Posted at 11.17.2018
This report focuses on explaining the change management at corporations. It includes the exemplory case of British Airways that has once successfully applied change management in their corporation. Change Management is the idea organizations apply in order to deal systematically with change.
When British Airways was formed following its merger, it wasn't successful. This is mainly because of the cultural and status dissimilarities of the employees of the corporations that were merged. There is no leadership and the business lacked the required competence to deal with the emerging problems.
In order to deal with that dilemma it was decided to appoint a fresh Chairperson and Lord King was appointed. He down the road, appointed King Marshall as the principle Executive. Both leaders knew that change was needed within the business. They saw that valuable resources were being wasted, company was working inefficiently, cultures variations existed, needs of the customers were not discovered properly and attitudes within the business were to be changed. They took major change management steps and came up with different programs and strategies to deal with the situation. It was ensured that the employees are fully supported through the process of change and needs of everyone are catered. Hence, an effective change management was implemented that helped the business to come out of crisis and emerge as a solid competitor in the airline industry.
Change Management is a word heard often now in most of the corporations. It has been around for some time now, but is famous in corporations that are enthusiastic about initiating a big change with their processes which includes both culture and work tasks. Change management is defined commonly as employed group of the processes to ensure that considerable changes are implemented in a systematic, controlled and orderly fashion to result in organizational change. (Hiatt & Creasey 2003)
Five principles of Change:
While implementing change management there are five basics that the managers need to keep in mind:
Different people have a tendency to react in different ways to the change.
Everyone's fundamentals needs should be met.
Change also involves loss sometimes and folks need to undergo the loss curve.
The expectations of most are to be met in an authentic way.
Fears of all are to be handled.
Organizational Change Management:
According to organizational change management both tools utilized by managers and the processes are to be taken into account. Mostly organizations want the change to be implemented with least resistance. Because of this to occur change must be implemented with a structured approach so that the transition of one behavior to another is really as smooth as possible.
Management's Role in the Organizational change:
It is the duty of the management to identify out the behaviors and processes that aren't proficient and produce new ones that are more effective for the business. Once these changes have been identified, managers should estimate the impact it will have on the business and its employees.
Management also needs to assess the reaction of employees to the implemented change and make an effort to understand the reaction as well. It's the job of the management to totally support their employees through the process of change. Finally the management should help employees to simply accept these changes and help these to change well and effectively after the changes are implemented. (Hiatt & Creasey 2003)
British Airways is the flag carrier airline for the United Kingdom with its head quarters in Waterside. The primary hub of British Airline reaches the Heathrow Airport of London; its second hub is at Gatwick Airport and the 3rd one reaches London City Airport which is served through BA CityFlyer a fully owned subsidiary of British Airways.
British Airlines is actually the greatest airline of UK on the basis of its international flights and destinations and their fleet size. In the entire year 1971 British Airways board was formed to manage the two airline corporations, BEA and BOAC, and relatively two smaller regional airlines Northeast Airlines from Newcastle and Cambrian Airways from Cardiff. However in the year 1974 each one of these airlines were dissolved to form one major airline British Airways (BA). The airline was made aiming at being the worldwide network and attaining economies of scale. The merger of these airlines resulted in 50, 000 workers and 215 aircraft, which are considered to be grossly overstaffed along with many levels incompatible management structure. Problems were being created because of the cultural differences between the airlines along with a 'class' distinction among the workers.
When the middle oil crisis arrived in the earth and led to reduction of market, it left the already overstaffed BA airline with massive losses, a very poor service reputation and 20, 000 potential redundancies. The union was so strong in the company which it made difficult for the company for taking any remedial measures. By the entire year 1980 the fleet was downsized to 174 aircrafts but still the business was loosing money at the speed of 200 pounds each and every minute. With the federal government supporting the business, there was no internal urgency for the change to occur and outside competition to be adapted. (Lundy & Cowling 1996)
By the year 1981 British Airways appeared to be a failing company making multimillion pound losses. It gained the reputation of being a major international airline giving the worst service. The only real solution than was seen to produce a change in the culture of the staff. For 13 years it remained a nationalized company and in February 1987 it became privatized as a plan of the conservative government of this time.
Major Problems being faced following the merger:
When British Airways was formed after the merger it faced a number of issues and problems. Problem was encountered in terms of the culture distinctions of the companies. When the members of organizations owned by different and diverse cultures interact with the other person and one of the cultures must adapt the practices and methods of another culture it brings about disruptive tensions. Same situation occurred between he employees of BEA and BOAC both emerging industries of this time. This problem can be explained as a culture clash or acculturative stress.
Another issue arrived in conditions of the management system being imposed in the business. BA implemented an extremely inflexible, preoccupied and hierarchical management system creating status distinctions that was also evident of their uniforms. The company also had problems being rule oriented. The brand new management had problems in identifying and addressing the needs of these customers. The company emphasized more on their inward looking management approach and on maintaining their various routes and all of this resulted in customers being unsatisfied.
Change in direction:
In the year 1979 Mrs. Thatcher's new conservative government took the decision to privatize the airline. At that time the European airline market originated majorly and almost all of the airlines were state owned. A complete process was put in place for the privatization of airline. Eight many years of time was taken up to make it happen, stand on its own feet and emerge to succeed as a commercial body. This included a whole procedure for culture change and cost cutting. Hence the different types of change process were being applied by means of Theory O (through concentrating on changing the behavior and culture) and Theory E (through cost cutting). Due to the restructuring of the airline there was a decrease in the number of routes served, the college or university of air training was closed, catering procedures were transferred to outside contractors and property interests were divested. (Horner & Swarbrooke 2004)
The airline was shown to be a peasant class of travel and showing general subservience to the pressures of trade unions. However, the inner studies showed that jobs of the managers of highly specialized, communications in between the departments were highly poor and technically the airline was bankrupt. Major management changes were being considered in order to change this trustworthiness of poor services. This was regarded as the change management which is incorporating change in to the working systems so that the company becomes more efficient is satisfying the needs of customers or clients.
This served as a basis for the appointment of Lord King as chairman so that Chief Executive King Marshall was appointed in the year 1980. Hence, first change took place in the form of leadership change where these leaders using their authority, down the road made organizational changes. When this Chairperson started working, noticed that a lot of valuable resources were being wasted and the business was working inefficiently. In order to make the business more profitable, it was made a decision to restructure the complete organization and change methodology change management plan was seen as the best way to do that.
Measures of Change Management:
The second most significant change took place at the group level in the form of operational change when it was determined by the leaders that there was inefficiency existing in the machine. Measures like reducing staff level and cut in production costs were occurring which change can be classified as fine-tuning. (i. e. Scale Type 1 of Dunphy and Stace (1993)). The business started decreasing their workforce very systematically. But before doing this, through the change management leadership of the chairperson, Lord King gave known reasons for the privatization and restructuring so the employees get prepared for the future changes. (Horner & Swarbrooke 2004)
In order to investigate the means of improving customer service in the year 1983 a steering group was established in the British Airways. It had been discovered that for British Airway's offering customer service is the key cornerstone in the market place. Two courses of actions were then recommended by the steering group which changed the way the company decisions were made. A marketing policy group was made for the re-organization of the company. Also, by the name of "Putting People First" an application of courses was employed throughout the whole organization. This program was aimed at increasing self image, to achieve the greatest possible standards of customer support and to change attitude towards the external and internal customers. Another program with the name of "Managing People First" covering the perception of the contact staff and their managers was started. (Lundy & Cowling 1996)
After identifying the inward looking rigid culture existing near the top of management hierarchy, the Chief Executive appointed a new top management team whose job was to strength customer oriented culture within the company. Transformation in the management, culture, strategy and operations took place on a big scale. These changes were both organizational and strategic. An external audit company conducted a two way audit that covered the perception of customers of the assistance being offered by BA. The frontline employees were awarded with the mandatory authority as well as the information to deal with the customers. The process was started by eliminating layers of the management structure and emphasize from divisional was changed to a functional structure. The personnel function was restructured by Marshall and for the mammoth task ahead a human resource department was made.
To provide a break from the old BA image Chief Executive's two main image fronts which were the uniforms of customer contact staff and the company livery, were improvised. (Lundy & Cowling 1996)
But changing external face is never enough so attitudes within the company were to be changed. Time Management International designed a training program for BA to be able to react to the needs discovered in the audit. The ultimate step and the logical step that was taken was linking performance with pay. Strong leaders were recruited as a part of the change management. The segmentation policies were evidently defined and we were holding targeted in well toned branding programs. (Horner & Swarbrooke 2004)
All the actions can be seen as an amalgamation of both planning (revolutionary) and incremental (evolutionary) change. The evolutionary change sometimes appears valuable in the short to medium term and revolutionary in the long run. These changes emerged to improve the company by means of delivering excellent service and quality to the customers and developing relationships with them and in the long run the company appeared to be the most significant airline for UK. (Clarke 2001)
In order to facilitate the stakeholders through the process of change the leaders gave their full support and time. THE PRINCIPLE executive and the Chairperson acted as the change agents for the company. The heavy support from the most notable management (Marshall attended a number of staff and management programs and spent 20% of his amount of time in this activity) and the continued training softened the harsh impact of cultural and organizational change. Although this change was bumpy incremental as there have been staff cuts this kind of change is called "Adaptation" by Balogun and Hope-Hailey (2004).
As a part of the cultural change program two days received to the employees and five to the managers. Around 40, 000 of the workforce were subjected to this program which was fully supported through analysis and compensation by means of bonus payments. (Clarke 2001) The leadership style here was democratic and the leader Other supported measures included, action groups, updated performance management, implementing total quality management (TQM), educational seminars and the staff newspaper "British Airways News". (Lundy & Cowling 1996)
Success of the Change Management:
The main objectives of imposing the changes were to become competitive in the airline industry and survive on the market place. The changes which were implemented by British Airways helped it to be more customer oriented by delivering excellent services and quality to the clients. Also, these changes helped the company to improve their relationship with the employees as well as the relationship of the employees with the clients.
The expensive and frustrating investments that have been a part of the change occurring also paid when the company won in the entire year 1989 the award of "World's Best Airline" which really is a prestigious business traveler award. The business after changes became more competitive in the UK market. The implemented human resource management and the strategies served as a basis to help the business emerge as a strong competitor in the airline industry. (Lundy & Cowling 1996)
The company achieved decrease in their costs through savage labor cuts, concentrating on key strategic business areas and shedding pounds of the business. All of the moves taken by the business and the programs being conducted led to revue of the management structure. The overall age profile of the team was decreased in support of those were chosen having entrepreneurial abilities. The major aspect of success for the airline was their marketing strategies. Some of these were campaign of the "Advertiser of the year", "Fly the Flag" and "We take more care of you" promotion, Red eye advertisement etc. All of this plus much more helped the business to come out of the difficult times. (Horner & Swarbrooke 2004)
The leadership of the company directed it through difficult times through the use of a change management in the business. British Airways still are actually the major global airline however now its reputation is declining. This can be because of the inappropriate decisions taken by the management, but mostly it reflects the hard times and the difficult business environment that exits for all your airline companies.
The management again is aimed at implementing new strategies and programs within the company by way of a marketing communication to be able to create an improved image. Also, the current management realizes the necessity of leadership and entrepreneurial competence that could wipeout all the problems from the business. For the company to fully run again on the track of success the management should identify the problems existing within the business. They should make an effort to resolve the issues and produce effective change management programs that can again benefit the company.