British Airways Story Case Study

Background

British Airways (BA), which is a multinational firm and holds a key position in the flight services industry has been thriving with the success of the organizational change process. There has been a continuous effort by BA administration to establish change within the organizational system (Cawsey et al., 2011, pp.17). The challenges are there, but BA leaders have stood firm to retreat these challenges as time has projected it to do so. This paper is going to produce a report on British Airways’ change process.

British Airways on Organizational Change

According to the theoretical perspective, a cultural change is a transformational process. It is a process, which travels along with one organizational stage of experience to the next organizational state of knowledge (Myers et al., 2012). Organizations, which have gone through experiences, are successful to apply the concept of cultural change (Hellriegel & Slocum, 2007).

Hence, time (experience) itself is a replication of cultural change within organizations and their systems. According to Burke Litwin Model (1992), change is possible when the leadership is committed and highly skilled. It is possible when leadership have will, clear vision, and method to roll the change within the organization system (Falletta, 2008).

High levels skills are required for leadership in projects, which involve revolutionary instead of evolutionary interventions to be made. No organization can accept change in a sudden manner as none of the organizational components can take sudden impositions. Hence, time and leadership are both critical factors to adjust for a change within the organizational system (Cameron, 2004).

British Airways a leading multinational firm in the flight service industry that has gone through different phases of change and experiences. The organization has shown its strong presence in the market over last five decades or more (Bowhill, 2008, pp.324). There have been certain ups and downs, which BA has faced throughout its corporate history.

Cultural change is a part of the BA’s system, which has been achieved through continuous struggles and efforts from its leadership (Bowhill, 2008). As literature projects, it was 1980 when British Airways recognized the need of change at the organizational level. It was the time when BA was facing serious business challenges and aimed to bring a complete change in order to stabilize its position in the competitive industry.

These challenges were persistent and directly related to the continuity of the company (Burke, 2010, pp. 238-240). There were many problems of rising fuel prices, high competition, low financial performance, low efficiency, and low profit projections, which actually turned down the airline’s business in the 1980s.

This demanded a cultural change within British Airways’ system as it had an organizational culture that derailed the company’s performance, and it was this culture which bottlenecked new modifications (privatization) of the system. Hence, as old trends and culture hindered the performance of British Airways, the leadership started to rethink and redo things in the same period (Burke, 2010).

This was the starting stage of the cultural change as the leadership became much concerned about the problem, and was highly engaged to revamp the BA system. From the theorists’ perspective, it has been noted that organizations start to change when there is a rethinking or reconsideration process going on.

It starts off with the leadership as it is the leadership that takes the stand and has the authority to make powerful decisions (decisions of change). The same was realized in the BA during 1980s, when the leadership was highly committed and well intended to adjust the organizational level of change – “the cultural change”.

This was the origin of cultural change within the BA system as there was a seed for change planted and actuated in the 1980s to make the organization change instinctive and progressive (Burke, 2010). According to modern contemplations, rethinking itself is a sign of change within the organization system (Kotter, 1996).

When enterprises start to realize their weaknesses and recognize their problems by themselves, it is this time that organizations begin with the change journey. This is the time when the organization expects change as it is in the profound stage of rethinking (Kotter, 1996). This rethinking stage is when the change process begins.

Applying it to British Airways’ context, the rethinking process began in 1980 when the organization was in the cover of problems, and recognized that it should dissolve its old trends that had derailed the organization’s performance. The culture of relying on the governmental financial support, the centralized decision making, the military mentalities, and the rigid culture of organizational politics introduced the first state of BA change – “the rethinking process”.

This is how the culture change propelled within BA when the leadership started to contemplate and repent on their past mistakes (Burke, 2010). It was the state of rethinking which actually extended the vision of BA leadership, and they started to put impressions on other business segments. According to Schein (2004), there are two things that are essential in the culture change process.

The first is the management of the organizational anxiety – “human behaviours” and second the assessment of organizational potential to change. In 1980, BA leaders identified the organizational potential in the human element (Burke, 2010). They recognized that if humans are changed-improved, it could precisely change the overall system of the organization.

This was firstly understood by BA leaders, and they kept the method of human behaviours management at the highest decision level. This was a part of the rethinking process as it was this process that identified people as potentials for BA leaders, which further led the management of the human activity in the organization (Burke, 2010).

They tried their best to change mentalities and perceptions of people at both internal (employees) and external (customers) levels of the organization. This was how Marshall, CEO of BA, improvised the cultural change within the organizational system. He first sorted out intact segments in the system to initiate the process as they were easy and more flexible to accept the change practice (Bowhill, 2008).

Engineering and Maintenance was the first segment which Marshall tried to adjust. It was the segment that was intact and remained highly influenced by the centralized system of leadership. Marshall thought that by changing people in the engineering wing would surely bring improvements in other sections like marketing or planning (Burke, 2010).

So, it was this human behaviours management practice, which was the second salient feature of the BA’s culture change practice during 1980s (Hellriegel & Slocum, 2007). The policy of “putting people first” was another example of efficient human resource management by British Airways. This policy was another feature that administrated employees and prepared them to display the highest level of performance (Burke, 2010).

It was the time of cultural change (1981-1990), when British Airways started to let go of the military mentality, which never wanted to see employees grow and flourish. The concepts of dedicated customer service and managing employees’ efficiently were implemented in the same period.

These steps were taken to promote the notion of “putting people first”, and also to influence human behaviours at the highest level of consideration (Cameron, 2004). It was a stage wise approach adopted by the BA administrators to bring a cultural change within the system. It took time, but things got on well when BA stood on the change practice apprehensively (Cameron, 2004).

In the striving period, BA was identified with problems in the leadership side. The military mentally in leadership and rules based on power and authority traditionalized the organization system. The employees and the managerial staff all were influenced from the centralized style of leadership in BA (Burke, 2010).

This required a cultural change as from top to bottom all organization segments were under the impression, and required a revolutionary upstanding of the enterprise. Actually, those were the customs that brought the whole system under the influence.

Before change employees had to confront rigid decisions from the leadership as the management was highly politicized, and it concentration was more on the authority, which actually divided the whole system of BA. The administration after 1980s rethinking stage signified its presence within the organization (Kotter, 1996).

It recognized that once the old trends are wiped out then the organization will inevitably stabilize its position. The leaders started to focus on the cultural change first, and brought in parallel decisions to change existing customs. The mentality of just flying off planes and treating customers as luggage also hindered the new leadership style.

It was the conservative mentality that actually stopped employees, workers, and managers to perform. This was the main hindrance that the new leadership faced in all functioning areas of British Airways (Bowhill, 2008). All areas of BA including maintenance, engineering, management, planning or operations were affected by rigid behaviours, culture, and norms imposed by previous military style of leadership.

There was less motivation among employees which was recognized by the new leadership in the declining period of BA (1979). All of these were leading issues when the second leadership took charge in 1980s (Burke, 2010). Among other humanly issues new leadership at BA also confronted coordination issues.

There were relatively weak relationships between bosses and subordinates, which affected the overall teamwork within the organization system. According to Schneider’s Study, the boss-subordinate relationship is particularly important for organizations. This relationship develops an interactive chain of command which is significantly among for building team work at the work place (Burke, 2010).

The MPF program within BA change period was one resemblance of Schneider’s study as it endorsed the coordination feature among the managerial staff (Burke, 2010). The program developed trust between managers and employees, which further on eliminated organization politics within the BA system.

It provided open chance to BA subordinates to learn from their managers and also an opportunity for managers to team up with their subordinates (Hellriegel & Slocum, 2007). The MPF program took a time to adjust, but once team leadership got established things eventually came out positive for British Airways (Hellriegel & Slocum, 2007).

In the striving change period, BA was brought with a couple of financial modifications (Burke, 2010). During the change period administrators reformed the financial and accounting system. They updated the activity by assuring annual reporting systems. This was to transform the slow reporting structure into quick annual reporting system.

The accounting managers were told to release annual financial reports, which was for the clarity of stakeholders and investors’ bench. The financial reform took periods to get transformed, and it was one of the stagnant issues which leaders addressed at the time of change (Cameron, 2004). The struggle was continuous and took a lot of time to adjust change within the BA system, in which functional reform was part of the process (Burke, 2010).

Change – A Systematic Process

According to the theorists’ perception, change is no way possible unless it emerges as a stage wise process. Organizations in the global scenario never change as quickly as they require time to adjust to the transformational process. This is a systematic process that alters all components of the organization over a long period of time.

For this reason, theorists propose a three way model of the organizational change, which includes structural change, cultural change, and then human change (Porter et al., 1975). When organizations pass on with this three stage model they have a probable chance to achieve the organizational level of change.

The first stage in this process is the structural change, which is achieved by making new quality reforms. Talking about British Airways, which was first a state owned firm failed to drive the structural change process. There was a lack of commitment, which brought a lack of deliverance in the organization system (Porter et al., 1975).

Actually, the organization was not structurally prepared to satisfy its customers and even employees of BA. Hence, the first proposed stage to launch the change is the structural change, which is done by adjusting quality reforms instead of minute rigid reforms as sought in BA before the change (Burke, 2010).

The quality reforms include powerful vision, high performance standards, deliverable constituencies, and sound communication systems, which further lead the change in other parts of the organization (Kotter, 1996). The second level of change is the cultural change. Organizations that ignore the cultural change make a big mistake as this is the kind of change required to transform the whole system.

There are different components of the organization including leadership, managers, and employees, which are part of the organizational culture (Cameron, 2004). It is culture that influences all components of the system. BA, which was at the fringe of conservativeness before 1980s, was unfortunate to revive its culture.

There were trends of high complacency, disrupted direction, low motivation, and less determination that kept the organization at low performance levels (Burke, 2010). Cultural change is the second key feature of the organizational change. No organizations can transform unless and until they allow cultural reforms and modifications. Trends formed by cultures and cultures are manipulators for the organizational functions.

To change functions it is necessary that cultures are tainted, and this is what directly fits in the case of BA – an organization which has significantly strived to change its cultural policy. The last and third most important feature of change is the ‘peoples’ change’. The main reason for 1980s BA crises was its conservative style of leadership (Hellriegel & Slocum, 2007).

There was authoritarian rule, which lagged the performance of BA. The change needed efficient and effective human resource management, which mobilizes people from top to bottom in the organization. When people are managed and well engaged, there are high chances that the organization’s performance excels. This is the most decisive area and requires a persistent consideration from the organization’s administration (Hellriegel & Slocum, 2007).

According to John Kotter (The author of the book – Leading Change), there are three main reasons of why enterprises fail to transform (Kotter, 1996). One of the reasons is the lack of vision by the leadership, which allows inspiring functions and actions necessary for change. The same was sought by the leaders at British Airways, which faced a lack of vision and determination by the leadership.

Employees’ performance was low just because they could not find any moral support or boost from the leadership. There were low opportunities to grow because the vision of leadership was limited and not open to recognize and extract employee skill and talent (Kotter, 1996). Similarly, due to lack of vision (1970) BA confronted low synergy and fewer competencies at the operational level.

John Kotter has also related lack of vision to low employee engagement. Kotter in his book described that when the leadership has a lack of skill (vision), there are more chances of high complacency, which negatively affects the organizational system (Kotter, 1996). At British Airways, it has been seen that leaders remained reactive instead of being proactive, which raised complacency among its employees in the period of 1980s.

Due to high complacency employees were not satisfied and enthusiastic to grow or perform. The carelessness in the attitude stained employees’ behaviour, their performance level, and also their commitment towards the BA system. For such reason, BA crew was just on flying airplanes on time and getting them to destinations on time and not more than that. This attitude was a major hindrance for the BA change, and also was against Kotter’s method of leading the change (Kotter, 1996).

Humans’ Management-Importance for Change

At the time of change, British Airways came up with a three way model approach. The model was based on managing human element of the organizational structure, and it was based on the philosophy of “managing people first” (MPF). Nick Georgiades (formal head of the human resources department) came up with a three leg stool approach to imply the philosophy of MPF (Burke, 2010).

He proposed that if three legs of the stool are managed then the human element becomes the source of achieving the change (Cameron, 2004). Here is the discussion of three legs stool model proposed by former BA officer Nick Georgiades:

Leg 1

The leg 1 of the approach dealt with strong communication in BA. It was the first basic component that was required in BA to adjust the organizational level of change. Georgiades proposed that when managers are without paranoia, and they have full confidence in their subordinates and teammates, change is possible.

He further recommended that removing the gap between BA managers and employees will open up ways for change. Leg 1 implemented the concept of managing people at earlier stage (Burke, 2010). Based on this model, BA projected employee-manager interaction as a necessity for integration in the organization system.

Direct employee reporting and performance based appraisals were also implemented as part of the first leg of Georgiades’s stool. This was the starting phase when the human factor started to receive high value and encouragement, and it was an early sign of change within the enterprise (Cameron, 2004).

Leg 2

Leg 2 dealt with the performance appraisal process. Nick Georgiades wanted to see his employees growing, and he identified performance appraisal to be one of the methods for increasing performance. Previously (before times of change), there were also performance appraisal programs in BA, but not aimed at raising employees motivation.

By implementing leg 2, the performance appraisal systems got modified in the BA. The appraisals were made on two bases including evaluation of results generated by managers and methods used for achieving those results (Burke, 2010).

This allowed evaluation of performance in a precise, effective and detailed manner, which eventually became a route to the BA’s change. Such modified performance appraisal systems introduced by Nick Georgiades became drivers to organizational change, and the system started to progress later on after Nick Georgiades left up (Kotter, 1996).

Leg 3

With this leg, the model of Nick Georgiades was completed which fulfilled requirements of the BA’s organizational level of change. Leg 3 was all about compensations; it dealt with rewards according to the ranks attained by managers. In the organizational practice, it has been seen that when employees get justified rewards, they are more determined and motivated towards work (Burke, 2010).

It is the organization’s successful compensation system that allows satisfactory employee rewards. This leg permitted clean rewards in BA to raise employees’ satisfaction and motivation (Kotter, 1996). The three leg stool model was completed in BA, which was implemented by Nick Georgiades to raise the performance of employees.

The model replicated the concept of managing people in BA, and also promoted consideration of the human factor at the highest organization level (Burke, 2010). The three leg stool was therefore, about human resource management, a route to embody the organizational level of change. This was a deliberate effort made by the former officer – Nick Georgiades.

The credit goes out to him as he recognized humans to be major carriers of change. He recognized that if complete change is opted then it is necessary that organizations should start with its employees. It is the same concept that Georgiades identified in the three leg stool model, which later on became a door for the organizational change in BA. Nick also clarified that if one leg of the stool gets damaged or removed then the entire stool will collapse.

Hence, it is necessary that all legs are fixed, managed and adjusted to make way for the cultural change in BA (Burke, 2010). In all of these projects, the human element played a decisive role in the BA organizational change. By managing humans and adjusting “MPF” concepts, BA was able to achieve change in a comprehensive manner (Cameron, 2004).

The same is true from the theoretical point of view as organizations cannot stand or affirm change without invoking human attributes such as “determination, passion, and motivation” (Hellriegel & Slocum, 2007). These are all human behavioural elements, which play a central role in conducting the organizational change.

The same were sought after by few gentlemen in BA, a time when BA revamped, and leaders became prominent figures to manage people of the system. The trend followed and brought concepts of managing people first, which deliberately came out positive for overall BA’s system (Cameron, 2004).

List of References

Bowhill, B 2008, Business Planning and Control: Integrating Accounting, Strategy, and People. John Wiley & Sons, San Francisco.

Burke, W 2010, Organization Change: Theory and Practice, SAGE, Singapore.

Cameron, K. 2004, A Process for Changing Organizational Culture. Research Report, Michael Driver, Ann Arbor.

Cawsey, T, Deszca, G & Ingols, C 2011, Organizational Change: An Action-Oriented Toolkit, SAGE, Singapore.

Falletta, S 2008, Organizational Diagnostic Models A Review & Synthesis, Leadersphere, Sacramento.

Hellriegel, D & Slocum, J 2007, Organizational Behaviour, Cengage Learning, Mason.

Kotter, J 1996, Leading Change, Harvard Business Press, Boston.

Myers, P, Hulks, S & Wiggins, L 2012, Organizational Change: Perspectives on Theory and Practice, Oxford University Press, Oxford.

Porter, L, Lawler, E & Hackman, J 1975, Behaviour in organizations, McGraw-Hill, New York.