1. Drivers of Change in an Organisational Environment
In this era of hyper-competition, significant common factors or drivers can effect a forcible change on any business. For example, in relation to British Airways (BA), the intensification of hyper-competition from other flight companies such as Ryanair and easyJet, who can produce superior goods and cheaper ticket prices, and the introduction of new technology and changing consumer preferences have resulted in BA having to redefine its business goals. The following factors are cited in a study (Wise, 2002) as common drivers of organisational change: political or legal threats (P), economic environment (E), social influence (S) and technological forces (T). Accordingly, in the second round, these PEST aspects (Table 1.1 - see Appendix) may lead a company to experience the following: (1) Inadequate Financial Performance, (2) Change in Strategic Objectives, (3) End of Product Lifecycle, (4) New Technology, and (5) Mergers and Acquisitions (Anderson, 2001).
2. How These Drivers Affect British Airways (BA)
These drivers affect BA in several ways as follows:
Financial Implications - BA has experienced a sudden downward trend in its trading results. It’s most recent results show a loss of £292m and the company is now losing £1.6m a day after failing to generate enough revenue. As part of a huge cost reduction programme, BA intends to cut a further 3,000 jobs. Staff jobs represent BA's second biggest cost after fuel, accounting for about one quarter of expenditure (Guardian, 2009b).
Human Resource (HR) Implications - Because of the cost reduction, the threat of strike action by BA cabin crew over the 2009 Christmas holidays will possibly materialise. The hot atmosphere at BA may cause BA major operational disruption. Legal Implications - Fairly recently (October, 2006) BA's uniform policy was legally under pressure for being anti-Christian after an employee was disciplined for refusing to remove a necklace in the shape of a Christian cross (Mosler, 2009).
3. How One Driver Affects BA
A number of direct implications from these political or legal drivers exist, i.e., HR and/or legal. Because of these implications, BA management has not enjoyed a harmonious relationship with its staff and workers (Mosler, 2009; Guardian, 2009c). The direct consequence of this fractured relationship is that it may lead to open hostility from workers and aggravate workplace conflict, which would be detrimental to BA’s working environment and long-term sustainability. Overall, this would jeopardise BA’s final consumer product, demotivate workers, reduce workers’ performance and diminish the company’s productivity.
4. What Changes are Required at BA?
Based on the points raised in the previous section several changes are required in BA’s management style.
Firstly, it is recommended that BA revise its leadership skills following the trait theories in leadership. The reason for recommending these changes in leadership skills is due to the fact that the existing set of problems is partially owing to the ineffectiveness of BA’s leadership skills. According to the Universal Theory of Leadership, certain personal characteristics and skills contribute to leadership effectiveness in many situations (McClelland, 1973, Green and Young, 2009). However, a study (Barker, Johnson and Lavalette, 2001) indicates that personal qualities alone are insufficient. Successful leadership requires also conducive structural environment such as "non-strike" environment.
Although trait theories have some weaknesses (Saros and Santora, 2001), BA executives may use them to assess their managers’ strengths and weaknesses. Next, BA executives need to educate themselves on the key traits and skills necessary to manage the current batch of BA crises. By gaining these requisite skills, BA will be able to regain control of its people management crises in future. The skills that need to be learned are related to how to motivate workers and improve empathy and social skills following Goleman (1998)’s meta analysis. Improving these skill sets will improve BA managers’ tolerance when considering employees’ feelings in decision making. For example, by employing these skills, BA managers would have been more understanding about their staff member wearing the Christian cross, realising that it did not interfere with her productivity. On the other hand, these social skills may help BA managers to be friendlier with staff, thereby finding mutual common ground as successful, collaborative managers.
Secondly, BA could also revise its leadership attitude and behaviour by] using a task or relationship orientation. By assessing their managerial styles, company managers could change their behaviours to be more effective for overseeing workers. Following “Classical Leadership Styles”, as stipulated by White and Lippitt (1959), from the three styles cited - autocratic, democratic and laissez faire - the most suitable style for BA is a democratic style because relatively no change is required. In order to avoid conflict with the unions representing its staff, BA needs to minimise change as much as possible. In addition, research (Vasu, Stewart and Garson, 1998) indicates that a democratic style is associated with a higher level of participation (consultative, consensus and democratic involvement) since it improves workers’ psychological involvement in decision making processes and reduces the amount of people considerably resistant to change. Conversely, the laissez faire style may not be compatible with the recent atmosphere (the threat of strike action) since it leads to the emergence of low group performance and of the emergence of informal group leaders (Vasu, Stewart and Garson, 1998). Alternatively, BA may use the “Concern for People” strategy along the vertical axis (Diagram 1) to follow Blake and Mouton’s Managerial Grid (Blake and Mouton, 1964, Green and Young, 2009).
By concentrating more on concern for people and placing relatively less emphasis on production, which in turn creates a hostile environment for its staff and the unions,
BA may reduce the current unpleasant working environment to the point at which its staff will be able work more harmoniously and productively. In this case, BA may implement point 1.9 of the Country Club leadership style characterized by a high people orientation and low production orientation. By concentrating on the needs and feelings of members of staff during this difficult time, a harmonious work climate can be achieved. Hence, as long as workers are happy and secure, they will work hard.