Managing Corporate Change - Report Example

Managing Corporate Change This study is centred towards analyzing organizational change in British Airways. In present scenario the company is a well-known carrier in United Kingdom. British Airways operate across large number of destinations providing superior service quality. However the organization witnessed managerial issues in terms of inappropriate operational procedure and declining brand reputation. In this study various change management tools has been utilized to highlight key objectives of organizational change. Deming’s PDCA cycle, Kotter 8 stage model and Kurt Lewin model are some change models used in this study. At the end of the study some recommendations have been given in order to improve process of corporate change in British Airways. Contents Introduction 4 Analysis 7 Diagnosis of the change 7 Vision for the change 8 Extent to which the (envisioned and actual) change was first or second order/adaptive or transformational/tectonic 9 Method(s) for implementing change 10 Image of the type of change held by the change agent(s) 11 “Culture” of the setting that is changing and the role culture played in the change 12 How the change was communicated 13 Overall Evaluation 14 Recommendations 16 References 18 Introduction The change can be defined as a mechanism which is much beyond process design, training and development, procedural writing, etc. A change should involve people so as to retain it for longer period of time. There are different forms of change occurring in an organization such as strategic change, structural change, people oriented change and process oriented change. These changes are clearly visible in real world organizations. It can be stated that change can either be perceived as negative or positive. Change at times is also regarded as a pervasive influence which can benefit an organization either positively or negatively. It is rather an element that cannot be eradicated both in context of organizational and social life. There is a continuous change witnessed by human beings of one form or another. The main area of concern is organizational change even though team or individual change tends to affect overall organizational change. This study focuses on British Airways which was supposedly an unprofitable international carrier in earlier years. There are some strategic tools utilized in order to analyze external market conditions that lead to organizational change. PEST can be applied on the organization as it highlights external forces for change. Governmental support has always been gained by airline companies in United Kingdom. This has eventually led to formation of many airline companies. However government imposed regulations tends to disrupt such operations to a great extent. Economical parameter is another aspect which facilitated British Airways to incorporate necessary changes. There were rising recession trend that made customers demand for quality services at lowest cost possible. Social factor mainly comprise of changing taste and preferences of customers. Customers eventually preferred to opt for those airlines which encompassed trained crew members. On the other hand, technological advancement appeared as a major strength for companies implementing IT infrastructure as it enhanced operational efficiency. External macro environmental factors as per PEST analysis are new technologies, changes in customer preferences and tastes, innovations made by competitors, government legislation, etc. Porter’s five forces model is generally employed for identifying internal factors. As per airline industry, competitive rivalry was intense due to emergence of new players offering similar services at low prices. Threat of new entrants was high since entry barrier was considerably low. SWOT analysis also helps to determine industry environmental elements in terms of need for new product development, growing competition, requirement of knowledge base, etc. Strengths and weakness are internal to a firm. They mainly reflect upon low performance, development of productive top management, initiating training programs, regulating staff turnover, etc. On the contrary, opportunities and threats are external trigger which initiates organizational change. They are represented through innovations in market place, new ideas being developed, changing dimension in external environment, etc. British Airways was established in 1972 and is United Kingdom’s flag carrier airline. It is the largest airline in the region in context of international destinations, international flights and fleet size. The company encompasses many smaller and larger airlines. British Airways has its main hub located in London Heathrow Airport. Organizational structure of British Airways includes a hierarchical format where Chief Executive is responsible for controlling overall operations. The structure has been further elaborated in figure 1. Figure 1: Organizational Structure of British Airways (Source: Gaskell, 2005) British Airways over the years have maintained a democratic management style. This style has enabled the firm to undertake proactive measures. The top management is responsible for final decision making but creative ideas are contributed by all team members. Aggressive organizational culture is observed in British Airways which eventually led to transformation in the firm. Employees working in the organization have recently shifted towards ‘people first’ approach so as to expand upon its customer base. There were certain challenges witnessed by British Airways in terms of retaining their market share and acquiring high profit margins. The company was lagging behind technological developments and this decreased satisfaction level of customers. IT decentralization was highly required in order to strengthen operational features. Financial loss was observed in British Airways where profit margins were declining in comparison to other players. Great financial loss enabled the company to incorporate certain structural changes. Simultaneously there was decline in market shares as customers were not satisfied with services provided by British Airways. High turnover was also observed in the company along with lack of innovative features. From personal perspective there was no such contribution made towards organizational change at British Airways. This entire study would be based on secondary sources of information such as journals, books, articles, magazines, etc. Analysis Diagnosis of the change Organizational change in British Airways has helped the company to increase its profitability and business efficiency. Its business operational process is highly influenced by various changes, implemented in the organization. British Airways is performing its business for a long time. The company has experienced different changing situations and for handling those situations efficiently British Airways has undergone through various changes. Among various changes there are some vital changes which have contributed a lot in improving its business process (Gaskell, 2005). The organization introduced one day program for all of its staffs which was focused on improving its customer service process. In this program people opinions are placed first. Employees of British Airways discussed different issues they have faced in operation customer service process of the company. Considering their views and opinions changes are implemented by company to improve its customer services. The company did a significant change in Fleet Direction program of cabin crew. Earlier, in one flight cabin crews were divided into separate teams and they performed their work in different shifts. For improving crew member efficiency the company created a new Fleet Direction program where the crew member get support British Airway (Jarvis, 2014). The firm also provides them guidance for managing different things in air and on the ground. The program was designed to make newly appointed crew members more efficient in their work. British airways implemented performance appraisal system in its management practice. This new strategies changed job type and different practices of the company. This appraisal system focuses on staff performance in details. The management of British Airways was provided training for implementing this change process. As a result of this change new organizational values are developed (Stanford, 2012). This organization has a strong dependence on information technology. Its operational activities are impacted by IT services. British Airways implemented a strategy which entirely changed its IT process. The company was decentralized and reorganized for focusing and improving its IT functions. Another important change of British Airways is it implemented a program of customer leadership. This change program was implemented to develop its brand and service by doing a detailed research of its customers. It helped the company to analyze different issues associated with customer retention. Vision for the change The main vision of British airways is to establish itself as world’s most responsible airlines company. The company made several important changes in its organization for improving its business process. Many internal and external changes are made by the company to hold its position in airlines industry. The firm wants to provide most comfortable and good quality of service to its customers. By implementing these changes British Airways focuses on its customers’ needs and desires. It can constantly upgrade its flight service as per the changing demands of customers. Changes are also implemented by this company for establishing the vision of securing profitable condition for British Airways for a long term. The company implemented changes in cabin crew program for making its flight operational process very smooth. The crew members will be capable enough to handle difficult situation efficiently. Detailed knowledge of this change program will increase their productivity. The vision of changing different management principles is to make British Airways strong enough to lead the completion of airlines industry. Management principles are made very effective by the company. It influences the employees to deliver excellent performances. In the long run it helps the organization to grow its business. Organizational change of this firm also involves up gradation of its technologies. With the help of modern and advanced technology the company will provide excellent service to its customers. It British Airways will operate its business process in a much improved way which enhance its working environment and will attract more customers. Extent to which the (envisioned and actual) change was first or second order/adaptive or transformational/tectonic There are different types of change approach which are observed within an organization. British Airways was facing major challenges since they were not able to analyze well demand of consumer market (Robbins and Judge, 2012). Airline industry was seeking growth but this carrier witnessed a downfall in its passenger base. Transformational change is a second order change that is adapted by organizations. This form of change is usually observed when companies are not able to acquire necessary elements present in the market place (Cameron and Green, 2004). British Airways had undertaken transformational change since the company was failing to sustain its competitive advantage. There is a difference between incremental and transformational change. In incremental change, companies need to increase its frequency of change in order to meet business objectives and goals. However transformational change is all about re-structuring organizational procedure. British Airways changed its human resources policies, management principles and its entire organizational structure. For implementing its transformational change successfully the organization adapted performances appraisal system of its employees. In this system employee performance is measured on different parameters and according to that appraisal is given to them. This change influenced the employees to become more focused on their jobs and improve their performance to get appraisal. Organizational structure of British Airways was decentralized. By this change the organization was divided into different departments and teams (Grugulis and Wilkinson, 2002). Another important factor of transformational change is restructuring its IT operations. Method(s) for implementing change Organizational change usually requires constant support from top management. Human resource policies have to be supportive enough to implement such change within the system. It can be stated that British Airways had incorporated proactive measures to remain competitive in the market place. There are various types of changes which are adopted by organizations. In context of British Airways, structural changes were mainly observed. Transformational responses were mainly observed throughout operational procedure (Kouzes and Posner, 2006). On the other hand, resistance also grew for such organizational change in British Airways. These resistances mainly aroused from team members which were effectively dealt through aligning them with long term objectives. Two models can be applied on British Airways in context of implementing change. Deming’s PDCA cycle was followed by the company while implementing change. The top management firstly planned for the change, ‘do’ aspect was fulfilled through setting actions, ‘check’ or evaluation of the entire procedure was conducted by selected team members and then employees were aligned with common goal to undertake actions. Kurt Lewin’s model can also be explained with respect to British Airways since it had undergone an incremental change (Palmer, Richard and Gib, 2006). The situation of the company had been was freeze to incorporate necessary changes and then operations were again started. Kotter’s 8 stage model lays the foundation on which multiple change related to operations and human resources was incorporated. According to this model a sense of urgency is established at first, followed by guiding coalition, strategic development, change vision communication, empowering action, focusing on short-term wins, promoting change and anchoring new approaches (Chesbrough, 2005). British Airways mainly implemented change in terms of brand image, cabin crew development, performance appraisal and keeping people first within the system may that be customers or employees. On basis of this model it can be denoted that company created sense of urgency through highlighting their decline in market share and profit margins. A vision was developed to become largest carrier in the region serving large base of passengers (Wren, 2005). Short-term targets were given to employees and it was evaluated on a regular basis. These short term gains were then focused on so as to implement long term changes in the operational system. Image of the type of change held by the change agent(s) Organizational change can be implemented successfully only with the support of change agents and change leaders. Agents need to possess certain skills such as ability to work independently, co-operative with other team members, high trust relationship development, respect change, multifaceted, high self-confidence and gain satisfaction on success. British Airways in their initial stage of operation was not in a stable position and it required a quick transformation. The changes introduced in the organization was firstly evaluated appropriately and then implemented (Chesbrough, 2005). Transformational leadership was observed in the organizational system of British Airways since leaders changed their behaviour or attitude according to external conditions. These leaders were highly professional and guided their team towards a common business goal. Problem solving attitude was strong enough since they were a part of rapidly changing environment. The change at British Airways can be categorized into two forms like structural change and process change. It was carried forth with the support of change leaders and consultants (Maginn, 2007). Change leaders for British Airways were mainly individuals belonging to top management. Consultants are basically those who are responsible for formulating strategy, planning change and executing change. These consultants in the chosen company were a part of middle management. They were responsible for designing strategies for organizational change (Stacey, 2007). Strategies were implemented not only in operational stage but also in human resource management. On the other hand, change participants were of two kinds such as customers and employees. Customers were a change participant in context of process change and employees played as change participants during structural change. “Culture” of the setting that is changing and the role culture played in the change The system of sharing believes, values, assumptions which helps to govern employee behaviour in an organization is call organizational culture. These shared value and believe strongly influence organizational members and their work activities. Each and every organization has its own unique culture. Culture of a company acts as a guideline to all employees of the company. Organizational culture contributes a lot in shaping internal environment of a company. British Airways has a changing corporate culture. The company has strong values. The organization puts huge effort to in keeping up its promises. British Airways has huge number of employees who came from different cultural backgrounds. The company has its offices in many countries of the world. It follows different subcultures which highlight its different customs, values, norms in its different departments and offices. Different subcultures of the company helps it to implements its organizational culture in an effective way. British Airways organizational culture helps the company to implement various changes within the company and its business process. Subculture of British Airways highlights the core value of the company. In corporate culture the employees often have to stay apart from company location for their job. These employees form a set of values and believe among themselves which help them to perform their job efficiently. British Airway has the culture of providing frequent training to its employees to enhance the cultural value of the company. By this process organizational member develops the habit of adopting various changes in the company. Burt sometimes the company faces the problem of handling its old employees who tries to resist different change. For this reason the firm has designed its culture in such a way that it can deal with employees resistance. The culture of British Airways plays a vital role in improving its educational training programs. Its culture supports employee participation in different business process. Different subcultures of this company increases involvement of all its employees in different organizational activities. For managing resistance to change British Airways has incorporated the culture which provides support to change employees mind set for accepting organizational change. How the change was communicated Communication of organizational change is an essential component since it aligns team members with a common objective. There are different communication channels utilized to communicate change to respective participants. British Airways had been transformed from an unprofitable carrier to the most profitable airlines. This transition was mainly due to changes at organizational and strategic level. Effective channels are generally required for communicating change to participants (Biech, 2007). The change agents play a significant role during change communication. In case of British Airways, change agent was the top management. This body was solely responsible for identifying the need for change and communicating it across all departments. An external analysis was initially conducted to identify probable market opportunities and threats (Kehoe, 2007). Top management of the company was actively involved in strategic change management along with necessary changes to be incorporated in human resource management. The change consultants who framed entire procedure for change communication was middle level management (Burnes, 2005). This team not only structured the change process but even contributed towards designing communication channels. Team members need to be fully convinced regarding organizational change since it demands for collaborative approach. Change can be well established only when all employees are convinced about the need for change and its long term objectives (Beer and Nohria, 2007). Middle management of British Airways had opted for written communication along with organizing a team meeting. All the change participants were a part of this official meeting and it indeed proved to be an effective communication channel. The meeting which was organized comprised of essential roles to be played by change agents as well as change participants. The employees were gives a detailed information about their new job role and responsibilities. In meetings opinions are taken from employees and that helped to make the communication process very strong and effective (OLeary, 2002). The employees produced there different views and cleared their doubts related to these changes. Overall Evaluation Various Organizational changes are implemented by the company for improving its business process. IT change of the company helped to develop its business operational process. British Airways has been able to deliver high quality of its business services by enhancing its business operations. The customers of British Airways experience a good quality of service for different organizational changes. For the advancement of IT operations the company is able to deliver excellent services to its customers at a proper time. Employees of this organization can place their views in front of the management (Jo Hatch and Schultz, 2003). The company is able to know about employees’ perspective and option to handle different issues. This change helps the company to understand employee productivity and their interest level. Effective participation of employees contributes a lot in improving business practices of the company. Earlier the company was facing problem in generating revenue. As a result British Airways had a very low profit for some period of time. Continuing the business process became very difficult for the company. So the organization implemented these changes which created a huge impact on its business process. The corporate culture of the company was changed and designed in such a way that employees’ motivation level increased a lot (Clark, Johnston and Shulver, 2000). This resulted in improvement of their productivity. The company started providing guidance to its employees for becoming more efficient in their work. This change benefited the company in such a way that it has become one of the leading airlines companies of the world. Effective training of British Airways made its newly appointed cabin crew members capable of delivering good services. Changes in various management principals have a huge contribution in making the management system of the company very strong. British Airways is able to measure the performance of its staffs in details by establishing these changes. Changes in company structure and culture have influenced British Airways to developed different organizational values which improve the morality of its employees. By decentralizing the organizational structure the firm is able to operate its business activities more smoothly. It has implemented different systematic framework for focusing on its different departments (Stuart, 2002). Recommendations British Airways had implemented certain important changes that enabled them to retain their overall market share. The changes adopted can be classified as procedural changes. A negative brand image was rapidly developing in airline industry. Passengers started to believe that British Airways did not offer appropriate services as promised. It eventually increased scope for growth for low cost carriers. This was an alarming situation for British Airways since it had to retain its market share and profit margins. The main structural change encouraged by the company was in context of considering people first in business operations. This was applied not only in case of passengers but also in relation to employees. British Airways started to consider team members as an integral part of organizational system. Their opinions or views were greatly encouraged and implemented in business process design. However some changes were essential for British Airways such as enhancing brand image. The project undertaken by the company was inclined towards bringing forth changes in management structure. British Airways usually followed a democratic management style. This style emphasized more on gaining views or opinions from team members and then implementing most productive ones. Organizational change which was communicated was aligned with this form of management style. It can be stated that this restricted team members to communicate across their views regarding the change. Some employees were not in favour of such change and this reduced its effectiveness. There was dispute within organizational system in terms of whether this change will be able to accomplish long term objectives or not. Few departments of this airline preferred existing operational procedure rather than shifting to a completely new one. This form of conflict reduced efficiency level of the project. It is recommended that the firm should have taken active measures to convince all team members. Pilot testing would have been a beneficial idea to analyze long term and short term impact of organizational change. These results if communicated to team members would make them believe the importance or need for such changes. Meeting was organized by management to highlight urgency for change and team member’s respective roles. On the contrary, it is recommended that the firm should have focused on long term or short term objectives of change. This would have eradicated barrier towards accepting change. Team members need to work in collaboration with management during change formulation and implementation. HR policies were reframed in British Airways but still there was absence of appropriate training and development program. Employees were often witnessed to remain confused regarding organizational developments taking place. This was mainly due to lack of training and development initiatives. Management should have been focused on organizing training program where team members would have been informed about necessary changes and its short term or long term implications. It also would have proved to be an efficient communication channel where employees can outline their queries associated with any form of change. References Beer, M. and Nohria, N., 2007. Breaking the code of change. UK: Harvard Business School Press. Biech, E., 2007. Thriving through change: a leader’s practical guide to change mastery. New York: American Society for Training and Development. Burnes, B., 2005. Complexity theories and organizational change. International Journal of Management Reviews, 7(2), pp.73-90. Cameron, E. and Green, M., 2004. Making sense of change management: a complete guide to the models, tools & techniques of organizational change. London: Kogan cage publisher. Chesbrough, H. W., 2005. The era of open innovation. MIT Sloan Management Review, 44(3), pp.113-156. Clark, G., Johnston, R. and Shulver, M., 2000. Exploiting the service concept for service design and development. New Service Design. 1(1). pp.71-91. Gaskell, K., 2005. British Airways. London: Crowood Press UK. Grugulis, I. and Wilkinson, A., 2002. Managing culture at British Airways: hype, hope and reality. Long Range Planning. 35(2). pp.179-194. Jarvis, P., 2014. British Airways. London: Amberley Publishing Limited. Jo Hatch, M. and Schultz, M., 2003. Bringing the corporation into corporate branding. European Journal of marketing. 37(7/8). pp.1041-1064. Kehoe, D., 2007. Leading and managing change. Australia: McGraw Hill. Kouzes, J. and Posner, B., 2006. The leadership challenge: how to keep getting extraordinary things done in organization. San Francisco: Jossey-Bass. Maginn, M., 2007. Managing in times of change. Australia: McGraw Hill. OLeary, M., 2002. The British Airways human factors reporting programme. Reliability Engineering & System Safety. 75(2). pp.245-255. Palmer, I., Richard, D., and Gib, A., 2006. Managing Organizational Change – a Multiple Perspectives Approach. New York: McGraw-Hill/Irwin. Robbins, S. P. and Judge, T. A., 2012. Organizational behaviour. Harlow: Pearson Prentice Hall. Stacey, R., 2007. Organizations as complex responsive processes of relating. Journal of Innovative Management, 10(2), pp.95-130. Stanford, N., 2012. Organization Design. New York: Routledge. Stuart, H., 2002. Employee Identification with the Corporate Identity-Issues and Implications. International Studies of Management & Organization. 32(3). pp.28-44. Wren, D. A., 2005. The evolution of management thought. New York: The Ronald Press. Read More