Leadership Assignment 111111111 - 1 (3)

8/6/2019 Leadership Assignment 111111111 - 1 (3)

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Introduction:

This report is written to give details about organisation overview and organisation process of British

Airways and provide the critical analysis on the organisation process. First, it will look at company

profile and the history of the organisation including the organisational chart in order to give an overview

of organisation and then will explore the evolution of the organisation. Next, it will continue to focus on

the organisational processes including (1) Management within organisation (2) Leadership Development

(3) Organisational Culture. These organisational processes will be provided in details regarding what are

organisational change, HR policy, and organisational culture? Moreover, it will critically organisation on

these processes in order to know their problems and benefits toward the organisation. Finally, it will give

recommendations for the organisation to use as a guideline to deal with organisational process in the

future.

Company Background:

British Airways (BA) is the world¶s leading international airline in United Kingdom which provides

international and domestic air services for passenger and cargo. BA has airline route which approximately

comprise of 570 destinations in 134 countries including North America, Central and Latin America,

Western Europe, North and Eastern Europe (plus the Eastern Mediterranean), Africa, and Asia. The

corporate headquarter is located in London and its main hubs are London Heathrow airport and Gatwick

airport which both short haul and long haul flight are operated in these airports. Moreover, BA has more

than 280 aircrafts, which mainly are Airbus and Boeing jets and it has more than 40,000 employees to

work for the company.

British Airways facilitates flight reservation for their passengers and also booking through their online

service in which their passengers can easily access. The airline industry aims on maintaining their



integrity to be the number choice and the best airlines in the global market with focus in quality and

customer satisfaction. Because of the recession in the airline industry, many airline companies filed

for bankruptcy while others resorted to downsizing. British Airways was one of the companies who

decide to cut down on their expenses being cutting down on their workforce.

OrganisationalChart:

For organisation chart, the structure of organisation is flat type because it has only one level of hierarchy

that separates Managing Directors at the top from bottom-line employees. The head of the company is

Mr. Stephen Ellis. Currently, he is working as a Chief Executive position. For other managers, the

organisation has divided management-level positions into ten departments and each department has own

subordinates. The organisation¶s departments include Planning, Investment & Alliances, Commerce,

Ground Operation, Engineering, Flight Operation, IT, Finance, Law, and Human Resource.

History of Organisation:

The history of BA is traced back into 1930s-1940s. At the beginning of the Second World War, two

airlines between British Airways and Imperial Airline merged together and formed new subsidiary

companies which are the British Overseas Airways Corporation (BOAC) to provide the international longhaul services and the British European Airways (BEA) to operate short haul service in Europe. In 1974,

BOAC and BEA were combined together and was operated under one company ³British Airways´. Next,

in the early 1980s, BA ran the financial problem and Sir John King (the former CEO) was appointed to

handle privatization project which the privatization was successfully transformed the organisation in

1987.



Composition of the workforce:

It is British Airways aim to promote diversity, inclusion and equality of opportunity in employment

regardless of sex, marital or civil partnership status, gender reassignment, race, colour, nationality, ethnic

or national origins, sexual orientation, disability, religion or belief, political affiliation and age, consistent

with British Airways business objectives.

They promote equality of opportunity and encourage diversity for three very important reasons:

� As people working together in a business, all employees have obligations to respect and value

each other. Equality of opportunity is a fundamental aspect of such respect.

� To be the best managed company, British Airways wants to attract and develop the most talented

people. Ensuring equality of opportunity and valuing diversity will help British Airways to

understand the needs of, and provide the best possible service to, its customers.

� There are legal obligations intended to promote equality of opportunity. As a responsible

company, it is essential that British Airways complies with these obligations.

Our recruitment and selection procedures positively support this aim of a diverse workforce. All

candidates are considered strictly on their merits in relation to the selection criteria for the job. We aim to

treat all candidates fairly and consistently and be responsive to their needs throughout the recruitment,

selection and appointments process.

BA Management:

Globalization of business has resulted in the growing acknowledgment of the value of a well-managed

employees and the fruition of the human resource function from being sighted as a support function to

one of strategic significance.

Recruitment Approach:

British airlines can put one of the three different approaches to recruitment:

� Ethnocentric: - The central focus of this approach is home country practice, where headquarters

from the home country takes foremost decisions, employees from the home country cleave to

vital jobs, and the subsidiaries pursue the home country resource management act.



� Polycentric: - In this approach, every subsidiary directs on a local basis, where a local employee

heads a subsidiary since headquarters¶ managers are not believed to have sufficient local

knowledge, whereas subsidiaries habitually expand HRM practices locally.

� Geocentric:- In this approach, the company manages employees on a global basis , recruiting and

developing a group of international managers from various countries, who comprise a movable

base of managers who are taken use in a range of facilities as there requires.

Training and Promotion Policy:

Organisational change transformed BA to be more service airline industry that emphasize on customer

service. According to Lewin¶s Change Model, BA had to stop present pattern and introduce new behavior

and culture to employees; therefore, BA launched a new training program which is ³Putting People First´

for bottom-line employee. Next, BA also introduced a special training program which is ³Managing

People First´ for management level employees as well. All training programs had objectives to identify

the organisation¶s management style and begin the process of developing a new management style that

would fit BA¶s new and competitive environment.

Employee Promotion Policy:

In 1987, BA successfully changed to be private company because there was one factor that facilitated

change within organisation which is ³Employee Promotion´ policy. To ensure that change became fixed

in the system. BA¶s top management levels used promotion policy to promote employee who clearly was

a role model of the new BA values in higher level. This strategy was used for promoting employees

especially in higher management levels to cement the new belief and value in organisation.

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Behavioural Leadership:

BA has great leaders to help contend with current trading conditions and achieve their long-term vision. A

leading global premium airline must be bold and highly effective in developing present and potential

leaders. This is why they introduced High Performance Leadership (HPL) system during the year. This is

an integrated system, linking business strategy, objective setting, performance assessment, development

and reward. Focused initially on the senior leaders, HPL has rigorous assessment mechanisms to identify



talented leaders and to provide them with the right tools and support to continue developing. They have

also defined, communicated and begun to measure individual performance against three capabilities they

need in their leaders, in addition to operational excellence:

� Communicating a common vision;

� Agreeing accountabilities; and

� Motivating and inspiring others.

For each capability, specific behaviours have been developed so that leaders understand exactly what is

expected of them and supporting them with a range of development programmes, including executive

coaching, networks, forums and external courses. They are also using new techniques to measure

performance. These will allow monitoring individual progress and tracking their own overall success at

managing talent.

The British Airways experienced leadership and change management during the term of as the company¶s

chairperson in 1981. Upon filling the office, recognized the effects of politics within the company on the

efficiency of their operations. With this, decided to restructure the British Airways. He justified the

restructuring with the nearing privatization of the company as well as making it more profitable. As a

result, saw it necessary to cut down on costs by cutting down their workforce from 58,000 to 38,000.

Along with appointed CEO resolved issues within the company and thus prepared it for privatization. The

programs that King and Marshall implemented during their term, focused on the management of the

change that the company was to face. Because of their efficient leadership and change management, the

British Airways was able to cross the boundaries between loss-making making with poor customer

service image to being a trademark of innovation and profitability.

When took over the position of CEO for British Airways in 2000, he believed that the company was too

complacent and that this attitude affects the operation of the whole organization. As such, he

recommended to the board that people ought to be more open and that they have to do what they say. He

introduced the daily TV broadcast, which update employees about company news and issues. This

eliminated the proliferation of rumour mills.

However, only six months after making the connection with the employees, ailing announced that he

would be asking 5000 volunteers to resign from their posts in the next 18 months in 2003. In line with

this, he also announced that he would be replacing the volunteers with more flexible and skilled new

hires. This announcement resulted in the angry reactions from the employees. The Business Efficiency

Programs aimed at outsourcing as a cost cutting measure aggravated the situation (2003). In order to





British Airways was one of only two airlines, the other being Air France, to operate

the supersonic airliner Aerospatiale BAC Concorde, inaugurating the world's first supersonic passenger

service in January 1976 from London Heathrow to Bahrain. Services to the eastern seaboard of the US,

which Concorde had been designed for, were inaugurated with a service to Washington Dulles airport on

24 May 1976 and with flights to New York JFK airport starting on 22 September 1977.

In November 1986 a British Airways Concorde flew around the world, covering 28,238 miles in 29 hours,

59 minutes. More than 2.5m passengers flew supersonically on British Airways Concorde flights.

Concorde was subjected to 5,000 hours of testing before it was first certified for passenger flight, making

it the most tested aircraft ever. Concorde¶s fastest transatlantic crossing was on 7 February 1996 when it

completed the New York to London flight in 2 hours 52 minutes and 59 seconds.

Following the Air France Concorde crash in Paris and the slump in demand for air travel after the 11

September Attacks in New York, the announcement was made on 23 April 2003, that both Air France andBritish Airways would cease Concorde operations by the end of October 2003, after 27 years of service.

The final commercial Concorde flight flew as BA002 from New York JFK to London Heathrow on 24

October 2003.

Capacity 100 passengers and 2.5 tonnes of cargo

Seating 100 seats, 40 in the front cabin and 60 in the rear cabin

R ange 4,143 miles (6,667 kms)

Engin

es

Four Rolls-Royce/SNECMA Olympus 593s, each producing 38,000lbs of thrust with reheat

Tak e-off speed 250mph (400kph)

Cruising speed 1,350mph (2,160kph/Mach Two) up to 60,000 ft

Landing speed 187mph (300kph)

Length 203ft 9ins (62.1m)



Wing span 83ft 8ins (25.5m)

Height 37ft 1in (11.3m).

Fuel capacity 26,286 Imperial gallons (119,500 litres)

Fuel consumption 5,638 Imperial gallons (25,629 litres) per hour

Maximum tak e-off weight 408,000lbs (185 tonnes)

Landing gear Eight main wheels, two nose wheels

Flight crew Two pilots, one flight engineer

Cabin crew Six

First commercial flight London Heathrow to Bahrain, BA300 on 21 January 1976 (Captain Norman Todd)

Last commercial flight New York JFK to London Heathrow, BA2 on 24 October 2003 (Captain Mike Bannister)

BA¶s Culture:

Historical / Pre-Privatization Decision

Prior to privatization, BA¶s culture was considered to be technically biased, authoritarian, bureaucratic,

and the relationship between employees and management-level is impersonal. At that time, management-

levels usually encouraged formality within organisation to keep themselves away from staff. This made

the organisation not believe in participative management. Besides, employees such as pilots and managers

were recruited from the Royal Air Force (RAF) which the organisation belongs to the government;

therefore, most employees feel that they are arrogant which the concept of customer oriented hardly find

in these employees. Importantly, the organisation tended to focus safety operation only and lacked of

service and market-led oriented. As a result, it leads the organisation run into crash and faced the financial

problem. It is because not only corporate culture itself but also the competitors in the industry which

enable to provide better service to customer superior compared to BA.

Prevailing / Post-Privatization Decision

After privatization, BA replaced some of its main historical values and beliefs by new corporate culture

and mission. BA tried to introduce new corporate and mission into the organisation by launching many

new training programs and new appraisal system to stimulate new changes in order to improve

organisation performance. New corporate cultures include informality, innovation,

customer/commercially-oriented, participative management and so forth. For example, BA tried to change



corporate mission from ³To be a safe airline´ to ³To be a competitive airline´ in responding to the change

of the external environment. It is necessary for an organisation to adapt itself when external environment

changes in order to survive; hence, changes in culture and mission are done for transforming an

organisation to be the effective organisation in the industry and for improving organisation performance

in order to overcome with fierce competitors. The table below shows company¶s characteristics from the

historical period to prevailing period or post-privatization decision.

Cultural Change in British Airways

Organisational culture is very important for an organisation today for setting organisation¶s direction and

creating tradition, value, and belief for its employees to behave, and building harmony within

organisation. Organisational culture is considered to be a central to company¶s change and revitalization.

When organisation¶s external or internal environments change (for instance, the increase in competitive

competitors, the organisation¶s structure and system), an organisation must adapt its present culture in

order to survive in the industry.

British Airways could be easily defined as a role culture reflecting functional differentiation in its

structure, but it¶s not that easy. One organisation often harbours two or more contrasting cultures, posing

more difficulties in order to remain successful. There are two cultures in British Airways, one high in the

sky at 30,000 feet which is highly co-operative, service oriented focused on passengers and the other one

on the ground highly competitive, politicized head-to-head with the external world, where it seems that

fiercely adversarial values reigned. Middle management, which is key to the implementation of any

strategy and the outcome of cultural change, is still ruled by separate functions and at the top all the

weight still goes on the individualist functions of high finance and take-over.

A customer oriented culture is very important for an airline. Its reputation relies mostly on verbal

encounters between airline staff and passengers, most lasting less than 30 seconds. A company such as

British Airways, with its 30 million passengers a year interacting an average 7.5 times per journey, could

expect 225 million of such short interactions. Those dealing directly with customers must have room for

discretion and personal initiative. They need to be looked after so that they can repeat this caring

approach onto the customers.

Customers¶ intuitive reaction is not to the product, but to an ambience, environment or culture within the

cabin and at the check in desk. Even when staff are seen as professional and competent they are likely



to be also seen as cold, uncaring and bureaucratic in their response to customers. The how is often

more important than the what, especially as a source of dissatisfaction.

Cabin staff¶s content of work varies so much. They don¶t know what kind of emotional response will be

called for (emotional labour). The best workers are in excellent physical and mental shape and must have

close group bounds for sharing each other¶s grief and pain. The culture must be one in which people pass

on to others the quality of the care they receive. The supervisor gives trust, support and the advice and

then leaves them free to use their judgement. Much work in cabins and on counters is not personally

fulfilling, they don¶t get customers¶ gratitude and friendship. The praise therefore must come from

colleagues and supervisors and must be an attribute of the culture.

As seen in the 7S¶s model evaluation and reward systems are an essential part of the culture and provide it

with support and reinforcement. British Airways applies a two-dimensional evaluation system for

managers based on what people achieve and how they do it. The how is in fact an upward appraisal

system. The appraisal system is then tied up to a cash bonus system, which directly rewards high

combinations of what and how.

There are some dilemmas that British Airways culture must reconcile: Lean and Mean versus Fat and

Happy, individual responsibility versus group cohesion, specialists versus generalists, hard (operational)

versus soft (service) part of the business.

All those elements are essential to success. Passengers want both safe, comfortable, punctual aircraft and

be treated as people, individuals whose cares and concerns matter. Leaders have to manage the conflict in

order to get the best for their employees and their customers. Management must find a paradigm which

reconciliates the top, the bottom and the middle of the organisation.

SWOT Analysis:

This will analyse the position of the industry. Based on the current condition of the industry, the strategic

position of the airline industry has been challenged because of the changing conditions of the market

environment. To be able to ensure that the industry will not be left behind, the industry has been able to

involve themselves into their expansion to technological advancements and developments as well as

quality services. This part will analyse the social environment of the industry in terms of their strengths,

weaknesses, opportunities and threats.

Strength: Being one of the most competitive airline industry British Airways has many strengths. One of

these is the state of the art and first-rate new fleet of aircrafts to be able to accommodate convenient travel

for their passengers to ensure customer quality service and satisfaction. In addition, the industry¶s



operation magnitude allows them on grow over their rival airline industries by providing services to wider

variety of passengers as well as customers. In addition, British Airways has knowledgeable and skilful

employees and staffs which enable British Airways operational research to perform their best by the

member of the industry and employees become its strengths. In addition, the wider orientation provides

expertise in passenger and clients areas can also be considered as their strengths and the industry

uses online marketing approach to reach international clients easily.

Weak: Although there is some strength, BA has also their weaknesses. One of these is the lack of

marketing strategy which will enable in reinforcing their competitive standards, to have customer

satisfaction and loyalty. In addition, the industry seems to lack more enhanced market schemes to attract

more clients. Moreover, the employees of the industry have limited knowledge of simulation

development as well as software, which is lost through high degree of internal personnel moves and their

inability to select software which tends to result in complexities in improving specialist airline software.

Opportunity: The opportunities of the industry include the availability of immense airline products and

services pose great opportunities to use it properly for their advantage. In addition, global transitions and

changes can be an opportunity for the industry to work with and virtual reality through online

marketing could give a new utilization for simulation, gaining network software and share expertise by

special interest professionals. Moreover, the latest hubs and trends in information technology can provide

ample chances and opportunities to various business domains like British Airways.

Threat: It can be said that the inner threats of the industry is its being centralized as well as bureaucratic

system and also poor decision-making. The threat of neglecting global issues instead of deeply giving

emphasis on the local and national level is yet another threat for the industry. It gives tremendous threats

when industries will ignore such and the aspect of globalization which can be a strength as well as

opportunity but can also be a threat if not to be observant and keen of its treachery and tricks. Lastly,

technological changes as well as clients behaviour can also be a threat if the management will interpret it

wrongly.

PEST Analysis:

This part will analyse the external environment that affects British Airways which include the political,

social, environmental and technological aspects.

Political: In terms of political aspects, operating restrictions that should be given attention which include

the monopoly of other nations in terms of airline industries can be one of the aspects that can influence

the operation of the industry. In addition, political benefit includes the bilateral agreements that all

members of alliance where British airways belong can utilise.



Economy: In terms of economic aspects, the ability of European market to outstrips demand that results to

rate wars and conflicts that equates to lower yields for industries can affects British airways. In addition,

the alliances can result to a greater manipulation in terms of capacity which reduce the competition and

enhance revenues. Moreover, such code sharing airlines will have the ability to split costs and enter the

markets and provide services but this can lead to having less aircraft at airports, hence less space are

needed.

Social: In line with social environment, it can be said that social aspects are strong from an employer

staffing aspects. British Airways and its alliances can reduce costs by using only one airline¶s staff and

cultural diversity of the social network is considered because of international operations.

Technology: Technologically speaking, it is said that technology in the airline industry is very expensive

and fast moving; hence, alliances can give opportunity for British Airways for having joint ventures when

it comes to technological aspects.

R ecommendation:

It is general accepted that it is not easy for any organisation to make changes in its structure and system.

Any change in organisation sometime leads to have a resistance from its employees. Change could be

resisted because it involves confrontation with the unknown and loss of the familiar which Arthur

Bedeian cites that there are four reasons of resistance from employee to organisational change including

1) Parochial self-interest, 2) Misunderstanding and lack of trust, 3) Contradictory assessments, and 4)

Low tolerance for change. In privatization era, BA tried to change behavior both in individual and

organisational levels such as changing the management style from authoritative to participative. New

behavior or pattern sometime make employee feel awkward and unfamiliar that it can make them to reject

and slip back to the familiar and comfortable pattern instead. For instance, BA needed employees to have

more participation in management decision; but when a difficult decision arises, it may not be possible to

get a consensus decision.

In the history of BA, there are evidences that BA put an effort to deal with chaos and resistance during the

organisational change period. Tactic that was used in BA to manage conflict and resistance mostly was

HR policy such as training policy. HR policy is an effective tool to educate employee and convince them

to comply with new system. Although, BA has an effective HR policy to facilitate change and manage

resistance from its employees, there is still a case regarding organisational change in BA. For example,

during 1990s, many new competitors emerged to overcome with incumbents in the airline industry such

as Easy jet and Ryan air. These companies used pricing strategy to gain the market share from existing

companies. To response this threat, BA¶s CEO declared that the organisation itself may need a second



revolution. BA tied to counter with the threat by sourcing new alliance with American Airlines, reducing

labor cost in both non-core staff and core staff by recruiting newly hired employees on lower pay to

replace existing staff, and restructuring payment system. Although, BA claimed that this is done for

majority and for improving organisation performance and benefit in 2000, some employees feel that it is

unfair and unsecured in their jobs. Finally, the strike occurred and cost BA £125 million especially

employee morale never entirely recovered since then.

Many organisations including BA desire to make change in their organisation when problems arise and

they is seeking means to make change successfully in the harmless or less conflict way. In the past, BA

often used HR tool such as manpower planning, recruitment, and training policy to facilitate change and

reduce resistance. However, HR policy is not only effective tool to make successfully change in

organisation. Another way to help organisational change is to use ³Change Agent´ which the change

agent is a person who leads a change project by defining, researching, planning, building business

support. Change agent is external consultant that an organisation hires him/her to take responsibility for a

specific project or sometime is a manager in the organisation who combines change responsibilities with

their regular duties. It is better to use the change agent especially external consultant to handle

organisational change because, first, an external change agent may possess some skills and specific

knowledge that can be handled management project effectively such as work-independently, effective

collaborator, and the ability to develop high trust relationships. To use an external change agent is another

way to handle change project effectively.

Conclusion:

British Airways is the world¶s leading airline which has a long history regarding organisational change.

Because of internal and external pressure, it force BA to adapt itself such as corporate culture, value,

belief, and company mission in order to improve the organisation¶s performance. Organisational change

gave a huge impact on organisation both individual and organisational levels which create positive and

negative effect on organisation. The most popular tool to handle and facilitate change and resistance is

HR policy. It seems that privatization in BA is success in 1987; but there was a strike case occurred

during that time, which gave an expensive lesson to BA in 1990s. Finally, the other way to help any

organisation to facilitate change is to use ³Change Agent´ which it is better to use external consultant

than internal consultant.

Based on the given analysis, it can be noted that the management must be able to know what is happening

in the internal and external as well as social and market environment of the business industry. This is also



done to know if changes and transitions are needed to meet the needs of these factors and to avoid

problems in terms of the management functions.

R ef erences:

British Airways Management (2006). www.thinkingmanagers.com

British Airways Leadership (2008). www.ivythesisi.typepad.com



British Airways Plc ± SWOT Analysis (2008). www.marketresearch.com

British Airways 2008/2009. Annual Report of British Airways 2008/2009

Fabio, E. N. (2006). µ The Ascent of British Airways¶. March London

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Leadership Assignment 111111111 - 1 (3)