MANAGING CULTURAL CHANGE
British Airways (BA) was formed in 1974 by the merger of the British Overseas Airways Corp (BOAC) and the British European Airways (BEA). BA’s integration did not come without problems. By the early 1980’s BA generated debs in excess of £500m, staff discontent and customer dissatisfaction were common denominators across the operational equation and in 1980 the airline topped a list of airlines to be avoided at all costs.
The appointment of Sir Colin Marshall, chief executive during the period 1983-1995, brought winds of change at the distressed air company. Sir Colin Marshall identified that focusing merely on cost cutting would not be enough to guarantee long-term success and profitability. He quickly discovered that BA was not addressing the needs of its consumers therefore Marshall embedded the “Putting People First” (PPF) initiative, celebrating a new ethos "Putting the Customer First because if we don't, someone else will".
To further embrace the new culture of cooperation, BA introduced a second program named “Managing People First” (MPF) to assist managers with the change process in their respective areas. The PPF and MPF programs worked superbly and contributed to the stellar turnaround of BA’s performance. Eventually in 1987 the company was privatized and became the “World’s favorite Airline.”
Despite the tremendous transformation that British Airways achieved over the 1980s, there were still a number of challenges that marred the company. Broadly speaking, the company had not been able to institutionalize change: this could be traced back partly to the questionable integration between BOAC and BEA (and their inherently different values and culture) and partly to the pressure yielding from the new competitive arena that BA was playing in the 90s.
These issues were palpable as employees felt that BA was still lacking a comprehensive integration across its different functional units. Furthermore employees observed a lack of recognition of emotional labor and they agreed that obsolete corporate values could not be repackaged and sold out again because the motives that incentivized in the 80s were radically different to those that prevailed in the 90s. Overall employees still not quite felt of themselves as British Airways.
Moreover whilst the 1987 merger with British Caledonian contributed to new routes, increased market share and enhanced net profits, it also added significant numbers of staff and new layers of the management, yielded malcontent across the organization, contributed to a lack of shared vision, increased operational costs and strained the delicate company culture further. The real challenge that BA was facing at this point was managing cultural change to drive productivity and profit. And more importantly management had to communicate this dual objective to the work force in a way that the latter did not feel that the focus was shifting away from customer service.
To address the issues aforementioned, we suggest the company to implement the best strategy that suits the situation to maintain focus on customer service while managing cultural change to drive productivity and revenues as primary objective. Henceforth we would like to propose two alternatives.
Internal change (IC) agents are those within the organization who have the right to influence the change management process. Under this process, the teams have to be subdivided to maintain proper balance of cultures, corporate identities and talent/expertise following the “Structural Intervention” strategy (Exhibit: 01).
Like the PPF and MPF programs, which were driven to emphasize “Customer Service” as common goal across BA, IC management has to develop creative and engaging training programs that would disseminate a common vision across the various teams at BA over a 2-weeks period in a year. The aim of these training...
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