Change Management Compulsion Or An Option British Airways Business Essay

There is a famous saying stated by an unknown author – ‘The only thing that is constant is change’ (Berman, 2007). With the current changing customer requirements and external environment necessities, organisations which behave as closed systems and do not constantly change themselves to fit the market requirements and customer demands will fail in the long term (Harigopal, 2006). Organisational change is an ongoing process which brings the systems and procedures of the organisation in line with the factors prevailing in the external and internal environment of the organisation (Nemetz and Fry, 1998). As business management gurus argue, external forces of change require not only ‘adaptive’, ‘flexible’ organisations and ‘new ‘ management approaches but also competent managers able to adopt to changing times and to manage organisational change (Beckhard and Harris, 1987).

It is essential to understand how organisations in the real world implement and deal with organisational change. One such organisation which has implemented various change methodologies in the past few years in response to the changing business environment is British Airways. British Airways is the UK’s flag carrier and one of the largest airlines in the world. Like many large organisations, the airline has had to change its strategy, technology, structure and culture in order to achieve competitive advantage in today’s rapidly changing global business world.

1.2 Aims & Objectives of Research

The main objective and strategic aim of this study is to explore the role and significance of Change Management in this era of globalization and changing market needs by taking the case study of British Airways in specific.

Research Question- The primary research question of this research study is: To explore the extent to which change management is necessary for a firm to achieve sustainable competitive advantage? Additionally, the secondary research question is to examine the change management initiatives previously taken by British Airways to attain competitive advantage and profitability.

1.3 Literature Review

This chapter will highlight the various aspects of change management. It will use academic research to understand the concept of change management by looking at its definition and determining the various approaches of change management. It will then describe the framework for change and various change management initiatives taken by organisations. The various change models will also be listed and analysed and the organisational background of British Airways will be provided along with a SWOT analysis of the organisation.

1.4 Methodology

This chapter will determine the methodology used to conduct this research and the reasons for various data collection methods chosen. It will also look into the philosophical aspects of the research study.

1.5 Research Findings and Discussion

During this chapter the researcher has analysed the findings and compared these with the literature review and methodology to establish the extent to which change management is necessary for an organisation to sustain competitive advantage and the role and significance of Change Management initiatives taken by British Airways to attain profitability.

1.6 Conclusion

The last chapter is the Recommendations and Conclusion chapter. This chapter will list the recommendations generated from the research study findings while also bringing to light the limitations of the research study. The references used and the research related appendices will then be presented at the end of the research study.

CHAPTER 2

Literature Review

This chapter will review the existing literature on change management. It is important to understand current research on the subject area, to enable the reader to ‘understand the nature of the existing knowledge of the subject’ (Denscombe 1998, p.15). Specifically, this literature review will focus on the following issues; Firstly, it will determine the definition of change and list the various types from the typology of change. Secondly it will describe the framework for the change process, generic model of change and the various change management diagnostic models are discussed. Thirdly the importance of communication in Change Management is explained. Fourthly the SWOT analysis is also described along with the various change initiatives taken by organisations in the aviation industry.

2.1 Typology of Change

Change in academics is defined as the ‘substitution or succession of one thing in place of another’. As per research studies conducted, it is identified that the patterns of change repeats and is recurring in every industry. These patterns of change constitute of incremental and radical changes. The increasing frequency of these patterns of change in various industries over the past couple of decades has necessitated for organisations to predict the pattern of changes in their external industry environment so that they are better equipped with the resources and capabilities required to embark upon change and maintain their competitive advantage. A ‘typology of change’ was developed by Nadler and Tushman to outline the various abilities of organisations to predict the patterns of change in the external industry environment. They have divided the ability to predict changes into two types of proactive and reactive while listing the scope of change as being transformational or incremental in nature. The typology of change is created by Nadler and Tushman by developing a matrix of the type and scope of change. They have differentiated the change strategy among organisations into four types of fine tuning, adaptation, re-orientation and re-creation. These strategies have been described in the following paragraphs (Hayes, 2007 and Chaffey, 2006).

The first two changes of fine tuning and adaptation in organisations which occur are incremental changes. Fine tuning is the change process where organisations are proactive and will try to fill in the inefficiencies and gaps internal to the company when compared to the changing external environments which act as reducing agents to the effective performance of the business processes of the organisation. Adaptation is a reactive change process where the organisations have to make changes to their internal processes after they have felt a threat in their competitive position due to the changes made in the organisation. These changes are limited and do not affect the core functions or business processes of the organisation but are targeted towards reducing or removing the threats from the external environment and competition in an effective manner (Cook, Macaulay & Coldicott, 2004). The two changes although occur for a long duration, are only basic changes and do not impact the fundamental aspects in which the organisations operations work (Hayes, 2007).

The change processes of re-orientation and re-creation are both transformational in nature since they impact the fundamental operations of change. They occur when the need for change is vital to survive (Poole & Van de Ven, 2004). The re-orientation change process in organisations basically requires organisations to change or re-define their existing corporate or business strategy (Chaffey, 2006 and Hayes, 2007). This change is conducted for two reasons. The first is to pro-actively prepare the organisation for the future changing external environment or to change the external environment itself by innovation such that the core competency of the organisation is increased over its competitors (Hayes, 2007 & Potter, 2004). In Re-orientation, since there is no external threat to the organisation and it is being pro-active, it is difficult for the employee workforce to understand the need for such a drastic radical change. This change process requires the management of the organisation to create a sense of urgency and a necessity for change among the organisational employees so that the change process can be enforced. Otherwise it is difficult for organisations to implement this change. The last type of change process is Re-creation. This is a forced change and is transformational in nature. This type of change is implemented by organisations when they feel they need to change their core operations in order to sustain in the changed external environment. In most scenarios, the success of these re-creation changes can determine the survival of the organisation. These changes however are high risk changes since the organisations do not plan these changes ahead and do not, in most scenarios, have the required time and resources for their successful implementation. The change impact is mostly lower than expected for many reasons such as low involvement and motivation among employees, inadequate readiness in management etc. This change if not tackled effectively can lead to employee resistance and de-motivations (Chaffey, 2006 and Hayes, 2007).

2.2 Framework of Change

The framework of change as developed by Lewin (1951) constitutes of the same three steps in all change processes. These steps are unfreeze, change and refreeze. Unfreeze is where the organisation tries to create an urgency for change so that the employees and the management are ready for change. Change, as the name indicates, is the second stage where the change occurs. Freeze is the final stage where the change made is now ensured to become part of the organisation. As per the framework, every change process has a higher level of uncertainty leading to resistance among employees. However, certain techniques can be adopted in order to avoid this resistance. One of these techniques is to introduce additional steps such as ‘identifying the future state’ prior to implementing the framework of change (Weick & Quinn, 1999). There have been many new models which have evolved in the past few years which have tried to add more steps or make modifications to this model. One of them is the ‘generic model of change’ created by (Hayes and Hyde, 1998) however, the general concept and baseline in all these change models is still the same.

The generic model of change signifies the change process to be continuous in nature. It states that the change results of one process act as the triggering factor for some new required changes. Change process begins by determining the internal inefficiencies and improper capabilities of the internal organisation and the external environment in the industry the organisation operates in and using this gathered information to develop the new organisation’s strategy. This new strategy will now automatically implement the new anticipated change in the organisation (Johnson, Scholes & Whittington, 2008). The ability to determine the correct strategy is the most crucial step in any change process since an incorrect change strategy can also be implemented successfully however it will not deliver the same benefits and fill in the required market inefficiencies as required and the overall change process can in turn be a failure (Buttrick, 2005).

After looking at the above studies, the change process is modified as below. The initial aspect of the change process is now moved to identifying the resources required to implement the change process and the various techniques which can be used further to begin unfreezing the organisation. While this is being done, the organisation’s inefficiencies and gaps with the external environment are determined in order to develop the change strategy. This change strategy is designed that such that it achieves the anticipated future state of the organisation and reviewed to make any modification such that it is aligned towards realising the future state. The next step is to create a change plan before directly implementing the change. This change plan is implemented on a step by step basis and upon completion of each step, it is reviewed to determine if it is still aligned or the future state and rectify any identified deviations. Once this is completed and the future state is realised by the organisation, new techniques in order to merge this change with the organisation’s culture will be implemented. This is when the final stage of refreezing appears and the success or failure of the change process and the involved resources is determined. It is also used to collect feedback of the change process and reward the resources who had performed effectively towards achieving the future state (Jones, 2008). This generic model of change created by Hayes & Hyde in 1998 and the change framework developed by Lewin in 1951 are both effective models which can used to implement change. However, both these models ignore one crucial aspect of change management which plays a vital role in the success of any change event, people management. Without effective people management, it is impossible to implement change in any organisation successfully.

2.3 Change Management Models

There are various models which can be used to diagnose the success of a change event or the need for a change event. These models reduce the overall change process into a few key factors which need to be taken into consideration while implementing the change process in any organisation. They allow the management to determine the key aspects from both the process and the people perspective which need to be looked into. This in-turn increases the ability of change managers firstly to implement the change process successfully and secondly to evaluate its success and take necessary actions (Hayes, 2007).

One of these models is the McKinsey 7S model. This model divides the change process diagnosis into seven elements which can be used to determine the existing internal environment status in a firm. These seven elements are strategy, structure, systems, staff, style, shared values and skills. The internal organisational efficiency of an organisation is determined successfully using this model and its results can be used to develop the internal strategy of the organisation (Saunders, 2007). This model can be used to develop change initiative programmes in organisations and develop a strategy which will achieve the overall internal fit in the firm however, it cannot be used to determine a fit between the internal capabilities of the organisation and the external environment in which it operates leading to a necessity for another model which takes this into consideration (Burke & Litwin, 1992).

The model which takes this into consideration is ‘The Burke-Litwin causal model of organisational performance and change’. This model is used for many purposes such as to identify the type of change implemented, whether it is incremental step-by-step change or a radical change or to determine the overall effect of using change management procedures in organisations while determining the performance of these management initiatives. This model constitutes of various elements which are crucial for a change process. The input element is the organisational performance and the output element is the individual and organisational performance. The other factors in the model are the through-put of the model. The model’s elements are further divided into two types of factors. The five factors of external environment, leadership, mission and strategy, organisational culture and the individual and organisational performance are the transformational factors while the remaining factors are the incremental factors. They are distinguished so based on the ability of the factors to influence the type of change. One of the successful applications of this model was to determine the success and performance on the change processes implemented in British Airways in the year 1983 (Burke & Litwin, 1992).

(Burke & Litwin, 1992).

This model will again be used in this study to determine the performance and effectiveness of the change management strategies used in British Airways in the past year.

2.4 Communication in Change Management:

One of the key aspects of any change process in terms of people management is communication. If the communication is ineffective or missing, then the employee resistance to embrace the change only increases further. The communication strategies used by various organisations are different and this determines the amount of information shared by them with their employee workforce. Another factor which affects this amount of information shared with the employees is the management’s personal views and understanding on the subject of change management and importance of communication. The Spray and Pray strategy used by management is where the information provided to employees is not considered or evaluated by the management to determine if it is actually relevant to them or not. This sort of communication can allow the vital and relevant information to be buried under irrelevant and not so vital information and reduce the overall necessary impact of communication on the employees. The management which chooses to share the relevant information with their employees and also provides them with the various benefits of the change implemented to these employees use the communication strategy of Tell and Sell. In this scenario, the communication effectiveness is higher than the previous strategy and the amount of the information shared is lower. One of the most effective communication strategies which can be adopted by management in any change organisation is the Underscore and explore strategy where the information is provided to employee workforce in exact reference to the change situation and the various inputs provided by the management are considered at the same time. This ensures that the employees feel to be a part of the change being implemented and reduce their overall employee resistance. In the other two communication strategies of Identify and reply and withhold and uphold, the information shared with the employees is not adequate and the management withholds some crucial elements of information which can increase the employee resistance to accept change. The below diagram represents the various communication strategies in accordance with the communication effectiveness and the amount of information shared by the management (Clampitt, DeKoch and Cashman, 2000).

Figure-2 : Communication Strategy Continuum  (Clampitt, DeKoch and Cashman, 2000)

2.5 SWOT Analysis

To determine the inner fit of an organisation with an external environment, one of the techniques which have proven successful on numerous occasions is the SWOT analysis. This SWOT analysis is divided into two segments, the internal factors segment which constitutes of the strengths and the weaknesses of the organisation and the external factors segment which constitutes of the opportunities and threats presented by the external environment in reference to the organisation. The role of strengths and opportunities is to determine the internal capabilities and inefficiencies of the business processes and the employee talent of the organisation. The role of opportunities and threats is to determine the external environment that the organisation is functioning in and find ways in which it can either support or act as a danger to the organisation’s functions. Once these are determined, it is then determined how the internal strengths of the organisation can be used to benefit from the external opportunities of the industry environment. The weaknesses are also looked into to determine if there is a possibility to change into a threat and how this movement can be avoided. The threats are looked at from the perspective of changing them into opportunities or reducing their possible impact on the organisation. The weaknesses are also worked upon in a similar way, to reduce their impacts and risks to the organisation or to remove them altogether by changing them into opportunities (Briggs, 2001).

2.6 Change Management in Organisations in the Aviation Industry:

Some of the change initiatives which have been experienced by organisations in the Aviation industry are the privatisation of companies such as Qantas airlines. This happened at the same time as most industries in various nations were moving towards privatisation and de-regulation while moving away from the shadows of the public sector. The change process was rapid and radical in nature. Another change in the aviation industry which was not just restricted to one organisation was the agreement of global alliances among the various international and domestic airlines in the global market. This changed the structure and process of operations in the Aviation industry while also bringing in harmony the use of labour and the strategies adopted by management across various airlines in the industry (Fairbrother, 2002). Another change initiative which was related across airline companies was the use of part time and casual employees so that they can benefit from using them when required and paying them only for the number of hours employed. This has allowed them to reduce the overall labour costs however, in most airline companies; most of the part time employees did work overtime just as much as full time employees leading to no change in the overall labour costs (Dawson, 2003). The privatisation of the airlines is not just limited to Qantas airlines but has increased further to British Airways, Lufthansa, Air France, KLM etc (Delfmann, 2005). An additional change management initiative is the collaborative effects among most airline companies to ensure a reduction in the carbon footprint overall and thus support the climate change initiatives along with the various other industries and governments (Bishop & Grayling, 2003).

Steve this is the other introduction to the research study I written, but I’m unsure if this is perhaps too current as it relates to the current global economic recession. Could you advise if it is maybe best to delete the information I have highlighted in bold and continue with the original introduction I have written on page 3.

Introduction to the research study

There is a famous saying stated by an unknown author – ‘The only think that is constant is change’ (Berman, 2007). With the current changing customer requirements and external environment necessities, organisations which behave as the closed systems that do not constantly change themselves to fit the market requirements and customer demands will fail in the longer terms (Harigopal, 2006). The punctuated paradigms irregularities frequency has increased over the past decade implying that the change in organisations is not as fast or as paced as the change in external environments which in-turn is increasing the gaps between the customer requirements and products/services provided by organisations (Hayes, 2007). This has made it crucial to study the significance of change management internally in organisations so that this building gap can be reduced and organisations can benefit from these constant changes through adapting their culture.

The recent economic recession and credit crunch with a decreasing GDP rate across the United Kingdom in 2008-09 (Statistics, 2009) has forced organisations to find new ways to reduce costs for the products and services generated by them so that they can survive in this difficult climate. Organisations responses to these necessary changes being forced upon them is being tackled using various techniques such as economies of scale (Grant, 2005), internal re-structuring and creating new operational processes which will reduce their operational and maintenance costs. This in-turn has led to need for effective change management in such organisations so that the changes implemented are widely accepted by the workforce which in-turn ensures that success from the implemented change techniques are achieved (Cameron & Green, 2008).

One such organisation which has implemented various change methodologies in the past few years in response to the changing industry environment is British Airways. The organisation like many others has undergone some changes in their strategy, technology, structure and cultural aspects in order to survive in the changing environment and maintain the organisation’s core competency. British Airways will be used as a case study in this research study in order to achieve the aims and objectives of the research study.

Many literatures focus on change management in organisations enforced due to various reasons and either at the beginning or at the end of the change management procedures being implemented. However, most of these researches have not taken into consideration the change management forced by external environments due to an economic recession especially since this scenario is not very common or recurring constantly. This research will contribute to the existing literature by using economic recession as one of the external factors leading to implementing changes in the airline industry. This research study will attempt to act as a guide to further researches who wish to identify the necessity for effective change management in the airline industry organisation especially when the external contributing factor is the economic recession.

Sharon,

This is a very well written first draft of your dissertation. I think there are some very good elements but there are also quite long passages where there are no references cited. I think if you do a little more reading and address these ‘gaps’ then you will have the basis of a very good literature review.

Steve