The Success of British Airways - Case Study Example

Executive Summary: The case analyses the organisational culture of British Airways. While analysing the current organisational structure the analysisalso sheds light on the past cultures which were prevalent in the organisation. By contrasting the two cultures the analysis tries to discern the variables which have led to the current success of the organisation. The case analysis also discusses the events undertaken by the organisation to strengthen its new culture and recommends an event which can unify the workforce. History of British Airways: The aircraft carrier has a long his of mergers and collaborations between different airline companies. These mergers and collaborations are cone of the reasons why British airways has reached the size it has today. After AT&T had laid the foundation for air traveling in August 25, 1919 there was no going back for this industry. The initial flight, which was from London to Paris, was on a single-engine de Havilland DH4A biplane. A major hallmark event in this industry took place on 1924 when a merger between four small airlines namely Instone, Handley Page, The Daimler Airway and British Marine Air Navigation Company took place; the merged company was to be known as the Imperial Airways (Mills, 1995). This was the first of the many mergers which were to happen in this industry with the progression of time. The momentum to the activity of merging received further boost in the mid 1930s, when number of small United Kingdom small air transport companies merged to form a privately owned British Airways Limited. This airline competed with Imperial Airways on European routes. In 1939, both these airlines were nationalised by the British government and merged into British Overseas Airways Corporation (BOAC). This newly merged and nationalised airline continued to operate long haul services, with the exception of routes to South America, where British South American Airways (BSAA) used to operate. However, ultimately BSAA was merged with BOAC in 1949. British European Airways (BEA) a new airline was formed to catering to the continental European and domestic flyers (Morrell, 2012). In the 1950s the air industry underwent a transition to the passenger jet era, this transition was led by BOAC. The first Comet 1 flew to Johannesburg in 1952, drastically reducing the flight time. When Air Transport Licensing Board was established in 1960s, airlines started to offer scheduled services. This was a major change in the industry, which led several small domestic airliners to merge with BEA (Mills, 1995). Another major merger took place in 1970, which result in the formation of today’s British Airway. This merger was between Caledonian Airways and British United Airways, which was followed by a merging of the operations of BOAC and BEA. The British Airways board was formed in 1974; this board was to oversee the operations of these two airlines which would work together under the corporate brand name of British Airways (Moyer, 1999). Introduction to Organisational Culture: The organisational culture is an amalgamation of its beliefs, vales and norms. It is a code of conduct which is shared by all employees of the organisations. The roots of the organisational culture stem from the vision of its owners, which later go on to evolve as the organisation’s history and traditions starts to germinate (Kasper, 2002). The organisational culture is a reflection of how things are done in an organisation (Jenkins, & McDonald, 1997). It is of utmost importance that the top management nurture a healthy organisational culture because it is this culture which will enable them to implement their mission statement and the resulting strategies. It is the job of the top management to effectively communicate the organisation’s shared vision to all the employees. There is another aspect from which culture can be classified as important, since culture shape the leadership style and management decision making therefore it makes it even more important to nurture a positive and forward looking culture. McKinsey’s 7S model describes the component of cultures as: Staff, Skills, Style, Shared Values, Systems, Structure and Strategy. In this framework strategy plays the role of keeping all the other components together. People in this case the top management; in order to build a strong culture must pursue an effective strategy. This strategy must involve the right selection of staff (service oriented), giving them appropriate training and develop the right skills (emotional labor), manage them according to the situation (trust, empowerment, delegation), select a set of shared values (customer orientation), have in place appropriate working system (high performance work system), adopt a relevant structure (formal, reduced chain of command). When an organisation effectively develops these components, only then can it harness the benefits of a strong organisational culture (Höpfl, 1994). It is the culture which in real sets two organisations apart. Customers when come in contact with the company, they actually are interacting with the organisation’s culture. In a marketplace product innovations and differentiations are never long last, but one thing that last forever is an organisation’s culture (Schultz, & Hatch, 1996). This culture neither can be replicated nor replaced. In an airline business, only that airline will be able to beat the competition which is successful in developing a superior service culture. The immediate projection of an airline’s organisational culture is the manner in which its cabin crew interact with the passengers (Grugulis, Wilkinson, 2002). Organisation Structure The organisational structure of a company is a reflection of the organisation’s culture, its operating environment, and the style of management used by its upper management. The organisational structure of British Airways has been architecture in a way which helps it to meet its operational objectives. In light of this need of the airline, it has a highly formal structure with clear rules and procedures. These rules and procedures are designed to fit the organisation’s scale of operations and its size. However, the airline has undergone a major change in the recent years, whereby it reduced its many management levels from its organisational hierarchy. This initiative decreased the gap between the Chief Executive of the airline and its front line staff. The current organisational setup has small ad hoc group or special task teams which work alongside the formal structure. These special task teams have the autonomy to cut across different functions of the organisation in order to fulfil their objectives. Organisational Culture of British Airways: In British Airways, the structure of the organisation emphasises strict adherence to the role which the organisation expects its employees to play. There are strict functional demarcations in the organisation. As present in theory, other than an overall organisational culture, there are also subsets of this culture prevalent in independent department of the organisations; it is of utmost importance for these sub-cultures to be in harmony with the organisational culture (Hatch, & Schultz, 2003). Similarly, British Airways has two main cultures, one on the ground and one in the aircraft. The ground culture is characterised by competitiveness, racing with the environmental variables, and strong focus on victory. Whereas, the culture in the aircraft can be described as: service-oriented, customer centred, and highly cooperative. The epicentre of the organisational culture is the middle management, which holds the key to effective implementation of organisational strategies and shaping the organisational culture. However, this level of management is bound by functional boundaries, and the most important of these functions are finance and takeover. The success of British Airways can be attributed to its customer-oriented culture, with a strong emphasis on a good on flight interaction between airline crew and passengers. In light of this on flight crew has been given discretionary powers to take personal initiative to please the customers and make their own plane experience a memorable one (Mills, 1998). The Period from 1980 to 1990 With the passage of time since its inception, the airliner became bureaucratic, inefficient and unproductive in its operations. Augmenting these problems were high fuel prices, over staffing, and an aging fleet. In this backdrop, the senior management in 1980s decided that a major over haul in the organisation is required, if they were to prevent the organisation from getting bankrupt (Barrows, & Neely, 2011). The CEO and the management decided to take employees on board this mammoth task. Thus, they told the employees about losses which the airline way incurring, and the bad perception the market had about the airline. The management convinced the workforce to adopt a customer oriented approach and understand the importance of changing the negative perception of the market regarding the airline. The fundamental reason behind the airlines malfunction was the disharmony that existed between the organisational cultures of BEA and BOAC, which merged together to form British Airways. This improperly executed merger between two previously autonomous entities did not allowed British Airways to reap the true benefits of merger. Furthermore, the workforce which mostly consisted of war soldiers, who were least concerned about operational excellence. There primary focus was to get their job done, which in their opinion was to send the plane up in the air. Governmental subsidies along with the profit earned by the company in 1970s allowed it the luxury to ignore inefficiencies. The airline had an internal orientation rather than external. As a result management kept on ignoring the changes in the external environment; most of their efforts were expanded on resolving internal disputes (Mills, 1994). To turn this dreadful condition around, the management initiated a series of strategies, which are as follow: Downsizing the workforce from 52,000 to 43,000 (British Airways) Initiate image revival campaigns by the name of “Manhattan Landing” and “The world’s favourite airline”. New talent was inducted in the work force to seek fresh perspective. The CEO started to spend more time with the staff, communicating to them his vision for the airline. The airline started to provide education and training programs to its employees. Some of them are “Putting People First” and “Managing People First”. The focus of these programs was to make employees more sensitive to customers’ needs. The changes made by the airline were communicated to the public. Most visible through the new attire of the air fleet. Today’s British Airways: The traditional style of British Airways was characterised by: bureaucracy, high segmentation, wide distance between staff and mangers, employees receiving low feedback, callous attitude towards employees and customers, and complex organisational structure. All this became history, when the management implemented the changes it thought were essential for the airline’s survival. The new environment had coaching, training, and support for employees. The manager started to delegate responsibilities to employees. They started taking special attention towards employees’ development. They even took employees opinion in the vision development process. A support system was developed in the organisation which showed the way the employees can seek help. Employees were told the importance of their job and how their work contributed to the success of the organisation. Employees were given discretionary powers to circumvent unprecedented circumstances. All efforts were employed to build strong relationships with customers and other stakeholder. Middle managers were give special powers which would support them in their work. Today’s organisational culture places huge emphasis on diversity. Management in the organisation is well aware of the potential benefits of diversity. Therefore they are encourage and nurturing all those endeavours which are aimed at creating diversity, coupled with harmony (Bamber, 2012). Promoting the Organisational Culture: In order to build a culture which has diversity at its epicentre, the company is hold events like group discussion where employees from diverse background talk on hot topics like religion, disability, sexual orientation, flexible working and etch. Not only does this drill help to create harmony between employees from different backgrounds but also it makes employees sensitive to the needs of diverse customers. Another event that has the potential to build harmony amongst employees and bring them under a single vision can be the annual employee congregation in the heritage centre. This event should be done on an annual basis in this centre. Holding this event in this location will communicate to the employees the rich heritage of the organisation of which they are lucky to be part off. Conclusion British Airways has a sound organisational culture, which is based on a long heritage of traditions. The new culture has all the components in it which are required to build a world class airline. List of References Bamber, G 2012, Up in the air: how airlines can improve performance by engaging their employees, Cornell University Press: Ithaca. Barrows, B & Neely, A 2011, Managing Performance in Turbulent Times: Analytics and Insight, John Wiley & Sons Inc: New Jersey. British Airways, Explore our past. Available at [Accessed 25 April, 2012] Grugulis, I, Wilkinson, A 2002, ‘Managing Culture at British Airways: Hype, Hope and Reality’, Long Range Planning, vol. 35, no: 2, pp. 179–194. Hatch, M & Schultz, M 2003, ‘Bringing the corporation into corporate branding’, European Journal of Marketing, Vol. 37, no: 7/8, pp.1041 – 1064. Höpfl, H 1994, ‘Safety Culture, Corporate Culture: Organizational Transformation and the Commitment to Safety, Disaster Prevention and Management, Vol. 3, no: 3, pp.49 – 58. Jenkins, M, & McDonald, M 1997, ‘Market segmentation: organizational archetypes and research agendas, European Journal of Marketing, Vol. 31, no: 1, pp.17 – 32. Kasper, H 2002, ‘Culture and leadership in market-oriented service organisations’, European Journal of Marketing, Vol. 36, no: 9/10, pp.1047 – 1057. Mills, A 1994, ‘The Gendering of Organizational Culture: Social and Organizational Discourses in the Making of British Airways’, Conference Proceedings, Vol. 15, No: 11. Mills, A 1995, ‘Managing Subjectivity, Silencing Diversity: Organizational Imagery in the Airline Industry. The Case of British Airways’, Organization, vol. 2, pp. 2243-269. Mills, A 1998, ‘Cockpits, Hangars, Boys and Galleys: Corporate Masculinities and the Development of British Airways’, Gender, Work & Organization, vol. 5, no: 3, pp. 172–188. Morrell, P 2012, Airline finance, Ashgate Publishing Ltd.: London. Moyer, K 1999, ‘Scenario planning at British Airways—A case study’, Long Range Planning, vol. 29, no:2, pp. 172- 181. Schultz, M & Hatch, M 1996, ‘Living with Multiple Paradigms: The Case of Paradigm Interplay in Organizational Culture Studies’, The Academy of Management Review, Vol. 21, No: 2, pp. 529-557. Read More