Organizational Culture And Change Management Essay

The universe has become a planetary small town and so make the concerns. Competition among industries is going more and more planetary and concerns are confronting of all time mounting force per unit area to vie at this degree. The market demands are altering quickly and continuously and to get by with this, organisations have to maintain on altering themselves to run into the new demands. The alteration can be a alteration in merchandise or service, selling schemes, alteration in direction or IT system etc. but the most hard thing to alter is the values and beliefs of the people because its natural that people resist alteration. Cultural alteration is a hard thing to make as there are people involved in it.

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British Airways had gone through a cultural alteration which started in early 80s when the company was in bad status and was about to travel bank corrupt. The freshly appointed CEO Colin Marshall lead the alteration and took the company out of the crises and made it one the most respectable air hoses of the universe in less than 10 old ages clip. This paper will speak about the jobs with BA ‘s leading and organisational civilization which lead the company to those crises and its affects on public presentation and this paper will besides speak about the successful execution of the alteration. The paper will show the analysis of the alteration procedure and defects in the alteration which could hold lead to better consequences if managed decently.

Organizational Culture:

Culture is the beliefs and values of people. The corporate scheduling of the head which differentiates the one group of people from another, civilization in this sense includes system of values. Culture comprises of linguistic communication, faith, imposts, manners and instruction ( Bode 2008 ) . Language is the most of import manner of understanding civilizations as this is the manner information flows. Many bookmans have been seeking to specify civilization and they have defined it but it is ever said that it is hard. Culture is a really complex a phenomenon and can non be captured in a few dimensions ( Bode 2008 ) .

Organizations do hold a civilization and in simple words it was defined by Deal and Kennedy ( 1996 ) that the civilization is the manner things get done around here. Organizational cultural is influenced chiefly by the leaders of the organisation and besides by the personal values and beliefs of the people. It is fundamentally the system of reciprocally shared beliefs and values by the people of the organisation. Organizational civilization is a cardinal constituent in accomplishing the organisational ends and schemes, bettering the organisations ‘ fight and effectivity and direction of alteration ( Adeyoyin, 2006 ) .

BA ‘s History:

British Air passages came into being in consequence of a amalgamation of two British bearers, BOAC ( British Overseas Airways Corporation ) and BEA ( British European Airways ) in 1970s ( Marriott 1998 ) . British Airways is one of the most respectable and preferable air hoses in the universe today. British Airways won the Airline of the twelvemonth award in 2007 on 25th OAG awards ( BBC intelligence ) . This success of the air hose is the result of a successful cultural alteration started in early 80s. Before 1980s BA was making good as there was small competition in the market and BA controlled 60 % of the UK domestic markets and faced competition on merely 9 % of the paths in and out of the UK ( Redman & A ; Wilkinson 2009 ) . Due to little or no competition BA did n’t focused on client satisfaction and other issues and carried on the traditional manner of making things which lead them to black state of affairss when they felt the demand for alteration.

In 80s the competition among the air hoses was limited in concerned to BA because BA was commanding 60 % of the paths ( Business & A ; Economics 1982 ) . The menaces of the replacements was besides limited for BA because BA has covered most of the paths and had big figure of finishs and left the clients some times with no other pick. BA did n’t hold the focal point on client satisfaction and net income maximization and this caused major client dissatisfaction. Lack of promptness and uncomfortable flights were the grounds for this dissatisfaction ( Warhurst 1995 ) . BA recorded fiscal losingss of ?140m and this leaves a menace for the new entrant in the market. So the menace for the new entrant was at that place.

Drivers for alteration:

Worlds change with the transition of clip as per the demand and state of affairs at manus. Similarly administrations need to alter every bit good to accommodate to the altering internal and external environment. A demand of alteration can originate from two sorts of factors i.e. Internal and External factors. External factors include the competition, technological promotions, invention, and deregulating of industry, labor costs, and entree to resources, international economic alterations, and authorities policies. Internal alteration factors tend to follow on from the external 1s, and include accommodating to switch in corporate missions, alterations in technological equipment and procedures, displacements in employee attitudes and behavior and corporate civilization. In BA ‘s instance the initiating factors were both internal and external. The external factors were the competition, the authoritiess ‘ menace of denationalization, and entree to cheaper resources and increasing monetary values of oil. The internal factors involved in forcing BA towards traveling for a alteration were the internal stiff civilization, Change of equipments and staff related issues.

How the civilization was formed?

BA ‘s cultural alteration was a success and still it is being used as a mention or a usher for the houses who go for cultural alteration ( Mills et al 2008 ) . There were four major companies who went through cultural alteration and some of the grounds among them were common, e.g. menace of denationalization. Those companies were Jaguar, British Airport Authority ( BAA ) , British Nuclear Fuels Limited ( BNFL ) , and British Airways ( BA ) . The laminitiss of a company or the sires have a important influence on the civilization formation of a concern. The manner they do things go forth a long permanent impact on the followings therefore become the portion of the civilization ( Poole et al 2004 ) . Jaguar and BAA for illustration have ever had magnetic leaders. Sir William Lyons and Sir Norman Payne were both magnetic leaders and bossy in manner ( Salama 1995 ) . This leaves the feeling on the follower directors and showed its effects in their determination devising manners.

BNFL and BA boulder clay 1984 did n’t hold any magnetic leader like Jaguar and BAA ( Salama 1995 ) . There was fluctuation in sections which shows the values of each of the departmental caput. Christopher Harding was appointed as the president in 1984 and before him there was n’t a individual dominant character at the top direction degree. Because BA had its beginning from the ministry of defense mechanism, there was a strong civil service influence in the company. BA had a strong and close contact with Royal Air Force and both pilots and directors were recruited from RAF often. These activists left a really operational spirit to the organisation ‘s civilization. In a study a director said that we could n’t acquire off from the fact that we are on a mission and that mission is everything to us and the client are merely an unfortunate attention deficit disorder on. The direction and leading manner was non participative as the CEO and the former president personally were really distant from the staff. The proficient cognition was considered to be really critical and the directors were recruited and promoted on the footing of their proficient abilities alternatively of managerial abilities.

All these factors made the civilization of BA really stiff and a critical cultural alteration became the lone solution for the company to last.

The Change Scope:

Background: Other than the increasing competition and fuel costs, old fleets, and high staff costs in 80s, BA ‘s direction had to undertake these issues in order to avoid traveling bank corrupt,

Bettering the company ‘s fiscal public presentation basically, pre-tax losingss were demoing a figure of ?240m in 81 and 82 ( Annual study 1st April 1983 ) . Chief executive officer of BA said in 1982 that their money is run outing at the rate of ?200 every minute ( Mills et al 2006 ) .

Converting the work force of the supreme importance of client services for the success of the company.

Bettering the perceptual experiences about BA in the market.

Keeping impulse and recovering the focal point which will let them to run into new challenges.

The chief grounds for this crisis on BA were its civilization and history. BEA and BOAC came together to organize BA in 1981 ( Staniland 2003 ) . They remained crowned head boulder clay 1976 when the group division was changed to a construction based on functional divisions. Still a typical split within BA persisted until the mid 1980s. This improper assimilation disallowed BA to accomplish the coveted benefits of the amalgamation, could non achieve a common focal point, created direction segregation bickers and resulted in a deficiency of a consolidative corporate civilization ( Doganis 2002 ) .

The amusing side of the amalgamation was that most of the BEA and BOAC employees were war veterans who used to wing military aircrafts and they had a great influence on determining the civilization of BA. BA ‘s civilization was influenced by military outlook with a purely operational focal point. The employees believe that their occupation is merely to wing the program safely and set down it on clip. Customer satisfaction and client attention, net income maximization and productiveness were non considered as top precedences ( Bowhill 2008 ) .

BA had fiscal support from the authorities and was making a profitable concern in the 70s ( Parker 2009 ) . These were the grounds which made it easier for BA to pretermit its increasing inefficiencies over clip. It was acquiring even more hard to carry the work force and the direction towards the demand of a cardinal alteration. The competition was lifting in the market and client dissatisfaction plus the employee ‘s absenteeism were on the rise and the demand for alteration was critical.

The 1981 endurance program: The amalgamation in 1981 leaves the company overstaffed and the staff disbursals were unaffordable. The survival program involves downsizing and the staff was reduced from 52000 to 43000 through voluntary steps. A 20 % lessening in work force in 9 months was a major retrenchment ( Thompson & A ; Martin 2009 ) . Freezing wage was increased for a twelvemonth which caused more voluntaries go forthing the occupation than was required. 16 routed were closed, 8 online Stationss and 2 technology bases were shut down ( Carleton & A ; Lineberry 2004 ) . The endurance program was all about minimising the costs and disbursals as the company was heading towards bankruptcy. The activities involved in minimising the costs besides includes the halting of lading service and selling the fleets and monolithic cuts in figure of offices, administrative services and staff nines etc ( Jones and Lockwood 2002 ) . Thingss were non traveling right and the endurance program was amended and staff was reduced by another 7000 and the entire figure than was about 35000. The voluntary laying off strategies cost the company about ?150 million and the company ended up with more voluntaries than necessary because of no occupation security and droping conditions of the company ( Carleton & A ; Lineberry 2004 ) .

Changing image of the Airline: British air passages had a bad image in the clients mind dew to unsatisfactory services and comparatively higher monetary values. AA surveyA by theA International Airline Passengers’A AssociationA putA BAA at the top of a list of the air hoses to beA avoided. ( Redman & A ; Wilkinson ) . To better the image of the organisation BA launched its “ Manhattan Landing ” and “ The universe ‘s favorite Airline ” runs and raised the advertisement budget which was ?19m to ?31m for the twelvemonth 1983-1984 in order to signal a clear committedness to altering the corporate image ( Leban et al 2005 ) .

Constructing its turnaround squad: 30 % of the old employees had left the organisation voluntarily which involved senior troughs every bit good ( Barsoux & A ; Manzoni 1997 ) . Culture is formed by leaders and now these leaders were non there which helped the cultural alteration procedure. Newly appointed CEO Sir Collin Marshall was a really magnetic leader. He brought in some new blood to give the company a fresh position and to recover focal point. In 1983, Colin Marshall made client service a personal campaign ( Reichheld 1996 ) . Customer services were something absent in the BA ‘s civilization which was really stiff and he wanted to accomplish a displacement from a strongly British, technology, and operationally goaded civilization to one that emphasized productiveness and net incomes while increasing the value placed on client service.

Support from top direction: To do a alteration successful the leaders need to play the function theoretical account. Leader needs to be the one, who really put the alteration footings in pattern, supports his squad and give them freedom of look ( Cameron 2004 ) . Collin Marshall in this respect was really concerned and he used to pass batch of his clip in terminuss with staff communication and reenforcing the coveted civilization for the organisation and its common and single advantages. Employees were given the freedom to portion their thoughts and ideas and give their suggestions about assisting the alteration to transport frontward. Employees feel listened to and experience themselves as portion of the company ‘s success.

Education and Training: Change needs to be reinforced and communicated on a regular basis to do it experience go oning. A uninterrupted preparation demands to be done to assist employees accommodating to the new civilization. BA in this respect conducted a preparation plan named PPF ( Puting People First ) . This preparation plan was aimed at the people to analyze their interactions with other people. The chief focal point of the preparation was to construct positive relationships and client services. About 40000 of BA ‘s employees attended the preparation plan ( Leban et al 2005 ) . Another preparation plan conducted by BA was MPF ( Pull offing People First ) . This preparation plan was aimed at other issues like civilization and its importance, the leading, trust, vision and feedback. These behaviour modeling plans resulted in good and BA was able to travel on towards cultural alteration. After one twelvemonth of preparation with TMI ( developing advisers ) , BA moved into net income ( Senior & A ; Fleming 2006 ) .

Make the Change seeable: Change needs to visible to the outside universe. British Air passages unveiled their new planes at Heathrow Airport and their new uniforms to give the universe an feeling that they have gone through a alteration and now they are a better organisation ( Leban et al 2005 ) . With in 10 old ages the cultural alteration plan succeeded in making a strong committedness to productiveness, net incomes and client services. The morale was higher and the company ‘s image in the market was better and this alteration lift the company out of bankruptcy to go one the universes ‘ most well-thought-of air hose. British Air passages have launched a new run in 2009 named “ ONE DESTINATION ” . The CEO said at the clip of launch that we started our journey towards responsible air travel in 1984 and we have discovered that our clients love to wing with us but are concerned about their impact on the environment ( BBC intelligence ) .

Geting over the opposition with the aid of suited alteration theoretical accounts:

Kurt Lewin ‘s alteration theoretical account comprises of three stairss, i.e. Unfreeze-Change-Refreeze. The first phase in Lewin ‘s alteration theoretical account is dissolving that is when director develops a felt or demand for the alteration which can be because of worsening net incomes or shriveling market portions etc. In BA ‘s instance both net incomes and market portions were worsening. This is where the CEO Collin Marshall felt the demand for the alteration. The unfreezing phase is really important as this is when directors are doing the work force ready for the alteration. This is the advertisement stage where the vision and content of the alteration is communicated which inspires the work force and additions their committedness. Brirish Airways in this respect conducted the behavior molding conferences named PPF and MPF to alter the behavior and do the people ready for the alteration.

The following phase in Lewin ‘s theoretical account is the alteration it self. This is the phase where the footings of the alteration are practically implied and practiced. The endurance program discussed above aimed at cost decrease and than the activities like increasing the advertisement budget, engaging new blood and educating and developing the people was the alteration procedure which was really good take by the CEO. At this phase uninterrupted feedback and support is required to do the alteration feel go oning. Collin Marshall himself used to speak with the employees in little groups and spent his most of clip reenforcing his vision and coveted civilization.

Refreezing is the phase when people start to encompass the alteration and the organisation has moved to the new civilization. This is the phase where the alteration should be seeable and BA made the alteration seeable by kick offing their new fleets and uniforms.

John P. Kotter in his 8 measure alteration theoretical account says that a strong adequate squad is required to transport the alteration procedure frontward. BA did make a squad of new blood directors who gave the company a fresh ad current position of concern. Kotters ‘ theoretical account emphasize on pass oning the vision of the alteration and BA was up to the undertaking and had a great support from the senior direction as the employees had the freedom of sharing their thoughts and ideas.

Leadership Manners:

As mentioned above that leading of BA was to a great extent influenced by the retired ground forces officers and co ordination and carbon monoxide operation was losing and leaders were like dictators. When the new CEO took over he changed the manner of taking as in the procedure of retrenchment, some senior directors were besides removed from their places because of the out dated leading techniques. The success of the alteration was because of the new leading who acted as wise mans, and by following the democratic, advisory and persuasive, and transformational manners of leading.

Analysis of the Change at BA:

The Thatcher Government ‘s proclamation of privatising British Airways was the initial trigger which started the whole procedure of alteration ( Staniland 2003 ) . The demand for the cultural alteration in BA arises in the transitional stage of the economic environment. The air hose industry in UK was confronting a terrible competition which was an result of the denationalization. Airline industry in UK was put to work under extremely deregulated market which historically used to work in extremely regulated market. The denationalization determination changed the historic values and beliefs of BA dramatically as the organisation ‘s mission in the yesteryear was to do certain that planes fly safely and set down safely. Net income maximization and competition were non much of an issue.

Changing the civilization is an on-going procedure ( Schabracq 2007 ) and even it is to the full achieved, it still goes on in the signifier of monitoring and uninterrupted review. British Air passages since 1984 is in the passage stage and is replacing some of its chief historical values and beliefs to be consistent with the new mission ( Salama 1995 ) . Collin Marshall was appointed as the CEO in order to carry through this needed cultural alteration. Training and behavior altering programmes and rating systems have been introduced to actuate and excite alterations. But in some countries other managerial calling subsystems such as choice and publicity, had experienced minor alterations. Despite BA had put great trade of attempt into promoting certain behaviors, staff did non collate its employment policies and patterns around the new civilization ( Coles et al 2000 ) . BA failed to commit the alteration through their stabilization action programs. Management techniques were surely impressive, but non everyone benefited from them. In countries such as selling, the standards for taking Directors had changed from proficient to managerial accomplishments. However, some directors still preferred the old fashioned enlisting process based on advancing and choosing people who were good proficient persons, hence BA had troubles keeping the alteration. At the corporate degree, the directors were now rewarded based on public presentation. The new assessment system varies across maps as the standards for good public presentation was different among different sections. This issue arises from the HR section ‘s ignorance towards the different subculture. The HR section had been seeking to enforce its ain values and beliefs on the remainder of the organisation and this was identified by Marshall and a new construction for HR was developed subsequently on in order to give the section units more autonomy. This conflicting state of affairs reflects a deficiency of consensus sing the coveted organisational civilization as viewed by top direction.

Recent Issues:

BA had won awards for Best Airline and Best Business Class, a sum of 7 awards ( Investors Report ) . However, BA was besides on top of the list of the companies that had ailments, made by the AUC ( Air Transport Users Council ) , numbering 117. Air France came 2nd with 110 and Ryanair 3rd with 77, EasyJet had 42 entire ailments ( 20 Aug 2002 ) . If BA adopt a scheme for focal point distinction, tighter controls on the safe handling of luggage, more effectual engagement services would necessitate to be implemented in order to supply this ‘quality service ‘ , therefore deriving client satisfaction and justification of monetary value distinction. This would necessarily heighten its image and repute ( Johnson et al 2008 ) .


British Airways had gone through many alterations in order to advance this cultural alteration. British Airways lacked a holistic attack while implementing the alteration because despite of the HR section ‘s efforts towards organizing policies and processs around the new civilization, there was obviously a spread between HR and in-between direction. Some directors were still utilizing the traditional attacks of wages system and enrolling people. British Air passages needed to follow a partnership theoretical account within HR. This theoretical account is about set uping a common involvement in order to procure the fight, viability and prosperity of an administration. Economic tensenesss appreciated within this theoretical account, are suiting to British Airways unstable environment. The Partnership theoretical account negotiations about acquiring a committedness from employees to better quality and efficiency and the credence by the employers as stakeholders with involvement to be considered when determinations are made. In the beginning it will necessitate a top to bottom attack in order to advance and publicize the alteration. However advancing good schemes which are suited for all the sections and countries of the organisation, as opposed to some countries, is the key to its success. British Air passages need to follow this theoretical account to advance teambuilding and working together sort of environment. This theoretical account will assist in placing the organisational end by reciprocally sharing the values and beliefs of the people and they will get down traveling in same way and the result of the alteration can be seen in the whole organisation.

British Airways is one time once more in crisis at the current clip and is demoing record ?401 million pre revenue enhancement losingss ( BBC intelligence ) . Flights are late and clients are confronting some kind of the same issues as there were in 1980s. British Airways has a good history and current image in the consumer market. They might necessitate another alteration in the organisation.

The alteration started in 1984 and still things need to be done. Therefore it can be said that altering civilization is a complex and long term project ( Thomas 2005 ) . It involves coordinated attempts by the top direction to alter its ain values and behavior and communicates it to the followings and others in the organisation. Such alterations must be reinforced by displacements in direction instruction, choice and publicity. Culture can non be managed on its ain or as separate from the remainder of the organisation.