Changing the Culture at British Airways
Changing the Culture at British Airways
Question #1
Life at “old” British Airways lacked a unifying corporate culture. The 1971 merger of British European Airways (BEA) and British Overseas Airways Corporation (BOAC), by the British Airways Board, only succeeded in putting an umbrella over two separate mature entities. The focus of the BEA had been to build a European airline infrastructure. BOAS was an innovator and pioneered the first jet passenger service. Neither company was concerned with cost or profit. British Airways was government run and according to Jick & Peiperl (2011) “success had less to do with net income and more to do with ‘flying the British flag” (p.26). This inefficient government structure was bogged down with bureaucratic red tape. “There were a lot of people doing other people’s jobs and there were a lot of people checking on people doing other people’s jobs” (Jick 2011.p.28). The British Airways Board failed to obtain a “buy-in” from the merged company employees. According to Jick (2011) “a deceiving string of profitable years in the 1970’s made it even easier for British Airways to neglect its increasing inefficiencies”(p.28). Kotter (2012) illustrates this under “Error #1: Allowing Too Much Complacency”. Why would anything change when there was money being made? People are short-sighted and without a plan for the future, British Airways was heading for financial failure.
Question #2
The difficulty in making changes at British Airways started with it being a complacent behemoth government company. The company had moved from a mature company to a company in decline, Kotter (2012). Sir John King instituted a “Survival Plan” that promised “tough, unpalatable and immediate measures” Jick (2011), to stop the hemorrhage of losses and avoid bankruptcy. In a years’ time staff was reduced by 15,000 and $150,000,000 in severance pay was paid. Pay increases were frozen for a year and offices, administrative services, and staff clubs were cut.
Question #1
Life at “old” British Airways lacked a unifying corporate culture. The 1971 merger of British European Airways (BEA) and British Overseas Airways Corporation (BOAC), by the British Airways Board, only succeeded in putting an umbrella over two separate mature entities. The focus of the BEA had been to build a European airline infrastructure. BOAS was an innovator and pioneered the first jet passenger service. Neither company was concerned with cost or profit. British Airways was government run and according to Jick & Peiperl (2011) “success had less to do with net income and more to do with ‘flying the British flag” (p.26). This inefficient government structure was bogged down with bureaucratic red tape. “There were a lot of people doing other people’s jobs and there were a lot of people checking on people doing other people’s jobs” (Jick 2011.p.28). The British Airways Board failed to obtain a “buy-in” from the merged company employees. According to Jick (2011) “a deceiving string of profitable years in the 1970’s made it even easier for British Airways to neglect its increasing inefficiencies”(p.28). Kotter (2012) illustrates this under “Error #1: Allowing Too Much Complacency”. Why would anything change when there was money being made? People are short-sighted and without a plan for the future, British Airways was heading for financial failure.
Question #2
The difficulty in making changes at British Airways started with it being a complacent behemoth government company. The company had moved from a mature company to a company in decline, Kotter (2012). Sir John King instituted a “Survival Plan” that promised “tough, unpalatable and immediate measures” Jick (2011), to stop the hemorrhage of losses and avoid bankruptcy. In a years’ time staff was reduced by 15,000 and $150,000,000 in severance pay was paid. Pay increases were frozen for a year and offices, administrative services, and staff clubs were cut.
References: Jick, J.D. and Peiperl, M.A. (2011). Managing Change: Cases and concepts. (3rd ed). Boston: McGraw Hill/Irwin Kotter, J.P. (2012). Leading Change. Boston: Harvard Business School Press.