At the start of the 1980s British Airways faces severe financial difficulties. The chairman, Sir John King do implement survival plan by reducing the staff from 60.000 to around 38.000, abandon unprofitable routes and sold off the surplus assets. So, BA returned to profitability in 1983.
To ensure the longer-term success, the newly appointed Colin Marshall as chairman to create a culture change. There is a gap between customer and employee expectations regarding service delivery, which employees focus on routine and functional aspect of their job and while customers expected this as a minimum level of service. They need for sharpened focus on customer service.
The strategy is to change the value, practices, and relationships throughout the company by creating trust throughout the organization. To achieve it company should develop the workforce.
In November 1983 British Airways launched ‘putting people first’ for the 12.000 BA staff who have direct contact with customer, such as employees on check in desk and cabin crew. This program focus on train the employees in developing ideas for improving customer service.
Subsequently, the program was extended to staff not involve in direct contact to the customer, such as pilots and baggage handlers using the premise that their customers were other BA employees. This provide all employees with an emotional context through which they could respond and change.
In 1984 a new corporate identify for personnel was introduced and a human resource director appointed. So administrative procedures formerly attached to the personnel role were move to line managers. HR intervention such as profit sharing were used to increase employees feelings of belonging and involvement.
Manager were expected to adopt the new shared vision and adapt their style of management to be more visible and dynamic. The training called ‘managing peope first’ was introduced in 1985. The aims is to remove internal blockage and change participants to Marshall’s organizational value-caring, achievement, creativity, innovation and profit.
The evaluation is through a new performance appraisal system and rewarded through a new performance related pay system. The change is not only about care, and being nice each other but it was about effectiveness, performance and survival.
In November 1985 the ‘a day in the life’ program was launched emphasising the benefits of collaborative working. Continued with ‘to be the best’ program launched in 1987, which focused in growing market competition and the importance of delivering excellence in service.
Change in managerial attitudes were undoubtedly achieved but there was also undoubtedly resistence by some employees. Relatively high insidence of industrial conflict throughout the 1980s introduces some doubts in cultural change.
BA’s mission is to be ‘fit for business’ and to ‘close the gap’ and necessitated buying into other airlines to become a global carrier and reduce salary costs through a variety of measures. Employees are being asked to improve quality of service offered and at the same time resources available are being reduced to lower costs. In 1991, BA announced redundancy measures to deal with over-staffing.
Case study question
1. What do you think senior management wished to achieve through the BA culture change program?
2. To what extent do you believe the culture change program at BA addressed employee’s basic underlying beliefs as well as their practices?
3. Did the culture change programmer at BA involve a top-down or bottom-up approach, or a combination of approaches? Give reason for your answers.
4. How would you introduce a culture change program to an organization in a similar situation to that of BA?
Answer
1. At the beginning 1980s, British Airways faced financial problems. This conditions make the chairman Sir John King had reduced employees from 60.000 to around 38.000. Not only that, in profitable routes were abandoned and surplus assets sold off. This a bad condition for BA.
Because of that senior management decided to change culture program which have already applied in BA was major cause of the bad financial condition in their companies.
2. Actually, it is good to change the culture in that company to become focus in costumer satisfaction by creating trust throughout the organization. So employees get training how to ‘Putting costumer first’ by changing the value, practices, and build strong relationship between costumer and employees.
But, I think the practices will not run as good as the program that created by company. Because it’s hard to change the habitual from focus on routine and functional aspects of their job to focus on create good customer services and try to build trust and satisfy the costumer.
But in order to reinforce employees feeling of belonging and involvement of their job, HR department try to give profit sharing to their employees. So although it’s hard to change the culture but slowly employees can build trust as their practices in work.
3. The culture change program at BA use top-down approach. The reason is :
The new strategy must empower BA to constantly balance the needs of their customers, shareholders and the community while obeying law and containing their costs within budgetary constraints. Strategy must be developed both bottom-up and top-down. Bottom-up is more pragmatic, because employees know what their customer wants and how they can provide it.
Top-down is to define mission, vision, or set of objectives that will facilitate change. Having a 'mission' is not good enough - it has to be a 'motivating mission' that inspires people and makes them feel good about coming to work. This will also drive organizational re-design and performance management.
Strategy development requires a thorough understanding of the external environments, organizational competencies and the consistency of corporate values with the broader needs of the community.
As we know top-down approach can be supported by range of human resource intervention. This approaches started with peoples values. In culture change program at British Airways, all of program handled by Human Resource Department. Manager make a decision were they had reduced staff from 60.000 to around 38.000. Manager gives training to employees to make them focus on people’s value. The program focuses on the individual and actively involved employee in developing ideas for improving customer services.
Training called ‘managing people first’ focus on organization value, such as caring, achievement, creativity, innovation and profit. BA again announced redundancy measures to deal with overstaffing.
4. If an organization face same situation with BA.
As we know the problem happen in BA is there is a gap between costumer and employee expectation regarding service delivery. It’s hard for the company to directly introduce the new culture change program to their employees. So:
1. to run the program, manager should give training to their employee about ‘how to putting employee first’
the aim of this training is to create good performance in servicing the customer. By held this training, easily for manager to introduce the new culture in that company. Slowly manager can change the old value into the new want which it can bring the company to achieve advantage, that is build better communication and relationship among costumer and employees, customer will achieve what they expect, such warmth, friendliness, attention to their personal needs, etc.
2. In doing a change, of course there will be some party who agree, and also some party who resist to that change. So after giving the training, and make the employee know about the benefit of that new culture, manager should do evaluation by using performance appraisal system not only for employee but also all side of the company to make all of them can feel the new atmosphere.
3. If there are still many employee feel not comfort, frustration and anxiety with the change and think that they can not do it by themselves, so manager should do enhancement of their attitude by giving motivate to them, manager should also implement the culture change to themselves, by that, they can be the good sample for their employees.
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