Debates in Strategic Management: British Airways Case Study Analysis

This report provides a comprehensive analysis of the strategic management practices implemented by British Airways, particularly in response to the economic crisis of 2008. It examines the organizational changes undertaken, including cost-cutting measures like staff reductions and pay freezes, and assesses the challenges associated with these changes, such as resistance from employees and labor unrest. The report delves into stakeholder management, highlighting the importance of communication and engagement with various stakeholder groups, including employees and management. It further analyzes the leadership styles employed and their impact on the implementation of change, emphasizing the need for democratic and participative leadership approaches. The report concludes by evaluating the effectiveness of the implemented strategies, the evolution of the organization's marketing communications, and the need for more experienced management in the future.

Running Head: DEBATES IN STRATEGIC MANAGEMENT
Debates in strategic management
Student’s Name
University Name
Author’s Note

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Table of Contents
1. Introduction..................................................................................................................................3
2. Discussion....................................................................................................................................3
2.1 Organizational analysis: Context of change..........................................................................3
2.2 Evaluating the kind of changes..............................................................................................4
3. Strategy for Change Management...............................................................................................5
3.1 The challenges associated with implementation of change...................................................5
4. Stakeholder Management............................................................................................................6
4.1 Managerial Challenges..........................................................................................................7
4.2 Change Management.............................................................................................................7
5. Conclusion...................................................................................................................................8
Reference List..................................................................................................................................9
Bibliography:.................................................................................................................................11

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1. Introduction
British airways are one of the biggest airways agencies, having one of the biggest
networks, involved in international operations. Over the years of their operations, the
organization has gone through several challenges. The crunch in the American economy in the
year 2007 initiated the global economic crisis of 2008. Like other organizations, the major
organizations of the aviation industry of UK like the British Airways experienced the need to
implement some essential changes for the sustained survival of the organization (Lawton 2017).
This research study makes a detailed analysis of the implemented changes by the organization.
The challenges faced and the strategies undertaken by the employee groups as well as the other
stakeholders have also been analyzed under the scope of this report.
2. Discussion
2.1 Organizational analysis: Context of change
Organizational change is inevitable when performance gap is observed in the
organization. Analysis of the financial statements of the organization shows that a successive
profit of £875 million was followed by a rapid loss of £401 that occurred in the year 2009. There
have been a steady growth in the airline industry since the inception point of the 20th century and
this has also brought about the emergence of growth challenges for the established airline
organizations (Lange et al. 2015). One basic competition had been delved with the budget airline
agencies that charged low fares. On top of that, after the global crisis in economy, Shaw (2016)
reports that there have been a remarkable reduction in the number of average flight passengers
and this is the reason why there had been depletion of business for the British Airways in the two
most important and traditional markets which are UK and the US (Santana et al. 2018).

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2.2 Evaluating the kind of changes
British Airways had implemented changes that were primarily concerned about the reduction of
operational cost. The strategy was to ask the workers to accept unpaid leaves and also perform
unpaid work amidst the month. The CEO himself set the example by going without accepting
his monthly salary of £61,000 (Eaton 2017). The first change that was introduced by the
organization is to cut down the number of staff. Initially, the company developed a plan for
retrenchment as an account of which 4900 members lost their jobs. The perception behind the act
of retrenchment was that there was overstaffing in the company and such high number of
employees could not be commensurate with the costs of the production (Wensveen 2018).
For evidence, there was a proposal from the end of the management for the reduction of the
number of cabin crews from 15 to 14. Analyzing this strategic outcome, it can be commented
that the company had been paying the extra cabin crew member for each flight without any
definite economic reason for this expenditure. Other than this plan of retrenchment, there was an
endeavor from the end of the management in order to ensure further savings by restricting further
payment hikes for a minimum of two years at least. As highlighted by Lange et al. (2015), tt was
evident in the interviews of the CEO that the pay freezes as well as the retrenchment plan were
on account of the transatlantic recession which had made the operations of the company,
unstable for the moment.
It was agreed by the engineers of the company that with the installation of a more utility
working system, the managers were ready for acceptance of a reduction of salary (Wensveen
2018). To make further cost reduction, the work hours of cabin crew were being extended with
scrapping of meals and the breakfast being left out. However, resistance to change had come in

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great proportion, whereas the management personnel had been ready for the change (Karami
2017).
3. Strategy for Change Management
The chief executive of the British Airways opined that with economic crisis, there was a
necessity for reducing the cost of business from a top down approach. As informed by Hanlon
(2017), for successful change management, a leader operates in the way of establishing a vision,
which can bring in further clarity in the process of change management (Kerckhofs 2017).
3.1 The challenges associated with implementation of change
Resistance to implementation of change comes in various forms. There might be resistance from
the end of the individuals. Most of the cabin crews were against the changes as they were
despising the retrenchment as well as the extension of the working shifts. The strong resistance
of the cabin crew resulted in protests and strikes and that is why fragments of work came to
standstill. There was a 12 days of strike from the end of the ‘cabin crew spanning from
December, 2009 to January, 2010. The organization could not come up with any alternative
workforce policy in order to pacify the challenge. Rather they had to appeal to the court to get an
injunction in order to evade the strike.
In this context, it can be analyzed that while implementation of any form of change, there
should be a stage of preparation for the change. Nevertheless, when there is severe or repetitive
motion against the implementation of the change, the organizational leaders should have
implemented participative or democratic form of leadership. On the contrary, there were
reflections of authoritarian style of leadership that was utilized by the management in order to
mitigate the resistance to the change (Wu 2016). The workers were not communicated in any

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way regarding the changes that were taking place. The context of impact between the economic
recession and the job losses and retrenchment of salaries were not explained (Karami 2017).
Hence, it can be easily argued that there had been a lack of communication within the layers of
hierarchy in the organization and as an account of that the worker unrests have been arising.
According to the views of Lawton (2017), the staff needs to be dealt in a fair as well as
motivating manner so that the overall organizational performance can be enhanced. In fact the
Stakeholder theory of management also highlights that the organizational management team
should be considering the inclusion of the stakeholders as serious forces responsible for
sustainability, profitability as well as competitiveness in a business.
In assessing the leadership concerns associated with this change process, it should always be
kept in mind that the operational and lower level management workers should be dealt in a fair
as well as motivating manner, so as to enhance performance (Karami 2017). This is why
democratic leadership is very important from the perspective of organizational management.
Participative leadership generally involves almost all stakeholder groups in the process of
decision making.
4. Stakeholder Management
The strikes that occurred in British Airways were caused by the employees and primarily the
cabin crew. Any business organization faces the demand of prioritizing as well as managing their
responses towards stakeholders (Holloway 2017). As stated by Santana, Valle and Galan (2018),
this would be possible by alignment of the socio-corporate strategies of the organization with the
expectations of the stakeholders.

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Another important aim of stakeholder management is the organization of the relationship
between society as well as business. Many market changes have been introduce by globalization
which has brought about impending challenges for the organizations also. However, stakeholder
management is very essential for forecasting changes in societal expectations and thereby
identifies the threat before they affect the organization. Influenced from the findings of Lange et
al. (2015), it can be stated that this implies that for British Airways, it is necessary that prior to
establishment of a strategy, planning, scheduling or budgeting, the stakeholders who will be
affected as an account of the change project should be initially anticipated (Mills 2017).
4.1 Managerial Challenges
Managers of the airline agencies have become increasingly competitive and the managers
are also prompted by challenges in the form of issue-focused stakeholder management. Since the
upper management of the British Airways had a lack in effective communication with the
stakeholders, they are not always aware of the responsibilities as well as limitations of the
organization (Wensveen 2018). There have been long term pay as well as job disputes, on
account of which the cabin crew workers started the long term strike (Stuart 2002). In order to
effectively resolve the issues, there should be a liaison with the stakeholders as well as experts
involved in the area of disputes (Shaw 2016).
Therefore, the management of the organization should be devising effective strategies for
communicating with the stakeholders as well as avoiding practices that might jeopardize the
reputation of the stakeholders. Strike and attrition have the potential of ruining the reputation of
the organization.
4.2 Change Management

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The change management has been implemented in order to make the organization more
competitive in terms of customer service as well as sustain in the airlines market as one of the
premium service providers (Kerckhofs 2017). Although there were labor unrests which caused
difficulty in workplace management, the cost reduction policy actually helped the organization in
reducing the costs against savage labor, emphasizing on the primary business areas as well as
slimming down the business activities (Holloway 2017). Among other achievements, Kaufman
and Taras (2016) informs that the organization was successful in decreasing the overall age
profile of the participating work groups (Mills 2017). However, after the restructuring of the
work teams, there was a stronger emphasis on the entrepreneurial capabilities (Wu 2016). The
implementation of the working capabilities of the various works groups, and specifically the
marketing personnel were enhanced. This prompted the organization to win consecutive awards
like the ‘Fly the Flag” award or the ‘Advertiser of the Year’ award.
5. Conclusion
The leadership of the organization has been autocratic and implemented with a top down
approach of organizational leadership. Although there have been criticism of the attrition or the
labor unrest that shook the reputation of the organization on various public fronts, there was
subtle improvement in the performance of the work groups. The marketing communication of the
organistaion has been better and as an account of that there have been betterment in the external
communication. In the following time, the efforts on external communication will result in
expansion of the client base and also ensure the sustenance and dominance of the organization in
the market amidst all the new and entrepreneurial organizations offering low budgets air fares to
the domestic as well as the international customers. However, there is definitely a problem with
the management of the organization that needs to be dealt in a more experienced manner.

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Reference List
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Hanlon, A., 2017. British Airways: a case study in social media management. The Business &
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Airways and Deutsche Lufthansa. British Journal of Management, 26(3), pp.388-407.

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Lange, K., Geppert, M., Saka‐Helmhout, A. and Becker‐Ritterspach, F., 2015. Changing
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Wu, C.L., 2016. Airline operations and delay management: insights from airline economics,
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