The Academic Report of British Airways
After that, claiming the managerial challenges as experienced or encountered in this problem that will be related to theoretical explanation, and suggesting approaches for overcoming resistance to change, ealing with anxieties, and supporting the implementation of change strategy.
The Core Issues in BA The Eight-step Change Process John P. Kotter (1996) introduced his theory, the eight-step change process, in his book, and is widely used for transformational top-down change initiatives by many multinational companies. He said that most of changes happened difficultly and cost a period ot time to achieve.
The theory was designed to alter strategies and reengineer processes. The core issue about strategic changes and change management strategy in BA was the dispute that happened from 2009 to 2011.
It was caused by BA’s strategy for reducing Cabin Crew members on long-haul flights and introducing a two year-long pay freeze in October 2009, and brought tremendous losses on money, passengers, employee relations and brand reputation for BA. Establishing a sense of urgency”Kotter thought that the change would be failed if most of employees and managers did not have a sense of urgency and needs for change.
The companies could build it through identifying potential threats, examining opportunities, giving dynamic reasons to employees, discussing, and getting support from other stakeholders. According to BA’s annual report (2010), BA was facing the threats from strong competition and financial crisis. In addition, BA had serious pension deficit.
Although BA management found the potential risks and uncertainties of these threats, but no news or report showed that BA management communicated with its crew members about these problems they had.
Creating the guiding coalition”strong leadership and visible support from top management or key people in the organization are necessary in change management. The leaders who have influence on the rest of employees are throughout the organization. Chairman, Martin Broughton (2010) claimed that he and other stakeholders supported to make the plan for reducing cost in the annual report. Developing a vision and strategy”at the beginning of making change strategy, people will probably have a number of great ideas and solutions.
People can grasp the strategy easily if the ideas and solutions link to an overall clear vision, so that they can understand the goals and accept the strategy. Although BA had developed a clear vision to explain the reason and plan for reducing costs, but the objectives and measures of BA were different from crew member and the plan eventually caused ispute. Communicating the change vision”the actions after creating the plan will determine if the plan achieves great success or not. Therefore, frequent and strong communication is important.
It makes sure that employees implement the strategy correctly, and they expect that the company can understand and solve their problems through communication.
When BA implemented the strategy, they did not communicate with Cabin Crew well and listened to crew member’s opinion. Prime Minister, Gordon Brown (2010) encouraged two sides to reach a negotiated settlement. Both two sides thought that communication was the only solution for the ispute. Empowering broad-based action”the company should continually check barriers of change and remove obstacles to make the change strategy successful.
BA (2010) announced that striking staff would forfeit cheap travel perks.
This action aimed to reduce strikes and penalized strikers. In addition, more than 80 crew members (2010) had been suspended and 13 had been permanently dismissed from BA. BA took actions to remove barriers. However, it did not help Cabin Crew to meet their needs, and caused new barriers. Generating short-term wins”managers and employees like the sense of achievement.
Traditionally, implementing a strategy costs a long time to achieve success.
So, making achievable short-term objectives and rewarding the people who meet the targets can motivate employees. BA did not make short-term objectives in this strategy, and no plan about rewards for those employees who would he p BA achieve the target. Consolidating gains and producing more change”Kotter (1996) stated that many change programs failed because the victory was declared too early. Companies should build trust to employees and customers through the success of short-term objectives and continue to work hard ntil the end of the strategy.
In May 2011, BA management and Unite union finally agreed a pay deal and the dispute ended.
However, BA did not celebrate it because it still faced several challenges and difficulties when they implement the new pay deal. Anchoring new approaches in the culture”the new change should be a part of the core in the company and it can be seen aspect of the company. On the other side, it is important that management and employees continue to support the change. The relationship between BA and Cabin Crew had changed since Keith Williams took over as the chief executive.
People thought that he was different from Willie Walsh, and they had confidence with him and the new pay deal (BBC News, 2011).
Change Leadership This part will be discussed through transformational leadership and situational leadership. Transformational leaders have a vision of transformation that converts potential followers, and comprise of inspirational motivation, idealized influence, intellectual stimulation and individualized consideration (Bass M. B. 1985). The chief executive, Willie Walsh is not transformational leadership style. People usually follow him by compulsion.
He does not spend time on understanding subordinates and motivating employees. Colleagues thought it was difficult to approach him and take part in decision-making with him (Walsh, 2009). Figure 1: Situational Leadership (Source: Hersey, P. and Blanchard, K. H. 1993) Situational leadership states different leadership styles that a leader uses depend on the situation (Hersey ; Blanchard, 1988).
According to the research from Huczynsky and Buchanan (2007), this theory divides leadership into four categories, directing, coaching, supporting, and delegating. Leader should Judge the confidence and motivation of followers correctly.
Willie Walsh can be placed in the Sl quadrant in Table 1 because of his high directive and low supportive oriented behavior. He does not change his leadership style to adapt different situation and follows the same style. So Willie Walsh has problems on the leadership. Change Readiness Balogun J.
and Hailey V. H. (2008) concluded that change readiness has two levels. The first level is the extent of staffs awareness of change needs, and the second level is personal commitment towards changing individual skills, attitudes, behaviors or work practices. The change management in BA showed low awareness of the need for change.
Even managers had already built the sense of urgency, but they did not communicate with Cabin Crew well so that crew member had low awareness about the change strategy.
It resulted in failure for the reduction plan. BA did not motivate employees to help it solve problems, and this reduction plan had negative impact on crew members who were change recipients. The change readiness in BA was not good. Resistance to Change and Strategies Piderit (2000) defined resistance as a negative attitude to change. It includes affective, behavioral, and cognitive resistance.
The affective resistance is about people’s feeling bout the change, for example, angry and anxious.
The cognitive resistance involves people’s point ot view about the change . The behavioral resistance involves actions that respond to change. The strategy BA implemented in 2009 caused strong resistance. Cabin crew was angry and decided to take strike because the strategy made them lost Jobs and money, and the dispute lasted two years. Finally, BA management and Unite union agreed a new pay deal through continuous negotiation. BA agreed to increase salary for Cabin Crew.
Stakeholder Analysis Table 2 shows the framework of stakeholder analysis from Grundy (1998). It enables company to identify the key individuals, groups or institutions that may extensively help companies to achieve success. Stakeholder analysis provides essential data about those individuals, groups and institutions which are involved in the business operation or affect success of the company. It also provides a foundation and structure to the company to make business plan and strategy. The key stakeholders of BA include subsidiaries, government institutions, tourists, local residents, communities, shareholders, competitors and so on.
They are one of the key factors hat influence BA to sustain its competitive advantages.
For instance, loyal customers give BA competitiveness against other airlines and have a huge impact on making strategies. The support from government makes BA expand its market share with fewer barriers. Shareholders have high input into selecting board members and authorizing new strategies. Figure 2: Stakeholder Analysis (source: Grundy, T. 1998) Organizational Variables Impacting on Change BA has already had a good structure.
Silla Maizey (2008), the new Acting Customer Director, introduced a new customer service that corporate with Heathrow Customer
Services and aimed to put customers first through current structure. BA changed its culture through changing the old headquarter building which reinforced hierarchical and bureaucratic values. In the new headquarter; executives are located with their units, not cloistered on a separate executive floor. The size, age, shape, and location of buildings might influence company’s teamwork, risk aversion and flexibility (McShane, Lattimore, Glinow, Young. 2010). Specific Concerns and Problems From BA management’s point of view, one problem BA has is re-building relationship with Cabin Crew.
Although the management and Unite union had settled the dispute and made an agreement to solve the conflict, there is a lot of dislike and hatred towards some employees who refused to support the strike, even some of them scabed the strikes. This problem affects team working and reduces efficiency. The dispute also influenced BA’s long-term planning because BA lost huge amounts of money and loyal customers. The brand image was damaged. BA has to redesign the strategy to solve these new problems and improve customer satisfaction which is the core idea of BA.
The other concerns and problems may cause by some risks that are utside of BA’s control, for instance, change in governmental regulation, pandemics, adverse weather, acts of terrorism, fuel price, and the availability of funding from the financial market.
Managerial Challenges As the discussion by the eight-step change process, BA has several managerial challenges. The first one is creating the guiding coalition. BA did not get support from the Cabin Crew who has good authority and leadership. It made barriers for BA to implement its strategy.
The strategy was only designed to meet BA’s needs, so that it caused conflicts between Cabin Crew and management levels. During the time of trike, the strategies, such as forfeiting travel perks that BA implemented were Just opposite to their wishes and inflamed Cabin Crew.
Short-term wins could motivate employees and improve efficiency, but BA did not set short-term goals in its cost saving plan. Advised Approach One advised approaches is provided by Kurt Lewin (1951). This change model is consist of three steps, which are shown in Figure 3. Figure 3: Lewin’s Planned Change Model (Source: Lewin K. 951) In the unfreezing step, BA should find the weakness of intrinsic system or issues first, then communicate with employees, tell them the reason and company condition, ultivate the sense of urgency willingness for change to BA management and employees. Meanwhile, BA must pay attention to employees’ psychological disorder for changes, motivate employees, and make them accept the change as much as possible.
The moving step is a learning process. BA should provide new information, behavior pattern, and vision to lead employees and implement strategies. BA can use role model, training, and expert presentation to support change management.
In refreezing step, BA can give employees opportunities to examine new changes and positive feedback or rewards, and make new changes become stable. Conclusion In conclusion, BA has some problems about its change management and lost huge amounts of money and loyal customers because of the dispute from 2009 to 2011. The brand image also was affected.
In order to solve these problems and develop business, BA can use Lewin’s change model or other frameworks as the foundation of change management and leave enough time for employees to adapt new changes. The strategic objectives are based on the company and employees’ needs.