Leadership Portfolio

Contemporary Organization Evaluation

Most of the companies in the 21st century are greatly affected by the fast-paced and global community of the emerging disruptive technology. Among the most affected sector by the innovations of technology is the airline industry. Specifically, the British Airways (BA) as an example that will be discussed in this review has been largely affected by technology mostly in the information technology department. BA has served in the UK airline industry as the oldest and leading global commercial airline carriers. Its home base is situated in London Heathrow. BA has established a large customer base with a fleet of more than 280 planes that serves more than 170 terminuses in 70 nations. The firm has acquired a good status where more than 40million customers enjoy the services provided by the airline such as free food and drinks on flights. The company is known to use a traditional operating airline system whereby in the 1970s it faced slight rivalry. Nevertheless, the dawn of the 1980s and 1990s new corporations evolved applying new attacks such as no-frills and low cost to expand their competitive position in the marketplace than the incumbent.

The competition was high in the airline market industry because of the aforementioned emerging disruptive technology that was intended to out-smart the BA from the business. Revenues continued to register a downward curve. It is due to this competitive drive force of technology that arouses the entire management of BA to devise several strategies to combat the drop in the company’s status. The company started to invest in their traditional business model, as one of the strategies devised to attack back and establish novel units to react to the emerging innovations posed by the new airline businesses in the market. The company later recognized that firms such as Easy Jet were openly attacking them through no-frills and reducing the cost of services; it is when they decided to remain capitalizing in its old-style methods of positioning itself in the market (Graetz and Smith, 2010). BA strategy was exceptionally unique as it continued to differentiate itself in the market by offering quality products and services in the market to its customers while the other upcoming companies differentiating themselves through prices. This marketing strategy made the BA Company do well in the market because customers were convinced that despite other companies providing cheaper services, BA used quality attributes to demonstrate that they provide a patronage of customers’ expectations (Cummings and Worley, 2014). According to British Airways (2010), BA did not haste to counter the attack by dripping their charges to differentiate themselves in the marketplace but instead, they differentiated themselves in the market by refining the quality of their services as was stated in their traditional industry concept.

Beside BA company strategizing on product differentiation, the company took another path of “fighting back the disruptive innovations brought by the new companies by disrupting the technologies” (Wirtz et al., 2016). The applied principle here is that, when a competitor, such as easy Jet, in the case of BA, is winning some of their customers, they have to introduce a counter strategy that is determined to upscale the quality and their own services over their competition. For instance, when easy Jet introduced no-frills and cheaper services they added other offering such as lodging house and apartment’s services, car fee, airfield space, insurance and the use of airstrip lounges as add-ons (Graetz and Smith, 2010). The strategy of easy Jet was not only directed to BA’s uncontended customer base who yearned to receive cheaper services, but also impact on loyal clients who needed extra amenities, but conceivably at a reduced rate than what was offered by British Airways. As such, instead of BA responding to reducing their cost, they focused on providing comfort and luxurious products in their airport launches.

British Airways recognizes customers as stakeholders. Managers in the BA are encountered with the challenge of issue-focused stakeholder supervision. Due to the new changes brought about by the disruptive technology, different stakeholders are affected. Customers who are the key stakeholders of the BA Company are affected in their choice of diversification and relationship of quality-price delivery of services and products. Customers as well look for convenience and expect to purchase good quality products and services at a reasonable rate. BA, strategies have little impact affected the customers because its key strategy is to improve the quality of products and services over low-priced products like the emerging companies.

Another important stakeholder is the suppliers of the BA Company. They are considered to be the third and most significant part in the industry since they offer products/services which can pose a risk to the fiscal state of the British Airways. The raw materials they supply should meet the standards the BA Company needs so as to satisfy its customers. New strategies of the BA as well affects the supplier’s distribution and storage of the stock, since it is not involved in making a critical decision in the Company, they follow orders not to cause conflict in the management.

Employees serve as the cornerstone of making the business execute its objectives, decisions, and goals. They are a group of key stakeholders who play key roles in ensuring the business maintain its reputation and attracting new customers. However, new strategies embraced by the BA Company made most of the employees to expect a higher wage. Most employees in BA have a concern in the industry in form of bonuses presented, cut-rate and leave allowances.

Unhappy shareholders are probably going to demonstrate resistance through strikes and other methods that disrupt the processes of the company. For instance, according to British Airways (2010), the cabin crew workers strike as a result of long-term pay and job disputes. But, resolving these conflicts brought about by resisting stakeholders requires the BA management to corporate with the stakeholders and experts in the problematic area. Some of the measures the BA embrace to solve resisting stakeholders is to hold a dialogue with stakeholders. Speedy actions are required to overcome resistance. Secondly, the BA must deign operational employment structures, and launch a just and pleasant working setting, so as to foster a culture of trustworthiness among the workforces. The management should focus on resolving disputes instead of victimizing the stakeholders or unions (British Airways. 2010).

British Airways interdepartmental units and collaboration has been affected by the disruptive technology. As new strategies are taking the shape in the company, the financial department has experienced a sudden downward trend in its trading results. This means that the new strategies to balance quality, price, and adoption of emerging technology, the BA management have to cut down on some stakeholders and operations. For instance, using its cost reduction programme, the BA intends to exclude more than 3,000 jobs. Staff jobs represent BA’s second largest cost after fuel, summing to about a quarter of the total BA’s expenditure (British Airways. 2010).

Another department used to fuse its tasks with other departments is the Human Resource (HR) units. As a result of cost reduction, the threat to strike action of BA cabin crew possibly materialized affecting most of the BA major operational disruption.

According to my opinion, the British Airways leaders responded well from the emerging companies not to raise the prices of their products and services but improve the quality of the products. Leaders have been effective in ensuring there is a roll out of new products because they compete against the premium carriers as well as against low-cost services. One thing I think the leaders were able to balance is the quality of products and price along with innovative techniques. According to Wirtz et al (2016), any business is sidelined by two equations: costs and revenues. If for instance, a business can focus one at the expense of the other is going to pay heavily. Therefore, BA managerial team did not lower cost to remain competitive, but instead they invested in airport hotels and in teaching individuals as long-term strategies. What worked for the British Airways is quality service they provided to its customers more seamless than their competitors. By that, it means that the BA was able to eliminate some of the normal stresses that one comes across when traveling, thus, making the client’s entire experience at ease. A strategy that seemed not to fit the company is earning a reputation through cost reduction by penning off most of the employees.

For any leader, having a clear vision and articulating it well is a core competency. This means that the leaders of the British Airways should guarantee that the shareholders who are the key players in the entire business be adequately encouraged and are involved in the change application process. Each stakeholder should comprehend the visions of the company because adaptability without a vision can lead to rudderless change. The strategy I think the BA Company should adopt to bring change and become competent due to disruptive technology is to adopt innovation and play both games of quality and technology. This means that, if BA realizes that other companies disruptive industry concept have operated and technology is going to remain in the long-term, destroying its own business to adopt both the innovation and continue offering its traditional quality services is effective.

References

British Airways (2010). British Airways - History and heritage. Retrieved April 2013, from http://www.britishairways.com/travel/history-and-heritage/public/en_gb.

Cummings, T. G., & Worley, C. G. (2014). Organization development and change. Cengage Learning.

Graetz, f., & Smith, A. T. (2010). Managing Organizational Change: A Philosophies of Change Approach. Journal of Change Management, 10(2), 135-154.

Wirtz, B. W., Pistoia, A., Ullrich, S., & Göttel, V. (2016). Business models: Origin, development and future research perspectives. Long range planning, 49(1), 36-54.