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Running head: British Airways
Case Study Response: British Airways
Name
Liberty University Online
BMAL 504-Spring 2019
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British Airways
Case Study Response: British Airways
When Jick & Peiperl (2011) introduce British Airways (BA) in their case study, it is rather far
along in the organizational life cycle and experiencing record profitability. However, BA had not always
had such good fortune - on the route to profitability, the airline experienced some turbulence and was in
danger of crashing. This was largely due to the culture and attitude that existed in BA during the post-
World War II aviation environment. Key leadership and change were needed if the organization wished to
keep the airline in the air.
Chronology of British Airways
BA is an organization formed by the British government in 1971 in order to “preserve the records
and artefacts” of two predecessor airlines British European Airways (BEA) and British Overseas Airways
Corporation (BOAC) (Explore, n.d.). BAE and BOAC culture that took large influence from British
military aviation, post-World War II (WWII). (Jick & Peiperl, 2011). Because the commercial airline
industry took a hiatus during WWII to support the war effort, BAE and BOAC saw relative success due to
revitalization of an industry and their willingness to pioneer (Timeline, 2011).
Early Problems
Despite being united under the name British Airways, BAE and BOAC essentially operated
independently (Jick & Peiperl, 2011). They each had their own board of directors and culture. BEA has
pioneered the early airline infrastructure and was concerned with “building something that did not exist”
(p. 26). BOAC, also a pioneering culture, initiated jet travel by sending a jetliner from London to
Johannesburg (p. 26). The two organizations had what Felix & Bento (2018) call low permeability.
Organizations with low permeability, during a merger or acquisition, often experience a high degree of
boundaries that prohibit them from easily “meshing” into one organization. In other worlds, the identity
of BA was not a unified one.
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British Airways
Furthermore, neither BAE or BOAC had been concerned with profit. Because the majority of
BA was comprised of aviators from WWII, the organization ran much like a military unit (Jick & Peiperl,
2011). This presented two main issues: The first being that personnel essential to the commercial aspect
of aviation did not have much of a voice, as is common in the lower ranks of the military. The second
was the organization’s focus was on accomplishing aviation, not customer service. As one Senior
Managers said, “when I joined, we were a transport business” (p. 34). This was another issue created by
the military culture – aviators were experienced in air travel and mission accomplishment, not customer
service.
By the late 1970’s the phenomenon that was passenger airline travel was not enough to keep BA
profitable against “rising labor costs, lack of productivity and poor service” (Jick and Peiperl, 2011, p.
29). The climax of the issue resulted in losses of £100 million during the 1981 fiscal year ( p. 25).
Revitalization of British Airways
In 1981, BA brought on Lord John King in order to renew the organization. With King in the
cockpit, BA hired essential internal personnel to affect a cultural and financial change. Furthermore, BA
used external assets in order to boost employee satisfaction, giving the long-neglected, lower-level
employees a voice (Jick & Peirpel, 2011).
Leadership must understand where the deficiencies lie in an organization and encourage
employees to adopt the new desired outcomes in order to be more successful (Miller, et al. 2014). The
leaders that King hired appear to be transformational (versus purely transactional) leaders in nature –
meaning they were ultimately able to “persuade followers to adopt certain behaviors in order to bring
about, what the leader regards as, beneficial change” (Bush, 2018, p. 883). Sir Colin Marshal,
specifically, transformed the culture from a transport business to a customer service oriented one (Jick &
Peirpel, 2011). Furthermore, BA outsourced employee development and advertising with organizations
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British Airways
that would align with the desired vision. Employee development was essential in facilitating a good work
environment. King and his subordinate leader’s abilities to identify where the deficiencies were in the
organization, and thus solving those issues, were critical to making it profitable.
For the efforts of King and his subordinate leaders, by 1990, BA had experienced three
consecutive years of record profits. BA’s total profits for the fiscal year on 1990 was £345 million before
taxes, solidifying the airline as one of the world’s most profitable (Jick & Peiperl, 2011, p. 25).
Related Readings
Beatty & Ulrich’s (1991) explanation of the organizational life cycle illustrates the stages that an
organization must undergo in order to survive. BA had become a prominent airline through pioneering
technologies and by a maverick culture. Technology and adventure were enough to carry the airline
through the first three stages of the organizational life cycle: entrepreneurial, growth and maturity (p. 38).
However, in the late 1970’s BA experienced dwindling profits, “lack of productivity and poor service”,
leading to a stagnation in the maturity stage (Jick & Peiperl, 2011, p. 29; Beatty & Ulrich, 1991).
The maturity stage, according to Beatty & Ulrich (1991), is where an organization will face
significant challenge in terms further evolution. Organization in this stage have established norms,
structures, systems and processes (p. 39). Furthermore, the organization has had several previous
successes that carried them to a place of prosperity. It is sometimes hard for members of an organization
to evolve with the times, so to speak, and change their way of operation due to comfort and complacency.
In order to survive BA had to to hire the appropriate personnel to affect the desired changes. In
this way, King, and his subordinate leaders, were able to redesign jobs and shift power and authority to
their employees (Beatty & Ulrich, 1991, p. 45). King and his group had been able to update, what Beatty
& Ulrich (1991) calls the hardware of the organization, by initializing new structure, systems and
processes (p. 43).
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British Airways
Now that BA was successful in updating hardware, they were able to improve upon their software
by shifting towards a customer-centric service. BA sustained their competitive advantage, and thus
continuously updated their hardware, by empowering their employees and further developing their
leadership (Jick & Peiperl, 2011; Beatty & Ulrich, 1991).
Specific Steps in Change
Step 1: Restructuring. Lord King was brought on and changes were made in terms of
downsizing and hiring the right subordinate leaders to complete specific tasks.
Step 2: Bureaucracy Bashing: Chief Financial Officer, Gordon Dunlop, did away with waste
and redundancy and saved the company money.
Step 3: Rebranding. BA was rebranded from transport to customer service supported by
leadership.
Step 4: Employee Empowerment. Through Put People First (PPF) and Manage People First
(MPF), BA was able to build comradery and give employees a voice in the organization.
Step 5: Continuous Improvement. BA continues to seek out business opportunities like
establishing partnerships with other carriers to improve service. However, improvements are largely
dependent on the context in which they are presented. Internal conflict arose later in BA history when the
airline focused on simultaneously cutting costs and increasing customer service. This message came
across as somewhat contradictory to those within the organization (Jick & Peirpel, 2011).
A Different Approach
Perhaps the biggest self-induced friction point in BA’s life cycle was the emphasis on cost cutting
while increasing customer service. An article published in bizfluent, an online suggest that are numerous
disadvantages with focusing on cost cutting (Gartenstein, 2019). From an accounting perspective, it is
difficult to accurately assess the actual cost of providing some products and services. The article gives an
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example of a restaurant who gives out free bread and butter before meals. On the surface, this appears to
not bring any direct income; however, it may bring people in to the restaurant and save money on more
costly items, as the guests are likely to not require larger portions due to being full on bread. Jick &
Peiperl (2011) illuminate a disconnect felt by BA cost-cutting/improved customer service model, so
perhaps “corporate” was too focused on numbers.
Furthermore, it may be hard to convince employees to undertake the potential stress associated
with unhappy customers (due to lack of some services) when the airline experiences a profit of £345
million.
Perhaps a better strategy would be to continue with providing the right amount of customer
service (whatever that is) and try to eliminate waste and/or services that do not directly contribute to
customer retention. This could possibly be achieved through surveys and analysis of ticket sales when
certain services are provided or taken away.
Conclusion
British Airways is a perfect example of how an organization is affected in different stages of the
organizational life cycle described by Beatty & Ulrich (1991). In the beginning, the success of BA was
largely due to the revitalization of the commercial airline industry WWII and their willingness to pioneer.
However, the pioneering spirit only carried the organization so far – they were forced to change or cease
to exist. BA was able to successfully revitalize and remains a dominant airline in the industry.
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References
Beatty, R., & Ulrich, D. (1991). Re-energizing the mature organization. Organizational
Dynamics, 20(1), 16-30. doi:10.1016/0090-2616(91)90080-s
Bush, T. (2018). Transformational leadership. Educational Management Administration &
Leadership, 46(6), 883-887. doi:10.1177/1741143218795731
Explore our past. (n.d.). Retrieved from https://www.britishairways.com/en-
gb/information/about-ba/history-and-heritage/explore-our-past
Gartenstein, D. (2019). The Disadvantages of Cost Control & Cost Reduction. Retrieved from
https://bizfluent.com/info-8609429-disadvantages-cost-control-cost-reduction.html
Jick, T. D., & Peiperl, M. A. (2011). Managing change: Cases and concepts. New York:
McGraw-Hill/Irwin.
Miller, D., Merrilees, B., & Yakimova, R. (2014). Corporate rebranding: An integrative review
of major enablers and barriers to the rebranding process. International Journal of Management
Reviews, 16(3), 265-289. doi:10.1111/ijmr.12020
Timeline of Commercial Aviation. (2011). Retrieved from https://www.burnsmcd.com/
insightsnews/publications/aviation-special-report/2011/timeline-of-commercial-aviation
Tony, B. (2018). Transformational leadership. Educational Management Administration &
Leadership, 46(6), 883-887. doi:10.1177/1741143218795731
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