Teesside Business School

Assignment on
(Management of Change for ‘British Airways’)

Course
(MSc in Accounting & Finance)
Module Title
(Management of Change)

Submitted to Carolyn Ward

Submitted by M MOHSIN

Introduction:
The aim writing 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:
 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 “19
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 “One 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 “The
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 - 1924 as Imperial Airways

Hubs - London Heathrow & London Gatwick

Airport

Frequent Flyer Programme - Executive Club Premier (Invitation)

Key People - Willie Walsh (CEO)

Member Lounge - Galleries First

Galleries Arrivals

Terraces Lounge

Arrivals Lounge

Concorde Room (LHR& JFK)

British Airways Group - Formed in 1972 – BEA+ BOAC

Tense Relationships - Virgin Atlantic, Formed 1984

Richard Branson

Privatization - BA Privatized in 1987

HQ - Waterside, Harmondsworth England, U.K

Website - http://www.britishairways.com

Federal or self-important Structure of British air ways

British air ways was based on centralized 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 Management Reporting to the

Operations Executive Board Chief Executive

Communications Customer Investments

Julia Simpson Silla Maizey Roger Maynard

Customer Engineering Legal and government

Silla Maizey Garry Copeland and industry affairs
Maria Da Cunha

Engineering Finance and performance Safety and security

Garry Copeland Keith Williams Tim Steeds

Flight operations People and organisational

Stephen Riley effectiveness
Tony McCarthy

Operations Sales and marketing

Andy Lord Andrew Crawley

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 Economical

 Government Legislation
Influences
 Government Ideology
 International Law
 Human Rights  Competitors
 Taxation  Suppliers
 Trades union activities  Employment rates
 Wage rates and
employee benefit
 Change from public to
private ownership

Internal Environment

Administration

Plan

Goals Administrator Subsystem

Structure

Machinery

Procedure Culture

Casual Subsystem Politics

Management

 Lifestyle change  New line of product

 Skills availability  Computerisation of
 Attitudes to work Processes
and employment  Change in
 Business ethics Technology
Socio-cultural Influences Technological Influences

Competitors of British Airways:

Changes in British Airways:
The change in the top management of BA brought a huge change in the era of 2005 till
date:

 BA won SKYTRAX and OAG airline of the year 2006 & 2007 award
 Best airline based in western Europe Awad-2007
 Best Trans- Atlantic Airline Award in 2007
By announcing changes in management of BA. Heathrow Terminal -5 was built exclusively 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.

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

Level of British Airways Change

Type of Change

Revolutionary change

Strategic Level

Dominantly Strategic

Characteristics
Change involves shifting or redefining existing 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 external change.
 Financial losses.
 Drop in profit.
 Increased Competition.
 Loss of Market Share.
 Technological Development.
 Cultural change.

Vision of change
“One 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 change
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 flexibility to stretch its 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 external 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 change

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:

 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 (part-
time, 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

 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.
 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.

Operator 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.
 Change of skill
 Change of Knowledge
 Change of attitude.

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, developing, presenting, and
evaluating specific training section. These are all employees got training 6 months about technology
of BMW , car design ,working on production line .The management aim was to sending the
employees to Germany to get these task.
  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:

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

 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
 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.
 Introduce new technology according to the market demand.

Weaknesses of Change
  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.
 Communication chains between the decision –making unit and the primary sources of
information are long.
 An Excessive workload on senior Executives.
 Top management t too distance.
 Weak power structure
 Decentralized structure
 Lack of communication between top levels to bottom level.
 Lack of sufficient training.
Recommendation

 The various ways of training programmes can contribute to a company’s success as it adopts
new technology.
 Structure of company must be decentralized that people may be communicating to each other
without difficulty.
 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.

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