Contemporary Developments in Business and Management
The organization that I have selected to make this report is British Airways. I would be discussing many things in this report; however more emphasis would be laid down on the impact of external and internal factors on the organization followed by the evaluation of British Airways.
Introduction of British Airways
British Airways is a worldwide airline service that offers airline services all year round ensuring low fares and has a vast flying network. It is one of United Kingdom’s largest global airline, flies over 550 destinations at appropriate timings and on the best located airports around the world. It provides the best services to its customers whether they are on ground or in the air. The British Airways group consists of British Airways Plc and other subsidiary companies including British Airways Holidays Limited .The Company has registered office at Waterside, Harmondsworth and has a registered office in England and is also a member of IATA & AEA. (British Airways n.d.).
Primary internal influences
The primary influences basically revolve around the performance of British Airways and the features that contribute to the success of British Airways, etc.
British Airways performance and growth strategy: problems and opportunities
The business strategy that is adopted by British Airways is directly linked to its growth plan. This would justify the financial position of British Airways. Although there is a threat of the increase in prices of the fuel, however British Airways also has opportunities that can enable the organization to compete with the market.
Problems of communication within organizations
Communication between managers and workers at work is essential for the growth of British Airways. The industrial relationships, leadership roles, employee motivation, flexible working, organisational change and its impacts on psychological contracts should be considered by British Airways. (Clawson & Conner 2004)
British Airways placed a ban on its employees from wearing religious symbols and this was done due to their uniform policy.
Marketing Mix and Value Chain analysis of British Airways
The value of British Airways should be examined and Porter’s value chain analysis should be conducted. The 4 P’s are the key marketing concepts that are described as academic literature related to relationship marketing is reviewed and applied to the practices of British Airways. (Kevin ; Kotler 2008)
Read also: PESTLE Analysis for Hotel Industry
Executive compensation analysis at British Airways
The salaries of the executives at British Airways are pre determined according to the main theoretical principles for executive compensation that is explained and it also provides a short overview on the current operation activities of British Airways. Furthermore, the compensation package of the executives should be worked on and suggestion for its enhancement should be proposed.
Importance HRM Practices in Organization Strategy
For this, British Airways should identify the growth of their performance. Furthermore the factors related to Human Resource Management practices such as to study the factors that affect the workforce of British Airways. Other than this, they should also think about ways in order to make their workforce effective.
Due to the emergence of new low cost carriers in the aviation market, the major market share of this industry has risen due to which many coalitions have occurred.
Budget Planning: Airline Industry and British Airways
British Airways has to do proper budgeting as budget planning explores the risks and uncertainties that can be faced by the company or by the whole industry.
British Airways in one of the most well known airlines and provides the customers with all kinds of airline services worldwide and they have their operations in 75 countries covering the entire globe from Europe, North America, and South America to Asia. (British Airways n.d.).
Strategic Tourism Management: Factual Strategies from British Airways Plc
This evaluates how the British Airways evaluates its strategies, however these strategies are factual. Other than this, the resources and capabilities, the competitive structure of the tourism industry, cultural or behavioral consideration, and exploring how globalization has impacted the strategy and structure of the organization and examine the ethical basis of a global strategy of the organization have to be looked upon by British Airways.
British Airways provides all kinds of airline services to the customers and operates in around 75 countries across Europe, North America, South America and Asia. PEST Analysis assists in carrying out an environmental scan of British Airways in order to highlight a specific factor or trend that might affect the organization.
This refers to the strategy that British Airways would adopt to differentiate by offering high quality services. Furthermore, it involves the theoretical marketing concepts such as the 7P’s of services marketing mix, the flower of services, the positioning map and customer relationship management, etc.
Primary external influences
The primary influences basically revolve around the competition from low budget airlines and the company’s pressures and future perspectives, etc.
One of the most external factors that influence British Airways is globalization. It affects the performance of British Airways and further pressurizes British Airways to adapt to the changes and introduce new ways for organisational planning and strategic management. British Airways has make changes according to the growing trend in the airline industry and focus more on the impact it has on the stakeholders, PEST factors and the policies of the European Union.
Environmental Changes in Global Airline Industry
This factor creates an impact on the global economic processes in the airline industry around the world and it further involves the accomplishment of PEST and Porter’s five forces analysis of the changes that occur in the environment of the airline industry. The future trends in competitive strategic patterns have to be looked upon by British Airways.
Analysis of the competitive environment
British Airways has to face the most important issues in the competitive and macro environments. For this a PESTLE analysis can be done that would help British Airways in identifying the macro factors that are impacting the airline industry. The PESTLE analysis done by the British Airways will highlight the social factors e.g. any kind of changes in demographics. This is done to increase the demand of the passengers and also highlights that the improving trend in the technology has creates lots of opportunities.
Analysis of British Airways
This examines both the internal and external problems faced by British Airways. Other than that it conducts Porter’s value chain analysis of British Airways and further discusses the PEST and HRM factors that are likely to affect the performance of British Airways after which the company’s strategies are assessed in the competitive environment of the industry.
Structure and Culture Analysis
British Airways is the second largest airline in the world and here, we will examine the organizational structure of British Airways, furthermore, the assessment of the value and the organizational culture being adopted, the cultural values and their impact on the behavior of the employee.
The changing competitive environment
Although British Airways is UK’s largest global airline and it meets all the travelling needs of the customers, along with the facility of online booking, this fact still cannot be forgotten that there are many competitors of British Airways and like other companies, even British Airways has to make sure that they beat the competitors on every way so that they receive maximum market share.
Following are the competitors of British Airways i.e. the UK Airlines.
1. Air 2000 is a UK charter airline, charges low prices to its customers and serves Europe. (UK Superweb n.d.). Other than this, they can also make online reservations of flights as the system allows them to check the availability of flights online.
2. Air Southwest also charges low prices for the South West of England.
3. Astraeus is one of the UK’s charter airlines that is independent and it flies to destinations all over Europe. Other than Europe, it also flies to other places such as Asia, the Middle East, North America and Africa. (UK Superweb n.d.).
4. Britannia Airways is now known as Thomsonfly and offers flights to Europe and many other places around the world.
5. British Mediterranean Airways was formed in 1994 and two years later, they agreed with a joint franchise partnership with British Airways.
6. British NorthWest Airlines is an airline basically for the business travellers, commuters, and the tourists, it charges economical prices and the customers can fully enjoy the professional, caring services available for them by the airline.
7. City Star Airlines is an executive airline.
8. Eastern Airways basically provides services for domestic flights in the UK. It has 17 airports in UK and it carries on its operations from many airports across the UK and in Europe.
9. Easy Jet operates all over UK and Europe and charges low prices.
10. Emerald Airways operates both freight and passenger airplane all over UK and Europe.
11. Excel Airways also offers charter flights with lower prices along with cheap hotel services and offers flights from all the major UK airports like Spain, Egypt, Greece, etc.
These are some of the competitors of British Airways in United Kingdom. Other than these, there are also many other competitors around the world with which British Airways has to compete. One thing noticed in all competitors is that they are offering low prices. Therefore, to stay in the competition British Airways also has to offer their services with reasonable prices if not lower than these. However, the competitive edge that British Airways can develop is by providing high class services both on ground and in the air.
British Airways is already a well known airline company but the emergence of the existing and up coming airlines companies can always be a threat to British Airways and can pull away the customers. As I mentioned above about a lower pricing strategy being adopted by the other airline companies, British Airways should either lower their prices as well or continue providing with excellent services to the customers. Nowadays, people have started thinking more economically and they tend to save more and more of their money and for this they may even sacrifice the quality of services. This however is not true in all cases as there are always some customers who do not want to compromise on quality of services they receive at any cost.
How it influences policies and decision-making
The strategic management at British Airways includes the description of their background, critically appraising their current competitive environment, identifying the stakeholders and the national policies that have influence over British Airways , conducting PESL analysis, and outlining the challenges faced by the company. (Butteriss 1998). Strategic options are suggested in order to assist the organisation in meeting these challenges.
British Airways should looks for a strong academic record when assessing the application of employees to cope up with the changing competitive environment. Past experience shows that academic skills are seldom sufficient to be a successful professional within a company as challenging, dynamic, diverse and global as British Airways. Therefore, British Airways has identified four skills and qualities as being essential to performing to the high standards that they expect from their employees. Capacity, achievement, relationships and technicality are these skills identified by Shell. Capacity is the diagnostic ability to put problems in an extensive but in a relevant view. Achievement is the ability to get things done. Relationships refer to the ability to work efficiently with others in a team and technicality is the ability to understand and approach technical issues coupled with an enthusiasm for technical challenge. The HR management refers to these qualities throughout their assessment and selection process, looking for candidates who can show them to a greater degree than their contemporaries.
To give their candidates the best value they can get from the organization, British Airways should make sure that it provides the job that the person wants. If the employee is more flexible about their preferred job and location, the more likely British Airways will be able to give what the employee want.
Training and development facilities should be provided by British Airways to cope up with the growing competition. Training usually refers to teaching lower level employees how to perform their present jobs, while development involves teaching managers and professional employees broader skills needed for their present and future jobs. (Leat 2001)
British Airways should provide training programs to their employee that is important for the employees who are new to their jobs. British Airways should focus on its performance and for this it should provide training to the employees needed to improve their performance. It is at the peak because of its employees and their skills. British Airways should develop its employees’ skills according to company’s needs.
British Airways should invest in training to enhance individual performance and organizational productivity. It should focus on developing management and developmental skills and supervisory skills, technical skills and communication skills. It should also provide training to the lower-level employees who are new to the company for their better performance to get good results.
British Airways should use MBO to achieve a set of goals that is clear, specific and reachable, and when managers want to empower employees to adapt heir behavior as they deem necessary in order to achieve desired results. The standard of performance at British Airways should be based on job analysis after which performance standards are notified to its employees. Management by objectives i.e. MBO is a course of action in which objective set by a subordinate and manager must be reached within a given time period. This is another name given to “Results appraisal.”
With the growing competition in the airline industry it is essential for British Airways not just to hire employees but to retain them as well and for this certain provisions and set of benefits should be given to the employees. They should also provide job security to their employees. Employees should be invited to join the valuable benefits programs run by British Airways that should include pension/retirement plans and healthcare coverage. (Lewis 2003)
At the time of retirement they should provide their employees a sufficient amount of money so they can use this money after the job. In case of any accident, if the employee loses his life, the company provides money to the family of the employee in order to help them.
Other than this, different ways of advertising should be used and campaigns should be run. Online campaigns can be run in many different ways. (Meyerson ; Scarborough 2007). They can run randomly, daily, weekly or monthly and all this depends on the type of business. There are many techniques that can be used to encourage repeat visits of the customers to the websites and this would then lead to an increase in sales made by the customers. For this, British Airways can use many brand promoting schemes for their websites. (Brown 2006)
Evaluation of the effectiveness of British Airways
Organizational Development is necessary to assure the success of British Airways and is vital for a company to form a hierarchal reporting system. Accountability is set for the employees and it clearly defines who is accountable for what and to whom is he responsible. They also consult the company’s management team to make sure they recognize what the company’s core business is and the culture being followed.
The training that British Airways gives its employees should include certain steps. First, British Airways should conduct analyses to discover the jobs, employees and departments that require training. Employees’ performance can be measured due to this. Not just this but British Airways should also plan out the training program for its employees and objectives of this program after which decisions about the training methods are taken. They should provide on-the-job training to the employees. They should use certain methods for that purpose, like lectures, role playing, case discussions, conferences, and job rotation. Finally, British Airways should evaluate the programs effectiveness in terms of employee reactions, learning, and behavior transferred to the job, and bottom line results. (Evans 2003)
Nowadays the trend of customer relationship management is increasing day by day. More and more companies are becoming aware of the fact how important customer relationship management is. As the customer is getting aware about the products, they also have complaints about them that have to be handled carefully and patiently by the customer relationship officers. Therefore, even British Airways should focus on this.
The types of methodologies that help a company to maintain customer relationships in an organized way is called customer relationship management. Its not always that customer might have any complaints but they might also have some suggestions for further improvement or there can also be prospective customers who would want to know more about the company.
Areas for improvement
It is the duty of the leader to make innovation an expectation. The leaders are the ones who should encourage their juniors to suggest ideas that could lead to creativity and innovation. The employees should be rewarded, supported and proper amalgamation should be provided for the processes.
Fund learning should be encouraged. This can be done by prioritizing it into budgets and work plans and to of course make it accessible to the employees or it would be of no use.
Trust and respect should be placed on all the levels of the organization. Free communication and personalization should be allowed.
The leader should set up an example for the others so that he can lead them properly. He should regularly update his staff if any changes have occurred in the company policies. He should always be compromising and should always try to learn new things even if he is not an expert in that particular field. Every organization has many people who can be from different cultures and backgrounds and so it is the duty of the leaders to introduce diversified teaching and learning methods. More focus should be laid on risk taking activities than to run away from the losses.
Staff should always be rewarded for their efforts. Constant training or at least monthly or yearly training programs should be held for all the staff to keep on learning new things.
The return on investment should be taken care of. The employees should know how much they are contributing to the company.
Questions to Ask
· What’s the history of multi-directional communication in your organization? Have there been repercussions for contributions in the past?
· Where we are and what have we gained? (Instead of, “What have we lost?”)
· What needs to change in the organizational policies, systems and structures to encourage and support learning and innovation?
· What needs to change in my leadership style to foster more of a learning culture? When and where should I practice being a learner?
Things to Consider
· Hierarchy is not inherently a problem.
· Technical hierarchy not social hierarchy.
· Acknowledge power ; power dynamics. The more open this is, the less it will be a subtext of interaction.
· Be in the role of teacher, when the authority in a particular skill or situation, and of learner when not.
· Trust, trust, trust. Trying to control everything accomplishes the opposite.
· Communication. Encourage interaction among different organizational functions.
· Documentation. Document learning in one area or project such that it can be shared with other areas and projects.
Summary of the Main Findings
The British Airways is an international airline with a diversified workforce and provides excellent airline services. However, the competition prevailing in the airline industry is intense due to the eruption of many airlines.
To cope up with the existing competition and the competition that British Airways would have to face in the future has to be taken into consideration and some steps should be taken in order to reduce it and to gain a competitive edge over other airline companies in the airline industry.
Therefore, British Airways needs a proper human resource department in order to carry out their functions well. This report begins with a short introduction of British Airways after which it highlights the impact of external and internal factors on the organization followed by the evaluation of British Airways.
Then we have talked about the changing competitive environment in the airline industry and how British Airways will have to cope up with the competition. Furthermore, the reports consist of the areas for improvement, how the competition influences policies and decision-making and the evaluation of the effectiveness of British Airways.
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UK Superweb., n.d., UK Airlines. Viewed September 22, 2008.