Contemporary Developments in Business and Management: British Airways

This report provides a comprehensive analysis of British Airways, focusing on contemporary developments in business and management. It begins with an executive summary and introduction outlining the scope of the report, which includes two main tasks. Task 1 evaluates the external factors influencing British Airways and the airline industry, employing a PESTEL analysis to assess political, economic, social, technological, environmental, and legal factors. It also uses Porter's Five Forces model to analyze the competitive landscape. Task 2 examines the impact of corporate social responsibility (CSR) and sustainability on British Airways' policies and decision-making, evaluating the effectiveness of the company's CSR response and identifying areas for improvement. The report concludes with recommendations for enhancing the company's business practices and performance, emphasizing the importance of adapting to external changes and integrating CSR into its core strategies.

Contemporary
Developments in
Business and
Management

Table of Contents
EXECUTIVE SUMMARY.............................................................................................................3
INTRODUCTION...........................................................................................................................4
TASK 1............................................................................................................................................4
TASK 2............................................................................................................................................8
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................14
APPENDIX ...................................................................................................................................16
Appendix 1................................................................................................................................16

EXECUTIVE SUMMARY
This report explains the technicality of the business activities and their management by
focusing on various developments that take place in an organization. It comprises of two tasks
which shows the strength and weakness along with the a comprehensive view about the external
environment affecting the operations. It is prepared by containing the details of the company
chosen in this assignment. In the Task 1 evaluates the influence of the external factors on British
Airways as well as the whole industry. For this purpose, PESTEL analysis is used depicting the
changes that have taken place in the UK. Task 2 presents the impact of corporate social
responsibility and sustainability on the policies and decision making of British Airways so that
alterations can be done for reducing the negative effect. Furthermore, the response of the
company regarding the CSR activities is evaluated to show the effectiveness. Along with this,
some of the areas which requires improvements are shown which can create positive results for
the business of the BMW and increase the profitability and growth.

INTRODUCTION
A business organization is a part of the industry in which it operates. Every such industry
or sector comprises certain rules, standards and regulations stating the ways in which operations
of an entity should be carried (Crane, and et. al., 2019). Meanwhile, variety of developments take
place due to fluctuations and opportunities in the business world. There are external and internal
environment which affect the strategies, policies and decision-making. These factors should be
evaluated in order to remove or eliminate any negative outcome. In this report, British Airways
has been chosen which is an airline termed as second largest. It has its headquarters in
Harmondsworth, United Kingdom. This report covers external influences which affect the
organization by including their significance of each such factors to the entity. In addition to this,
one of the given theme has been chosen for presenting the relevance with the selected company.
Also, the impact it has on the policies and decision making has been shown followed by a critical
evaluation of the effectiveness of the organization's response. Lastly, recommendations have
been given for making improvements in different areas so that corporation can provide better
response to difficulties.
TASK 1
Birtish Airways is a flag carrier airline in UK which has been ranked as the second
largest airline in the UK based on fleet size and passengers after its competitor easyJet. The
headquarters is located in Harmonsworth, UK. It was established in the year 1974 and chaired by
Alex Cruz who is also its CEO. It was merged with International Airlines Group (AIG) which is
registered in Madrid, Spain. Below are the analysis which may have impact on the business
activities hence, different types of external factors have been presented which are as follows:
PESTEL analysis
This analysis is conducted to show the influence of various factors such as political,
economic, social, technological and legal on the entity. PESTEL of Lotus Cars has been
provided as follows:
Political factors-
These are the factors in which intervention of the government is there by formulating
policies for administrating the activities of the company (De Roo, and et. al., 2019). These are
changed frequently in order to make it more effective. British Airways is an airline which has to

comply with number of rules, regulations and restrictions put by the UK government. The
restrictions and intervention of the government have increased by considering the financial crisis
and terrorists attacks in the past years. The major changes are introduced in the laws for
enhancing the safety of the customers in UK and other European countries. British Airways is a
British company which is always get the support of the government for growing more and more.
This may impact the business operations as not only the federal but also the local authorities
intervene the matters (Hollebeek, and et. al., 2019). This can make British Airways to modify its
policies according to political conditions and policies of the government. The management of the
British Airways should ensure all the rules are abide by in order to avoid any financial burden
and hurdle in business operations.
Economic factors-
Some of the elements included in this are interest rate, currency rate, tax policy and many
more. These are crucial for the survival of the company in the competitive environment. In UK is
the current scenario is about BREXIT which has resulted in many challenges. This has caused
fluctuations in the rate of the the sterling which has affected the international trade of British
Airways. Furthermore, the occurrence of financial crisis in UK has declined the growth of this
company in European countries. Apart from this, the prices of the oil has increased for which the
Aviation industry is carrying changes to reduce the fuel price so that airfare can be reduced
(Bryan and Clegg, eds., 2019). It will have direct impact on the demand of customers leading to
increasing sales and profitability of British Airways. It should also consider the global challenges
and trends going on in the international markets before making execution of expansion plan.
However, after becoming the part of AIG, British Airways has seen improvement in the
competitive position in the UK market. In nutshell, this airline should focus on making
investment in other avenues in order to have increased performance. Also, it can add new routes
in international flights as a part of economic stability (Joelle and Coelho, 2019).
Social factors-
The factors which are related to the culture, beliefs, community, opinions etc. of the
people living in a country. The resources used by the organization belongs to the community and
society in which it operates the business. British Airways is the second largest airline in UK with
400 different routes in which flights operate on daily basis (Singh, 2018). This means that there
are increased number of stakeholders including suppliers, customers, employees etc. In all the

cases, it should be aware about the demands of the buyers and various changes taking place in
the choices and preferences. British Airways should appoint candidates who are willing to
provide unique and new ideas for carrying the work in a desired manner. It can affect its
existence in a particular area.
Technological factors-
Technologies are important part of the business world which keep changing every year
by including more advancement in the existing ones. It involves good amount of time and money
in R&D activities to design technologies which can increase the profitability and growth of the
company (Galan-Muros, and et. al., 2019). British Airways should focus on this factor otherwise
outdated technologies can make it lose customers. Technological up-gradation helps in
increasing the quality of the service which may lead to manage the challenges effectively.
Environmental factors-
These factors are related with the ecology or the environment in which it carries the
business activities (He, and et. al., 2018). An organization has different kinds of resources which
should be used in the company so that environment can be prevented. British Airways has
reduced the consumption of the fuel and energy by using advanced technology and
aerodynamics. According to its CSR report, it has been seen that it has complied with al the laws
responsible for the safety of environment. It has impact on the policies because of frequent
changes in climate programs by the government.
Legal factors-
These are the laws, rules and regulations which are applicable on the organizations for
maintaining legality. British Airways often got involved in legal consequences for not adhering
to the laws (Richards, and et. al., 2019). This added financial burden on the business which
reduced the efficiency of the company. Furthermore, it has been encountered in unequal pay to
its staff. This factor is important in to avoid any contingency and uneven situations. Therefore, it
can impact the business in a negative way and may even make it wound up in extreme cases.
Porters Five force Model
Threats of New Entrants-
Airline industry is a very reputed form of industry. British airways is also amongst the largest
airlines operating in this industry since 1974. There are very least threat of new entrants to the

companies operating in the airlines industry . As there are many barriers a company has to go
through before entering this industry such as huge investments, high maintenance cost, survival
cost , establishing distribution channels (Nolan, and et. al., 2016). Also it becomes difficult for
the companies to build a competitive edge as a new brand in the Airlines industry. People prefer
using the existing services . British Airways thus, has very less threat of new entrants.
Threat of substitutes-
All the different modes of transport available are a threat to companies in Airlines industry. As
customers can substitute any mode of transport they want with the air transport. It depends upon
the customer priority in this case (Steccolini, 2019). If the customers are having low price as the
priority then they will choose some other means of transport apart from airlines. The
differentiating factor here is that which is the target market for the company. If the customers in
target market want to save time and they want comfort then they will prefer British Airlines . It
will be difficult for them to find its substitute. Hence, it is totally dependent upon the customer
that he will be able to find a substitute or not.
Bargaining power of Buyers-
Nowadays, the customer is very aware and they have many choices available with them .
Customers are also becoming more and more price sensitive . This has created pressure upon
companies to offer services best in terms of quality and low in price as compared to their
competitors (Khalid, and et. al., 2019). The reason is that there is no switching cost to be
incurred by customers. This has created pressure upon the companies to offer best deal and offers
to attract new customers and retain existing customers. British Airways must make efforts to
reduce the bargaining power of buyers by offering best services in terms of price and quality.
This will make it difficult for its customers to switch to any other brand.
Bargaining Power of Suppliers-
Bargaining power of suppliers is high when there are few suppliers but companies are more.
Suppliers in British Airways are people supplying labour, fuel etc. The bargaining power of
suppliers is high in case of British suppliers as there are few suppliers and demand is high. It
becomes very important for companies to have good relationship with such suppliers on a long
term basis.
Industrial Rivalry-

There is huge competition being faced by companies in their country as well as across the
boundaries (Husgafvel, and et. al., 2018). This competition can be on any terms like price,
quality. Offers. Marketing activities etc. British Airlines must make efforts to ensure that their
existing customers are satisfied with their services. They must also try to increase their
promotional activities to stimulate the prospective customers to use their services.
TASK 2
Corporate social responsibility is considered to be a type of private business self
regulations all across the globe. The CSR plays an important role for the firm to be socially
accountable to public, their stakeholder and to themselves for sustaining any scale business
(SEBIKARI, 2019). Every organisation implement CSR in an effective manner for satisfying
the society, the corporate citizenship have impact on all aspect of society including economical,
social and environmental. It is necessary that CSR should give emphasis on creating a strong
relationship between the members who forms a society. The main object of conducting CSR
activities is to achieve long term benefits while growing the business.
2.1 Relevance of CSR on British airways
The British airways is second largest airlines in UK. The airline is based in waterside
around the main headquater at London Hearthrow Airport. Recently the airline have been
generated more revenues of about $ 1 billion(2017-2018) . The British Airways have effectively
adopted CSR activities that have found to be relevant in engaging employee, consumers,
communities, stakeholders and other members of society. The triple bottom line prime aim
focuses on environmental, social, viable, economical, sustainable and equitable. The
implementation of CSR bring a key responsibilities of building a strong relations with each
member. Through CSR activities the management of British airways will produce services that
will be beneficial for both consumers and society.
Employee-
The workforce considered to be the most important aspect of internal environment of
every organisation. The British airways gives major emphasis in developing each individual
working in an environment (Hudson, and et. al., 2019). The employee are the first member who
directly communicate with existing and potential customer. It is necessary that employee are
been satisfied while giving efforts in their work. The interest of internal shareholders are
essential for increasing the productivity and capturing market share in airline industries. As

British airways are dealing in giving quality service to the passengers. Through CSR activities,
the management could give training session to each employee, so that they can effectively
interact with target base.
Investors-
The investors plays an important role in sourcing funds in any organisations. It is said
that top managers need to plan more CSR activities for attracting the investors so that can invest
more in company share. The investor should know about the goals that are to be achieved by
organisation in future terms (Shujahat, and et. al., 2019). The social activities implemented by
management help in gaining more revenues. Also it can achieve more market share in the
industries. Thereafter the investor decide the financial budget that will be beneficial for British
airways.
Customer-
The customer behaviour vary from individual to individual, they are the key element for
growth and decline of any scale of business. Every organisation need to focus on demand and
requirement of target consumer (Kranz, and et. al., 2016). In context with British airways, as the
trend are rapidly changing the management can conduct effective CSR activities, in regards for
seeking knowledge on preferences of consumers. Also, such activities create an awareness about
the brand that are taking responsibility of providing better environment to the society.
Competitors-
The competitor are one who gives a boost for expanding the business in target market.
The competition give existence to any scale business. In context with British airways
management need to plan marketing strategies for maintaining customer loyalty in market. The
CSR activities help management to remove threat that might impact their current business
positions by providing quality service to potential customer (Evers, eds., 2019).
Public-
In current scenario, social media play an impactful role in the customer base as most of
the buyers online users across the globe. Through effective communication channel a brand is
able to create a positive impact in mind set of consumer. In regards with British airway, CSR
activities could be conducted through the use of You-Tube channel. The public nowadays take
more interest in watching and reading articles on company websites that are been posted by

teams (Gössling and Michael Hall, 2019). The CSR activities help in building strong network in
target society.
Self-
The company are directly connected with customer through CSR activities. It is
necessary that every employee need to be motivated while performing task as a unit. In context
with British airways, it is said that member of CSR team have authority and delegation to make
decision that are been helpful for client as well as organisation.
2.2 Evaluation of effectiveness of organization's response
British Airways is providing its services to different cities in UK as well as international
countries. The strategies and policies formed by its management have made it successful and
gained a position in the cut-throat competition by taking into account the importance of CSR
(Yar and Steinmetz, 2019). Therefore, it can be said that it is responsive or active towards
corporate social activities and treat them an integral part of the goals and objectives. The
effectiveness of the responses of British Airways has been explained as follows:
Preference to customers
Customers are considered the significant part of the business as they have direct impact
on the growth and success of the company. Entities make the products or services as per the
demands and choices of the buyers (Alvesson, 2019). Their opinions matter to the company and
all the decision making revolves around this. British Airways gathered feedback from its
customer who are frequent flyer as well as first time flyer and it has been obtained that
customer's satisfaction has increased. They have presented their honest opinions which helps the
company have healthy relations with the customers. It is important for it to have interaction with
them in order to survive the competition.
Policies for community
British Airways is a company which has set example in doing good for the society and
the community in UK. Also, it takes initiatives for the betterment of people living in different
communities outside the UK. It makes donations to various voluntary organizations for helping
the underprivileged (Vlajčić, and et. al., 2019). It is part of charitable activities which also help it
building brand image which can be relied upon. Apart from this, British Airways has raised the
awareness about importance of education, job, etc. These activities were carried through social

campaign and other programs. The main aim is to put light on crucial and important elements of
the society.
Eco-friendly business activities
The increase in industrialisation has increased the pollution level in the environment
which has made the people concern about the society as the climate is getting warmer with every
passing day. British Airways has included in its policies about reducing the CO2 and other
harmful gases emission (Blanc, and et. al., 2019). This initiative is taken as step by depicting the
ethics and social responsibilities. The prime impact will be on the reputation in the competitive
market. It has increased the number of customers in the past years.
Betterment of employees
Employees are important for the the business by which the goals and objectives are
achieved. Companies make policies and strategies for the management of the employees in the
company. It is important that their expectations are fulfilled. British Airways ensure that proper
training are given to the employees for providing them growth opportunities. Also, it makes sure
to appoint employees from diverse backgrounds from local community for increasing the
employment. Employees prefer companies who are ethical in terms of their business operations.
By this, the problem of unemployment is reduced to a certain level. This helps in creating strong
relationship with the government for making the conditions better.
Education perspective
British Airways contributes to the local community by helping them get the required
education so that their financial conditions can be made better by getting jobs. Furthermore, it
has created positive impact on the environment and community. It is one of the main parts of the
the CRS activities of the company (Katsos and AlKafaji, 2019). In future, it can build education
institution for imparting training to those who are interested in entering the field of airlines.
Collaboration in the community
British Airways has focused on make its customers and employees participate in the
activities of the business for making decisions which will be implemented in the business. This
helps in enhanced interaction between these groups so that better understanding can be formed.
Furthermore, it faces number of problems or dilemmas in which the solution provided in
collaborated manner helps brining down the hurdles in the business. This leads to enhanced
productivity and good financial position (Kanki, and et. al., 2019). Apart from this, opinions of