Reference no: EM13347071

The British Airways story

The story of British Airways is one of the most widely used inspirational accounts of changing culture. Throughout the 80s and 90s it was used to demonstrate the necessary compatibility of pleasure and profits in celebratory accounts where culture change is presented as the only explanation for the transformation that occurred. This case study sets the changes in context noting the organisation's environment at the time of the transformation, the structural changes that took place and observes the impact that such changes had over the long term.

Even by the standards of modern management myths the British Airways transformation was impressive. In the late 70s and early 80s BA was performing disastrously against almost every indicator. An old fleet made for uncomfortable journeys and contributed significantly to the airline's record for unpunctuality, its productivity was considerably below that of its main overseas competitors, it was beset by industrial disputes-and it was recording substantial financial losses (£140 million or some £200 a minute in 1981). It seemed that staff discontent was more than matched by customer dissatisfaction and in 1980 a survey by the International Airline Passengers' Association put BA at the top of a list of airlines to be avoided at all costs. By 1996 this picture was reversed. Not only had BA become the world's most profitable carrier, it was also voted the company that most graduates would like to work for and, by the year 2000, another survey declared it the second most admired company in Europe (Corke 1986; Warhurst 1995). Much of the management literature attributes this turnaround to BA's own cultural change which remodelled staff attitudes and set customer care as the primary focus of activity. As Doyle noted:

In the 80s BA had been transformed from a disastrous loss-making state enterprise into the world's largest and most profitable international airline. It was a triumph for management, showing that Britain could produce world-class companies that could beat the best of the competition. Its success was the result of the process and strategy that management introduced.(Doyle 1999).

The process focused on creating a vision that would inspire the BA staff and gain their enthusiastic commitment. It is certainly true that a great deal of effort and energy went into shaping BA's culture. At the heart of this was the ‘Putting People First' training programme launched by Colin Marshall, the company's new chief executive, in December 1983. Originally intended for staff who had direct contact with customers, it was, in fact, attended by all 40,000 employees by 1986 and it aimed to revolutionise their attitudes. In a direct challenge to the hierarchical and militaristic culture that existing in BA at the time, staff were instructed not to attend in uniform and, once on the course, put into cross-functional and cross-grade groups. The course itself was consciously designed to modify behaviour. Attendees were encouraged to take a more positive attitude to themselves, taught how to set personal goals and cope with stress and instructed in confidence building and ‘getting what they wanted out of life'. Lapel badges inscribed with the motto "We're putting people first" provided a visible reminder of the course's message.

The approach was self-consciously "indoctrinative".(Bate 1994) As Colin Marshall said: We ... have to ‘design' our people and their service attitude just as we design an aircraft seat, an in-flight entertainment programme or an airport lounge to meet the needs and preferences of our customers. (Barsoux and Manzoni 1997).

Colin Marshall's own personal commitment is one of the most written-about features of the PPF programme. He attended 95 per cent of the PPF courses, setting out his vision for BA and participating in question and answer sessions with staff (Georgiades and Macdonell, (1998).

This involvement extended beyond the PPF programme. Each time he flew the chief executive would introduce himself to front line staff and passengers and discuss their experience of BA. Once, when a queue formed at the launch of a new service he helped to deliver breakfasts to customers( Ho¨pfl 1993).

In his presence all of the symbols of the ‘new culture' were expected to be in place- even down to the PPF lapel badges. Staff not wearing one of these had replacements pinned in place and Colin Marshall wore his own PPF badge for two years.

But the most impressive aspect of BA's cultural change is not so much the sophistication of the PPF programme itself, nor the commitment of executive time, but the extent to which other employment policies and practices were changed to fit the ‘new' culture and the continued emphasis on these practices and programmes throughout the 80s and 90s. Three-quarters of the one hundred Customer First teams, formed to propagate the message of PPF, survived into the 90s. Not only were team briefings and team working introduced but these were developed and refined with TQM, autonomous team working and multi-skilling introduced in many areas. Direct contact with all staff was considered so important that ‘down route' briefings were developed to ensure that mobile and isolated staff were not neglected and in March 1996 BA became the first company to make daily TV broadcasts to its staff.

In addition to this, emotions were increasingly emphasised in the work process. The way cabin crew were rostered was changed, creating ‘families' of staff to work the same shift patterns. These were intended to provide mutual support, make cabin crew feel happier about their work environments and, as a result, facilitate the production of emotional labour. A new role of ‘Passenger Group Co-ordinator' was introduced and staff appointed based entirely on personal qualities. The importance of emotional processes was also reflected in the new appraisal and reward systems such that work was judged on the way in which it was performed as well as against harder targets (Hopfl 1993). Managerial bonuses could be as much as 20 per cent of salary and were calculated on a straight 50:50 split between exhibiting desired behaviours and achieving quantitative goals. Awards for Excellence and an Employee Brainwaves programme encouraged staff input. The Personnel Department was renamed ‘Human Resources' with many decisions devolved to line managers and, in the first few years of the programme at least, a commitment was made to job security.

Question 1

"A great deal of effort went into shaping BA's culture". Critically review British Airways approach to culture change - what were the main features of its approach? Your answer should analyse the defining characteristics of organisational culture and explore the theoretical issues surrounding culture change.

Question 2

Porter, Lawler and Hackman (Behavior in organizations 1975) propose that change can be seen at three places in the organisation:

• Change in the Structure and system
• Change in the climate and style (culture)
• Change in the people

However, John Kotter (Leading Change; Why transformation efforts fail - Harvard Business review 1995) identifies a whole series of reasons why individuals are resistant to change.

Analyse these assumptions as they relate to the British Airways story.

Question 3

Given the importance of the effective management of the human element and the nature of the ‘people-organisation' relationship, identify and analyse the different demands that would have been made of managers during the BA change initiative?