Running Head: BRITISH AIRWAYS
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Change Management in British Airways
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Table of Contents
Introduction .................................................................................................................................................. 3
Context of the change................................................................................................................................... 3
Evaluation of the nature of such changes..................................................................................................... 4
The change management strategy ............................................................................................................... 5
The challenges and difficulties in implementing such changes .................................................................... 6
Change management model ......................................................................................................................... 8
Stakeholders ............................................................................................................................................... 10
Managerial challenges ................................................................................................................................ 11
Overcoming resistance to change............................................................................................................... 12
Managing change ........................................................................................................................................ 12
Conclusion ................................................................................................................................................... 14
Reference .................................................................................................................................................... 16
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Introduction
UK largest international Airline, British Airways, is among the leading airlines in the
world, with one of the most extensive route network, running internationally (British Airways,
2010). The income of the airline has been on the increase with the profits for the period between
2007 and 2008 being a total of £8,753, which translated to 3.1% more than the previous period.
Throughout its operating years, British Airways has faced different challenges, as it is for all
other companies in the industry. During the year 2007, the American economy experienced a
crunch due to the bursting of the housing market. This was the beginning part of the 2008
economic crisis, or recession, which had global effects (Åslund, 2010). Like any other industry,
the UK airline industry faced a major setback, British Airways being one of the companies and
there was a need to implement changes for long company survival. This paper is an analysis of
the changes implemented by the British Airways in the period between 2009 and 2011, and the
challenges faced by employees and management during the change process.
Context of the change
Organization change is a useful strategy in times of crisis, or when an organization
experiences performance gap. There may be other reasons for change but examining a good
number of companies and institutions that have instituted wide-ranging changes, one notes that
they mostly deal with the two issues. Companies may have good strategies in place but external
and internal factors can lead to them failing. For example, management strategies can sometime
contain inherent contradictions that create management spaces that in turn lead practices and
identities that contradict overall aims and objectives of the company. The 2008 economic crisis,
or recession, which had global effects led to the collapse of many companies.
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An examination of British Airways company’s financial statements on the company’s
website shows that it made a profit of £875 million that was quickly followed by a loss of £401
million in 2009 (Milmo, 2009). It was after the company’s midyear loss that it became apparent
that change was indeed needed. Although the shortcomings faced by the company may have
been because of a mix of both internal and external factors, change was still a necessary
undertaking if the company was to survive. A rise in oil prices, for example, needed to be
countered by cost reduction within the company’s operation, which could only be achieved
through measures such as staff retrenchment or freezing any more pay rises. In other words, the
company’s move to change was motivated by the need to survive. The airline industry has seen a
steady growth from its beginnings in the early 20th century and with that growth challenges have
also emerged. Traditional airlines such as British Airways have over time been forced to
compete with low cost airlines that charge low fares. In addition to this, the global economic
downturn has seen the companies experiencing lower passenger numbers especially in
traditionally strong markets such as the United States (US) and the United Kingdom (UK).
Evaluation of the nature of such changes
The CEO of British Airways Mr. Willie Walsh suggested changes that mainly revolved
around cost reduction. He asked workers to take unpaid leaves and to perform unpaid work
between a month. To set a good example to the workers, Willie Walsh went without his monthly
salary of £61,000. The first of the changes that the company did was to cut down on the number
of staff. According to BBC (2009), the company started off, by a retrenchment plan, which
would see 4900 employees losing their jobs. The thinking behind the retrenchment by the
company was that the company was overstaffed and that the high number of employees was not
commensurate with the costs. For instance, the company’s management proposed that the
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number of cabin crew for long haul flights are reduced from 15 to 14. This means that for a long
time the company had been paying one extra cabin crewmember per flight yet there was no
economic reason for the payment.
Apart from the retrenchment plan, British Airways sought to make further savings by
freezing any future pay rises for at least two years. The Chief Executive of the company justified
the pay freezes and the retrenchment plan by noting that the spike in global oil prices and the
transatlantic recession had made the company’s operations at the time unsustainable (Plumberg
& Johnson, 2008). He therefore warned that any resistance to the planned changes would lead to
even more grave consequences such as company insolvency.
British Airways engineers agreed to a more efficient working system and managers
accepted a reduction of salaries. To cut even more cost, cabin crew’s working hours were
extended, meals were scrapped and only breakfast was left. Though the British Airways
management personnel were ready for the change, the cabin crew was still resistant to change.
The change management strategy
The CEO of British Airways, Willie Walsh realized that with the economic crisis, there
was a need to reduce the business cost from top to bottom. Introduction of a change is one thing
and it a very different thing to ensure that the change strategies are implemented and managed
(British Airways, 2010). For successful management of change, a leader leads in the
establishment of a vision that is clear for the process of managing change. This helps in creating
a picture of the outcomes which are anticipated and where this leads the organization. For new
realities to be adopted effectively and to ensure the organization benefits from these changes,
monitoring and evaluation is needed. This helps in the determination of how effectively the
change has been managed and the benefits that it has brought into the organization (Graetz &
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Smith, 2010). It is also through this way that the organization realizes areas that need to be
improved or even changed. Willie Walsh identified the problems that British Airways was facing
and identified the necessary cost cutting strategies to assist the business in the recovery process.
The challenges and difficulties in implementing such changes
When implementing any form of change in an organization, leaders face challenges such
as resistance from individuals, who do not want to change and acceptance from others. During
his effort to turnaround the performance of the British Airways company, Willie Walsh received
understanding from some of the employees, but faced resistance from others.
“Everyone knows that British Airways is in financial difficulty. Many of my
colleagues understand this. Our pilots have agreed a pay cut. Our engineers have
agreed more efficient ways of working. A third of our managers have accepted
voluntary redundancy. And nearly 7,000 colleagues volunteered for salary
reductions because they wanted to help this great British company in a time of dire
need” (WALSH, Willie, 2009).
Walsh also faced a fair deal of change implementation challenges. Among the major
challenges were posed by the cabin crew, as they were against retrenchment, and extension of
working hours. The resistance from the cabin crew was strong and resulted in strikes (Samuel &
Bridges 2010). Willie Walsh had to make sure that the strategies are implemented, and evaluated
to ensure an increase in organization performance.
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When Willie Walsh was busy planning the change strategies, the cabin crew unite union
was busy organizing a counter action through a strike. They announce a 12days strike that was to
start on December 22nd, 2009, and end on January 2nd, 2010. This was going to be a strike
organized over the Christmas period, and would result in to more losses for the company that
was trying to reduce loses. Faced with this challenge, British Airways moved to court and
acquired an injunction to stop the strike (BBC, 2009).
When implementing change in an organization, it is important for the management to
organize or prepare for change. This is can be through creating communication to employees on
the need for organization change. Willie Walsh used the authoritarian system of organization
leadership and did not offer the workers a chance to express their feelings about the changes
(Dyer, 2010). Most of the opposition and resistance faced during the change process was due to
the fact that there was no clear communication from the company to the employees on the effect
that the economic recession would have to their jobs and salaries. Therefore, it was necessary for
the company to improve the communication between the management and the workers to ensure
that their contribution is heard, and that the company is in a position to handle any future
problems.
British Airways is has faced many operational and managerial challenges. The
management has to deal with staffing issues, strategic issues, and manage the costs effectively.
One of the problems that the management has to deal with is staff resistance to change and
strikes. Staff form a crucial element in enhancing the success of an organization. As a result, the
management has to treat employees in a fair and motivating manner, in order to enhance
performance. According to Whysall, an organization that treats their stakeholders well is
perceived to be well- managed (Whysall, 2000). Stakeholders’ theory maintains that the
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management of every organization must consider the input of stakeholders since they are the
major forces behind sustainability, competitiveness and profitability of a business (Littau,
Jujagiri & Adlbrecht, 2010).
Leadership is a fundamental concern of the change process as change starts with the
identification of what needs to be changed and which and then goes to the stage of executing and
implementing this change. In an organization, it is from the people that a manager is able to
identify the change areas. This is the aspect of connecting the people in the process of change
and when it comes to the implementation of this change, it is expected that the change will be
more accepted by the people. Democratic leadership is a very effective form of leadership as
individuals in an organization are given the opportunity to participate in to the decision making
process of the organization (Beerel, 2009). In this form of leadership, members of an
organization feel appreciated and it enhances their productivity. Due to the feeling of being
engaged in decision making, individuals of an organization become more prod of working there
and tend to give more as they own the change implementation process.
Change management model
An organization can be seen as a family, where everyone has a different role to carry or
as a mechanical system with different components, that enables performance (Lussier & Achua,
2009). For the machine model or the family to be sustained, the right form of leadership is
required. British Airways stakeholders who are equitable to a family and need sound
management and leadership, in order to operate effectively. Systemic leadership style model has
various components and these are structural component, human resource component, and the
political component. The structural component implies that the organization is taken from the
point of view of being a machine or factory.
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As a family, people carry out different things together and so does an organization. The
political component is that component that shows the jungle nature of the organization. This
means that the organization strives to ensure its adaptation of new realities. For the organization
management to determine the importance of leadership in developing organizational
components, it is important to understand that these components need thoughtfulness as well as
an imagination that is beyond seeing the problems that the organization faces (Beerel, 2009).
Problems are simply a means of challenging an organization to improve on their services.
The organization is required to be ready to take hold on new opportunities, which are presented
by change management. This means that the people need to be ready to accept change and
further understand that the changes, which are effected in the organization, are for the benefit of
the entire organization and these include the individual benefits as well. By taking these
components together, a manager who is at the same time a leader gains a feeling for the
organizational architecture, the needs of the people, and the competitive attributes of the
organizational culture. This guides the thinking of the leaders and helps them in seeing the
existent multiple realities in the organization.
Additionally, the leaders get options and new insights that help, when they are dealing
with challenges that come with change and strategic solving of problems. To exercise leadership,
this model gives the managers ability of reframing problems; something, which is a great asset to
them. To solve problems in an organization may require changes and this implies that effective
change management is required to ensure that individual as well as overall organizational needs
are met.
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Stakeholders
Employees are significant stakeholders in any business. British Airways has experienced
many strikes from the cabin crews due to various reasons. In order to achieve the Company’s
strategic goals, British Airways must address the issues that affect the Company. Stakeholders
hold significant influence on the ability of an organization to attain its strategic objectives.
Failure to recognise and respond to major stakeholders adequately can impede a firm’s
operations (Stoltzfus, Stohl & Seibold, 2011). Firms are under pressure to prioritise and manage
its responses to the stakeholders, which requires an organization to align its socio- corporate
responsibility strategies in line with the stakeholders’ expectations. The management of British
Airways should consider the effects of the various stakeholders on performance, during the
strategic planning process (Kipley & Lewis, 2008).
Stakeholder management aims at organizing the relationship between the society and
business. Globalization has caused many changes in the market, which has created challenges for
businesses since, they have to adapt to the numerous and contradictory societal demands.
Stakeholder management is crucial in forecasting the changing societal expectations and
detecting threat before they affect the organization. This means that British airways should know
its stakeholders and keep in touch with them, to understand their expectations and demands, and
recognize changes in the affiliation. Before the management embarks on planning, budgeting and
scheduling, they should determine the stakeholders who will be impacted by the change project.
Omission of stakeholders who will be affected by the change project is a potential source of
resistance (Cabanis-Brewin, 2011).
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Managerial challenges
The airline travel industry has become increasingly competitive, and managers are face
with the challenge of managing the business. Managers are faced with the challenge of issuefocussed stakeholder management. They lack effective communication with the stakeholders;
hence, the stakeholders are not aware of the company’s responsibilities and limitations. For
instance, the cabin crew strikes are an indicator of resistance. Dissatisfied stakeholders are likely
to show resistance through strikes and other means that sabotage the operations of an
organization. The cabin crew workers strike due to long-term pay and job disputes (British
Airways' cabin crew begin five-day strike, 2010).
In order to solve issues effectively, British Airways management should liaise with
stakeholders and experts in the problematic area, and should not leave employees issues to the
Public Relations department only. If the deliberation between the stakeholders and the
management conclusions sums up the need to implement change, then the board of directors in
the Company should agree to these suggestions.
Managers are expected to participate in discussions on societal issues that affect the
company operations or the society is affected by the operations of the company. For instance,
British Airways management is expected to participate in discourse of either societal issues,
which are caused by the Company’s operations or societal issues that affect the Company’s
operations. The Company representatives must learn, listen to affected stakeholders, seek advice
from experts, and contribute towards solving the problem (Roloff, 2008). Hence, managers must
possess listening and communication skills and other interpersonal skills, necessary to deal with
such roles. The public, according to its business activities, judges British Airways. Managers will
encounter conflicts and costly problems, but must act in a manner that guards the Company’s
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reputation. This can be done by developing a sustainable business through communicating to
stakeholders, about the issues, involving them in problem solving.
Brand image and corporate identity are inter-connected and belong to all the stakeholders
(Balmer, Stuart, & Greyser, 2009). The management must protect the brand image and corporate
identity of British Airways, especially in the contemporary business world, of increased societal
expectations. British Airways management realized that the identity of an organization resides
with stakeholders (Balmer, Stuart, & Greyser, 2009). Hence, the management should devise
effective strategies of dealing with stakeholders and avoid practices that will jeopardize the
Company’s reputation. Strikes and go-s lows can ruin the reputation of British Airways since; it
shows flaws in leadership of the Company.
Overcoming resistance to change
All change initiatives should be treated as projects, since they are limited by budgets and
deadlines (Cabanis-Brewin, 2011). The management must meet deadlines, work on the budget
and ensure that quality is not compromised during the process. In order for an organization to be
successful in change implementation, it should carefully plan and communicate effectively with
the stakeholders. At some levels, the management should acceptance risks, increase its flexibility
and incorporate lessons learnt from experiences, in order to manage change effectively.
Managing change
Introduction of a new corporate goal can trigger resistance, since the stakeholders are not
able to identify with the new image of the Company. British Airways should ensure that the
stakeholders share similar reflections as that of the Company goals. Stakeholders’ acceptance is
crucial during the implementation of key change projects. Resistance of change originates from
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several factors such as long standing organizational traditions. Long standing traditions leads to
development of routine or familiarity, and may attract resistance if disrupted.
Common factors, which influence change resistance include lack of trust, economic
threats, beliefs that change is not feasible or unnecessary, resentment of interference, fear of
personal failure, loss of power and status, threats to values and ideals, and relative high cost
(Long & Spurlock, 2008). An organization can counteract change resistance through conversion
of stakeholders to change proponents. This is done through involving the stakeholders in the
change process. Organizational communication is an effective tool in managing change. British
Airways should adopt issue- focused stakeholder management, which will help in problem
solving through collaboration and communication.
Resistance is caused by lack of information, inadequate or ineffective communication.
British Airways can persuade its stakeholders, to help with the change implementation process.
The management should involve stakeholders and enhance their participation in change
implementation. Relevant contributions from the stakeholders can be of significant value to
informing the change strategies, and enhance commitment from the stakeholders. British
Airways management must facilitate and support stakeholders in the change implementation
process. Stakeholders’ resists change due to adjustment problems, and managerial support will
help them adjust accordingly.
The management of British Airways can use negotiation and coercion, in order to solve
the disputes that lead to cabin crew strikes. Negotiation with stakeholders is useful in facilitating
change process. Coercion is useful especially in cases where speedy change is required. Change
initiators hold considerable power and they can use it to coerce or manipulate the stakeholders to
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accept the proposed changes. In some instances, speedy action can help overcome resistance
significantly.
British Airways should design effective employment structures, and introduce a fair and
friendly working environment, in order to build the trust of employees. When dealing with
disputes, the management should focus on effective solutions to the issues, and avoid victimizing
the stakeholders or the unions (Milmo, 2010). Managers should explain their decision and
maintain open communication channels, in case the stakeholders require clarification.
Communicating expectations, involvement of stakeholders and supporting them with the
necessary skills increases their commitment and confidence on the change process. Stakeholders
should be given ample time to adjust to change demands. The coping cycle, which comprises of
denial, defence, discarding, adaptation, and internalization phases, allows the stakeholders to
balance performance and self- esteem needs, and accept change.
Conclusion
In conclusion, leaders at the British Airways should ensure that the stakeholders are
adequately motivated and are involved in the change implementation process. This will elicit
positive responses, enhance performance and reduce change resistance. Participation, managerial
support and communication are vital elements in enhancing the change implementation process.
The stakeholders must understand the need and extent of change, and other relevant change
information. The management at British Airways faces challenges in protecting its brand name
and maintaining corporate identity, especially due to the cabin crew strikes, which depicts
leadership flaws. Employees are major stakeholders in the airline industry and their welfare
should be of priority to the management.
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Strikes can ruin the reputation that British Airways has strived to build and protect, if the
issues surrounding the strikes are not addressed sufficiently. The management should provide
sufficient information on the expectations, limitations and changes that the Company is
implementing, and allow participation from the cabin crew staff, in order to minimise resistance.
Careful listening, and responding to their grievances, will portray responsibility and help in
conflict resolution.
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