A Report On The Strategic Change Issues Facing British
Ancient philosophers always said that the only room that never gets full is the room for change and growth to better levels. Change brings a sound of celebration and relief. In the business sector any change is always geared to the increase in profit. Any business venture has one driving force: creation of wealth and economic growth. This is the reason for existence of businesses like: banking, hotels, airlines, schools, hospitals among others. Operation management is the day to day decisions and ventures that are undertaken to run the company. This can help give a projection into the future 5, 10 or so years.
One thing that is very basic is that the world is changing, and an effective business should also help to bring this very necessary difference. “One of the key roles of a serious manager and entrepreneur is to solve problems decision making is another major role of this officer. ” These were the confession of Carleton (2005). Decisions pertaining various departments in a company are made by key management staff in every firm: The key drivers for change that are most likely to impact on the future of business and management are: Stiff and ever increasing competition from key rival firms.
One must always be the best in the market place in order to remain advantaged. This will call for several reforms towards improvement, and such challenges will be dealt with as they come. Some decisions to be made, take time and energy. However, the knee-jerk response is to jump straight to the most obvious solution: training and coaching to develop individuals’ leadership skills and potential. This conveniently bypasses the problem-diagnosis stage. It also overlooks the disconnect between what happens at individual and organizational levels. Managerial and human resource aspects have always put pressure on firms.
Such pressure is sure argent of change. A global trend is another driving factor towards change. Any new standards set up must be adhered to if one needs to e in the market. The main aim is to develop an appreciation to the role of management in the process change in the firms of interest. Management of such a change can never be an individual affair. It explores the forces driving organizational change and offers a contextual understanding of change management principles. Do you do it alone as a manager? Do you involve others? Do you let others make the decisions?
Management is an organized, systematic application of the knowledge, tools, and resources of change that provides organizations with a key process to achieve their business strategy. Change Management is a critical part of any project that leads, manages and enables people to accept new processes, technologies, systems structures and values. Changes are inevitable in any firm or sector. Of great interest is change management in British Airline Company. Many such firms as this exist. This calls for real outstanding leadership in the market place. BRITISH AIRWAYS This is an airline with it’s headquarters in London.
Europe has increased sharply over the past decade as the introduction of new airlines has helped push prices down significantly. This airline has routes both within and without the great United Kingdom sky. This airline is the world’s second largest international airline, with a passenger carrying capacity of more than 27 million passengers from one country to another. Also, as one of the world’s longest established airlines, it has always been regarded as an industry-leader. British Airways’ worldwide route network covers more than 216 destinations in 94 countries (including franchises, subsidiaries and one world partners).
British Airways is one of the founding partners of the one world alliance, which took off in February 1999. Fellow members now include American Airlines, Aer Lingus, Cathay Pacific, Finnie, Iberia, LanChile and Qantas and Swiss. The original predecessor airline, called Aircraft Transport and Travel, launched the world’s first daily scheduled international air service, British Airways traces its origins back to August 1919. At the moment the airline has an amazing fleet of 312 aircraft; including 100 wide bodied long haul aircraft (57 Boeing 747-400s and 43 Boeing 777s).
The current world has gone into corporate alliances, with mergers and acquisitions being the common norm of doing business. For this reason, British Airways has one-on-one relationships with a number of airlines. It owns a 17 per cent stake in Qantas and 9 per cent in Iberia. It also fully owns subsidiaries such as British Airways CitiExpress. Members of British Airways’ franchise family include British Mediterranean Airways, GB Airways, Comair, Loganair and Regional Air. Some of the main components of British Airway’s business strategy include investing in its people and products, and continuing to build a competitive cost base.
These objectives, along with other strategic goals and values, have been delivered through a program called “The BA Way,” which was launched in 2004. This was in response to the people wanting real clarity about where company is positioning itself in the marketplace. The leading entrepreneur once observed that major firms often started as either government or public properties. This however is never the case with British Airways. This company is owned entirely by private investors, with more than a quarter of a million shareholders. British airways just like any business have its own problems.
The problems always arise in the process of moving to greater heights. As executive assistant to the director of British airways, change issues facing the organization in the next 5 five years are amazing. The major problems are as below: MANAGERIAL The BA Way has five factors for success: be the best U. K. -based network, understand the customers better than the competition, be a powerful brand that people know and trust, foster a competitive cost base and work together as one team. For a progressive development of a business, proper leadership is bedrock to build on.
Managerialism, especially in the public and quasi-market sectors, has provided a key development in how organizations are managed, co-coordinated and controlled, and is suggestive of new relationships and a reordering of organizations and management. In the March issue of Fast Company magazine, a fascinating article titled “What is the Biggest Change Facing Business in the Next 10 Years? ” Avram Miler, the CEO of Avram Miller enterprise explained that “The cornerstone for this millennium is the end of time and space. Most organizations today are run the same way as early-20th-century businesses.
Everyone goes to his car, drives to work, has certain hours, and has a certain job. It’s all built on the factory model. Moving forward, it really isn’t going to be important where you are in order to do your job. Ideas are being worked on 24 hours a day. Nobody seems surprised anymore if I wake up in the middle of the night and start IM-ing someone in Europe, because the fact is, they don’t even know where I am. And it doesn’t matter. ’’ He continues to say that “Fewer and fewer people will want to be employees of corporations, because corporations don’t have anything to offer.
Corporations don’t provide security and provide fewer and fewer benefits. People may find new ways to sell their skills. ” This illustrates that many people often get employed in companies, but the never have any intentions of staying for long periods. Tim Brown President and CEO, Ideo, Palo Alto, humorously says “people are ever on the move to greener pastures. ” This is one major problem in management. Employees, some of whom hold very key positions in the company always transfer to the so called green pastures.
The human resources manager of British airways observed that many of their staff has often moved to start their own ventures. These range from local to international ventures. The best way to manage this problem is to create laws governing employment. Its true that a person performs best only after getting good orientation on an environment. Consistency is another key to excellence. To avoid loosing employees, a minimum duration should be put, such that no employee can leave before finishing some specific time duration. This will help the airline to retain workers for some good time and hence foster consistency.
The major hindrance to this implementation is some weakness in management. Friends to departmental heads are always favored and the axe rarely falls on them. This however can be managed by prosecution of any corrupt staff. Another managerial problem often realized in British Airways is lack of commitment in some of the employees. They often take long to finish any assignment given to them, and when asked to give an explanation, this is a ticket to being their enemies. This vice in a company leads into loss of money, because people are paid their allowance while they don’t perform their duties.
Many researches argue that training and development programs increase the organizations performance and effectiveness. This can help increase the work output because more experience is injected to the generally trained staff. Toward a better understanding of the effects of training and development in the workplace, this research points out the importance of training and development the workforce, determines the major types of training and development programs, discusses the relationship between training and the overall organizational performance, and offers some guidelines for HR managers to design effective training and development programs.
Signing of performance contracts has helped to alleviate this vice. This helps to ascertain that an employee indeed deserves to get his salary. Burnes (2004) in his book arrives at a style which enables healthy competition within a firm, resulting into increase of production. He says “the ability of an enterprise to compete within the prevailing settings relies on two qualities: • The capacity of the firm to identify and understand the competitive forces in play and how they change over time linked together.
• The competence of a business to mobilize and manage the resources necessary for the chosen competitive response through time. British Airways have implemented this, and many staff has always been awarded for showing commitment and excellent performance. GLOBALISATION Another method British Airways’ learning division has used to promote organizational values is through owning its Future program, which every employee across the enterprise—from in-flight crews to customer service staff—must go through at some point.
This is delivered by the internal senior management teams. It’s about helping people understand the business direction, the environment that they are operating in and the way they are positioning themselves in the business. By understanding that, people will understand the actions the team is taking in driving the business forward (British Airways, 2005) Some of the changes that British Airways has in the next five years include: • BA to increase services between New York JFK and Gatwick, but at the same time drop its link to the US city from Manchester Airport.
• BA to enhance the passenger experience at the new London Heathrow Terminal 5 with the installation of art works in its premium lounges. Companies move towards forming alliances, both local and at international level. The environment in which most organizations operate today is continuously changing, and the rate of change is increasing. Almost most organizations are now involving in tremendous increase in international business and foreign assignments. British Airways is not left behind. At the moment, the company has offices in all capital cities in the world.
At the same time, serious advertisements are on the run. To enhance collisions, BA purchased the small German domestic airline Delta Air Transport in 1992 and renamed it Deutsche BA. By the time it was sold in June 2003, DBA was operating 16 Boeing 737s and was the second-largest German domestic carrier, after Lufthansa. Globalization is a disposition towards international interaction and co-operation. This comes with the general growth of a knowledge based economy. Impacting on the financing structure of organizations and employment practices.
The ability of an enterprise to compete within the prevailing settings majorly relies on two qualities: the capacity of the firm to identify and understand the competitive forces in play and how they change over time, linked to • the competence of a business to mobilize and manage the resources necessary for the chosen competitive response through time. . The environment in which most organizations operate today is continuously changing, and the rate of change is increasing. Almost most organizations are now involving in tremendous increase in international business and foreign assignments.
BA aims at increasing the number of passengers greatly. New infrastructure is required for this. Heathrow Terminal 5 was built exclusively for the use of British Airways at a cost of ? 4. 3 billion and officially opened by Queen Elizabeth II on 14 March 2008. It opened to passengers on 27 March 2008. more air crafts are also to be purchased come 2013. for instance, On 27 September 2007, BA announced their biggest order since 1998 by ordering 36 new long haul aircraft. The company ordered 12 A380s with options on a further 7, and 24 Boeing 787s with options on a further 18. TECHNOLOGY
Technological factors are information technology/the internet, new production processes computerization of processes and changes in transport technology (Human Resource Management Journal, 2008). There are also internal triggers for change which include: new chief executive, unionization or de-unionization, structural a change, re-design of factory or office layout, re-design of jobs, new IT equipment or software introduced, cuts in overtime working and redundancies (Epmbook, 2007). As research continues in the energy sector, Bio fuel may be used by BA planes. This is an improvement towards good environment creation.
Indeed this is amazing. Currently the test of planes is going on, on their response to bio fuel. The above forces are for easier information transfer, facilitates global structures, requires new competencies and expectations, facilitates telecommuting; new employment relationships, more emphasis on knowledge management, quick competition through globalization, more educated workforce etc (McShane and Travaglione, 2003). Change management entails thoughtful planning and sensitive implementation, and above all, consultation with, and involvement of, the people affected by the changes and BA has mastered this art.
Change must be realistic, achievable and measurable. These aspects are especially relevant to managing personal change. Before starting organizational change, ask yourself: What do we want to achieve with this change, why, and how will we know that the change has been achieved? Who is affected by this change, and how will they react to it? How much of this change can be achieve without? These aspects also relate strongly to the management of personal as well as organizational change (Business balls, 2006). If you think that you need to make a change quickly, probe the reasons – is the urgency real?
Will the effects of agreeing a more sensible time-frame really be more disastrous than presiding over a disastrous change? Quick change prevents proper consultation and involvement, which leads to difficulties that take time to resolve, (Burns & Stalker, 1994). BA does not sell change to people as a way of accelerating ‘agreement’ and implementation. ‘Selling’ change to people is not a sustainable strategy for success, unless your aim is to be bitten on the bum at some time in the future when you least expect it. Change can be unsettling, so the manager logically needs to be a settling influence.
BA has gone through extreme lengths to ensure that they study the market. They are keen on the use face-to-face communications to handle sensitive aspects of customer relations and encourage managers to communicate face-to-face with their people. They discourage the use of email and written notices as they are extremely weak at conveying and developing understanding. At all times involve and agree support from people within system (system = environment, processes, culture, relationships, behaviors, etc. , whether personal or organisational). • In depth understanding of the organisation’s position at all times.
• In depth understanding of the direction of the organisation. • Open and clear communication channels. SPECIFIC CHANGES THAT BRITISH AIRWAYS HAS ENCOUNTERED From a humble background BA has expanded to the giant it is by now. This never occurred in one day, neither was it a very smooth transition. Given time, all have a potential to expand to the highest levels. One of the greatest changes that occurred in BA was mergers and acquisition. During the 1990s BA became the world’s most profitable airline under the slogan “The World’s Favorite Airline”. The management then saw the need to expand.
A merger is the business transaction that takes pace between two firms. One firm acts as a buyer, while the other company is bought. Mergers take place to help cub extreme competition and also to widen the market scope. In 1992 BA purchased the small German domestic airline Delta Air Transport and renamed it Deutsche BA. This widened the market space into Germany. By the time it was sold in June 2003, DBA was operating 16 Boeing 737s and was the second-largest German domestic carrier, after Lufthansa. The lesson learnt is that mergers bring expansion and growth.
In the year 1995, BA formed British Asia Airways, a subsidiary based in Taiwan, to operate between London and Taipei. Owing to political sensitivities, British Asia Airways not only had a different name, but also had a different livery, with the Union Jack tailfin being replaced by Chinese characters. Many airlines followed the same practice, e. g. , Qantas flew to Taiwan as “Australia Asia Airways” and KLM’s Taiwan operations became “KLM Asia”. British Asia Airways ceased operation in 2001 when the airline suspended flights to Taiwan due to low yield. A change brings with it many resettlements.
Some include employment of new staff to handle the expansion. This was the case in the two mergers in Germany and Taiwan. Other changes are indeed not pleasing. An example is the laying off of staff incase of closure. Proper marketing must be done. This is to keep the much esteemed customers aware of the company’s developments. The road to success is never a smooth one. Any push to the positive is always met by opposing currents. Some of pitfalls to change into a new market include competition. The main competitors of British Airways are bmi and virgin Atlantic. These offer great rivalry.
However BA has managed this through its strategies to make sure that clients are satisfied by the service delivery. Capital is another challenge to expansion. Some expansion ventures require much money. This is money to buy planes and to do office set up, with an aim of getting back the profit. Many a times the company has gone through looses especially when they were forced to pull back. Withdrawal is not very pleasant but it is the best option especially when things are not working. This was the case in Taiwan. The world population is large and ever-growing. This has and will provide market for flight industry.
The best way to venture is to do market surveys. Once the costumer’s desires are known, follow up can be made to come up with a product to satisfy the need. It pays a lot to be the market leader in terms of innovations. This will give an advantage over other companies. CONCLUSION It takes commitment and vision to be on the top. BA has one dream, which is to be on top in the flight industry. In the next five years, the company shall have diversified its services in terms of quality and quantity expansion. REFERENCES 1. British Airways(2005): The Wings of Learning.
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