Introduction & Background
In business organizations, there are many aspects that come onto repetitive considerations; culture is one of those considerations. According to Justin Paul (The Author of the International Business), culture is a manifestation of human custom, values and attributes (Paul, 2011, p. 149).
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Such customs and values represent a particular system, group, society, or an organization. They are a sort of identity for such systems group and society. As per Hofstede’s assessment, culture is collective programming of minds. It is programming that distinguishes one group or system from another group or system (Paul, 2011).
According to the modern literature, culture is a source of practice for international business organizations (Kinicki & Kreitner, 1999, p. 42). Culture has influences for strategies, decisions, plans and actions which take place inside the organization system. Similarly, the literature also highlights that culture is a part of the organization system. It has influence for all components of the system, whether its leadership, management or administration all comes under the affect of culture and its changing dimensions (Hauser, 1999).
In theorists’ perspective, there are different levels of cultural diffusion. Likewise, culture diffuses through National level-outside (macro level) and through organizational level-inside (micro level), depending upon the nature and scope of the business in which it corresponds (NDU, 2013). The wider scope of a business the broader are dimensions of a culture to affect. Similarly, the national culture shapes up through societal norms while organizational culture gets formed through human behaviors, practices and attributes. It includes the practices of professionals and practices of the corporate, which eventually shapes up the organizational culture and system (Kinicki & Kreitner, 1999).
For international business organizations, timely assessment and evaluation of the culture is vital (NDU, 2013). Organizations cannot survive or sustain if they do not have a close eye on their cultures. According to the modern literature, cross cultural management is precisely crucial for businesses, especially multinational corporations which comprise a cross-cultural system of human behaviors and attributes (Kinicki & Kreitner, 1999). To bring the competitive strength and effectiveness, it is necessary that organizations change, reform and improve their business cultures. It has been a frequent practice, a popular activity accompanied by all international corporations (Paul, 2011).
In view of the discussion, there are two of the leading companies which are going to be analyzed in this study, Virgin Atlantic Airways and British Airways. Here is the assessment for both organizations in international business perspective:
Company Background and Structure
Virgin Atlantic Airways
Virgin Atlantic Airways is one of the renowned UK’s airline firms established in 1984 by the famous entrepreneur “Richard Branson”. The company owns its place in the international airline market. The best services include mixed fleets based on Airbuses and Boeing wide-bodied airplanes, which are trademarks of the company (Virgin Atlantic, 2013).
Virgin Atlantic has established its name due to innovation and creativeness which are attributes innate by Richard Branson to the company system and culture. Meanwhile, with a starting off name the company determined its first place and still today believes in the philosophy of innovation and advancement which seems to be the company’s real strengths and potencies (Virgin Atlantic, 2013).
British Airways is another trademark company in the airline sector. The company got established in 1974 and since then it came out as a flag carrying European organization for airline fleet services. Meanwhile, the organization is the member of the European Royal Family holding the name and recognition of the European monarchs (Hoovers, 2013).
The company provides flight and courier services to more than 70 countries across the world. The fleet services are based on Airbus and Boeings which travels to more than 150 destinations of the world (Hoovers, 2013). BA’s flight central hubs are London’s Heathrow, Gatwick and London airports which take flight exchanges for national and international regions.
Apart from all, British Airways is the member of the American Airlines and One World Alliance, which shows the company’s direct international recognition and status. There is a strong affiliation with governmental authorities, which makes British Airways a public service organization (Hoovers, 2013).
Leadership & Culture
As the above discussion highlights that culture is influential for all segments of an organization. Whether its leadership, management or administration, all falls under the influence of culture and its dimensions. Some organizations adopt a culture from their leaders while some take it through learning and experience (Virgin Atlantic, 2012). Virgin Airways is an organization which took inspirations and culture from the leadership.
The leadership of “Richard Branson”, who was a courageous, a daunting and an imaginative man brought the brightest culture of innovation to the organization system. With a true entrepreneurial spirit Richard Branson innate the culture of advancement and technology. This was to bring modification and creativeness in the organization system and in the thoughts and actions of the people associated to the organization (McClendon, 2009).
On the other hand, British Airways has a much diversified business system. The diversity is in terms of employees’ experiences and in terms of operations and services. In recent times, the leadership has a wider vision as British Airways is all about bringing people together (British Airways, 2012).
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Giving full opportunities to the employees has become a tradition in British Airways system. 36 million people, who travel all the way with BA, are given chances of self development and training. They are provided equal opportunities to make the organization system prolong and effective (British Airways, 2012).
Issues prevailing within Organization System
In view of the Virgin Airways system, there have been several issues, which the organization has faced. The issues were at the managerial side just as the young team management or cross cultural development and at the leadership side just as the establishment of Branson’s innovative philosophy (Virgin Atlantic, 2012).
Bringing a technological fleet service with a competitive low price was another significant challenge. Price competition was a core challenge because the fleet services derived from Branson’s rich philosophy were respectively high in price than other rivalries in the market “British Airways” (Burke, 2010).
British Airways has been a direct international competitor of VA. Being a public service organization, BA has competed on price grounds as it offered low price fleet services with respect to VA. VA provided quality fleet in high price while BA provided mid level fleet in respective low price. In this way, price was the greatest challenge for VA especially in the international market, which already contains several other price competitors like Singapore Airlines or Arabian Airlines (Virgin Atlantic, 2012).
These were the macro level challenges (cultural, environmental, political and economical), which VA had to manage to build its place in the international business market. This required an assessment of the VA’s internal culture which is based on two micro level practices, professional and corporate (Virgin Atlantic, 2012).
Just like VA, British Airways has also been in the siege of problems. There have been problems associated to culture and system of the organization (Hauser, 1999). Due to cultural instability, the organization has been challenged in the international business operation. Managing business in cross cultural way and in the diversified international market all became difficult for organization and its administration (Burke, 2010).
Since from the origin, BA has remained in the transformation phase, the transformation of culture and the system. The main problem was in the culture which affected all segments of BA.
Some leaders at BA appreciated the conventional culture which was close to governmental rules and interferences while some admired the culture of privatization which contained the elements of advancement, technology and innovation. It was due to governmental interference the organization has remained stagnant in growth and technology (Hoovers, 2013).
Managing Conflicts & Issues
According to Richard Branson, “I’m often asked what it is that makes Virgin different. The simple answer is – our people. If it weren’t for a bunch of well trained, motivated and, above all, happy people doing their bit, we’d have never launched a record label, never mind a fleet of 747s” (Virgin Atlantic, 2012). From this statement, it can be said that behind VA’s success, there are two strong forces; one leadership with the brightest vision and culture, and second human resource with the capability to adopt that culture (Virgin Atlantic, 2012).
For managing issues, the leadership precisely focused on personnel management and engagement. Managing individuals first has brought a way for the organization to cross cultural integration (Hall, 2007, pp. 120). Developing wider communication networks and international communication programs are some of the strategies laid by the VA’s administration.
These are to bring strong and effective cross cultural system based on personnel management rules and principles. Hence, it can be said that VA evolved through people oriented culture. Individuals were considered as the force and strengths of the organization to find its way in the international business market (Aluya, 2009, pp. 27).
Apart from all, the organization has brought action plans for international business expansion. Over taking companies running out of the businesses has been part of the VA’s action strategy (Aluya, 2009). The company acquired failed brands and promoted them by its stable name and logo.
This was a risk taking strategy but eventually came out well for Virtual Airways international business. The Virgin group expanded in the form of Virgin Blue (The Australian affiliation of VA). It expanded to US, New Zealand, Thailand, and South Africa, which brought intensive prospects for the company in the next few years of time.
Similarly, with on-board innovation VA worked out on design and service (Aluya, 2009). Providing exceptional flying experience to the customer and taking alternates of the biofuel have been strategies of VA to determine its first place in the international airline market. This was a technological move assessed by the company’s leaders to make VA an international business organization (Walenius, 2010).
Culture, mainly acquired from the macro side (National level), and micro side (internal trends) has been the problem for BA. Since from the last decade, the company has shown good progress, and this is because the culture has been changed and improved. Thanks to Long King and Sir Collin Marshall who worked out aggressively to change the culture of BA. The improvement in service is a result of such cultural change which was engineered by both of revered former leaders (Mayle, 2006).
After the company recognized its problem “culture”, it started to change it by personnel management and team leadership. Under the leadership of Sir Collin Marshal, BA acquired revolutionary approach. It was for changing the culture by using human resource as a force of change (Mayle, 2006). In Collin’s period, the company launched the programme of “MFI (Managing People First)”, which was to assert individuals as a source of cultural change.
This was to bring an intrinsic change that is a long term, sustainable and effective for BA’s international business operation. Today, British Airways has acquired a dominant position in the international market, and the secret behind it is not technology nor advancement but in-fact an intrinsic cultural change initially proposed and suggested by Sir Collin and Long King (Mayle, 2006, p. 177).
Apart from all, Nick Georgiades (former head of the human resources BA) introduced a three leg stool approach. The approach was there to establish MFI programme. The first leg of the stool was about communication, coordination and team building; the second on performance appraisal and the third on rewarding employees. After completing the stool and establishing it at the organizational level, the organization was transformed with new principles and trends to achieve progress (Burke, 2010).
This improved segmental performance including performance of engineering, operation and management which overall boosted the performance of BA in the international business market. Hence, by establishing a new culture (a revolutionary one), BA acquired a new place in the market (Burke, 2010, p. 238).
Conclusion & Recommendation
After analyzing both companies, it can be said that culture is a central influential factor for organizations. It affects all areas including, leadership, management or administration. Virgin Airways acquired culture through leadership while BA attained it through learning and experience.
There were significant differences of how culture evolved and affected both organizations and their systems. Meanwhile, British Airways was affected by conventional culture, which was based on Government rules and decisions. As soon as the company realized that it should adapt change, things turned out well for the organization and its system.
Similarly, Virgin Airways, which was more on the innovation side, headed forward by a strong leadership vision. Richard Branson the head of the company had a strong vision and ideology. He established a unified culture within the organization system, which ultimately brought strength for VA to move in the international business perspective.
Based on the analysis, it is recommended that BA should work on the technological aspect. Moving on with innovation has become a requirement and hence has to be adapted within BA’s system. Similarly, for Virgin Airways it is recommended that organization concentrate on price aspect.
Moving on with low price can create a competitive advantage for the company. Apart from all, Virgin Airways should prolong its innovative principles. By sustaining innovation, the company can become more dominant in the international business spectrum.
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