BRITISH AIRWAYS CASE STUDY
Due to economic reasons, management finds itself at the receiving end when it has to bring in change, which may be seen as undesirable by some employees. Most managers find it easy to change the way things have always been done in their respective companies. One of the ways through which the process can be simplified is by ensuring that the employees are aware of the reasons that the changes are taking place. Once they are aware, they should be involved in the process and this will make the process easier. Prosci, who developed the AKDAR model, noted that there are five building blocks for change. These include awareness, knowledge, desire, ability and reinforcement. This model is centered on the employees since they are important in determining the success of the change. In addition to knowing why change is needed within the organization, they should have a desire to support the management by participating in the process, know how they are going to go about it, implement the change and sustain it (Hiatt & Creasey, 2003). Being a high-end legacy carrier, in a market dominated by low-cost carriers, British Airways should look for ways to embrace change if it aims to make any profits.
British Airways has faced many challenges from its competitors, who are mostly the low cost carriers. These challenges include introduction of online ticketing, which enables the customers to compare the prices of all the airlines. The high fuel prices, which change without warning, have also proven to be a major challenge to the airline. In a bid to cut the operational and administration costs, the airline has had to reduce the number of employee, cut on payments and restructure the company. John Kotter noted eight strategies for dealing with change. These include establishing a sense of urgency, forming a powerful coalition, communicating the company’s vision, removing obstacles, creating short-term goals, building on the change and anchoring the change in corporate culture. Cameron and Green (2004) observed that leaders should be aware of what is going on around them. They should not be content with things as they are but they should learn to read more into any situation. The low cost carriers and the airline industry changes did not happen overnight. It took some time before people could trust the other airlines and ignore what they had been used to. The management in British Airways not only failed to see this but it also failed to have a corresponding action. Had it seen the vision, it would have continued to be a trendsetter in the industry by introducing innovative services, which the passengers could have identified with. Everyone in the organization should be aware of the company’s vision so that they can work towards attaining it. Apart from creating a vision, the management should come up with a strategy on how they intend to execute their vision (Blokdijk, 2008).
The organizational structure, job description, staff appraisal, performance and the compensation system should tally with the new vision of change. If this is not the case then the organization is facing obstacles to embracing change. The company should therefore eliminate any employee who is resisting change and even processes or structures that are getting in the way. For instance, British Airways should come up with their own model of Low Cost Carriers that will make it easy for them not to face competition. The management of British Airways did a commendable job by training 1000 cabin crew staff to work in place of the ones who were on strike. This strategy was used so that the airline does not incur losses. Doing away with obstacles or barriers can empower and encourage the team that is geared towards executing the change vision thus helping the organization to move forward (A.Hitt, Ireland, & Hoskisson, 2009).
The collapse of high-end demand at the end of the year 2000 was a wakeup call to the British Airways management to embrace change and consider coming up with Low Cost Carriers. The gap between legacy carriers and low cost carriers in terms of cost is significantly large. This is because Low Cost Carriers are affordable not only to leisure travelers but also to business travelers. From the article, we are told that the carriers, which earn a lot of profit, are the ones that charge the lowest prices hence British airways needs to adjust their fares to suit air travelers (Forsyth, 2005).
The airline is also faced with structural challenges such as lack of network distribution channels. This is a major hindrance for the management and they need to up their game because their existing distribution channels and systems are not networked. The other airlines find it much easier to operate and offer online services because their channels are internet enabled and they are able to offer cheaper services. The airline should be ready to spend a lot of money in the programming and setting up of the system if it intends to offer competing services. When expecting change, the management ought to be ready to spend some money in order for them to save in other areas.
In the past high-cost, carriers such as British Airways were able to counter the cost gap by focusing on increasing revenue on business travelers and the sale of premium tickets. The strategy worked back then because the customers were used to paying high fares and they did not have alternatives (low fare carriers). This shows that the airline could easily run into bankruptcy and debts, which could intern result in pension obligations. The airline therefore needs to come up with an alternative strategy of making profits. To some extend British airways cannot avoid the cost gap because it is an international carrier and international operations normally bring higher costs thus generating higher revenues. The airline is equipment and labor intensive and therefore not efficient because planes and employees wait for long hours. Low cost carriers on the other hand avoid connections to the big hubs and therefore empty and refill airplanes much faster (Shimbun, 2010).
The management of British airways may try to show its employees the urgency of changing their culture concerning the competition that they are facing (Weinwright, 2010). They should come up with convincing reasons on how the market competition is affecting them and have the staff members brainstorm on strategies to use in order to achieve a flat platform with its competitors. The management should go as far as developing scenarios to employees on what might happen in the future if they do not embrace change. This will in turn motivate the entire organization to get things moving (businessball 2010).
On the plus side, British Airways has an advantage over the low cost carriers because it offers direct flights with only one connection. When initiating any change, the management should note the services or products that are beneficial to the company. Theses services should be maintained and enhanced. It is therefore important to note that though everybody in the organization may be willing to change, not everything should be changed. That which is good and beneficial should stay ( Bennet, 2006). Managing change entails leading it. This can be achieved by forming a team of strong and influential people such as CEOs, shareholders, experts and politicians. This team can be referred to as a change coalition meaning it has been formed to build and emphasize on urgency and bring about change.
Change is not easy but it cannot be avoided and everyone concerned must be ready and willing to participate (Paton & McCalman, 2008). In order for change to be successful, the management should not disregard the concerns brought up by the employees. The management should instead incorporate all the suggestions and come up with better alternatives. Communicating the vision is important and any obstacles that will hinder that should be avoided or dealt with when they occur.
Cameron, E. & Green, M. (2004). Making sense of change management: A complete guide to the models, tools & techniques of organizational change. United Kingdom: Kogan Page Publishers
Hiatt, J. & Creasey, T. J. (2003). Change management: the people side of change. Poway, CA: Prosci,
Hitt, A. M., Ireland, D. & Hoskisson, E. R. (2009). Strategic management: Competitiveness and globalization : concepts & cases. Clifton Park, NY: Cengage Learning
Paton, R. & McCalman, J. (2008). Change management: A guide to effective implementation. Thousands Oaks, CA: SAGE Publications Ltd