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Running Head: CHANGE MANAGEMENT IN BA

Implementation and resistance of the


-change management approach in British Air management team

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BRITISH AIRWAYS

Change Management

It was during the birth of civil aviation when British Airways was born, these pioneering
times were the days just after the end of Wrold War I. It is now going to be a century when on
25th August, 1919 the first schedule air operation in the world took off (British Airways, 2012).
Those who were young in 1972 still have a emotional link with the name BOAC, or British
Oversas Airways Corporation, this name remained glued to the minds of air travellers worldwide
till 1972 when British Airways was formed, a meger of BOAC and BEA. Each decade thereafter
brought new challenges and shaped British Airways. It was on 12th November 2009 that it
confirmed the merge with Liberia. During the global recession that hit the world when British
Airways went into the red, its profits went down to become loses and then came the period of
change in management at British Airways. Change management has become a very important
factor now and many great organizations, like Microsoft, Google, Boeing, OPEC all have to go
throught it. This aspectdetermines the success of an organisation once change is introduced
within an organisation or the environment in which it operates.

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1.

Implementation and resistance of the


-change management approach in British Air management team

It is often said that change is the only constant in the world people live in. The
pervasiveness of change is seen in every sphere of human activity. Despite efforts by humans to
bring in routines to create more order and stability, the world becomes increasingly unstable.
Organisational change implies taking a system from a state of stability to a new (and changed)
state.
Understanding of the change concept and the nature of change will facilitate learning and
development of strategies and, eventually, the competencies needed for living with change.
These competencies will contribute to a sense of being in control. The goal is an organisation
that is constantly creating its future rather than defending its past.
Societies are changing rapidly and the people across the world experience much more of
a global awareness than before and global competition has become a reality. With technology
innovations and scientific breakthroughs have emerged changed values, attitudes, life
expectations, etc. Organisations have been subjected to a state of constant change as a direct
result of the changing competitive landscape.
Kurt Lewin (1951) equated change to a force field. He viewed change as a
sequence of activities that emanate from disturbances in the stable force field that surrounds the
organisation (or object, situation or person), tends to focus on the role of context, stability as a

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satisfactory state, and the beginning of reaction of events when the force-field is disturbed.
Porras & Silvers (1991:52) view organisational change as a process, which consists of the
following:
-an initiative which alters
-critical organisational influencing processes
-individual behaviours, which subsequently impact on
-organisational outcomes.

1a.

Internal and external contextual factors which influenced the strategic changes:

British Airways is the largest airlines in the United Kingdom, and one of the largest in the
world. It serves to more countries with an extensive international network (British Airways,
2010). The airline witnessed a growth in its income, financial review: Revenue for the year
ended 31 December 2012 rose by 8.4 per cent to 10,827 million (2011: 9,987 million). This
included an increase in passenger revenue of 778 million or 8.9 per cent, of which bmi mainline
contributed 262 million, with the remainder being an increase in capacity and traffic. Capacity
(ASKs) increased by 5.4 per cent for the full year and traffic (RPKs) increased by 7.7 per cent
with the like-for-like change being 2.5 per cent and 5.2 per cent after stripping out the impact of
bmi (Statistical composite that calculates changes in financial markets, expressed in percentage
changes from a base year). Various challenges have been faced by British Airways since its
inception. This paper analyses the implementation and resistance of the change management

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approach in British Air management team during the period 2009-2011 and challenges faced
thereof.

1b.

Evaluation of the nature of changes

It can be argued that the successful change-management is crucial to any setting in


order to survive and succeed in the continuously evolving business environment (Rei, 2012).
Change is life, even for organizations, hence when an organization is challenged by crisis of any
sort or faces gaps in performance, it has to change to survive. The story of British Airways is
described as one of the most widely used inspirational accounts of changing culture (Grugulis &
Wilkinson, 2002).

A management change is mostly to deal with the two major issues. (1) When
organizations are in possession of effective strategies in place but the internal or external factors
can turn damaging. (2) On the individual level change happens to the individuals expatriate
assignments, promotion, burn-out, and midlife crisis. Sometimes even the best management
strategies contain latent contradictions which effect management spaces that ultimately lead
identities which in turn belie the future aims and objective of the organization. The effects of
economic crisis or global recession that took place in 2008 are still felt today and it has led to the
downfall of many powerful organizations.

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British Airways financial statements show that it made a profit of 875 million only to
enter in red with a loss of 401 million in 2009 (Milmo, 2009). The midyear loss by the company
called for a change. It did not matter whether the loss of due to internal or external factors, or a
mix of both, at that time change was a necessary undertaking to survive.

Sudden and overwhelming oil price rise had to be countered by means of cost reduction
in the companys operation, either by retrenching workers or pay rise freeze. Due to the global
recession the airways experienced low passenger traffic even to the high end markets like the
United States. According to British Airways annual report 2009/2010 (British Airways Plc.
2010), the airlines identified five objectives through change management in order to transform it,
and these actions have yielded positive results.

The industrial dispute between British Airways and Unite (the UK general union with
over two million members) in the spring of 2010 provides a fascinating insight into the anatomy
of an industrial dispute involving not only an employer and its employees, but also the
government, political parties, customers and the media. The British Airways and Unite (the UK
general union with over two million members) dispute in 2010 due to change management
strategies implementation, is a fascinating study into the anatomy of disputes. British Airways
has 13,500 flight attendants, most of them members of Unite. The airlines unilateral decision to

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slash workforce including the cabin crew was actually in an answer to the pre-tax loss of 401m
in the previous year.

British Airways answer to the strike of its crew during March 2010 was a walkout on
different ways. The management took away all discounts offered to the air stewards, the
management also requisitioned other airlines cabin crew to serve in BA long haul flights, and
even used volunteers. A surprising gesture was from the BA pilots who volunteered to act as
cabin crew also. Even then BA saw a 15% decline in its air traffic.

As cabin crew represents the largest segment of any airline workforce to in order to
reduce the cabin crew cost by over 140m a year, new cabin crew on less attractive perks were
appointed. The Unite went on a seven days strike the fleet is more like a Trojan horse allowing
minimum wage workers, the restructuring of cabin crew operations and plans to bring pay in line
with competitors who are widely reported to pay cabin crew significantly less than BA.

1c

An outline of the change management strategies

Mr. Willie Walsh, the Chief Executive Officer of British Airways recommended cost
reduction changes. He requested the workforce to avail unpaid leaves and do some unpaid work
too between a month and he himself did not accept the salary package of 61,000. In the first
ever change that was made was to do away with staff overcrowding. A retrenchment plan began
in 2009 and approximately 5000 workers lost their jobs. This was due to the thinking of the

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management team that BA was overstaffed and this was bad for the companys growth and even
survival. Because many other low-cost carriers have posed great challenges not just to BA but
to all big airlines of the world. The management recommended that the long haul cabin crew
should be reduced to 14 members from fifteen and this meant that since its long haul services
began the airways was consistently paying one extra cabin crew for no economic reason.

Then British Airways management went for another change, it froze all types of pay rise
for two years. Due to the global hike in fuel prices the CEO of British Air noted that the salary
freeze was justified in order to sustain the airline operations (Plumberg & Johnson, 2008). In this
regard he also cautioned the union that no resistance would be accepted because if done so, it
would lead the airways towards insolvency. The top brass of British Airways management and
engineers accepted a more efficient working system and cut in their salaries. Though the
companys management personnel were accepted the change, the cabin crew was still resistant it.

The Lewins change model:

It is one of the early fundamental models of planed change. Lewins change model
regards change as moment in time when two forces work against each other one striving to
maintain the status quo and the other pushing for change. When these forces are both stable
Lewin defines this state as quasi-stationary equilibrium. To change the state at any one state
requires change in any of the forces. However Lewin also suggested that modifying those forces

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that maintain the status quo produces less tension and resistance than increasing forces for
change and consequently is a more effective strategy for change (Waddell, Cummings & Worley,
2011: 22). Lewin change process denotes the essential progressions through phases of unfreeze,
change and refreeze. The unfreezing stage is the stage where by organisations recognizes the
need for change. At this stage there is reduction of the forces that maintain the organisations
behaviour at the present moment.

Willie Walsh, the BA the Chief Executive Officer, said the airline flew more than 60,000
passengers on 470 flights on a given day of the second strike, compared with 43,000 on 350
flights on the previous day. In response to such claims, the Unite leader, Len McCluskey said:
"This is the great BA con trick To change matters for the worse the media also joined the fray
and shaped public opinion by leaking classified information which only worked in favor of the
Union. The strike by the Union took a political dimension, and David Cameron, the leader of the
Conservative Party gained political clout as he recommended the then PM Gordon Brown is a
weak leader as he has failed to support the workers on strike and reign in the union. The truth
was that the government feared of the consequences of industrial action and its impact on
elections.

1 d.

The Challenges and difficulties experienced by the BA team

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Many organisations also try to combat any resistance to change that may want to arise.
The change stage is a stage in the change model where transformation occurs within the
organisation. It involves the development of new behaviours, values and attitudes through
changes in organisational structures and processes (Waddell, Cummings & Worley, 2011: 22).
There freezing stage on the other hand is a step that stabilizes the organisation at a new state of
equilibrium. The change team can assess the results of the action and make any needed
modifications that can reinforce the new state organisational state British airways tried to adopt
the Lewins model between the years of 1996 2000. It was called the British airways: Flying
into storm. This is a case of failed management in British Airways where from posting its highest
ever profit margin it slipped to its lowest ever share price. They failed to follow the sequence of
the Lewins models and this resulted in a flop of the whole process.

Willie Walsh, the Chief Executive Officer of British Airways understood that a need
existed to slash the cost of doing business from top to bottom. The concept and introduction for a
change is hard to implement. For the success of the implementation of any change the leader
established a vision for the process of managing change. This strategy helps in the creation of an
outcome picture and for new realities to be adopted and ensured. Willie Walsh cost cutting
strategy was implemented in top down manner. The CEO of British Airways not just turned
down a 334,000 bonus, once but twice. Walsh also made sure that his salary remained frozen at
735,000, the level it was set at in 2008.

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Willie Walsh was the first Chief Executive who sacked another Chief Executive, Colin
Matthews of Heathrow as he said Heathrow is ripping off passengers, its inefficient, and its
been grossly over-rewarded by the CAA. Walsh called the powerful Chief Executive of
Heathrow, incapable of running the airport. Walsh also took on Qatar, Chinese and Singapore
wealth funds, the owners of Heathrow, and said they were using passengers as 'cash cows'. He
also criticised the UK government for making policies which discouraged tourism. Then he also
went for other employees and more than 7000 employees took voluntary pay cuts.

2.

Academic Report

2 a.

Core issues to the strategic changes

In the management's perspective there are various factors which derails change
management, some of the problems are - resistance, ignorance and denial, and it takes a lot of
wisdom on the part of the management to counteract them. When workers heard about change
management in BA, their initial reaction was anxiety, fear and curiosity. Change management is
not taken lightly by the management, overcoming resistance in change management is a very
sensitive issue.

Change in any organization poses great challenges to the management just as it posed
challenges to Willie Walsh, the CEO of British Airways. While he was understood by some of
the employees, but to some he was just unacceptable. Everyone knows that British Airways is in

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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).

Willie Walsh spent nearly nine consecutive months in close consultations and
deliberations with the Union group at British Air. He was fully committed to the negotiations
with the union. Walsh was confident that the management's rationale for change management is
unquestionable so was its fairness. According to Willie Walsh what was done during 2007 was
right in its own context and no parallels should be made between what was being done now,
because due to the global recession, it was the responsible step to take for the management. To
the management British Air is a legacy and is very much unionized, so whatever was being done
came into spotlight by the media. To the management it was necessary to separate the two
pension schemes, one, the APS which is a very mature scheme while the NAPS is an immature
scheme. But according to Walsh the Trustees controlled the scheme.

2b.

Specific concerns and problems from a stake holders point of view

Any organization resembles a family, every member playing a role to carry or as a


mechanized system with various components, all of which are essential to performance of the

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machine (Lussier & Achua, 2009). The stake holders at British Airways, are equitable to a family
and required strategic management and style, so that it can operate smoothly. 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.
Willie Walsh had to face a great deal of change management strategies implementation.
The most daring was by the cabin crew as they did not accept retrenchment and working hours
extension without any pay and this was the reason that the strikes were announced (Samuel &
Bridges 2010). Walsh had to be sure that his strategies of change management are implemented
and he also evaluated it to be satisfied. The work-force is the most important stake holder in any
organization and so also in British Airways, which was challenged by any strikes due to change
management implementation. In its history British Airways has faced many managerial
challenges and it has successfully dealt with staffing or strategic issues. It is imperative for the
management at British Airways to treat its employees in a respectable manner so that they are
motivated and their performance increases. According to Whysall, an organization that treats
their stakeholders well is perceived to be well- managed (Whysall, 2000).
The management made sure by involving all the stakeholders about the issues and raising
the awareness amongst them and it also undertook open dialogue on its change management
strategies with its loyal customers and other external stake holders and to a great extent to the
global community.

2c.

Advised approaches and recommendations

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Change initiatives are like projects, as they have budget constraints and deadlines
(Cabanis-Brewin, 2011). The management should be prepared to meet all deadlines, work on a
tight budget without compromising on quality of services. For British Airways to be successful it
should make sure to be successful in change implementation and also carefully communicate
with all stakeholders. At various junctures, the management is recommended to accept risks by
increasing flexibility. Lessons learnt should be incorporated, and media hype should not be
created. Similarly involvement of political parties should be avoided as it impacts elections.
Effective strategies should be in place to face any such circumstances like economic recession.
Strikes are not liked by managers by earn the sympathy of the masses in case they are held
against retrenchment of workers, strikes play havoc to the image and reputation of organizations
like British Airways, and only helps in showing the flaws in leadership style. Lack of
communication is the root cause of resistance. The stakeholders of British Airways can be
persuaded to cooperate in the process of change implementation process. Hence management of
British Airways should welcome stakeholders opinion and value them. The pioneering work of
Greiner (1972; 1998) is perhaps the best-known contribution toward this paradigm
Today travel industry is highly organized and competitive hence managers are often
challenged in the management of the business, and issue focused stakeholders management.
Because not all the stakeholders know about the organization's limitations. Resistance can be
shown by dissatisfied stakeholders by means of going for a strike or go-slow activities which in
turn can sabotage the organization, like the cabin crew strike at British Airways. It is essential for
British Air to liaise with all the stakeholders in an effective manner and should not leave any
issues just for the Public Relations department. If the deliberation between the stakeholders and
the management conclusions sums up the need to implement change, then the board of directors

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in the Company should agree to these suggestions. Brand image and corporate identity are interconnected and belong to all the stakeholders (Balmer, Stuart, & Greyser, 2009). It is the duty of
the management to protect the brand image and the corporate identity. The management at
British Airways understood that any organization's identify resides with the stakeholders
(Balmer, Stuart, & Greyser, 2009). Services improve when problems are understood and
solutions made. British Airways should be ever ready to grasp on new opportunities, which come
through change management. The work pool should be ready to face such challenges and accept
change by understanding why these changes are essential for the sake of the good of the
organization. A manager who is also the leader is the architect of the strategies, he should know
the needs of the people and the organization. To stay competitive individuals, teams and
organisations have to engage in continuous learning and improvement, competency-building, and
above all, the capacity to engage in continuous change (Van Tonder, 2004).

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