Download - Case Study of the Change Management of British Airways After the Economic Crisis of 2008

8/9/2019 Case Study of the Change Management of British Airways After the Economic Crisis of 2008

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21.05.2014.

Case study of thechange

management ofBritish Airways

after theeconomic crisis of

2008


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Case study of the change management of British Airways after the economic crisis of 2008

The British Airways is the biggest airline of the nited !ingdom and the

third biggest of "uro#e. $t is one of the leading airlines of the world. %uring the

#eriod between 200& and 2008 it increased its #rofit by '.1(. )hen the economic

crisis of 2008 * which had effects all around the world * started+ the BritishAirways * li,e many other organisations * had to face the large recession+ so it

was necessary to ma,e changes to sur-i-e the crisis.

)hen a com#any #erforms wrong or has to face #roblems li,e the

economic crisis+ it has to set u# change management. Changes mean serious

managerial #roblems for com#anies+ because ma,ing changes is one of the

difficult challenges of business life and if an enter#rise is not able to change+ then

it will not sur-i-e. )hat is change management Change management is the

#rocess of diagnosing the errors of the com#any/s o#eration+ #lanning a future

state * which the organisation wants to achie-e * and how it will be reached+

ma,ing the changes and fiing the new state into the com#any. The change

management can focus on technology+ culture+ strategy+ structure+ systems and

staff. There are three ways to recognie if changes are needed #roacti-e

recognition+ reacti-e recognition and crisis recognition.

3n the com#any/s website can be seen that it had a 8&5 million #rofit in

2008 and the net year it had a 401 million loss 6ilmo+ 2007. After it the British

Airways recognied that changes are needed.

9The reasons and the needs for change can be summaried as below

The economic crisis+ beginning from the sub#rime crisis to the "uroone

crisis

Changes in mar,et conditions * increased com#etition from low costairlines.

6anagement #roblems * the re-olt by the wor,ing staff:

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As you ,now+ change management is a systematic #rocess+ which has

three stages

nfreee stage %iagnosing the #roblems+ hel#ing sta,eholders to

understand the situation and the reasons of change and setting u# a

strategy.

6o-ement stage ;ro-iding trainings and education+ ma,ing the change+

analysing the #rocess and showing the #ositi-e effects of it.

cutting

#rocess missing identifying the #roblems and their reasons. )ith this decision the

airline made a big chaos in its life. $t decreased the number of em#loyees and the

#er,s of the staying em#loyees+ did not #re#are the staff for the change and of

course moti-ation was missing+ too. $t should inform its em#loyees about its

situation and why the current system cannot eist anymore+ to sum u# it should

do the unfreee #rocess. As in e-ery situation+ the first ste# is the hardest and the

British Airways failed at it by lea-ing out unfreeing and starting with the

downsiing strategy. These une#ected and fast ha##enings * in the em#loyees/

#oint of -iew * caused re-olt? the management should gi-e them more time to

thin, about their state. $ thin,+ in this case they would ha-e been more

coo#erati-e.

The second ste# of the change management is the mo-ement stage.

Although there was downsiing the airline made #ositi-e changes+ too. $t

o-ercame low cost airlines by cutting the #rices of the flights down and etending

its ser-ices which hel#ed it to ,ee# its eisting customers and to ,ee# the brand

loyalty. $t also #ut em#hasis on customer satisfaction and #unctuality+ furthermore

#ro-ided emergency trainings for the staff.


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As at many other com#anies+ the em#loyees did not see any ad-antages of

the change+ they #ut their interests before the com#any/s. $t is really hard to ma,e

a change in such an en-ironment+ so British Airways should ha-e #ut more

em#hasis on communication with its staff and should ha-e gi-en them more timeto hel# them to decide.

@inally+ they had to refreee the changes. After the mo-ement stage * as $

mentioned * the new state has to be stabilied and the conse=uences ha-e to be

handled+ so the negati-e effects must be com#ensated and the #ositi-e effects

must be ,e#t and built into the e-eryday life of the organisation. $t is a -ery

im#ortant #rocess of change management because if it is not a##ro#riate+ then

the em#loyees may feel unsatisfied with the new state. The staff must be

integrated into the new conditions and after it can come the net change. The

achie-ed goals can be celebrated+ which will moti-ate them and ma,e them

coo#erati-e.

ummariing the case study we can say the change management of British

Airways was successful+ because it sur-i-ed the economic crisis and it o#erates

well today. %es#ite the success+ it did not manage well the changes+ and it can beseen by the wal,>outs in 2007 and 2010. These cases should not ha-e been

handled so hostile by the management and should ha-e a-oided the legal

#rocedure and in this case the whole #rocedure would not ha-e ta,en as much

time.

astly $ would li,e to mention the s#eech of )illie )alsh+ the C"3 of British

Airways after realiing that the business costs must be reduced.

Everyone knows that British Airways is in financial iffic!lty. "any of my

colleag!es !nerstan this. #!r pilots have agree a pay c!t. #!r

engineers have agree more efficient ways of working. A thir of o!r

managers have accepte vol!ntary re!nancy. An nearly $%&&&

colleag!es vol!nteere for salary re!ctions beca!se they wante to help

this great British company in a time of ire nee' (A*+% illie% ,&&).


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airways>record>loss

htt#www.britishairways.comen>gbinformationabout>bahistory>and>heritagee#lore>our>#ast

)alsh+ ). 2007+ %ecember 14. $ canNt let this union drag us to destruction+ says BA boss

)illie )alsh O 6ail 3nline. egymillio>utas>si-hat>a>british>airwaysstraF,,al.html

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Download - Case Study of the Change Management of British Airways After the Economic Crisis of 2008

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