Change Management In British Airways

INTRODUCTION

British Airways is one of the fastest growing airlines in the world. It has grown by its own leadership qualities and unique culture. Bob Ayling, Chief Executive implemented changes in the organization without getting support from its employees. He thought a change is necessary, even when BA was making record profit, because in the long run some decision has to be made. On one side he tried to raise staff morale by reinventing training programmes and by building a hotel at Heathrow just for staff members and on the other side he outsourced departments like maintenance, engineering and information technology to developing countries. This paper reviews leadership issues with reference to motivation and culture. This paper concludes with a significance that Bob Ayling's strategies and plans for change were in the right direction, but the way he carried out to achieve his objective were not accepted by employees or people around him. We take the impact of the leadership and management style of Bob Ayling and look at this in relation to motivation of employees.

"Leadership is the capacity to translate vision into reality"

(Warren G Bennis 1995; cited by K Aswathappa, 2004)

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Leadership is interpersonal influence exercised in a situation and directed through the communication process, towards the attainment of a specified goal or goals

(Tannendaum et al 1961 ; cited in K Aswathappa,2004)

Leadership styles and implications

Leadership style is the typical approach a particular person uses to lead people. Stated differently, the behaviour the leader exhibits during supervision of subordinates is known as leadership style. Style is to comprise of 2 distinct elements- The leader's assumptions about subordinates, and the leader's actual behaviour while interacting with the subordinates.(Luthens,1973).Leadership and management are two opposing styles of employee supervision . Between leadership and management, which one is most effective and what is the difference between the two? Both styles (leadership and management) are analyzed as they are applied within a team-based work environment. Now it is necessary to describe a team-based work environment and demonstrate what can be accomplished within that setting by using leadership.(supervision,2006) .The influence of leadership style on job performance, satisfaction, stress, and turnover intention has been well established. While leadership style has an impact on organizations, departments, and teams, as well as work climate and atmosphere, leaders who want the best results should not rely on a single leadership style (Goleman, 2000).

There are mainly 4 different types of leadership styles:

1. Style based on amount of authority retained by the leader.

2. Style based on the relative emphasis placed on the task to be performed versus that placed on people.

3. style based on assumptions about people made by the leader

4. Entrepreneurial leadership style

Bob Ayling was appointed as a chief executive in 1996, at a time when BA announced a pre-tax profit of GBP 474 million. It was a period of Turbulence . It was a time when oil prices were record high, increase competition both domestically and globally and BA's profits were reduced because of pounds getting stronger. Though British Airways was showing a rapid growth, Ayling was forced to take certain measures in order to make the airline more competitive. It was during his tenure BA management and trade unions clashed between and lost hundreds of millions of pounds.

In order to increase the profitability further, management embarked on a move to cut cost by GBP 1 Billion within 3 years in what was known as the Business Efficiency Programme (BEP), originally developed to anticipate recession, this became a long term strategy to respond to the effects of an increasingly deregulated market. Many of cost cutting measures were extensions of previous policies; Outsourcing was applied to areas such as routine maintenance, engineering and information technology. In a bid to compete with the low cost operators such as Ryan air and EasyJet, many low yield routes from the Gatwick were also transferred.

Ayling's adopted an authoritative leadership style. After the strike, Ayling goes against his image as a reasonable, down-to-earth leader and bears down hard on employees. Ayling carried forward the reforms initiated by his predecessors and significantly improved the efficiency of operations. But his aggressive style of management and efforts to cut costs and jobs backfired.(ICFAI,2003)

This paper reviews leadership style of Ayling: Was he a visionary, or did he over-manage a healthy company? Why did BA's staff ultimately refuse to follow him? Was he simply unlucky, or did he make some fundamental mistakes?

Ayling attacked BA's cost with vigor and did flinch from taking on BA's powerful unions. Once employees lost faith in him, he worked hard to recover staff morale by building a hotel for staff, providing attractive working conditions at waterside and reinvesting in training. For many outsiders, they felt Ayling has tried too many things in a shorter period. For example BA has been building a continental European network at the same time launching a budget airline and pursuing its ill-fated alliance with American Airlines. Then BA unveiled a striking new identity by changing its 'logo'. The change in logo was done to create a more modern image and to reposition itself as a 'citizen of the world'.

Rod Eddington ayling's successor argues BA is confronted by a combination of 3 'negative forces'. He describes the first of these negative influences as the weakening of the world economy. Looking towards the east, Eddington is concerned about the fragility of the Asian Pacific economies, including Japan, Taiwan and Singapore. Second negative force is the consequence of security concerns on the willingness to travel. His third 'worrying' issue, and clearly the most important, is costs. Various extra charges have risen directly as consequence of US attacks-security, fuel costs and insurance.(Guardian,2001)

How does leadership affect motivation?

A Psychologist, Abraham Maslow determined that when one level of