Mike Steverson 2-5-2012
British Airways Case Study:
I. Problem(s) you identified from the case
a. Two things really, inefficiency and lack of motivation. They had power split up amongst all these separate airlines who were all competing to be the best part of British Airways instead of working together to achieve one powerful company. The recession and economy at some points made it hard to stay motivated and made people frantic and even more competitive within the company because of the threat of losing their jobs. They had way to many employees, outdated operation systems and lost all sense of efficiency. They had poor productivity and horrible customer service. They lost sight of the main goal and had to correct themselves or lose it all.
b. This only takes one word. CULTURE. It was a complete culture clash come 1981. The consequences of culture become apparent in cross national operations, mergers, and acquisitions, where not only different organizational cultures but also organizational cultures rooted in different national cultures meet. When organizational members from diverse cultures interact and, especially, when one culture is required to adopt the methods and practices of the other culture, disruptive tensions emerge.
II. Causes – Well, these differences in the culture, I believe caused costly result from the differences of the personnel. The employees of BEA described the BOAC staff as somewhat distant, and ill-equipped with their knowledge of the competitive airline industries. On the other hand, BOAC were snobbish with the staff of BEA. They thought flights to the European mainland were for tradesmen, while long haul air travel were for the upper-class gentlemen. The opposing ideas and beliefs of each of the employee was the cause of the problems encountered by British Airways after the merging.

III. Organizational Systems Affected
a. Structural - BA’s best move was when Conservative Prime Minister Margaret Thatcher appointed John King in 1981 to be the Chairman of British Airways. Under the management of John King, he imposed changes including closing several routes as well as selling off the cargo service and planes. The company also had to lay off 20,000 staff.
In 1982, Colin Marshall became the Chief Executive Officer of British Airways. BA was generating its first surplus, which is the effect of the cost-cutting activities put in place by John King. This was when Marshall realized that the organization needed to pay attention to their customer service. In addition, the organizational structure of British Airways was streamlined into five sections of the industry that are directly reporting to the CEO and eleven profit centers were created. This structural alternation aims to enhance the staff integration and communication, within BA.


b. Psychosocial - The main objective of the changes were to make the company survive in the marketplace and become competitive in the airline industry. The changes had helped the industry to become more customer-oriented by providing quality and excellent services. Through these changes, the company has also been able to improve the relationship of the employees as well as the employee-customer relations. The time-consuming and expensive investments as part of the changes also paid off when BA won the, World’s Best Airline” award in 1989. c. Technical – I guess you could say that the different ways in which they chose to advertise and the new systems in which they used to conduct business were technical changes. There wasn’t any specific information on the ladder though.

d. Managerial – BA’s changes really kicked in gear with John King. First he cut 20% of his staff, later up to a quarter; and he then closed 16 routes, eight on line stations, and two engineering bases. The CFO Dunlop used some creative financing and wrote down 100 million pounds of redundancy cost. The Manhattan Project brought the organization together to uniquely advertise the Worlds Favorite Airline thanks to King replacing their old advertising with Saatchi & Saatchi.

Goals and Values – "The operation of international and domestic scheduled air services for the carriage of passengers, freight and mail and the provision of ancillary services." – British Airway mission statement

Alternative Solutions & Recommendations and Implementation Plans It seems that the major cause of the problems encountered by British Airways is due to the unplanned management changes and the merging. In addition, the problems also arise because of the lack of knowledge of its management about the use of strategic management and other management systems. I suggest they use a few.