Changing the Culture at British Airways - Research Paper Example

? British Airways At the end of the 1970s and the beginning of the 1980s, British Airways found itself in a disastrous position. Then CEO, Roy Watts, wrote a desperate letter to employees of British airways stating that it will be necessary to cut any and all costs as soon as possible even to ensure that the brand remained viable through the next several months. Needless to say, more row and profitability were all but gone from the prospects that British Airways saw within the near future. However, within the course of 3 ? years, British airways was able to completely turn the tide and present a company that had a high level of morale and an unbelievable level of profitability; as compared to what it been evidenced over the past several years. In short, rather than merely changing the organization, the changes that occurred to British Airways between the years 1981 – 1983 can be referred to as a change in culture. As such, the preceding analysis will analyze the means by which the culture of British airways prior to this re-emergence was fundamentally different from the new culture that developed between the years 1981 – 1983 and has definitively succeeded in defining and differentiating British Airways as a premier global airline. In seeking to define the culture that existed prior to the turnaround which will be discussed, it is necessary to understand that low levels of customer service, bad experiences, a self-perpetuating image of low quality and poor service, bloated payrolls, and ineffective governmental regulation/management were partly to blame for many of the cultural breakdowns which ultimately led to the loss of profitability which was experienced during the 1970s. As stated by Lord King, British Airways was faced with the position of losing 250,000,000 pounds over two years; in effect, the airline was hemorrhaging money (Miller, 1995). Ultimately, part of the degeneracy of the previous culture can be blamed upon the government control and bureaucratic oversight that was exhibited since the conclusion of the Second World War. As the case study defines, to unique entities came to oversee and direct British Airways after the war; these were the BEA and the BOAC. These operated in such a way to create a de facto state run airline that was not focused upon profitability or long-term sustainability. Moreover, the split board of oversight made decision making difficult if not impossible; leading to a situation in which two distinct leadership operations controlled the development of the airline. For instance, the BEA was set up shortly after the close of the Second World War to develop the infrastructure of the European air service route. As such, it had little interest in operations control with regards to the development of profitability and sustainment for an airline carrier. Likewise, the BOAC, as the author of the case study indicates, was more interested in flying the British flag and it was in developing business and satisfying consumers. This of course ultimately led to a situation in which not only was money being perennially lost but more row was poor and the overall productivity level never exceeded 59% during the 2 decades since the conclusion of the war (Leahey & Cotter, 1990). Yes, nearly all of these cultural issues began to fade into obscurity nearly as soon as Lord King came to be appointed chairman of British Airways. Coming from a background of business entrepreneurship and business development, King approached situation from a no-nonsense point of view. Firstly, and perhaps most importantly, King identified that a culture of development must necessarily be put into place in order for British Airways to experience any type of rebirth. As a function of this, King immediately froze wages, reduced staff by 20%, closed eight engineering bases, closed 16 routes that were deemed extraneous and ultimately a profitable, and stated that the worst was not yet behind the airline (Tushman & O’Reilly, 1996). At face value, each of these decisions may be viewed by the reader as placing the final nail in the coffin of British Airways; however, rather than this being affected, King was able to increasing around drastically by focusing upon the needs and development of the remaining employees that existed and focus upon business development of the remaining routes and services that British Airways was tasked with providing its consumers. Surprisingly, the results were near immediate as BA soon posted a 45 million pound profit within a single year of these reforms. Focus then turned to increasing the morale and brand image that had suffered such a string of defeats of the past several years. Yet rather than merely seeking to maximize profitability, the new culture placed a premium on the way in which the existing employees of the firm interacted with the customers as well as one another. In such a way, the firm soon began to integrate with expensive yet effective trainings that took focus away from the individual and placed the focus upon the means by which interactions took place between groups and between people. Such a level of interest was never before illustrated in the prior culture of BA; however, within the new culture, leadership was keenly aware of the fact that no changes could be realized or not baseline of improvement created without integrating with these primary stakeholders of the company. The emphasis upon the employees soon led to a situation in which morale was greatly increased as these employees began to feel that they had a value to the firm and could made an impact with regards to the future role and direction of the business entity; previously, the employees had on the whole felt as if they were merely riding along with a doomed business that cared little for their contributions and would be highly unlikely to seek to develop their talents in any acceptable way. These training programs not only existed for management positions as a means of training those individuals under their command, it also extended to the line employees and attempted to integrate an appreciation and understanding of the existence of a new culture throughout the firm. References Leahey, J. K., & Kotter, J. P. (1990). Changing the culture at British Airways. Harvard Business School Cases, 1. Miller, A. N. (1995). British privatization: Evaluating the results. Columbia Journal of World Business, 30(4), 82-98. Tushman, M. L., & O'Reilly III, C. A. (1996). Ambidextrous organizations: Managing evolutionary and revolutionary change. California Management Review, 38(4), 8-30. Read More