Staff-Management Relations in British Airways - Assignment Example

 Staff-Management Relations in British Airways Executive Summary The survival of firms in the global market is highly depended on their ability to identify appropriate solutions during periods of severe organizational crisis. In British Airways, management initiatives for increasing redundancies in order to control the firm’s operational costs have not been carefully planned. As a result, strong conflicts have been developed between management and the staff, a problem that has negatively affect the quality of the firm’s customer services. The identification of the causes of problems in staff-management relations in BA could help to the resolution of the crisis and the standardization of the firm’s performance towards its rivals. The literature that has published on this issue has helped to understand the reasons of conflicts between staff and management in BA. However, the solutions adopted for addressing the relevant problems should be appropriately aligned with the firm’s culture and resources, otherwise the firm’s position in its industry would be threatened. 1. Introduction The level of communication and cooperation in the internal organizational environment is critical for evaluating the potentials of the particular organization to survive in the global market. Most commonly, strong market pressures can negatively affect the conditions in the internal of each organization, a problem that is usually reflected in the staff – management relations. Moreover, firms that operate in highly competitive markets are most likely to suffer from internal conflicts, which are difficult to be managed. British Airways is an indicative example. Under the pressure of the global financial crisis, the firm’s managers decided to proceed to redundancies and to freeze payments (BBC News 2011). The staff did not accept these decisions; as a result strong conflicts have been developed between staff and management. The long-term conflicts in the workplace have resulted to the deterioration of the firm’s customer services and the decrease of the organizational profits. The need for measures for the standardization of the firm’s performance is emergent taking into consideration the industry’s strong competition and the severe turbulences in markets worldwide. At a first level, it seems that neither of the parties is willing to negotiate in regard to its claims. Indeed, even after reaching an agreement in May 2011 (Paterson 2011), staff and managers in BA still face problems in developing critical organizational decisions (Mail Online 2011). However, the continuation of the specific trend could destroy the firm’s name in the market. In this way, no chances would be exist for the firm to survive. In this context, the key issue of the particular case is the following one: which are the key causes of problems in the staff-management relations in BA and how could these problems be terminated ensuring the firm’s survival. 2. Staff – management relations in British Airways 2.1 Key aspects of Staff – management relations in British Airways Staff-management relations in BA are characterized by continuous conflicts between the firm’s managers and the employees. These conflicts are based on the reduction or even elimination of certain benefits but also, mainly, on the use of redundancies as a measure for reducing the firm’s operational costs. Managers in BA have tried to introduce important organizational changes, especially in regard to the level of employees’ compensation and benefits but also in regard to the work hours. Temporary employment schemes have been chosen as a solution for controlling the firm’s costs and improve its financial efficiency. This target has been, at least partially, achieved but it has led to severe conflicts between managers and staff. These conflicts have been also negatively affected the relationship between the firm and its customers (Hughes 2011). More specifically, due to the continuous strikes, the trust of customers towards the firm has been decreased, a fact that could result to non-reversible damages for the organization. Through the years, conflicts in the internal environment of the organization have become quite complex. Initially, employees across the organization have established a common plan of action, in regard to their claims. However, gradually, a differentiation has been developed between the cabin crew and the pilots as to the methods used for pressing the firm’s managers in regards to employees’ claims (Ellis 2011). In this context, pilots have chosen to negotiate with the firm’s managers differently than the members of the cabin crew. This trend is reflected in the following fact: in Easter 2011 the member of the cabin crew decided to proceed to strikes for promoting their claims (Ellis 2011). On the other hand, pilots followed a different strategy, supporting the continuation of negotiations with the management team and the avoidance of strikes. The suggestion of pilots for avoidance of the strikes has been based on the fact that in 2010, strikes have led to a loss of profits of about £ 150 million (Ellis 2011). The development of crisis in the firm’s internal environment, as explained above, has led to severe communication problems between staff and managers. In fact, the crisis is such that it is expected to last in the long term (Milmo 2010). Moreover, the involvement of the union in the negotiations has not particularly helped to improve the communication between the staff and the management team; in opposition, the union has contributed in the expansion of the conflict, as proved through the facts highlighted in the relevant reports. The use of strikes by the union as a means for pressing for employees’ rights has been proved quite ineffective. Rather, these strikes have led the firm’s staff to follow different plans of action: pilots have accepted the proposals of the firm’s management team while the members of the cabin crew, i.e. the majority of employees, have refused to agree to the suggested measures. On the other hand, all the employees who are negatively affected by the decisions of the firm’s managers are ‘customer-facing employees’ (Milmo 2010); the number of employees who are involved in such activities, i.e. in the firm’s customer – services sector, is estimated to 13,000 (Milmo 2010). This means that the limitation of employee motivation in the organization, as a result of the conflicts between staff and management, will lead to the decrease of quality of customer services, a fact that would threaten the firm’s survival in the industry. 2.2 Potential causes of problems regarding the Staff – management relations in BA Different views could be developed in regard to the problems that characterize the staff – management relations in BA, as these problems were developed above. The causes of these problems could be identified by reviewing organizational practices but also key management decisions, as related to the claims of the firm’s employees. Also, the reference to the relevant literature would be necessary in order to understand the reasons for which the staff – management relations in BA have been led to such point. In accordance with Rahim (144) conflicts are likely to appear in organizations where job stress is high. The specific view could be possibly used for explaining the lack of communication and cooperation between staff and management in BA, under the following terms: managers in BA may not be able to understand the level of stress involved in the firm’s daily operations. In this way, they have not been able to understand the needs of employees and their claims in regard to the tasks assigned to them. On the other hand, Gardner and Palmer (233) note that conflicts can appear within all organizational areas, meaning the workplace but also in regard to the relations between the organization and its customers. The above view leads to the assumption that conflicts within organization can affect all aspects of organizational life, increasing the chances for severe organizational failures. Moreover, Marchington, Wilkinson and Sargeant (418) claim that conflicts are normally expected to appear within the organizational environment due to the opposition of interests that characterize the specific field. Indeed, in all organizations employers are likely to fight for keeping the labor cost low while employees are expected to fight for protecting their rights on equal compensation. In this context, conflicts in modern organization can be regarded as a social phenomenon, not just a problem related to the economic characteristics of the industry or the firm involved. From a similar point of view, in organizations that problems between staff and employers are left unresolved for a long period of time, it is quite possible for severe conflicts to appear (Farnham 2000). In other words, when problems in the staff-management relations are not addressed on time, they are likely to lead to long-term conflicts which can severely affect the organizational performance. The decisions of employees in BA are highly influenced by Unite, the union that backs the firm’s employees (CNN 2011). In this context, the responses of the firm’s employees towards the suggestions of the firm’s management team are highly influenced by the union’s choices in regard to the particular dispute. This fact seems to be related to the current status of staff-management relations in BA. Indeed, the high intervention of the union in the resolution of conflicts between the firm’s management team and the staff has led to the increase of the conflicts between these two parties and the limitation of chances for long – term peace within the organization. Indeed, even after the agreement developed between the firm’s managers and the union, in May 2011, the conflicts between the staff and the management team have not been avoided, as reflected in a recent dispute which has threatened, once more, the firm’s current flight schedule (Mail Online 2011). In accordance with the issues discussed above, the problems regarding the staff-management relations in BA have resulted because of the following facts: traditionally, the communication between staff and management has not been crucial in the development of key organizational decisions. As a result, cooperation between these parties for addressing various organizational problems has been limited. At the same time, trust does not seem to be developed within the organization. Rather, each group of persons tends to decide in accordance with its interest; the interest of the organization, as an independent unit is often ignored. Even the decision of the firm’s management team for excessive redundancies reflects such trend. More specifically, the above strategy would, normally, expected to lead to severe resistance in the workplace, a fact that has not been take into consideration by managers in BA. 3. Conclusion Communication and cooperation in BA are quite poor. The conflicts between managers and staff in regard to redundancies and payment freeze seem to be the key reason for the appearance and the development of the crisis in the firm’s staff – management relations. The lack of effective strategic planning and the controversies in the firm’s operational strategies, which are not aligned with the organizational culture or the firm’s existing resources, are considered as factors that have negatively influenced the staff-management relations in BA. The approaches used in the literature for evaluating such crises lead to the following assumption: conflicts within organizations are common but they are not addressed using similar practices. This means that strategies, which are effective in confronting a firm’s key problem, may not be appropriate in another firm of the same industry that has to face similar issues (Aswathappa 2007). This fact has been made clear in the case of BA; the firm’s managers chose redundancies as a key strategy for supporting organizational performance. Although this strategy is usual when having to decrease a firm’s costs, it is inappropriate for BA, a firm that is mainly based on its customer services sector. A different plan of action should be chosen for achieving a balance between profits and expenses across the organization; the measures suggested below would be used for resolving the specific organizational problem. 4. Recommendations In accordance with the issues highlighted above, staff-management relations in BA are at a critical point. Despite the agreement that the two sides reached in May 2011 the development of conflicts between staff and managers has not been, yet, eliminated (see also Mail Online 2011). It is clear that the achievement of a long-term peace between the two sides, management and staff, in BA will be difficult. For this reason, a plan should be developed so that the damages on the organizational performance to be controlled. Moreover, Singh noted that ‘conflict within organization is inevitable’ (Singh 245). This means that peace in the internal organizational environment is difficult to be established, particularly in case that the opposing interests are significant. On the other hand, it is made clear that the practices adopted by firms operating in a specific industry would be valuable for controlling conflicts within organizations in the same industry (Singh 245). In the context of the above explanation, conflicts as an organizational phenomenon need to be treated as follows: they should be carefully reviewed for identifying their causes. Then, the strategies chosen by firms facing similar crises would be reviewed and appropriately adopted taking into consideration the following fact: the strategic decisions of each organization cannot be identical, meaning that the needs of each organization are likely to be differentiated, even when referring to firms operating in the same industry (Williams 2002). Rather, each firm’s existing resources, its culture and its aims in the long term should be used as the basis for addressing one or more critical organizational problems. In the case of BA, the exact form of the plan chosen for controlling conflicts in the internal organizational environment would be depended on the priorities of the firm’s managers: in the case that the resolution of conflicts between the staff and the managers would be set as a priority, then the firm’s strategy for decreasing its cost should be changed. In other words, instead of choosing redundancies or reducing the compensation/ benefits of employees, the managers should focus on the limitation of the firm’s other costs, by changing, for example, the firm’s existing suppliers (Sims 2002). On the other hand, if there were no chances for negotiations between staff and management to be terminated in the short term, then plans should be developed for keeping the quality of the firm’s customer services, in order to avoid a major damage on the organizational performance (Collins 2008). A plan of ‘virtual strike’ would be introduced (Hughes 2011). In the context of this plan, ‘employees would continue to work but they were not get paid, their salary would be donated to a charity or, else, the customers would be given the chance to travel for free’ (Hughes 2011). In any case, an agreement could be developed between the staff and the managers so that their claims to be discussed before a mediator, a governmental organization or even the courts, so that a solution that would be viable in the long term is established. Works Cited Aswathappa, K. Human Resource And Personnel Management. New Delhi: Tata McGraw-Hill Education, 2007. BBC News. “Q&A: What's the BA dispute about?” May 12, 2011. BBC News. 3 December 2011. CNN. “British Airways union backs new strike” January 21, 2011. CNN. 3 December 2011. Collins, Sandra and James, O’Rourke. Managing Conflict and Workplace Relationships. Belmont: Cengage Learning, 2008. Ellis, Mark. “British Airways cabin crew vote for fresh strikes” March 29, 2011. Daily Mirror. 3 December 2011. Gardner, Margaret and Gill, Palmer. Employment Relations. South Melbourne: Macmillan Education AU, 1997. Farnham, David. Employee relations in context. London: CIPD Publishing, 2000. Hughes, Barry. “British Airways strike action, a game theory example”. May 12, 2011. Game Theory Strategies. 3 December 2011. Mail Online. “BA halts flights amid staff dispute” December 3, 2011. Daily Mail. 3 December 2011. Marchington, Mick, Wilkinson, Adrian and Sargeant, Malcolm. People management and development: human resource management at work. London: CIPD Publishing, 2002. Milmo, Dan “British Airways dispute 'will undermine staff relations for years'” March 30, 2010. The Guardian. 3 December 2011. Paterson, Jennifer. “British Airways reaches deal in 18-month cabin crew dispute” May 13, 2011. Employee Benefits. 3 December 2011. Rahim, Afzalur. Managing conflict in organizations. New Jersey: Transaction Publishers, 2010. Sims, Ronald. Managing organizational behavior. Westport: Greenwood Publishing Group, 2002. Singh, P. Employee Relations Management. Delhi: Pearson Education India, 2011. Williams, Richard. Managing employee performance: design and implementation in organizations. Belmont: Cengage Learning, 2002. Read More