British Airways Case

British Airways Case

British Airways Case

Introduction

British Airways (BA) was created in 1979 by public law allowing the “British Airways Board to assume control of two state-run airlines, British European Airways (BEA), and British Overseas Airways Corporation (BOAC) under the name British Airways” (Jick & Peiperl, 2006, p 26).  Many problems arose from the combination of the two companies.  Structures, culture, and systems had to be combined and improved to help BA become a viable company and prepare itself for the move from a government owned entity to a privatized corporation.

Problems Macro

The two airlines served different markets and were run as services rather than as businesses.  Efficiency and customer service were not part of the organizational structures or design.  Each had its own hierarchy of personnel who functioned independently of the other group.  Leadership style was heavily task centered rather than service centered.  Much of this can be attributed to the history of the companies and their creation following World War 2.  At the time of inception, each company was tasked with making commercial airline travel possible by creating the airline infrastructure, designing routes, and proving commercial travel a viable means of transportation for the public.  As a government run institution, layers of bureaucracy separated most employees from the idea that they were serving the public interest and should keep quality and customer service in mind.  The influx of military personnel leaving service and working at the airline further engrained the task mentality in that each job function was its own endeavor and culturally the view of customer service was not a prevalent concern.  The view of customer service as a needed top priority followed by cost-saving efficiency measures were resisted by the employees and management.  The culture had to be changed for BA to become successful and sustaining for the long-run.

Problems Micro

BA functioned as two distinct units for many decades and this led to increased costs and inefficiency in the use of assets and in human capital utilization.  A complacent attitude that focused on tasks such as getting a plane to and from a destination were viewed as a success.  However this notion was short-sighted and failed to recognize the importance of each employee contribution to the organizational success of the company.  The compartmentalization of job components likely was influenced by the military background of some of the employees and leadership.  “Soldiers take orders, they don’t question” them is a reality for many who have served in the military.   This limits the thinking of the individual and creates a sense of detachment from what is going on in other areas of the enterprise.  As a result, each functional unit was viewed as an island that was not wholly related and dependent on the success of the entire company.  The culture had to be redefined where leaders took the responsibility for the work they did but also how it impacted the success of BA as a whole.