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A SWOT analysis of British Airways

LEADERSHIP THEORY

Leadership Theory can be defined as assumption of distinguishing some characters of a particular kind of leader. The theories will focus on particular qualities i.e skills of the leader that distinguish the leader from the follower. (Identified by Stogdill in 1974).

Leadership outlines what needs to be done by creating and identifying new ideas and establishing a vision and clear direction. However according to Johnson, Scholes & Whittington, leadership is the process of influencing an organisation in its efforts towards achieving an aim or goal.

Eight main Leadership Theories are discussed as below:

Great Man Theories

This theories assumes that Leaders are born not made, the theory portray great leader as rose because they were born to lead, this theory was dominated by primarily male, military and western. This theory led to the Trait Theories.

Tait Theories

The Trait Theories assumed leaders or people inherit particular qualities which makes them better to leadership

Contingency Theories of Leadership

On this leadership Theory it focuses on situational point of view according to the situation, success is actually depend on variables i.e Leadership style, qualities of the followers.

Behavioural Theories

This theory emphasise on what actually the the leaders do rather than their qualities. The theory says an individual can learn and become a leader through teaching or observing. (Peter G Northhouse, Leadership Theory and Practice, Third Edition)

Situational Theories

This leadership theory talks about leaders base their decision according to the situation they are facing in front of them.

Participative Theory

The participative leadership theory encourages that best decisions have to be contributed by all participants.

Management Theory

Management leadership Theory focuses on roles of organisation, supervision and also group performance. Also on giving rewards, recognition for those who follow in return for their commitment. (Knoontz and O’Donnel, 1984)

Relationship leadership Theory

This Theory focuses on connectivity between leaders and followers, it help group members by inspiring them and also each member fulfilling its desired organisational performance.

Johnson et al quoting Farkas and Wetlaufer, identified five approaches to strategic leadership. These are:

Strategic Approach. In this approach the leader focuses on strategic analysis and the formulation of strategy. Other managers take responsibility for the routine operations and for the management of change.

The Human Asset Approach. Here the main activity of leaders is the development of the organisation’s people. Other managers take responsibility for strategic management, such leaders are concerned to recruit the right people and to develop the right culture.

The Expertise Approach. This focuses on some form of technical expertise as a source of competitive advantage and concentrate on building experts through systems and procedures.

The Control Approach. This is box approach and leaders follow this approach by concentrating on setting procedures and control measures and monitoring performance.

The Change Approach. The leader under this approach focuses on continual change and expends much effort on communication and motivation.

Importance of leardership skills in 21st Centuary and its practice by leading organisations

Leaders need to display a wide range of skills for example Bill Gates founded the Microsoft Corporation in 1975. Microsoft is one of the global leaders in software, service and solutions that enables people and businesses to maxims the value of computers in their lives. The display which Bill Gates has displayed so far and other such as Jack Welch former Chief Executive Officer of GE can be summarised as follows:

Building Vision for their companies, meaning that the leader has a vision meaning he/she has a clear idea of what he/she wants to do and will know when they get there.

Goal setting so that milestones can be measured

Able to communicate the vision to the rest of the staff

Should be able to build coalitions and network with others.

Be able to monitor and control their objects and goals

Are able to facilitate and deal with conflict within their organisation and outside.

3. Organisational change process.

Change in an organisation can occur at the different levels within an organisation such as at Individuals, structures and systems, organisational climate. Organisational change process can be defined as the process of planning and implementing change within an organisation. (BPP, Management in Practice, June 2009) Change is always required for businesses, and its managers. Organisational change can be in the contest of acquiring new technology in the company, change in Technology advances, Organisation structure and size, response to the changes in the environment.

Changing individuals involves changing their skills, values, attitudes and behaviours. The individuals have to support the overall organisational changes required.

Changing structure and systems involves changing the formal and informal organisational structures in place and this may involve changing business processes or roles.

Changing the organisational climate involves changing the way people relate to each other in an organisation, management style and the culture. For example change may come in the form openness between staff and trust.

Lewin suggested that organisation changes actually have three steps namely: unfreeze. Move and freeze or refreeze

This is called the unfreeze-change-refreeze model. The unfreeze step involves unfreezing the current affairs and creating the motivation to change.

While on change step this involves learning new concepts and new meaning for existing concepts. This is a transition stage, by which an organisation moves from current state to its future state.

The refreeze stage involves internalising new concepts and meanings by setting policies to embed new behaviours, establishing new standards.

The main problem with Change is the impact change has on people in an organisation. Managers have to understand and accept that human nature might fear change due to the following reasons which will affect the organisation in the long run. The following suggestion can be made in order to achieve change effectively.

Change management initially starts at planning stage by identifying need for change and holding meetings to allow any objective, fear, and misunderstanding of the staff. This should be operated by the open door policy.

The need for the organisational change should be clarifies to all stakeholders. All feedback should be made by the staff.

The organisation should contact all internal marketing of the change programmes.

Organisational change should be scheduled according to the intended objectives of the change. i.e in 6 months time all staff in the accounts department should learn and understand the SAGE computer programme in order to reduce inefficiency

How change will effect the operation in long run

What needs to be noted is that any change programme will have an impact on an organisation’s staff as individuals. People respond to change in different ways and develop their own ways of coping with change. In this way change will affect the operations in the long run. Since leaders will have to make sure that the new change becomes part of everyday working life. This will involve continually reinforcing the new ways and finding ways to communicate, celebrate and reward achievement.

British Airways

British Airways plc is an airline company of the United Kingdom. The BA has the largest fleet of aircraft of any British airline, but is among top five in terms of international passengers carried. Its main hubs are London Heathrow and London Gatwick.

The British Airways was formed on 1st September 1974 through nationalization by the (then) labour Government. BA was formed from two large London based airlines BOAC and BEA and two much smaller regional airlines Cambrian Airways Cardiff and Northeast Airlines Newcastle. All four companies were dissolved on 31 March 1974 to form British Airways (BA). (British Airways company profile)

The need for change for British Airways (BA) was driven by a number of factors and was started by the appointment of Sir John King as chairman of BA. His vision was to make BA “to be the world’s favourite airline” this was the goal BA was set to achieve- putting the customer first.

In 1981 the new conservative government has set out to privatise BA and this was an external driver that was evident to everyone working at BA and as Chairman he used this to impose several important reforms that would have been difficult to achieve in other conditions.

Between 1981 and 1983 BA had suffered heavy financial losses and this gave the chairman Sir King the permit to bring change.

With the BA’s strategic intent of putting the customer first as the focus for the organisation and the chairman’s stance above the project team was created to act as change agents to manage the project of change.

Internal also the BA wanted to create a new corporate image followed up by lively and new advertising campaigns one of them was BA’s “we brings a million people together. “

The above events and other factors brought the change which was needed at BA which created a not a long lasting solution as currently BA is struggling as a result of a number of issues ranging from credit crush, to fuel prices raising.

The economical downturn presented a challenge to British Airways. BA planned to cut jobs because of the loss it suffered. Its revenue for the period of 6 month went down by 13.7% compared to 2008/9. www.bbcnewsonline 6/11/09. Operational changes are absolutely necessary in order to improve the performance of British Airways.

British Airways is planned to changes on jobs and pay, i.e cutting down the number of cabin crew on its long haul staff also BA proposed a two year pay freeze and narrated that these changes are necessary to BA’s survival in this economical downturn. The above situation posed a big threat in the British Airways survival (Saj Ahmand from Lehrman Group)

BA reacted by launching small personalised services. Ie innovative all-business class service from London to New York. According to BA this was an instant success (BritishAirways2009/10/annual report). Willie Wals,h Chief Executive. Also BA introduced new service which was the self check at some of its terminals.

SWOT analysis of British Airways

A SWOT analysis is a tool which is used for auditing the organisation (BA) and its environment and enables decision making for all sorts of situations in a business or organisation. The acronym stands for Strength, weaknesses opportunities and threats. The tool was originated by Albert S Humprey in 1960. Swot Analysis can be used for decision making i.e In British Airways it can be used for the following:

The Company, The Position of BA on the market compared to the competitors. BA’s viability.

Product brand/services in BA

A Business Idea in BA

A Strategic option i.e BA entering a new market or coming up with a new service.

A potential partnership, i.e BA joining or entering into a contract with other Airlines like Liberia Airways.

SWOT ANAYLSIS FOR BRITISH AIRYWAYS

Strength

Weakness

The Chairman’s passion for change

The Imminent change brought by the conservative party in the 1980’s

The heavy losses suffered by BA

Easy to persuade managers and employees

Cost cutting exercise was on the cards

British Airways reach, and awareness of experience in the aviation industry.

No management skill of change management

Loss of skilled labour and management

Solution not long lasting

Failing to breakdown internal barriers

The lack of skills to motivate workforce to achieve this goal of change

British Airways luck of competitive strength.

Opportunities

Threats

Focus on the new opportunities

Clear strategy was in place initiated by the Chairman

The privatisation of BA under the Conservative party lead government

The new marketing drive of BA and the firing people and cutting budgets

Technology innovation of BA i.e. Self check in services.

Partnership with other Big airlines which makes BA strong on the market.

Resistance to change by both management and staff.

The trade unions and law suits due to redundancies.

Change of government policies and intense competition

Environment effect i.e. pressure groups campaigning against expanding of the airport due to environmental issues.

The dynamic and ever changing marketing environment through the PESTEL factors

Loss of important staff due to industrial strikes.

Natural disaster, Icelandic Ash which prevented a big threat not only to BA but all airline industry.

Weather – heavy snow which presented a big threat to BA.

SUMMARY

By identifying British Airways SWOT Analysis managers will be able to develop strategies in order to remain competitive on the market. The Analysis will evaluate the impact of internal and external factors of British Airways. The internal process is the one considered strength and weaknesses. All aspects considered opportunities and threats are external factors of British Airways which they might not have control over it.

The objectives of organisational change in British airways should be communicate to all British Airways stakeholder in the company most important the customers. Also Change management for British Airways need to be scheduled according to the stated objective of BA.. To succeed in meeting objectives plans for changes should be monitored and measured against the objective of the change. Also by communication the organisational changes as benefits not a cost in a long run to both BA and its Stakeholders.

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