A Study Of Lewins Model Management Essay

In the refreezing stage the company stabilized changes by establishing systems that can establish behavioural pattern in the organisation. A new performance appraisal system based on behaviour and results was introduced to encourage customer service. (Goodstein., D., L. & Burke, W., W., 1991) 14

It is not easy for an organisation change its structure and business processes since any change may lead to some level of resistance by the employees. One of the main causes for resistance is the fear of the unknown and loss of what is familiar. There are four reasons of resistance from employee to organisational change including 1) Parochial self-interest, 2) Misunderstanding and lack of trust, 3) Contradictory assessments, and 4) Low tolerance for change. (Buchanan D. & Huczynski A., 2004) BA tried to change behaviour by changing the management style from authoritative to participative. BA wished employees participate more in management decision but since this was unfamiliar employers would fall back to the old patterns. 15

A tactic that was used in BA to manage resistance to change was the HR policy which included training guidelines. Such an HR policy is important in making the employees understand and react positively to change. There is also an example where resistance to change hindered the organisations goals and objectives. In an attempt to cut down cost can compete with low cost airlines BA tried implementing a new payment system and also hiring workers for lower salaries. This created insecurity among the employees which ended in a strike that cost the company in millions in 2000. Therefore handling resistance and the HR aspects of the company is vital to a successful change process. 15

REFERENCES 16

Wilson, C.D., (1992), A Strategy of Change, Thomas Learning, London 16

British Airways, 2006, Leaders For Business: What are we looking for?, http://www.britishairwaysjobs.com/baweb1/?newms=info196 (22 December 2006)

British Airways, 2006, Our Recruitment Process: The Assessment Process, http://www.britishairwaysjobs.com/baweb1/?newms=info48 (22 December 2006) 16

Paton, R.A. & McCalman, J. (2008) Change Management 2nd ed. Sage Publications, London 16

Cellars, T. (2007), Change Management Models: A Look at McKinsey’s 7-S Model, Lewin’s Change Management Model and Kotter’s Eight Step Change Model, Associated Content, [Online], http://www.associatedcontent.com/article/237685/change_management_models_a_look_at_pg5_pg5.html?cat=3, accessed on 30 November 2009 16

Green, M. (2007), Change Management Masterclass, Kogan Page Limited, Philadelphia 16

Syque. (2007). Lewin’s freeze phases. Retrieved April 12, 2007, from Changing Minds 16

12Manage. (2007, April 9). 7-S framework (mckinsey). Retrieved April 12, 2007, from 12Manage Web site: http://www.12manage.com/methods_7S.html 16

Chapman, A. (2006). Change management. Retrieved April 12, 2007, from Business Balls Web site: http://www.businessballs.com/changemanagement.htm 16

Mind Tools. (2007). Lewin’s change management model: Understanding the three stages of change. Retrieved April 12, 2007, from Mind Tools Web site: http://www.mindtools.com/pages/article/newPPM_94.htm 16

Morgan, O. (n.d.). Organization management part 1. Retrieved April 12, 2007, from Oliver Morgan Web site: http://www.omorgan.info/download/Part%20I/organisation_management_Part_I.pdf 16

Recklies, D. (2007). The 7-s-model. Retrieved April 12, 2007, from Recklies Management Web site: http://www.themanager.org/Models/7S%20Model.htm 16

Johnson G and Scholes k (2002) Exploring Corporate Strategy, Prentice Hall, 6th ed. 17

INTRODUCTION

British Airways Plc, renowned in the world as a leading airline, operates international and domestic scheduled and charter passenger services, freight, mail as well as ancillary services. Including 6 domestic flights, British Airways serves nearly 150 destinations. New code share arrangements agreed with Finnair, Iberia and Cathay Pacific are included in BA’s global alliances. The airline operates in geographical areas such as the UK, Europe, America, Africa, Middle and Far East, Australasia and Indian sub-continent.

For the year ended March 2009, the company generated revenues of £ 8,992 million which is an increase of 3.1% on the £ 8,753 million revenues generated in the year ended 2008. The net loss of the company was £358 million during the 2009 financial year, showing a major decrease from the £696 million profit in the previous year.

British Airways Plc was formed from the airlines, BOAC, BEA, Cambrian Airways and Northeast Airlines on 1 September 1974 through nationalisation by the Labour Government. In February 1987, thirteen years later, the company was privatised. Measured by passenger numbers, British Airways was the largest airline of the UK until 2008. British Airways is listed on the LSE and is a constituent of the FTSE 100 Index. The airline celebrated its 35th anniversary on 31 March 2009.

Change management

According to cook et al (2004) change management is a set of processes that is employed to ensure that significant changes are implemented in an orderly, controlled and systematic fashion to effect organizational change. One of the goals of change management is to reduce resistance to change in order for organizational members accept the change and thereby achieve the organization’s goal of a smooth transformation.

Change management can be seen to have five specific stages that must be realized for an organisation to be successfully implementing change. Firstly the organisation must know why a specific change or series should be brought about. Secondly the organisation must be motivated and desire to go through this particular change. Thirdly the organisation must posses the knowledge of how to carry out the change. Fourthly the organisation must acquire new skills and behaviours that are necessary for the change to occur. Lastly the organisation must become sustainable by making these new behaviours their usual practice.

Further according to Wilson (1992) change can occur mainly in two dimensions depending on the theories and models used. This view explains that change can be either planned or unplanned. Also change can be described in terms of the process or implementation strategy. The issues of understanding and managing change within an organisation depend on the change approach that is selected by the organisation.

Organisational Structure

British Airways operates as a group of companies whose main industry sectors are international and domestic scheduled and charter air services carrying passengers, freight and mail as well as providing supplementary services. The group consists of British Airways Plc and a number of subsidiary companies, including British Airways Holidays Ltd, British Airways Travel Shops Ltd etc. The two main operating bases of the company are Heathrow and Gatwick airports and has established in branches around the world. The company is listed in several stock exchanges including LSE, Munich, US etc. British airways together with its partnerships have managed to extend its network thus entering all significant markets.

As for the structure of BA, it has suffered a shift from modern to post modern to post modern organisational structure i.e. it has moved from mechanistic to more organic style of operation. The operations of BA can be analysed departmentally into Planning, Distribution and mileage partnerships, Marketing communications, Global contact centres, eCommerce, Triton Programme, Revenue management, AirMiles Travel Company, Travel Shops, BA Holidays, BA travel Clinics, Corporate communications, BA world Cargo, Ground Operations, BA engineering, Information management, BA shares etc. Each division has its own functionalities to perform, goals and objectives to meet which contributes to corporate aims and objectives.

Department

Responsibility

Planning

Planning fleet, network, schedule, infrastructure, resources, property

Distribution & mileage partnerships

Ensure that customers can book pay and ticket a booking through the website, contact centres, shops, travel agents around the world

Marketing communications

Marketing communications, advertising, promotions, gain insight into customer needs

Global contact centres

Delivers services to customers who prefer using the phone

eCommerce

Major projects to broaden the range of transactions customers can do on their own, improve quality of online channels

Triton Programme

The 10 year contract with Amadeus, leading provider of travel industry systems

Revenue management

Monitors, controls, forecasts sales working to improve profitability

AirMiles Travel Company

Carries out customer loyalty programmes

Travel Shops

Provides personal services and expert advise from well travelled consultants

BA Holidays

Sells holiday packages

travel Clinics

Offers travel health advice and comprehensive vaccination service

Corporate communications

Protects and manages the global reputation ensuring that a wide audience are aware of the airlines news and developments.

world Cargo

Provides freight, mail and courier services

Ground Operations

Management of Customer services and terminal operations with safety and security

Engineering

Responsible for aviation maintenance providing full support for the fleets

Information Management

Responsible for all IT across the BA group and plays a fundamental role in shaping the future of the airline

BA shares

Responsible for all investor relations

Table 1: Departmental Analysis of British Airways

Market Environment – PEST Analysis

The Airline industry has become extremely competitive due to the budget airline and the current unfavourable economic conditions. All player compete for the market share in an environment where the bargaining powers of customer have increased and there is no control over the powers of fuel suppliers and prices. In the current economic conditions there is limited growth in volume and demand for air travel has declined significantly. The PEST analysis shows the external factors that affect the organisation and its change processes. It also reveals the changes the organisation must make in order to remain competitive in adverse market conditions. Thus, this section looks into the external environment of British Airways since change strategies are affected by the factors and changes in the macro environment. Such changes could bring about favourable or adverse effects on the company’s turnover and growth. The PESTEL framework has been applied to examine the external factors and its impact on the company.

Political and Legal Factors

Developments in the political and legal factors can have a high impact on the airline industry. Political developments include changes in governmental policies, international regulations and legislations, government taxes on air travel, political and economical relationships with counties, changes in airport and aviation rules etc. Some of the developments have a favourable impact on the company while some others will have an unfavourable impact. The EU policy has increased air travel and therefore has been a positive impact on the airline industry. On the other hand, increase of government taxes has adverse results on the industry since demand for air travel declines due to high airfare.

Economical Factors

Economic developments such as increase in fuel prices, unfavourable currency and interest rates, recession, inflation, increase in unemployment has a negative impact on British Airways. In such environments leisure travel declines because people have less disposable income and business travel declines because corporate spending is reduced. Also recession negatively impacts on growth of companies in terms of expansions and buying additional aircrafts.

On the other hand, changes such as economic boom, deflation could favourably contribute towards a company’s performance.

Social and Environmental Factors

Airline industry is constantly under pressure for various environmental pressure groups due to high CO emission, noise and the effects on the climate. Also outbreaks of diseases such as such as Swine Flu can decrease air travel. Another aspect that could reduce air travel is safety related issues such as acts of terrorists and crashes.

Technological Factors

Changes in technology have shown negative and positive impacts on the airline industry. The positive impacts have been safety, cost reduction and ease of booking and planning travel online. On the other hand due to new technological developments such as advanced meeting facilities business travel is not necessary to the same extent as before.

BA and Ryanair

British Airways aims to operate a high quality service to its customers at a affordable price. It operates long and short haul flights to many destinations around the world and ensures comfort while taking the passengers closer to their destination. British airways mainly operate in three areas, namely passenger transport, cargo and mail services. British airways aim to understand its customers’ needs and operate accordingly. The company has a strong brand image and the employees are expected to work up to its standards. The organisational structure can be regarded as a flat type because it has only one level of hierarchy that separates Managing Directors at the top from bottom-line employees.

On the other hand Ryanair operates on a “no- frill” strategy which means that the passengers are not provided with any extra facilities and operates simply as a point to point transportation service. It has grown largely in Europe by attracting customers who prefer low ticket prices thereby reducing the market share of British Airways. It mainly operates short haul flights to destinations which are secondary airports.

Factors Affecting Change Management

According to Paton and McCalman (2008) Change management can be defined as a planned process for changing a core function or organization of an enterprise. Change Management is an organized, systematic application of the knowledge, tools, and resources of change that provides organizations with a key process to achieve their business strategy. (Lamarsh 2000). With the aid of technology the industries and products are congregating which means each firm has to take a very holistic approach to the marketing of goods and services. Paton & McCalman (2000).

Factors driving change

Most organisations change when internal and external environments change. The factors that initiate the need for organisational change can be two fold. The first factor can be called an External Trigger which involves the activities and innovations of competitors, change in customer requirements, legislation and government policies, and so on. Economic change can create the need for change. Also, due to the EU policies many companies had to change their practices and procedures. Environmental pressure groups that impose pressure due to adverse environmental effects can force a company such as BA to change its processes to make it climate friendly.

The second factor can be called the Internal Triggers including new product and service design, innovations, appointments of new directors, new ideas on how to achieve service quality etc (Buchanan D. & Huczynski A., 2004). The British Airways privatization program that changed the company’s ownership was launched due to the impact from such triggers. The aims and objectives of this programme was to improve the organisations performance and gain a competitive advantage over its competitors. According to the change model described by Lewin, organisational change occurs in three stages. The first stage is called Unfreezing which reduces the forces which maintain behaviour as it is currently and recognition of the need for change occurs. The second stage is called Movement which is the development of new practices and the implementation of the change. The final stage is named as Refreezing which is stabilizing the changes that occurred and reinforcement through supporting mechanisms. (Mullins, J., L., 1999)

Involving People

It is essential that the organisation manages its human resources in a manner that is favourable to the change process. It is important that the employees understand and support the change in order to have a smooth transformation. If the change managers can make the people involved to see the common objectives and mutual benefits that the change will bring about it helps in making the change more successful (Paton & McCalum, 2000). However, each individual will react to change in a different manner. The factors that affect how individuals will react to change are manifold, namely the organisational culture, the reasons for change, factors of change, leadership aspects and organisational structure. The change management style and approach are important aspects with regards to involving the employees of the organisation. Change management requires a considerable amount of skill and previous experience on the management of the organisation. It is important to consider each individuals perception and attitude towards the process for it to be a success.

For example during the second stage of change, BA developed tactics and programs to bring the vision of the top management-level to the bottom-line employees throughout the organisation. Thus the internal structure and systems were changed and also a permanent training center was established to promote staff training.

Stakeholders

It is important that the company analyses its stakeholders since the change will have an effect on them. Communication is vital to involve all stakeholders in the process so that the change is successful. It is also important to categorise your stakeholders according to their power and interest involving the change. There are some aspects regarding stakeholders and the change process that should be taken into consideration. Differentiating and grouping employees and deciding how to deal with different types, planning communication in both directions and also looking after the interests off all individuals. There are mainly four types of stakeholders, blockers, sponsors, champions and sleepers Green (2007). Blocker have high power but low level of commitment, while the sponsors have high power and high commitment. Also Champions have high energy and high commitment while sleppers have both low power and low commitment to change. For a successful change it is important to identify the stakeholders with high power and commitment.

British Airways has a number of stakeholders who have various interests in the business and from whom the company expects different things. There have been conflicts between these stakeholders due to their differing interests as well as formations of coalitions. It can be observed that most stakeholders have an interest in the organisation performing well. In the above context it is important that the stakeholders are analysed according to the power and commitment grid so that change can be successful.

Planning the change

The change process must be planned and it is advisable to use models of change and also consider the impacts of resistance to change. Two different change models are discussed in the following section, namely the Mckinsey 7-S model and Lewins Model. The basic principle of the model is that there are seven internal aspects of an organization that need to be aligned if it is to be successful. The 7S model can be used in a wide variety of situations such as improving the performance of the company.

The McKinsey 7S model contains seven interdependent factors which are categorised as hard or soft elements. Hard elements are strategy, structure, systems and soft elements are shared values, skills, style and staff. The Hard elements are easier to identify and influence while the soft elements are more difficult to manage but equally important for a successful transformation. The model depicts the interdependencies of these elements in terms of how a change in one element affects the others.

According to the model the seven elements must be aligned. In the case of BA, the model can be used to identify what needs to be realigned to improve performance during other changes in the company. What ever the change is this model can be used to understand the interrelationships. Further it can be used to analyse the current position, proposed position and identify the gaps between the two. It is also necessary to adjust these elements to make sure the company works effectively.

Now let’s examine Lewin’s change model. According to Lewin, there are three stages of change in an organisation which are unfreezing, movement, and refreezing.

Unfreezing Stage

accordingly, the first step for BA is to unfreeze present pattern of behaviour to manage resistance. In this stage change did make an impact on individual level due to the implementation of Downsizing of Workforce policy to restructure the organisation. This policy reduced hierarchy, and allowed worked to be carried out easily thus improving performance. (Shibata., K., 1993) The downsizing was achieved through compassion. BA also introduced training programs such as Putting People First to help line managers and workers understand the change and the requirements of the industry.

Movement Stage

The second stage of Lewin’s Model is movement. During this stage BA used tactics and programs to bring the vision of the top management and line employees. In support a number of new systems where implemented. (Goodstein., D., L. & Burke, W., W., 1991)

Refreezing Stage

In the refreezing stage the company stabilized changes by establishing systems that can establish behavioural pattern in the organisation. A new performance appraisal system based on behaviour and results was introduced to encourage customer service. (Goodstein., D., L. & Burke, W., W., 1991)

Resistance to change

It is not easy for an organisation change its structure and business processes since any change may lead to some level of resistance by the employees. One of the main causes for resistance is the fear of the unknown and loss of what is familiar. There are four reasons of resistance from employee to organisational change including 1) Parochial self-interest, 2) Misunderstanding and lack of trust, 3) Contradictory assessments, and 4) Low tolerance for change. (Buchanan D. & Huczynski A., 2004) BA tried to change behaviour by changing the management style from authoritative to participative. BA wished employees participate more in management decision but since this was unfamiliar employers would fall back to the old patterns.

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