The paper "The Dynamics of Employee Relations" is a perfect example of a Management Case Study. Dynamism is a trademark of business. An organization is continuously subjected to various internal and external factors which compel it to keep adjusting in order to sustain. Similarly, the journey of British Airways is also full of various strategic changes to cope up with the issues it has been facing from time to time. This proposal endeavors to highlight some of these issues which surfaced after the privatization of BA. It will critically analyze some of the specific issues and would correlate them with some theoretical concepts.
However, this proposal would not endeavor to recommend or suggest any possible solution for these issues. Introduction British Airways (BA) is one of the global leading scheduled international airlines. It has in its kitty, a capacity to carry around 33 million passengers every year to more than 150 destinations across the globe and capacity to transport around 800,000 tones of cargo annually across the globe. It also boasts a huge employee base of around 36,000 people which are required to manage its global operations through a large fleet base of around 240 aircraft.
It is also one of the oldest established players in the industry and has been highly regarded (Oum & Yu, 1998). But the situation of the company has not always been in line with its credentials in the industry. There have been some key business issues like those associated with employee involvement and management of quality of services rendered by the airlines which did not allow the company to reach the position in the industry which it deserves. Situational Analysis (PESTEL and Benchmarking) First of all, in order to understand the situation in which the company is, let us carry out a situational analysis.
Various factors that would be considered to carry out this analysis are as under: FACTOR ISSUE ANALYSIS EFFECT ON COMPANY International World economy changing rapidly, becoming highly competitive and unstable. Reduction in trade barriers, through establishing trade agreements. The Globalisation movement - improvements in IT, and telecommunication The emergence of new economies & country development – causing new markets for opportunity. Increased competition (Negative) Acquisition of cost-effective labor & material(Positive) Reduction in trade barrier (Positive) Newmarket Avenue (Positive) Overall Ruling: Positive Economic Increasing individual income. Ongoing global slowdown Increasing Unemployment levels. Interest & taxation rates. Increased affordability (Positive) Reduction in overall demand (Negative) Reduction in affordability (Negative) Falling Margins (Negative) Overall Ruling: Negative Political Impact of international trading barriers. Government & attitude towards the Airlines industry Creating international trading agreements (Free trading agreements) with countries Regulations & agency – uncertainty with international trading, (Negative) Encourage industry expanding (Positive) International trading agreements ease entry into the country (Positive) Overall Ruling: Positive Technological Improvements & development of technology. Revolutions & innovation in transportation. Technology integration into the industry Improved innovation at a global level (Positive) More efficient manufacturing operations/procedures (positive) Achievement of the economy of scale and scope (Positive) Overall Ruling: Positive Legal Industry regulations and laws. Penal Clauses against poor service delivery. Corporate social responsibility. Prevents monopoly & dominant control (Positive) Brings corporate ownership (Positive) Overall Ruling: Positive Social / Cultural The change in social attitude & behavior. Influence of education/literacy Social issues – concern for accidents like 9/11 Recent movements of multiculturalism immigration into the Western world. Quality innovative services bring satisfaction and enjoyment (Positive) Increase services acceptability through more rational to buy the product (Positive) Increased fear of air travel (Negative) Multiculturalism – change in religious beliefs & custom (Balanced) Overall Ruling: Balanced Sustainability Continuously rapidly changing environment, due to globalization. The increasing issue of ‘ global warming’ & ‘ climate change’ – encouraging companies to become ‘ green’ : recycling, waste management, environmentally friendly. Change is continuous, uncertain, unstable (Negative) Establishment of renewable energy source which is not cost-effective (Negative) Overall Ruling: Negative The above analysis shows that most of the factors are having an overall positive impact on the company.
Even for those which are either balanced or negative, they have some impact on other players in the industry too. However, when compared to its peers, the performance of the company is far from being comparable. For example, the chart given below indicated that when benchmarked on various parameters with other competitors, the overall performance of the company was found abysmally poor. Let us now examine some of the key issues which are responsible for such a situation for one of the great global airliner. Issues The two key issues that would be dealt with would be associated with employee relationship and quality management.
For any services company in general and British Airways in particular, both these factors would directly affect the customer sentiments and hence the likelihood that the company’ s business would, in turn, suffer due to such customer mindset.
Thus the analysis of these two issues would put forward very critical study on the overall business operations of the company. Employee involvement and Change Management After the integration of British Overseas Airways Corporation (BOAC) and British European Airways (BEA) which created British Airways, it had faced many concerns and troubles. One of the major troubles encountered by BA was pertaining to employee relationship due to cultural change (Lebrecht, 1999). The consequences of culture become specifically obvious in cross-national operations, amalgamations, and takeovers, where not only different organizational cultures but also employee relationships.
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