International Business Environment: Open Case Study on British Airways

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International Business Environment: Open Case Study on British Airways Causes of Change Failings in people policies have been cited as the greatest cause for change BA faces:

  • Thomas (2004) reports that the most senior HR professional at British Airways PLC (BA) has claimed that the past three years “have been the most difficult in our history”
  • As a result of this, Thomas believes that many structural changes to be undertaken by the business were unavoidable.
  • The company, which has cut 13,000 jobs since the September 11 terror attacks, has admitted the problems were down to staff shortages.
  • BA further suggested that the main cause was a large number of resignations, and security vetting procedures delaying replacements. (Thomas, 2004)
  • BA executives have spent months studying how to change working practices, although change will not be easy, given the reported tendency of BA employees to strike. (The Economist, March 2005)

BA has also identified the need to cut costs, in order to increase margins, across its operations, and this is another key driver for change:

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  • BA has specified a major effort to trim £300 million a year in costs,
  • The airline announced, in January 2004, that it would hold talks with staff and labour unions over possible changes to the funding of its pension plans.
  • It has been claimed that corporate customers will inevitably face an increase in costs as a result. (Davern, 2005)
  • A main part of the changes is the proposed move to Heathrow Terminal Five, seen by many as the most important change in the industry to date. (The Economist, 2005)

A final, major, driver for change is the need for BA to reinvent their brand, in the face of falling passenger loyalty and the continuing rise of the budget airlines:

  • BA recently announced it would give passengers the option to pay a few pounds extra on every ticket and BA would use the money to offset the carbon emissions from their trip.
  • Reed (2005) reports that BA has formed a marketing think-tank to rebuild brand power after its “recent global pummelling”.
  • Given that maintaining service is of “critical importance to its brand” (The Economist, Aug 2005), BA needs better contingency plans to protect itself against strikes.

Lewins Force Field Analysis The force field analysis will be undertaken for each of the three main areas identified as having significant cause for change. People Policies Cost Cutting Brand Reinvention Applying Lewin’s Change Process Model to BA Lewin’s Change Process involves seven steps, all of which are currently relevant to BA. 1. Disconfirmation

  • Disconfirmation involves generating some form of dissatisfaction or frustration to disconfirm current expectations or hopes.
  • For people policies, it would involve needing to show existing staff that the status quo is harmful to both the company, and the staff.
  • In the case of cost cutting, it requires senior executives to show the staff and shareholders that the company is currently performing very inefficiently.
  • For brand reinvention, it will be necessary to show that the current brand performance is not doing enough to help the company gain customer loyalty.

2. Induction of Guilt or Survival Anxiety

  • In order to achieve this, it is simply necessary to convince the BA staff and shareholders of the validity of the disconfirming data presented to them.
  • Whilst this may be relatively easy to induce in the stakeholders, the staff members are likely to be much more difficult to convince.
  • It may be possible to achieve by convincing the staff leaders, for example, the union secretaries.

3. Creation of Psychological Safety or Overcoming of Learning Anxiety

  • Here, it is important not to overstate the threat to the organisation, as it may induce anxiety in stakeholders, making them more defensive.
  • It is particularly important for the shareholders, as they could withdraw from the company if they perceive the threats to BA as being too great.
  • Excess anxiety could also harm the change process by making staff too wary of the changes.

4. Cognitive Redefinition

  • This process involves redefining the new concepts to be introduced, so that they fit into existing belief systems.
  • It is important for the staff, as cost cutting and people policy changes are often associated with job losses and a poorer quality of working life.

5. Imitation and Positive or Defensive Identification with a Role Model

  • The key to introducing a new point of view is how one is able to ‘hear’ or ‘see’ something from a new perspective.
  • For BA, it is most important that the staff see their role models ‘buying in’ to the changes, especially the more contentious ones, such as cost cutting.

6. Scanning: Insight or Trial and Error Learning

  • If no role models can be found, the learner must expose him or herself to a variety of new information in order to overcome any dissonance they may feel.
  • This will probably be more relevant to shareholders, as they will need to see data which confirms that BA’s change management is proceeding well.

7. Personal and Relational Refreezing

  • Refreezing occurs when new behavior is congruent with the rest of the behavior and personality of the learner.
  • It is vital for the BA staff, to avoid new rounds of disconfirmation, which may lead to unlearning and post-change resistance.

References

  1. Davern, F. (2005) BA cut: the reaction. Travel Trade Gazette UK & Ireland; Issue 2649, p. 2.
  2. Reed (2005) Think-tank to fix BA’s reputation. Travel Weekly: The Choice of Travel Professionals; Issue 1785, p. 2.
  3. The Economist (March 2005) A whiff of Wapping? Vol. 374, Issue 8417, p. 60.
  4. The Economist (Aug 2005) Catering for suppliers’ strikes. Vol. 376, Issue 8440, p. 48.
  5. Thomas, D. (2004) BA stands its ground despite staffing crisis. Personnel Today; p. 1.
  6. Yeoman, I. Sparrow, J. and McGunnigle, F. (2000) Accessing knowledge at Bristish Airways: the impact of soft OR. Journal of Organizational Change Management; Vol. 13, Issue 2, p. 121.

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