British Airways Analysis Essay Example

a resisting force to a driving force by investing in more training for management into employee relations.

Union battle and McCalman ; Paton's Tropics Factors

British Airways are faced with the threat of a long fight with its unions as well as a possible expensive strike ahead as the organisation has cut thousands of jobs as a part of its restructuring programme.

By applying McCalman and Paton's Tropics Factors to this problem, the type of change situation faced can be identified, which guides the design, planning and implementation of any change:

As the illustration above shows, the problems British Airways have with its unions are soft problems or "messes" as the Open University has described it. Messes tend to be larger scale, have serious implications for all concerned and are an interrelated complex of problems which cannot be separated from their context.

Dealing with unions and possible strikes is intricate business, and there are rarely cases were both parties come out of it pleased and having reached their objectives. British Airways should consider other options to make savings in order to come to an agreement with the unions and with that avoiding a strike and massive losses.

PEST analysis

The problems outlined above have mainly been caused by internal influences. But it is important to remember the different environmental factors that also influence the organisation, its strategies, structures and means of operating. A good technique for outlining the political, economic, socio-cultural and technological factors affecting an organisation is the PEST analysis, and the following outline several problems and opportunities as well as barriers to change:

Political factors

• A tightening of the EU stance on cross subsidy by parent company could prevent national carriers
  

from diversifying into the no-frills market. This would provide less intense competition for British Airways from no-frill airlines.

Economic factors

1. Increases in airport taxes could push up the cost and thus price of no-frills flights, whilst national carriers may be able to absorb the costs without having to change their prices at all.
2. There could be a strong tendency for people to substitute more expensive flights for no frills flights and spend more abroad on entertainment and accommodation instead.
3. All the new countries that have just entered the EU may increase flights to the UK.
4. An increase in interest rates will influence people to save their money instead of spending, thus demand for flights and holidays would fall.
5. Mergers and acquisitions by national carriers and low cost carriers could have dramatic implications on British Airways' market share and customer numbers.

Socio-cultural factors

• Threats of more terrorist attacks using planes, similar to the events experienced in September 2001, reduce peoples desire to fly.
• Increases in airline
  

crashes could result in people being unwilling to casually travel by plane and may increase substitution rates.

Technological factors

• British Airways' customers are slowly being weaned off using the telephone to book their tickets. This may be a huge advantage for company, because according to Computer Weekly, the Internet will be the most dominant technology for booking travel within the next 3 years.
• Technology is advancing so rapidly in today's society, that the future may make travelling by plane obsolete.

Looking at the PEST analysis, it is obvious that no-frill airline companies may pose a big threat to British Airways in the future. A recommendation to deal with the problem would be to take advantage of the marketing means available today, and highlight the advantages of choosing British Airways over no-frill airlines.

Another problem that we have been made painfully aware off in recent years is the threat of terror attacks. British Airways have already had to cancel a number of fights due to this. The only recommendation

that can be made in this case is to invest as much as possible in security in order to prevent flights from being cancelled due to threats.

Implementation of Changes

As the changes recommended are of different natures, the strategies for implementation should be chosen accordingly. The best approach in this case would be a combination of the "parallel running" and the "big bang" strategies, as well as pilot studies.

When starting to take advantage of new technology, it is important that the new system is run alongside the old system until confidence is gained that the new system is reliable and effective, i.e. parallel running.

As far as the incentives scheme, the motivational courses and management training are concerned, it should be approached with the "big bang" strategy. The company is loosing a considerable amount of money due to the absenteeism, and the need for maximizing the speed for change is evident. "Big Bang" implementation can generate the greatest resistance to change, as well as carry a high risk of failure, but in this case the changes to be implemented are fairly straight forward and will improve employees' work environment, i.e. great resistance can be avoided and careful planning will ensure success.

Stricter security and a new marketing strategy should be implemented with pilot studies leading to eventual change, the reason for this being that any problems can be sorted out before more extensive change is instituted, which is essential when dealing with so important and expensive changes.

Barriers to Change

There are several barriers to change in this case. If we first address the problem of cancellations due to terrorist threats, sadly there is very little that can be done

by British Airways to stop these threats, and cancellations are preferred to putting costumers health and safety at risk.

When it comes to the problems concerning absenteeism and strikes, the barrier to making changes and satisfying the employees, is British Airways economy. Like most airline companies, British Airways have had to cut back on expenses to survive in the industry. Hopefully, this can be changed with the recent announcement that the organisation is now making their biggest profit yet in recent years.

Stricter EU regulations for the airline industry also limit what British Airways are able to do in terms of change.

Change Agent

To facilitate change within British Airways, it will be wise to use a change agent. The changes recommended above are complex and require knowledge and skills that some of the managers of the company may not possess. And as the changes are so important for the future of the company, a change agent should be used to improve chances of a successful implementation. When considering whether the agent should be internal or external, it is important to remember that most parts of the organisation is in focus for this change in one way or another, and it may be difficult to find and internal agent who is able to stand back from the current situation in order to look at how things might be different. In this particular situation, it would be easier for and external agent to be effective and reach change agent goals outlined by Buchanan and Boddy (p. 274, Organisational change).

Resistance to Change

As the force field diagram above indicated, resistance to the change is most likely to come from the employees of

British Airways, as changes already carried out by the organisation has left them with a fear of the unknown as well as a dislike of the uncertainty and ambiguity surrounding change.

There are a variety of different approaches to deal with resistance to change as outlined by Kotter and Schlesinger (p. 222, Organisational change), and the most appropriate method to use in context would be the education and communication. As most of the changes recommended will benefit the employees, they will be more acceptable to the change if kept informed and being insured that their jobs are not at risk like with previous changes.

Further Requirements for Assessment of Situation

In order to be confident in this assessment of the situation and solutions that has been suggested, more in-depth information would be needed describing in more detail what the sources of the problems are. Thorough information about British Airways is possible to obtain, but as most sources charge a high rate for the information, it is impractical for university study purposes.

To construct a more concrete timetable for implementation of change, it would also have been useful to hold information about how the recommended changes have been acted out in real life by other organisations to use as a guideline to the time needed.