Changing the Culture at British Airways
Changing the Culture at British Airways The British Airways case study was a very interesting case to read. It proves that not all people can be leaders, especially the chairman, board and chief executives of British European Airways (BEA) and British Overseas Airways Corporation (BOAC.) According to the case study of British Airways, the life at the “old” British Airways was “bloody awful” (Changing the Culture of British Airways, 1990, p. 1). There definitely was a crisis happening in that airline. They didn’t seem to have a cohesive culture and it seemed as if they continued down this path they would no longer have a business either. British Airways had this divide between BEA and BOAC.
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And another mindset was,
“If you’re providing service at no cost to the taxpayer, then you’re doing quite well” (Changing the Culture of British Airways, 1990, p. 3).
If you had to compare this philosophy to Kotter’s book, The Heart of Change, this company was in huge trouble. There was definitely no leadership—just really greedy chairman, in my opinion. There was definitely no sense of urgency and such a lack of vision. The unfortunate this was it still remained the same even when reorganization occurred in 1976, by Sir Frank McFadzean. According to the study, divisional loyalties prevented the carrier from attaining a common focus (Changing the Culture of British Airways, 1990, pp. 3-4).
It was not until February 1981, where things began to look up for British Airways. It was when Sir John King became chairman. Sir King made radial steps by reducing staff significantly, freezing pay increases, closing several airline routes, online stations, and engineering bases. In addition, halting cargo-only services, and selling the fleet, and inflicting massive cuts upon offices, administrative services and staff clubs (Changing the Culture of British Airways, 1990, p. 4). Although you would think this would have caused a lot of fear and negativity with employees—my impression of what I read, Sir King alleviated this by
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British Airways faced the worst crisis in its history in the late 1970’s early 1980’s.
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The tacit collusion case to be discussed involves the illegal collusion and setting of fuel surcharges to commercial and cargo transatlantic fares between British Airways (BA) and Virgin Atlantic Airways (Virgin). The factors which contributed to its success will be discussed, as well as why, and its implications, of becoming public. To begin with, it would be beneficial to define both collusive behaviour and the nature of the competition involved in the aviation industry.
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Macro: The first problem changing the culture at British Airways was the merger of the BOAC and BEA. In 1971, the Civil Aviation Act became law and the board was to control policy over British Airways but both BOAC and BEA remained autonomous, each with its own chairman, board, and chief executive. This caused a split within British Airways throughout the 1970s and in the mid-1980. The second problem BA faced was the threat of privatization. In 1984 the government passed legislation that made BA a public limited company. The third was productivity was bad compared to other leading foreign airlines. The fourth was poor service. Poor customer service
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Prior to the marketing campaign touting BA as “The World’s Favorite Airline,” BA was often referred to as “bloody awful.” The company suffered from poor performance, inefficiencies, an older fleet, and substantial financial losses. Following passage of the Civil Aviation Act in 1971, BA assumed control of two state-run airlines, British European Airlines (BEA) and British Overseas Airways Corporation (BOAC), under the name British Airways. However, BEA and BOAC operated autonomously with separate boards, chairman, and chief executive officer that provided a challenge in making change. The level of
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1 This essay will assess how globalisation has impacted on the airline industry using British Airways as an example to illustrate this change had on the industry as a whole. This essay will attempt to show how the airline industry and British Airways in particular coped with thesee change and how neoliberalism thinking allowed and supported this fundamental change to happen.