British Airways - Case Study Example

Case Study Analysis – British Airways: Leadership and Change Problem definition British Airways has been a leader in the airline industry. The company which was formed on 1974 after the merger of British Overseas Airways Corporation and the British European Airways was traditionally considered as a ‘pattern’ of effective managerial structure taking into account its performance even during periods of severe financial turbulences worldwide. Despite the significant performance of the company since its first appearance in the airline industry, there are certain problems related mainly with its daily operational activities. More specifically, it seems that the poor communication among the employees of the firm has been a constraint towards the development of the firm’s profitability. This problem has led to the design and application of inappropriate rules that govern the firm’s structure and its communication with the customers. It is also because of this fact that employees do not perform in accordance with the goals set by the firm’s management and as a result the financial development of the company faces severe delays. 2. Justification for Problem Definition The poor communication among the employees in British Airways can be assumed through a series of facts related with the firm’s daily operational activities as well as the performance of its leaders since the firm’s entrance in the British market (in 1974). More specifically, immediately after the firm’s formation in 1974 from the merge of British Overseas Airways Corporation (BOAC) and the British European Airways (BEA) the employees of the two companies (who now should cooperate) were differentiated regarding their cultural aspects. In this context, the former employees of BOAC believed to belong in a ‘traditional’ and ‘high class’ firm different from the ‘low class’ BEA. On the other hand, the employees in BEA also considered employees of BOAC to be snob while they saw themselves as ‘true competitors’ in the British market. For this reason, it can be assumed that for employees in BEA the merger with BOAC was a wrong decision which could lead the new formed company, the British Airways, in severe financial losses. In accordance with the above the cultural differences among employees in British Airways were intensive since the firm’s formation and this fact has been the main reason for the lack of effective communication among employees in the firm’s particular departments – at least at the firm’s initial ‘steps’ in the British market. The above problem has been limited partially after the reduction of staff in 1981 by Lord King (the firm’s newly appointed Chairman) from 58,000 to 38,000 employees and the replacement of directors of the firm’s particular departments. At a next level, the measures taken by both Lord King and Ken Marshall (the firm’s CEO) in the years that followed, helped towards the improvement of the communication between the employees of BOAC and those of BEA. More specifically, employees were encouraged to ‘look beyond their narrow functional and cultural boundaries’ and they were also offered a series of employee development programs. Furthermore, the appointment of a strong management team and the offer of shares to employees (after the privatization of the company in 1987) should be considered as significant tools towards the improvement of the employees’ productivity and the development of the firm’s performance in the years that followed. It seems from the above that the appointment of Lord King and Colin Marshall as Chairman and CEO of the British Airways has been the main reason for the improvement of the communication among the firm’s employees, the increase of their productivity and the enhancement of the firm’s performance in the long term. It should be noticed however that despite the application of appropriate employee development plans (like the PPF and the MPF programs) the turbulences in the internal environment of BA were continued among employees in the particular firm’s departments. The provision of temporary benefits to employees (like the loyalty bonuses and the staff travel entitlements) did not have the result expected by the firm’s managers. 3. Alternative Courses of Action In order to face the problems of communication among the firm’s employees, managers in BA could proceed to the following measures: Arrangement of a series of events referring to the operational activities of BOAC and BEA before their merge. These events could include presentations, conversations and so on. In this way, employees of each company would have the chance to see their ‘competitors’ in their daily activities in their previous workplace. These events could help towards the improvement of communication between the employees of the two firms bringing them ‘closer’ in terms of understanding of their daily efforts to help the improvement of their firm’s performance. Arrangement of a series of health related initiatives where employees of both companies should participate. It would be ideal if these initiatives were related with the provision of help towards people with severe health problems. The relevant actions could have many forms, like offering blood, gathering money for the therapy of a particular person and so on. Such initiatives would give the chance to the employees’ ‘sympathy’ and ‘mercy’ to be revealed and in this way it could be expected that the problems in their relations would be resolved. Establishment of rewards for the achievement of specific targets (like the achievement of specific level of performance) in which the joint effort of employees would be imposed as a term for the provision of these awards. Arrangement of ‘contests’ among employees during which employees should be divided in teams. It should be noticed that in each team employees of both companies should participate. 4. Evaluation of Alternatives The plans proposed above for the improvement of communication among employees belonging to BOAC and BEA could be criticized as for their effectiveness if taking into account the following issues: The presentation of each of the above two firms’ activities during ‘open events’ could lead to the opposite results. Employees of each company could think their previous workplace as a best one (according to personal thoughts and because of the existed competition with the employees of the other firm) and in this way the opposition between the employees of the two firms could be increased. On the other hand, the participation in common initiatives related with the health sector could have just temporary results and after the initial ‘warmer’ communication between the employees of the two firms, gradually the ‘cold’ climate in their relations could return. Employees of both companies could show no particular interest for the achievement of rewards under the term that they have to cooperate with their ‘competitors’ In the same context, the participation of employees in common efforts (contests) could be easily proved without specific importance since employees of each firm could remain ‘loyal’ to their former ‘counterparts’ and present no particular interest for the victory in the contests set by the company 5. Conclusion and Recommendations In accordance with the above, employees of both companies could easily choose not to participate in a particular scheme that would refer to a common effort of the firm’s employees. However, among the schemes proposed above it seems that the participation in health-related initiatives could be proved the most effective tool for the improvement of communication among the firm’s employees. This is because these initiatives do no refer to the employees’ previous workplace and do not ‘oblige’ employees to proceed to specific actions. They are voluntary (they should be voluntary). In this way, employees would feel free to choose their participation or not in a joint effort and because the health related issues tend to cause the ‘mercy’ of most people, the use of these initiatives as a tool for the improvement of relations between the employees of the two firms is expected to lead to positive results. The relevant initiatives should be designed and monitored by the firm’s HR management team while the participation of the employees should be voluntary. The arrangement of an event after the end of the whole procedure as a reward for the participants would be also a valuable technique towards the development of communication among the firm’s employees. 6. Implementation of evaluation procedure The effectiveness of the measures proposed above could be evaluated using a series of methods which are presented below in accordance with their sequence: a. Production of report referring to the announcement of the relevant recommendations to the firm’s employees (date and time of announcement should be mentioned) b. Monitoring of the rate of employees’ participation in the scheme proposed c. Identification of problems appeared during the development of the scheme d. Relation of issues arisen during the scheme’s application and the reactions of employees – identification of possible external influences on the procedure e. Audit of employees’ views through relevant forms filled in and submitted by employees without giving any personal details f. Production of report including employees’ views and personal (manager’s) evaluations regarding the effectiveness of the scheme proposed g. Submission of the above report to the firm’s strategic management team The above procedure should be followed in any case that the firm’s top management team would ask to be informed on the effectiveness of the employees – related programs. It should be noticed that all the above actions should be made preferably by the firm’s HR manager who should monitor the whole procedure. The design of the above procedure however should be made by the firm’s strategic management team in order for the targets set to be valuable regarding the evaluation of the effectiveness of the firm’s strategic plans especially those related with the firm’s human resources. Read More