SIM337 Report: British Airways and Business Management Analysis

This report provides a comprehensive analysis of British Airways, examining the impact of various external factors on its operations and decision-making. It begins with an executive summary followed by an introduction to the airline and the scope of the report. Task 1 focuses on a PESTLE analysis, evaluating political, economic, social, technological, legal, and environmental factors influencing British Airways. Task 2 delves into the relevance of Corporate Social Responsibility (CSR) and sustainability on the airline's strategic choices, evaluating its CSR practices and providing recommendations for improvement. The report highlights the effects of Brexit, rising terrorism, technological advancements, and environmental concerns. It also discusses the company's efforts in CSR, such as renewable fuel sources and community development projects. The report concludes with recommendations for enhancing British Airways' approach to CSR and sustainability, offering insights into the airline's response to current challenges and future opportunities in the aviation industry.

Contemporary Developments
in Business and Management
Assessment

EXECUTIVE SUMMARY
British Airways is the largest airline carrier which predominantly operates at Heathrow
Airport, one of the busiest airports of the world. The company was formed in 1974 and serves
more than 95 million passengers each year with the headquarters of the company located at
London, United Kingdom. In the following report, it has been observed that factors such as rising
terrorism activities, Brexit, rising global income, changes and developments in technology and
many more affect the operations and decision-making of British Airways. It has also been
concluded that management of British Airways has taken many effective steps such as using
better renewable sources of fuel, making investments in fuel-efficient aircrafts, running
community development projects etcetera to fulfil the corporate social responsibility of the
company and improve its sustainability standing. The last section of the report provides some
recommendation which can be followed by the management of British Airways to respond to
CSR and Sustainability matters in a better and optimum manner.

Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
1.i) PESTLE Analysis of British Airways...................................................................................1
TASK 2............................................................................................................................................4
2.1 Influence and Relevance of Corporate Social Responsibility and Sustainability on
decision-making of British Airways............................................................................................4
2.2 Evaluation of Corporate Social Responsibility and Sustainability practices and response of
British Airways............................................................................................................................7
2.3 Recommendations..................................................................................................................9
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................12
APPENDICES...............................................................................................................................13
Appendix I (Organisational Profile)..........................................................................................13

INTRODUCTION
Corporate Social Responsibility defines the management practices and efforts to fulfil the
obligation of a business organisation to create a positive impact on economy, society and the
environment (Tai and Chuang, 2014). British Airways is one of the largest airline carrier which
was created in the year 1974 and is headquartered at London, United Kingdom. The company
provides its services to more than 95 million customers every year with the help of 441 airports
in more than 85 countries and a fleet of more than 1000 aircrafts. In the following project report,
an attempt has been made to analyse the impact of external environment factors on the
operations and decision-making of British Airways. The report also aims to determine the
influence and relevance of Corporate Social Responsibility and Sustainability on the policy
making of British Airways and evaluate the response of the organisation to provide suitable and
appropriate recommendations.
TASK 1
1.i) PESTLE Analysis of British Airways.
PESTLE Analysis is a tool or framework of strategic change management which is being
used by business managers to identify and determine the impact and influence of the key changes
in the external business environment factors such as political stability or instability, income level
etcetera (Perera, 2017). These factors exist outside the business organisation and its control but
have a significant influence on the operations of the company or the business organisation. In
light of today’s dynamic and competitive business environment, it is crucial for the managers to
scan organisation’s macro environment for identification of any early opportunity which can
provide competitive advantage to business or any early threat which should be mitigated.
PESTLE Analysis of British Airways is being done to determine the external influences on the
managerial decision-making as follows:
Political Factors affecting British Airways:
Political factors affecting the operations and the decision-making of British Airways
include political stability or instability in its territory, government policies etcetera. Over the past
few years, political stability in United Kingdom has been an opportunity for the company to
increase its operations and improve the generation of revenue. It is particularly important for the
management of British Airways to consider the influence of political environment and its factors
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because aviation industry is largely influenced by the political factors and government
regulations. As an impact of Brexit, trade agreements and other custom related contracts between
European Union and Britain have changed significantly which has also changed the immigration
laws and other custom related laws creating a negative impact on the revenue and profits of
every major airline including British Airways. Increasing terrorism activities in regions such as
Paris, Middle-east countries etcetera have also affected the operations of the British Airways in a
negative manner (Lawton, Rajwani and Doh, 2013). However, the decision of the government of
United Kingdom to allow a third-runway on Heathrow airport has been a great opportunity for
the management of British Airways since the company predominantly operates at Heathrow.
Hence, political factors have a major influence on the operations and decision-making of British
Airways and it is very important for the managers to consider key political changes and
formulate strategy for future business growth and development with respect to these changes.
Economic Factors affecting British Airways:
Economic factors such as level of income, tax rates, rate of interest, gross domestic
production etcetera have a direct impact and influence on the operations and profitability of
British Airways. Brexit has caused an economic slowdown in Britain which has also impacted
the profitability of British Airways but the economy is now recovering and witnessing positive
growth which presents an opportunity for British Airways to increase its profits. Rising level of
global income has increased the demand for airlines industry and people now prefer airway more
than any other way of transportation. Decrease in the rate of interest and the falling prices of fuel
has increased the profitability of operations for the management of British Airways and the
company can now offer more discounts and use additional sales promotional tools to attract more
customers (Vasigh and Fleming, 2016). Increasing trade activities between countries and
expansion of trade beyond the national boundaries has also led to a major growth in aviation
industry opening up opportunities for business managers of British Airways to increase the sales
and revenue for the company. Impact of Covid-19 can be felt on the world economy and the
operations of British Airways have declined majorly. The management of British Airways have
cancelled the flights as there exists an uncertainty with respect to future industrial environment
and Covid-19. Hence, economic factors influence the operations of British Airways and are
important to be considered by its management for sustaining future growth and business
development.
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Social Factors affecting British Airways:
Social factors relate to trends of consumption and consumer behaviour which impacts the
operations within the aviation industry. Over the last few years, travel and tourism activities has
witnessed a huge growth and the rising level of household incomes have fuelled the urge of
people to travel more places and spend a major part of their income on improve standard of
living and personal expenditure. This has been a huge opportunity for British Airways to cater to
the needs of this new spectrum of customers by offering additional discounts and best quality of
service. However, impact of Covid-19 can be felt majorly on the aviation industry. International
flights and operations have been on halt for a long period. Although, domestic operations have
been restarted but there exists a fear in the minds of people. Social distancing needs to be
followed in flights which requires the airlines to operate at a passenger capacity lower than
normal (Gössling, Scott and Hall, 2020). There exists an uncertainty in what the travel and
tourism industry in future would be like and these factors needs to be considered by the
management of British Airways to sustain profitable business operations in future by mitigating
the adverse impacts of Covid-19 and other social factors.
Technological Factors affecting British Airways:
It can be argued that this decade has witnessed one of the biggest waves of technological
changes and innovation which has disrupted the operations and changed the dynamics of every
industry. Changes in technology have been drastic influencing the decision-making and
operations of British Airways. Technology has become the key driver of operational productivity
and efficiency for the management of British Airways. Changes in digital technology such as
online websites and social media have provided the opportunity to business managers of British
Airways to expand its customer base and offer its services to widely scattered potential
customers (Taneja, 2017). The management of British Airways has decided to ride the wave of
technological innovation and has made significant improvements in its fuel-technology, cargo-
handling systems, automation of process and many more areas with the primary objective of
reducing the cost of operations for the company and improve the quality of service which is
being rendered to the customers to improve customer satisfaction levels. Online website of the
company provides the comfort of booking tickets with the help of few clicks to the customers of
British Airways. Hence, operations of British Airways and aviation industry are largely
influenced by the key technological changes and innovation and it is important for the
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management of the company to consider these changes for constantly innovating and continuing
profitable business operations.
Legal Factors affecting British Airways:
Compliance with legal rules and regulations is one of the most important concern for any
organisation in the aviation industry as the non-compliance leads to a heavy fine and adversely
impacts the brand image and reputation of the company. Legal factors have been a challenge for
the management of British Airways and in the past, company has also made some settlements for
various employment lawsuits (Fones, 2014). It is very crucial for the management of the
company to consider and evaluate the legal factors since the company operates in many countries
around the world and each country has different set of rules governing the operations under
aviation industry. Hence, it is important for British Airways to deploy considerable resources for
scanning the legal horizon and ensuring compliance to improve the goodwill and reputation of
the company and avoid any lawsuits in the future.
Environmental Factors affecting British Airways:
Increasing environmental concerns and protection of the ecological balance has become
the forefront of changes being made in the operations under the aviation industry. Raising
environmental issues has put the onus on companies like British Airways to reduce the amount
of carbon footprints and emission of greenhouse gases (Gegg, 2014). The management of the
company has taken steps like using fuel-efficient technology and increasing consumption of
renewable energy at the airports and has a vision of reducing its carbon emissions by at least
20% by the end of year 2030. Hence, it is important for British Airways to consider the
environmental factors and improve its sustainability standing which determines the image and
reputation of the company.
TASK 2
2.1 Influence and Relevance of Corporate Social Responsibility and Sustainability on decision-
making of British Airways.
Corporate Social Responsibility can be defined as the comprehensive set of actions and steps
taken by a business organisation to create a long-term positive impact on the community, society
and the environment (Crane, Matten and Spence, 2019). It lays emphasis on the responsibility
and duty of a business organisation to look beyond the profits and create benefit for the
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community and the society in which it operates by actively engaging in solving their problems
and extending support. Sustainability refers to the comprehensive approach of managing and
controlling the organisation to maximise the long-term economic, social and environmental
benefits generated from the business operations (Fontaine, 2013). Over the past few years,
sustainable development and business growth has been the primary motive of every business
organisation. Corporate Social Responsibility of an organisation is concerned with enhancing
the aspect of sustainability in the operations and the business activity of the organisation. Over
the past few years, importance of aviation or airline industry in the service sector has witnessed
an exponential growth pertaining to the rising international trade and travel and tourism
activities. British Airways has expanded its operations to many countries all over the world and
has been providing service to millions of customers every year. However, with the rising
business operations in the airline industry, the importance of Corporate Social Responsibility and
Sustainability for the management of British Airways can’t be overstated. Organisations under
the airline industry are being encouraged to remain ethical in their conduct and mitigate the
harmful impacts being created on the environment with respect to rising emission of greenhouse
gases, depletion of ozone layer, carbon footprints, consumption of non-renewable energy and
many more things. Corporate Social Responsibility also includes activities such as generation of
more employment opportunities, Importance and relevance of Corporate Social Responsibility
and Sustainability and its influence in the policy formulation and decision-making for British
Airways can be better comprehended with the help of considering the following points:
Improving public image: CSR activities of a business organisation goes a long way in
improving the public image and goodwill of the company. These has been a rising concern
among the consumers with respect to damage being done to environment and the ecological
balance. Increasing airline operations have also faced a lot of criticism from various segments of
the society for creating an adverse impact on the nature and rising the problems of global
warming and climate change. As a result, the public image of a company depends a great deal on
the Corporate Social Responsibility practices which it adopts and the steps taken by the
management of the company for improving the sustainability standing of the organisation. With
the help of taking care of its CSR, the management of British Airways can improve the goodwill
and the reputation of the company and it is crucial for the long-term profitability and business
operations of the company (Persons, 2012). It is important for the managers of British Airways
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to take decisions in harmony with the social responsibility and sustainable development of the
company and remain ethical in its conduct for improving the public image. Hence, in this
regards, every policy and decision which is being taken by the business managers of British
Airways is widely influenced by the aspects of Corporate Social Responsibility and
Sustainability.
Customer loyalty: Rising environmental concerns has shaped the behaviour of the consumer
where he evaluates the impact which the business organisation is creating on the society and the
environment. The managers of British Airways needs to adopt CSR policies and follow the
ethical conduct of business activities which will increase the loyalty of customers and help the
company in long-term relationship management with the customers. Customers are more likely
to engage or associate themselves with a brand which remains ethical in its conduct and its also
induced trust in them with respect to fair trade activities and offering the best quality of product
and services at the best price (Lozano, 2015). Hence, managers of British Airways needs to take
decisions with respect to social responsibility of the company for maintaining customer loyalty.
For example, a business decision which increases the profits for British Airways at the cost of
environment must not be taken by the management of the company as a part of its Corporate
Social Responsibility to improve positive impact on the community and the environment.
Cost reduction: Making changes in the business operations and processes with respect to
CSR and sustainability will help the managers of British Airways in reducing the cost of the
operations and will increase the profitability of the company. For example, using less packaging
and plastic material for the luggage will also create a positive impact on the environment and at
the same time, help in reducing the costs of the company (Sarker,
Hossan and Zaman, 2012). Hence, making sustainability changes is crucial for the
management of British Airways to reduce cost and take better decisions.
Increasing brand awareness: Remaining committed to ethical business activities and
actively engaging in the community issues for discharging the corporate social responsibility will
help the management of British Airways to improve brand awareness. Information about a
business organisation which is actively taking care of its CSR spreads like fire and this will result
in more people becoming aware about British Airways and will increase the target market of the
company.
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Avoiding legal actions and government regulation: Due to the increasing negative impact
being created by the aviation industry such as increasing pollution, over-consumption of energy,
increasing emissions of carbon and ozone-depleting gases etcetera, government has issued
various guidelines and regulations to monitor the sustainability in operations of these airlines
(Amran, Lee and Devi, 2014). Non-compliance with these guidelines can result into heavy fines
for British Airways and hence, compliance with corporate social responsibility and sustainability
in every decision which is taken by the management of British Airways needs to be reflected to
avoid any legal complication and lawsuit.
On the basis of above discussion, it can be summarised that Corporate Social
Responsibility and Sustainability is an important concept and principle which is extremely
relevant for the management of British Airways. It influences the decision-making and policy
formulation of the company. For example, rising fare prices in anticipation of high demand is
against the business ethics and the guidelines of Corporate Social Responsibility and hence, the
management of British Airways has to take price-strategy decisions in accordance with these
guidelines and ensure that it doesn’t create a negative impact. Hence, every major decision of the
company needs to be considered from the perspective of Corporate Social Responsibility and
Sustainability.
2.2 Evaluation of Corporate Social Responsibility and Sustainability practices and response of
British Airways.
The management of British Airways has taken many steps and measures to promote
Corporate Social Responsibility and aspect of sustainability in its operations. Impact and
effectiveness of the various steps taken by the management of British Airways with respect to
various dimensions of CSR and Sustainability is being evaluated with the help of following
points:
Tackling Climate Change:
The management of British Airways has responded in a very effective manner to deal
with the issues of climate change which is the most pressing issue in the world right now. The
company has partnered with Velocys for production of sustainable and renewable jet fuel
through converting the waste generated by domestic work and household under its Atalto
Project. By taking significant steps such as washing the engines more frequently to improve
efficiency and optimisation of the flight routes, carbon emissions of British Airways have been
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lowered by more than 360,000 tonnes since the year 2014 (Corporate Social Responsibility,
2019). British Airways has made a significant amount of investment to include new range of
Airbus A-350 aircrafts which have refined aerodynamics and light-weight composite materials
contributing to its 25% more fuel efficient engine technology which goes a long way in eco-
friendly flights and airline operations. Customer carbon funds have also been created by the
management of British Airways providing an opportunity to people to contribute in reduction of
carbon emissions by booking flights with British Airways. The fund is being used for operation
of community-wide renewable energy projects in many countries all over the world such as
Kenya, Scotland etcetera. It can be said that the efforts being made by the management of British
Airways for fighting and tackling climate change are significant and very effective.
Reducing environmental impact:
With an objective of reducing the negative and harmful impacts on environment, many
steps and measures have been taken by the management of British Airways which have proved
to be very effective. Compliance with environmental legislation and guideline and the efforts
being made to enhance the environment management model and system of the company have
been very effective. The company aims to reduce the impact of noise generated from aircrafts on
the local communities by reducing the average production of noise per flight by 13% in the year
2020 (Corporate Social Responsibility, 2019). Investment have also been made in cleaner and
energy efficient ground vehicles by British Airways to improve the quality of air. Efforts are
being made to minimise thrust of engines during the landing and take-off procedures for
improving the air quality. Waste management program of British Airways also looks promising
where the company has a clear goal and objective of reducing the usage of single-use plastic
during flights by more than 700 tonnes by the year 2020 which is very effective strategy for
dealing with adverse environmental impacts.
Conducting business responsibly:
Management of British Airways conduct fair trade activities and integrity is the key
element in its business ethics. Safe and healthy working environment is being provided to the
employees for maintaining better workforce satisfaction. The management of the company has
also adopted zero-tolerance policy against evils such as human trafficking and modern slavery
and the employees and cabin-crew members of the company are provided special training to spot
any such incidents and handle such situations in the best manner possible (Vourvachis and et. al.,
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2016.). Hence, British Airways is effective in ensuring that business is being conducted as per
the rules and guidelines of CSR and responsibly.
Supporting local communities:
British Airways exhibits commitment for creating a positive impact on the society and
the community in which it operates. Many effective steps have been taken by the company.
Flying start campaign has been launched by the company with an objective of providing
disadvantaged people and primarily children, the best possible start to their future. Customer
donations and contributions made by the company along with charity organisations are being
used to immune children against deadly diseases, provide them primary education and many
more things which are very effective in improving the quality of life for the under-privileged
section of the society ( Soto, 2012). British Airways has partnered with the Disasters Emergency
Committee to provide relief funds and financial support to communities affected by any natural
disaster or calamity. In the year 2019, the company actively engaged in responding to crises in
Bahamas and provided financial support for reassuring infrastructure and helping the local
communities.
On the basis of above mentioned points, it can be evaluated that the management of
British Airways has taken some significant steps for discharging its Corporate Social
Responsibility and improving the sustainability in the operations. It has been evaluated that the
steps and measures taken by British Airways to improve the positive impact on environment and
tackle climate change have been very effective which has also improved the public image and
reputation of British Airways.
2.3 Recommendations
From the above information it can be determined that there are several component external
factors that create influence over the business of firm in form of positive as well as negative. Si it
can be suggested that to analyse the influence of these factors over the business the venture can
use and implement PESTEL analysis framework. Because this concept considers diverse
extrinsic aspects like political, economical, social, technological, environmental and legal etc.
which all are offered data about government intervention in business, economical influence and
growth of firm, technological innovation in business and many more (Corrales, Fenwick and
Haapio, 2019). By considering factor like environmental, the venture can monitor the impact of
business and influence of environment over business. It can be also suggested that by following
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effective laws and legislation of national authority, the management of BA can operate its
business in successful manner in global business environment in effective and efficient manner.
If the organisation will consider this analysis then it positively affect the decision making of
firm. Before considering an environmental factor in context of respective firm, the administration
develop and design a framework or strategy so that they can implement in effective form and the
management can determine their importance regarding business.
Along with this, it can also be suggested to the firm that corporate social responsibility is an
effective activity and process that influence policies and determination devising. If the venture
consider appropriately this process then it create a long term favourable influence on the society,
community and environment as a business establish in a society. By considering CSR activity,
the business like BA can make development in its public image as these kinds of activities are
organised for the benefits, welfare and making development in their living standards. By making
such things like reduction of wastage and lack use of plastic material care create positive impact
over the business of respective firm. It can also be recommended that the management of BA
should effectively follow environmental law and innovative government laws related to it so that
they can run their business more efficient form (Al Rahahleh, Ishaq Bhatti and Najuna Misman,
2019). By supporting local communities through offering services in disasters or emergency
services they can also sustainable and survive in respective business sector in adequate manner.
This will favourably affect the firm in term of increasing sales, profit and increasing customer
base.
CONCLUSION
It can be concluded on the basis of above project report that external factors such as political
stability, level of income, developments and innovations in technology etcetera influence the
operations and the decision-making of British Airways. The management of the company needs
to analyse the impact of these factors for taking better managerial decisions and identify any
early opportunities or threats. It can also be concluded that with the rising concerns of
environmental protection and sustainable business development, it is very crucial and important
for the management of British Airways to follow the guidelines under Corporate Social
Responsibility and Sustainability. CSR and Sustainability helps the company to build a better
image in the industry and also increases the profitability of the operations and hence, every
decision of British Airways in influenced by CSR and Sustainability dimensions. It has also been
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observed that the steps taken by British Airways for following CSR and creating a multi-
dimensional positive impact of its business activities have been effective. At last, the report
provides some recommendation which can be implemented by the management of British
Airways for responding in a better and more effective manner to its Corporate Social
Responsibility and Sustainability obligations.
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REFERENCES
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Fontaine, M., 2013. Corporate social responsibility and sustainability: the new bottom
line?. International Journal of Business and Social Science. 4(4).
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Lawton, T., Rajwani, T. and Doh, J., 2013. The antecedents of political capabilities: A study of
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Lozano, R., 2015. A holistic perspective on corporate sustainability drivers. Corporate Social
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Perera, R., 2017. The PESTLE analysis. Nerdynaut.
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Sarker, M.A.R., Hossan, C.G. and Zaman, L., 2012. Sustainability and growth of low cost
airlines: an industry analysis in global perspective. American Journal of Business and
Management. 1(3). pp.162-171.
Soto, C., 2012. British Airways–Iberia: Environmental Friendly Synergies.
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Taneja, N.K., 2017. Driving airline business strategies through emerging technology. Routledge.
Vasigh, B. and Fleming, K., 2016. Introduction to air transport economics: from theory to
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Vourvachis, P., Woodward, T., Woodward, D.G. and Patten, D.M., 2016. CSR disclosure in
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Turunen, T., Eloranta, V. and Hakanen, E., 2018. Contemporary perspectives on the strategic
role of information in internet of things-driven industrial services. Journal of Business &
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Online
Corporate Social Responsibility. 2019. [Online]. Available thru<
https://www.britishairways.com/en-gb/information/about-ba/csr/corporate-responsibility>
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APPENDICES
Appendix I (Organisational Profile)
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