Reference no: EM133160860
MANAGING CHANGE, THE BA WAY!
British Airways (BA) a leading multinational firm in the flight service industry that has gone through different phases of change and experiences. The organization has shown its strong presence in the market over the last five decades or more. There have been certain ups and downs, which BA has faced throughout its corporate history.
Cultural change is a part of the BA's system, which has been achieved through continuous struggles and efforts from its leadership. It was 1980 when British Airways recognized the need of change at the organizational level. It was the time when BA was facing serious business challenges and aimed to bring about a complete change in order to stabilize its position in the competitive industry.
These challenges were persistent and directly related to the successful continuity of the company. There were many problems of rising fuel prices, high competition, low financial performance, low efficiency, and low profit projections, which actually impacted the airline's business in the 1980s.
This demanded a cultural change within British Airways' system as it had an organisational culture that derailed the company's performance, and it was this culture which bottlenecked new modifications i.e., privatisation of the system. Hence, as old trends and culture hindered the performance of British Airways, the leadership started to rethink and redo things in the same period.
This was the starting stage of the cultural change as the leadership became much concerned about the problem, and was highly engaged to revamp the BA system. From the theorists' perspective, it has been noted that organizations start to change when there is a rethinking or reconsideration process going on. The change that was needed at BA needed to be a programme of internal organisational change that had to be massive and widespread.
When enterprises start to realize their weaknesses and recognize their problems by themselves, it is this time that organizations begin the change journey. This is the time when the organization expects change as it is in the profound stage of rethinking.
According to Schein (2004), there are two things that are essential in the culture change process. The first is the management of organisational anxiety - "human behaviours" and second the assessment of the organisations potential to change. In 1980, BA leaders identified the organizational potential in the human element and they recognized that if humans are open to change, then change of the overall system of the organisation is possible.
BA leaders, identified the need for human recourse management and employee behaviours to be integral at the highest decision level. This thinking identified people as potentials, for either making change happen or not. As a result, they tried their best to change mentalities and perceptions of people at both internal (employee) and external (customer) levels of the organisation. This was how Colin Marshall, CEO of BA, and Nicholas Georgiades improvised the cultural change within the organisational system. They first sorted out segments in the system to initiate the change process as they were easy and more flexible to accept the change practice.
Marshall also came up with the policy of "putting people first" another example of efficient human resource management by British Airways. This policy was another feature that directed employees and prepared them to display the highest level of performance.
BA also identified problems in the leadership of the organisation. The military mentally and rules based on power and authority traditionalised the organization system. The employees and the managerial staff were all managed based on a centralised style of leadership. From the very top to the bottom of the organization everyone required a revolutionary re-education on the institution.
Marshall and Georgiades a former consultant also realised before change can happen employees had to confront rigid decisions from the leadership, a management that was highly politicised, with a prime focus on authority, and which actually divided the whole system of BA. All areas of BA including maintenance, engineering, management, planning and operations were affected by rigid behaviours, with culture and norms imposed by military style leadership
The leaders started to focus on the cultural change first, and brought in parallel decisions to change existing customs. The mentality of just flying off planes and treating customers as luggage also hindered BA. But they recognized the old trends needed to be wiped away before the organisation could be stabilized.
Change - A Systematic Process
According to the theorists' perception, change is no way possible unless it emerges as a stage wise process. Organisations in the global scenario never change as quickly, as they require time to adjust to the transformational process. This is a systematic process that alters all components of the organisation over a long period of time.
For this reason, theorists propose a three-way model of organizational change, which includes structural change, cultural change, and then human change. It is said when organisations pass this three-stage model of change they have a probable chance to achieve the organisational change they seek to achieve.
The Approach
The organization was not structurally prepared to satisfy its customers and even employees of BA. There was a need to improve Communication, Performance Appraisals and Compensation/Rewards. Implicit to this they introduced quality reforms which included a powerful vision, high performance standards, deliverable objectives, and sound communication systems, that lead the change in the organization.
They also recognised the need for a cultural change. Organisations that ignore the cultural change make a big mistake as this is the kind of change required to transform the whole system. There are different components of the organisation including leaders, managers, and employees, which are part of the organisational culture; and it is culture that influences all components of the system.
There were trends of high complacency, lack of direction, low motivation, and low determination that kept the organisation at low performance levels. No organisation can transform unless and until they address cultural reforms and modifications. Trends formed by cultures are manipulators of the organisational functions.
The most important feature of their change is the 'peoples' change'. The main reason for BAs 1980s crises was its conservative style of leadership. The change needed efficient and effective human resource management, which mobilizes people from top to bottom in the organisation. When people are managed and well engaged, there are high chances that the organisation's performance will excel. Employees' performance was low just because they could not find any moral support or encouragement from the leadership. There were low opportunities to grow because the vision of leadership was limited and not open to recognise and root out employee skill and talent. Similarly, due to lack of vision BA confronted low synergy and fewer competencies at the operational level.
THE RESULTS
Mitchell and Georgiades together created and implemented training that appealed to the emotional side of employees immersing them in transformative experience with the objective of changing management style.
The three-leg stool model was completed in BA, with legendary levels of success. The model replicated the concept of managing people, and promoted consideration of the human resource management at the highest organization level.
The three-leg stool was therefore, about human resource management for BA; this was a deliberate effort made by Georgiades. Strong communication was the first basic component that was required in BA to adjust the organizational level of change. Georgiades proposed that when managers are without paranoia, and they have full confidence in their subordinates and teammates, change is possible. Second Compensation and rewards according to the ranks attained by managers. It was seen that when employees get justified rewards, they are more determined and motivated towards work. This leg of the three permitted BA to raise employees' satisfaction and motivation. Finally, Nick Georgiades wanted to see his employees growing, and he identified performance appraisal to be one of the methods for increasing performance. This allowed evaluation of performance in a precise, effective and detailed manner, which eventually became a route to BA's change.
The credit goes out to him as he recognized humans to be major carriers of change. He recognized that if complete change is required then it is necessary that organisations should start with its employees. Nick also understood that if one leg of the stool gets damaged or removed then the entire stool will collapse.
Hence, it is necessary that all legs are fixed, managed and adjusted to make way for the cultural change to happen. In all of these projects, the human element played a decisive role in the BA organisational change. By managing humans and adjusting "Managing People First" concepts, BA was able to achieve change in a comprehensive manner.
The same is true from the theoretical point of view as organisations cannot stand or affirm change without invoking human attributes such as "determination, passion, and motivation". These are all human behavioural elements, which play a central role in conducting the organisational change.
QUESTIONS:
- Identify and discuss four factors acting as: forces for change in the case and justify your choices