time the passengers not allowed them self to go anywhere, and they just wanted to save their saving. So BA is also affected due to the crisis. (DeAnne, 2013)
The issues which are related to strategic changes are as follow:
Strike by crew cabin member: due to the heavy loss the BA announces to their employee to do work for one month for without pay, and to take leave for one year without paid, also the critical decision was to cut 1700 cabin crew member from their jobs. Against this the cabin crew members announce to start strike. So this was the core and major issue for the BA to change their strategy. (Idrc.ca, 2004)
Financial loss: due to the crisis the BA suffered a very huge financial loss; the profit margin of the BA was going down. Due to financial loss the BA was not able to sustain with all its employs. The BA needs to change their strategy to sustain its profit.
Effectiveness in work: BA needs to do work effectively and provide the customer satisfaction. To work effective the BA require to change its ongoing strategy. Due to the lack of punctuality the reputation of the BA go down.
Highly cost: the cost of product which is required to sustain in the market for BA was going to be in peak. The oil price, service providing cost, employs salary, crew cabin member’s salary all the things are going from bottom to top. So to reduce the cost of all these elements the BA require changing its strategy. (Pmi, 2006)
Change management is a word which used by most of the company to change their process. While change management done, the fundamental needs of every one met. The BA changes its strategy, whenever an organization changes its strategy so the management should consult and communicate the same to its employees. BA CEO MR. Mr. Willie Walsh, changed the strategy for work more effectively and with more accuracy and efficiently. The BA need to change its strategy as due the above describe reason. The financial loss sustain by the BA impacted its brand and goodwill. Due to the changes in strategy the following changes occurred:
Without pay work: employs were ready to work without pay for one month, as the BA was running from the low financial ability and crisis. So after changing the strategy the staff ready for the without pay work.
Work with more efficiently: the staff needs to do work more efficiently; they have to provide their complete work within the provided timeline. So that the BA industry can serve best to their passengers so that by providing the services they can improve their financial profit and the brand will be sustain. (Goodstein & Burke, 1991)
Long hours shift: the BA staff needs to work for extra hour. They have to work more than their shift without any incentive. The staff needs to work extra hours to produce high work with less time and less cost.
BA is the brand name in the airline industry, the one of the largest airline which provides the fleet services and also the biggest international destination airline. The airline industry is a service providing organization. It’s main work to provide the services to its customer by reaching them to their required destination. Time to time the changes occurred in the industry, in 2008 the crisis happened. It impacted huge to the entire world but the main area which were most affected by the crisis was the airlines industry. The airlines industry was the most affected industry from all of the industry. The main reason is that the airline industry always provides the services to their costumer, and from a customer point of view in the crisis time none is going to invest the saving for tour and travel until unless it’s very important. So the crisis impacted the airlines, and BA was also a part and also the major affected airline by this crisis. The company is not able to pay the salary to its employs. They brand value go down from top to bottom, the customer not allowed them self to use the BA airline. Due to the crisis, the cost of using material and services increased. The cost of fuel increased. This impacted the BA airlines in a very wrong way. The BA organizations strategy failed at this time, none strategy works properly in this time. (Datamonitor, 2005)
At this stage the BA require to change their strategy. So with the help of change management the BA changed its strategy. When crisis occurred, the BA revenue go down which can be seen the below:
The revenue of BA was Euro 7994 million in 2009-2010, compared with previous year which was Euro 8992 million.
The loss which calculated before the deduction of tax was Euro 531 million in 2009-2010, compared with previous year which was Euro 401 million.
The operating loss of BA was Euro 231 million in 2009-2010, compared with previous year which was Euro 220 million.
The loss per share was 38.5 pence in 2009-2010, compared with previous year which was 32.6 pence. (The guardian.com, 2015)
According to the above data the picture is clear that how the crisis impacted the BA financial condition. Due to the crisis the BA management announce that the staffs needs to work without salary for one month, they can take leave for one year but without paid that means the unpaid leave and they cut the 1700 cabin crew staff from the job. Due to this announcement the cabin crew member announce that they will do a strike against this. With the help of Unite trade the cabin crew staffs announces to do strike. But the BA announces that if the staffs join the strike then the staff will have to loss the travel perk. The High court stopped the strike as this way the BA won the legal matter but after 20 days they again announce for strike, so in revert the BA also announce to take another legal action against this strike. The conciliation service Acas asked to both the parties to talk with peace and then after a discussion the strike matter has closed. BA needs to change their strategy because due to all these issues BA has lost its brand name and also face many financial problems. So BA decided to change strategy through change management. (British Airways, 2006)
The changes done in the BA, it impacted not only the BA management but also impacted the BA cabin crew members and the British public/government. The changes are required at that point of time because the BA was in a worst condition, the financial problem, brand name go down, staff problem, service problem and so on. (Seatguru.com, 2015)
BA Management (as a particular stakeholder): due to the crisis the BA management was in not a good or wealthy condition, financial losses occurred, the staffs is on strike. The entire situation was not in the favour of BA management. The BA was more concern about their business; their employee needs brand value, brand name, and the financial loss. Due to crisis the BA management was not able to provide the salary to their employee, so as per the discussion on with management the announcement done that the employee need to work without pay, they can take leave for one year but without pay. Due to the heavy loss the BA management need to cut down their staff as well, so the BA management cut its 1700 crew cabin members, due to this action the crew cabin members start strike. Now the more problem begins, as the BA, already suffer from the financial loss and other problem arises from crisis, the crew member also starts their strike. The BA management need to choose a legal way to stop the strike and keep their brand value. By the order of the High court the strike has been stopped. And later on the conciliation service Acas discuss with both the party with peacefully and closed the matter. (Aslund, 2010)
The BA management also need to change their strategy, because the current strategy did not support the situation. So the BA management need to adopt the change management strategy so by this way they can sustain in the industry and also can again make their name as a big brand. The management change their strategy. Due to the new strategy the employs now need to work more effectively with efficiency. They employs are need to do extra shift or the long hour shift to sustain their job and also to keep BA brand value in the peak. The employs are ready to do job for one month without pay. (Americanexpress.com, 2015)
So BA management took the right decision to comply with the entire situation and keep their brand value as it was earlier. The change management required to sustain all the above discuss types of problems. (Street, 2014)
As per the above whole discussion the BA management should create the strategy in which it can easily survive, or it can also create the substitute for every situation. The BA management should contain the entire situation which can be occurred anytime. The BA management should try to keep their name on high through using the change management system. Although any industry should make the policy, strategy in a way from starting point of time so that it can sustain in every kind of problem. The cabin crew members should also try to keep up with the BA management; the cabin crew need to provide help to the BA at the time of problem, the government should also try to solve this kind of problem and also try to help organizations through the finance. (BBC, 2013)
The government should also provide the every kind of help to the organization so that industry can sustain in that situation and also it can keep itself more powerful. The BA management, its crew member and the government all the factors are interrelated. So they should co relate with each other in every situation. BA industry is now again its peak time. And the brand value is again on peak as well. (Shibata, 2013)
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Datamonitor, 2005, British Airways Plc: Company Profile, https://web.ebscohost.com/ehost/pdf?vid=28&hid=20&sid=e3c8e78c-c7b3-4487-bab4-848f87d32e03%40SRCSM1 (21 December 2006)
DeAnne Aguirere, 2013, Cultures role in enabling organizational change
Flyertalk.com. 2014. British airways: Executive club. Flyer talk forums.
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Hoovers, 2006, British Airways Plc., https://www.hoovers.com/british-airways/--ID__41761--/free-co-factsheet.xhtml (11 December 2006)
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PMI, Pulse of the Profession, 2014, Enabling organizational changes through strategic initiatives.
Papadogiannis, D., 2006, British Airways Information, https://www.aircraft-photos.net/BA.aspx (20 December 2006)
Poole, R., 2011, Privatization: Providing Better Services With Lower Taxes, https://www.isil.org/resources/lit/privatization-english.html (18 December 2006)
Salama, A. & Easterby-Smith, M., 2014, Cultural Change and Managerial Careers, Personnel Review, 23 (3): 21-33.
Seatguru.com. 2015. British Airways flight information: Seat guru.
Shibata, K., 2013, Privatization of British Airways: Its Management and Politics 1982 – 1987, EUI working paper. EPU; no. 93/9, Florence, European University Institute.
Street, M., 2014, Training People to Deliver Service Excellence in British Airways, Training for Quality, 2 (3): 18-21.
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Tosti., T., D. & Jackson, F., S., 2006, Targeted leadership, https://www.vanguardc.com/articles/targetlead.pdf (17 December 2006)
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