Travel And Tourism Management For Ba Management Essay

Published Date: 23 Mar 2015

The travel and tourism industry is one of the burgeoning industries of the world, the reason being the increased trends in travelling, modernization as well as the globalization. With a promising future and increase in the new markets, travel and tourism industry is likely to add new jobs and secure employment. To ensure the sustainable development of the tourism industry professional managers are required who are able to manage and proactively respond to the challenges in the industry.

According to Mintzberg, (2004) management and leadership are complimentary attributes. People owning a commercial recreation or tourism business should encompass a set of knowledge skills and abilities to manage the industry well. These managerial duties are illustrated in the following figure:

Figure Showing managerial duties and responsibilities

Source: Pfister, R. & Tierney,P. (2009).Recreation, Event, and Tourism Businesses: Start-up and Sustainable Operations. USA: Library of Congress Cataloging-In-publication data

Organization: The British Airways

British Airways operate as the one of the leading international airlines in UK, providing both domestic as well as international air services. It covers a wide service area of 150 destinations in 75 countries operating from the main airports of London Heathrow airport and Gatwick airport, as its hubs (Datamonitor, 2005). The corporation has an employee backbone of over 40,000 employees (Hoovers, 2006). The organizational structure is flat ranging from the managing director at the top to the managers at the lowest level (Buchanan D. & Huczynski A., 2004)

The British airways operated previously as two separate entities of British Overseas Airways Cooperation and British European Airways (Papadogiannis, 2006). Later on in 1974, BOAC and BEA merged together to form one company named as the British Airways. In the 1980, British Airways underwent financial turbulence and as a result was privatized in the 1987 under the management of Sir John King (Datamonitor, 2005).

The Management and Leadership style at British Airways

The management style had been autocratic, that took its roots from Sir Colin Marshall, who liked to work on a one to one basis, entrusting the key responsibilities to selected individuals. Lord King also carried forward the autocratic style, strictly following the functional boundaries and segmentations, a formalized hierarchy with overlooking and depersonalization of the subordinates.

Later on with the changing circumstances, the paradigm shifted to a personalized one, paying more emphasis on the training, coaching and empowering the employees. Mutually responsible employee-manager relations are being managed now, empowering the subordinates to contribute to a larger whole. Managers try to provide a framework for others to follow, empowering the employees to take effective decision in the non standard situations. Managers are encouraged to build a support system and be innovative and flexible in their decision making (Noia, 1996).

Management style and leadership at Virgin Atlantic- A comparison

In contrast to BA, the management style at Virgin Atlantic has been a laissez faire style. It is informal, yet not being casual. A serious approach to business with a risk taking and entrepreneurial management has lifted Virgin Atlantic to new heights .R Branson's charismatic leadership, the ability to communicate with its employees, innovative and forward thinking has made him the biggest asset for his company. He followed a collaborative structure where the managers as well as the staff are equally regarded and involved in decision making and encouraged to be innovative and participative. There is a trend of cross functionality among departments, working in a conducive environment where everyone knows each other.

The secret of Virgins success lies in its hierarchal structure that regards the employees as their top most priority followed by customers and then shareholders. This is contrary to the traditional view of hierarchy being followed at BA that puts the prime importance on shareholder satisfaction followed by the customers and then the staff (Noia, 1996).

Evaluation of the management and leadership at British Airways

The British airways should assess its leadership structure based on the trait theory of leadership. Some of the problems aroused in British airways management partially due to in-effective leadership.

The universal theory of leadership defines the importance of effective leadership skills in many situations (McClelland, 1973, Green and Young, 2009). However a study by (Barker, Johnson and Lavalette, 2001) pointed out the individual qualities is not sufficient enough. In addition to the personal characteristics, structural environmental factors such as the "non strike" environment are also important. Although there are certain drawbacks associated with the trait theory of leadership, it can be used as an assessment tool for analyzing the strengths and weakness. Through this analysis, managers are able to equip themselves with the right skills required to manage crisis.

Among the three styles that are usually followed i.e. autocratic, democratic and laissez faire, democratic style is best suited for British airways, since it involves a high degree of participation on the part of employees, improves the decision making abilities, and reduces the resistance to change. The leadership style and behavior can also be improved using a task oriented approach. The recent trend of strikes and union calls makes the management style of laissez faire unsuitable to the company. The laissez faire style usually results in low group performance and gives rise to informal group leaders.

In order to reduce the tensions and hostilities in the work environment, BA management worked to improve the management in the form of "concern for people". This promoted harmony as well as productivity simultaneously. By placing emphasis on people orientation over production orientation, the managers are able to promote a safe and healthy work environment for its employees, this in turn increases productivity because happy employees are more likely to work hard as compared to the ones that are neglected (Barjasic, 2009).

Group and group dynamics at British Airways

Group behavior helps to shape the perception, values and attitude of the employees. Group behavior attempts to influence the behavior of those around them. Several type of groups such as the functional groups, virtual groups, interest-friendship groups exists and are employed by the managers.

A success story of group dynamics is witnessed at the British Airways, who employed a group of experts involved in baggage handling operations. This group of experts were assigned the task of proposing innovative techniques to improve the baggage handling process. Out of the 62 proposed systems, the bar code baggage handling system was accepted and successfully implemented that ranked the British Airways as having the worlds' most efficient baggage handling systems.

Following this pattern of group structure success, British Airways applied the formula of innovative team techniques to other areas of business such as the cargo handling, aircraft cleaning and catering. This strategy helped BA to lead to a productivity increase of up to 67 percent. The use of innovative teams has helped BA to increase productivity and customer service at the same time (Hodgetts and Hegar, 2008)

In an attempt to improve the organization's dysfunctional management style and to initiate the process of new management style development, British Airways came up with some specialized programs that can enable its employees to work in a competitive environment. (Goodstein., D., L. & Burke, W., W., 1991)

"Putting People First" Program

The Putting people first program was initiated with the perspective of equipping employees with the importance of teamwork, making them realize the importance of individuals' contribution to the organization as a whole. This program also attempted to make the employees aware about the customers' expectation with the company as well the managers' expectation to the employees. This program was launched to enable the organization reach its goals and to make it the best airline in the industry (Street, M., 1994).

"Managing People First" Program"

As a part of its change movement, British Airways launches the "Managing people first" training program that aimed to bridge the gap between the management and the employees and to bring forward the corporate mission to the employees. This program that was initiated for the management level and included training, multi-source feedback, active senior management participation, support team, and a linked performance appraisal system. This training program enabled British Airways to equip themselves with a managerial force that focused on corporate objectives and greater customer focus (Tosti, T., D. & Jackson, F., S., 2006).

Organizational Structure at British Airways

During the period from 1983 to 1995, the CEO of British Airways led the company through a serious of extensive shifts and major shake ups. The company underwent major intra firm changes, both in 1983 and 1986, to get rid of the operation-driven culture. Instead it worked on to bring innovation in different areas of the industry such as marketing, production, design and IT etc. These innovations were categorized by promoting the young enthusiastic mangers to the top slots of the firm in just an overnight time. In the revival of 1983, alone 161 executives were removed in just 24 hours.

British Airways was quick at sharing and transfer of power. It extended its technical functions to mangers having a marketing expertise. These shifts from operations to marketing were made possible under the CEO of a Marshall. In 1986 marketing gained control over BA ground services at London airports. Another strategic move in improving its organizational structure was the induction of generalist-university trained managers. These generalists provide two types of benefits:

They facilitated the steady transfer from operations to marketing.

They also facilitated the coordination and flow of information across different functional departments such as the ground service, cabin crew, meals etc (Hall and Soskice, 2004)

According to Lehrer 1997, British airways succeeded in selecting the optimal structure for themselves by carrying out a trial and error method. In contrast to the route based strategy, British airways adopted a network based strategy. This network based strategy is characterized by:

Home country hub serving global market

Centralized sales organizations

Scheduling, pricing and selling are under the control and scrutiny of the marketing department

In comparison if we see the hierarchal structure of other airlines like the Air France and Lufthansa, they are compartmentalized, that there exist a marked difference between middle and top managers, or the presence of managerial specialists as in the case of Lufthansa. Although these traits are successful in many of the industries, but when Lufthansa, in 1992 faced threats of bankruptcy, it realized the strong need for change in the compartmentalized behavior and hierarchical structure to a more spontaneous and informal structure flowing across differential departments and functional boundaries.

Organizational Culture of British Airways

The British Airways under the leadership of Colin Marshall underwent the transition in its organizational culture, thereby demonstrating the feat of withstanding pressure and handling it well to produce dramatically results. The cultural transition brought forward the benefits of greater customer satisfaction, employee satisfaction, shareholder satisfaction as well as increased profits. The British Airways cultural transition step is considered to be the first large scale transformation in the corporate history.

The need for the transition aroused when British Airways acquired Caledonian Airways. It then found that there exist a major clash between the two firms on the basis of culture, especially in the Gatewick airport operations where the profits were drastically declining ( Carleton and Lineberry, 2004).

The British Airways culture fuses with its marketing and it is actually what the customers buy. Culture and marketing are intermingled through tangibles and intangibles such as the seating, food arrangement, staff courtesy etc. Other things can be replicated and reproduced but culture is something that is unique to an organization and cannot be copied easily. In the case of an airline travel, improvements in the staff culture and customer courtesy alone can take the firm to new heights.

British Airways has a role culture based on functional differentiation. Mainly two cultures harbor here. One is operated at the highest level, that is characterized by a cooperative and highly customer focused that took every possible measure to ensure the best service orientation. The other is the ground level culture that is competitive, innovative and fierce to cope with the external threats. In between is the middle management, which is responsible for the implementation of the strategies and to deal with the cultural changes as and when required.

Cultural transformation at British Airways

The cultural transformation at the British Airways is one of the most talked about changes in the corporate realm. This change enabled the airline firm to change its stature from the last ranking to the top most aviation firm in the world.

The reason for the need for change was triggered by an unfavorable environment that was overmanned, disorganized, non disciplinary, union attacked, strike prone and not customer friendly. It needed a philosophy and revival to bring it on the oath of success. The first step it took was to alter its image through marketing orientation. The launch of a TV commercial was the right step in this regard. The ad tried to deliver their cultural philosophy through the demonstration of a satellite broadcast' that showed 13 satellites, transmitting pictures from almost 25 different places to 126 locations in 63 countries across five continents. The hidden message was to convey the idea of a global airline that is caring, versatile, open and more cosmopolitan (Grugulis & Wilkinson, 2002).

However, much more was to be done to bring about the revolution. The cultural change had to be brought forward through a coherent philosophy, bringing the customers as the centre of interest, equipping the employees, being innovative, taking initiatives learning to respond to customer requirements and so on. The idea was to remove the bureaucracy from its roots.

BA's Culture Before privatization

When British Airways wasn't privatized, the culture that was prevailing was at fault. It was bureaucratic, authoritarian, biased driven by an impersonal relationship between management and the employees. The relationship was in fact formal, with the dearth of communication between the management and the employees, thus discouraging participative management. The recruitment of employees i.e. pilots and managers was done from the government run Royal Air force, and their employees seemed totally unfamiliar with the concept of customer orientation. In pre privatization era more focus was placed on operations than on service or market orientation (Salama, A. & Easterby-Smith, M., 1994).

BA's Culture (Post-Privatization Decision)

The post privatization era brought with itself a cultural change. The corporate mission was revised and changed in to "To be a competitive airline" in order to respond to the external environment (Salama, A. & Easterby-Smith, M., 1994). The cultural change was facilitated by training programs and appraisal systems to stimulate the change. The new corporate culture introduced was informal, innovative, customer oriented and encouraged participative management and so forth.

The post privatization era that brought with itself the cultural change proved to be beneficial for BA as its loss in profit was reduced from £466 million in 1982 to £225 million in 1987.Thus changes are likely to bring improvements and enhancements in performance and increase in industry effectiveness.

Recommendations

As change is not easy, and may get sometimes difficult to accept, the company must be able to deal with any kind of confrontations and challenges. The fear of the unknown and the lack of trust and familiarity may make the employees resistant to change. For reasons for denial of the change may be:

Parochial self-interest

Misunderstanding and lack of trust

Contradictory assessments

Low tolerance for change. (Buchanan D. & Huczynski A., 2004

British Airways brought change both at the individual and organizational levels such as changing the management style from authoritative to participative. It is possible that the employees feel incompetent or not able enough to make the decisions. They are likely to feel comfortable in the familiar and less challenging environment. Therefore, a situation may arise where the BA management may not be able to make its employees to get to a consensus decision (Goodstein., D., L. & Burke, W., W., 1991).

There is a need for the management to equip itself to deal with chaos and uncertainty more effectively. In its effort to improve, BA management launched HR policy of training. Although training does prove to be beneficial, but there is still a room for improvement. The case of 1990 brought this need for improvement, when the competition from the companies like Easyjet and Ryanair brought forward the idea of a second revolution to the BA management. To deal with the situation BA made an alliance with American airlines that involved reducing labor costs, replacing existing staff with relatively low paid new staff. The employees felt the mistreatment and launched a strike to voice their demand. The strike alone cost BA 125 pounds and also damaged the goodwill among employees (Wilkinson, A. & Grugulis, I., 2002).

If we review the changes brought about in BA, many of them where brought about by the HR tools of planning, training, recruitment and performance appraisals. However, it is noted that the Hr tools are not sufficient to bring the change. Sometimes a 'change agent' proves to be useful. A 'change agent' is a person who works through proper researching, planning, and building business support. (Bhardwaj, M, 2003). He is hired externally by the organization for a specific task or project. It is beneficial to hire or use a change agent as he possesses the specialized skills, knowledge and expertise of independent working, collaboration and mutual understanding and trust. It is also recommended to prefer an external consultant as compared to an internal one as the internal may be biased and may have a narrower view as compared to the external consultant.

Conclusion

Organizational structure, culture and management are the most important pillars for a business. They provide the direction as well as cultivate traditions, values and beliefs for the employees to follow. Company change, revitalization and betterment revolve around these three aspects. When changes take place in an environment, both external as well as internal, such as competition, structural change, socio economic change etc, it becomes vital for a firm to adapt to the changes in order to strive and thrive. Without the adaptation, a firm may get aloof and not be able to withstand the competitive forces (Salama, A. & Easterby-Smith, M., 1994).