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This report is about how Companies should modify and implement their Management Strategies. There are three companies which I investigated include British Airways, and Air Canada and Air France. This report include 6 Tasks.
Task 1 is designed to select three (3) organizations/companies, perform detail investigation of each of these organizations Investigate participation of stakeholders, to produce a presentation for the selected companies and a suitable structure for the company and involving the stakeholders.
Task 2 is to analyze the feedback of the stakeholders, make suitable plans (solutions) to involve the stakeholders in the process. Also to consider the resources needed for the company plan. Construct strategies to satisfy these requirements and write a report to present the outcomes.
Task 3 is designed to identify the Core Values of British Airways, SWOT and PESTEL Analysis of British Airways, Ethical Cultural Social and Environmental Background of British Airways and to write short Report on Company Values.
Task 4 is scheduled to develop a Mission Statement and to create a new Vision Statement.
Task 5 is to define objectives and set the Objectives for British Airways Evaluating the new Objectives created for British Airways.
Lastly, Task 6 is designed to analyse issues around the implementation strategy. To produce a realistic timetable for the strategy implementation and to create appropriate dissemination processes to gain commitment of all the stakeholders.
Noteworthy is the great work of management professors used in this project work. They include Stiglitz, Michael Porters and Drucker. These are great management authors whose work of art has done a tremendous work and has a great impact on the various management around the world for strategic placement.
FOR A RECOMMENDATION ON THEIR MANAGEMENT STRATEGY
To become the world’s most responsible airline
www.businessdictionary broadly defined strategy as a alternative which is chose to make happen desired future outcome, such as achievement of goal or solution of problem.
In other words art and science of planning different recourse for most effective and efficient use. So organization must achive target to get strategy succeed. Accordingly management guru peter Drucker, strategy objectives falls in to 8 groups.
Human resources: selection and development of people/staff
Innovation: development of services, methods and skills
Market standing: desired shared of new and present market
Physical resources: facilities and equipments
Social responsibility: awareness towards shareholder and community
Profit: measurable financial well being
Financial resources: identification of capital
Productivity: in other word output
British Airways Plc and its subsidiaries’ main operation are international and domestic scheduled air services for the passengers, freight and mail and the provision of ancillary services.
Select three well-known organizations in any industry.
Provide a detailed investigating of their organization and management strategies.
Investigate the Participation of their Stakeholders – identifying each type of stakeholder.
Produce a presentation of the Company you select that you think is struggling.
Propose a suitable structure and solution for the problem for the company selected. The Presentation should involve feedback from all the Stakeholders
BACKGROUND AND OVERVIEW OF BRITISH AIRWAYS
British Airways plc is the one of the main airline in UK. It got headquater in waterside near main London Heathrow Airport. It is largest airline of uk having international flight with different international destination. Second main hub is Gatwick airport. Currently BA discontinued all its flight from all other UK airports.
On 12 November 2009, British Airways confirmed that it had reached a preliminary agreement to merge with Iberia. The merger between the two carriers will create the world’s third-largest airline in terms of annual revenue and the second largest airline group in Europe. The merger was confirmed on 8 April 2010, and it is expected to be completed by the end of the year.
From (‘British Airways’ 2006a company website)
LIST OF STAKEHOLDERS FOR BA:
BA stakeholders are as under:
Management and shareholders
Debtors and creditors
Passengers / customers
The mission statement of British Airways is ‘To be the undisputed leader in world travel for the next millennium’.
The vision statement reads ‘To become the world’s most responsible airline’.
OBJECTIVES OF BRITISH AIRWAYS
British airways objective which state `Be the airline of choice for long haul premium customer so that people want to fly with us whenever they can`
In an incredible tough trading environment BA have to focus on pulling their selves through the immediate problems, while preparing business for better future in this economic time. Their objective is to go towards world’s leading global airline.
They aim to introduce great products like new business class seats, restyling of first cabin. Its also planning to develop New York JFK in other word to complement its home terminal Heathrow. So above is the main objective of BA.
It also provides world class service to customer by providing proper training to their colleagues, doing hospitality in the air and on ground too. Customer can check in online by mobile or PDA. Which constantly improve BA.
MANAGEMENT STRATEGIES OF BRITISH AIRWAYS
Strategies is basically combination of drafting, implementing and evaluation of cross-functional decision to achieve long term objectives. To channelize any organization’s vision, mission and objectives by developing different policies and plans.
Balance score card is used to evaluate performance of business overall progress towards objectives.
According to Arieu (2007), “there is strategic consistency when the actions of an organization are consistent with the expectations of management, and these in turn are with the market and the context.” (http://www.britishairways.com/cms/global/microsites/ba_reports0809/pdfs/Our_business)
Below are the few strategy of British Airways which followed by company at different level to make major changes. They are as under:
To cope with the serious competition with other airlines BA follow below strategies of customer care:
Be the airline of choice for long haul premier customer
Deliver an outstanding service for customer at every point
Meet customer needs and improve margin through revenue stream
Grow presence in global cities
MERGER AND ACQUISITION – ALLIANCE
In merger two companies agreed to move ahead and exist as a totally new company, which can be equal or unequals. Number of alliance increased by 25% in last decade. BA adopted this strategy well as in 2009 BA had preliminary agreement with Iberia which result in world third largest air-line in term of revenue and second biggest in Europe, which confirmed in 2010.
MAKING BETTER THE FACILITIES OF THE AIRLINES
To cope with the competition with other airlines BA improves some primary facilities and amenities to improve airline service. This is done by introduction of new information system and in addition to that BA take initiative in following area:
First in offering jet passenger service
First in weather beating auto landing
Online check in
Offer fully flat beds(2006)
In addition to all that BA believes in fundamental global cultural system, which does not limited to environmental, political, economical or cultural matters.
Diversity is the unique element in BA which does not associate with religion, age, gender, culture, and ethnicity. Thus they follow this strategy for staff as well as passangers.
THE MENDALOW MATRIX FOR (BRITISH AIRWAYS) STAKEHOLDERS
A stakeholder analysis is the method used to identify and investigate the force field by stakeholders or its activity, which can affect the achievement of objective of any organization.
The relationship between stakeholder and organization matters in term of effect to the company.
Mendalow’s matrix show stakeholder relationship with company and its effect to it.
Stakeholder group with—————-Level of importance
High interest and high power —————High importance
Low interest and high power —————Medium importance
Low interest and low power —————-Low importance
High interest and low power —————-Medium importance
on the base of above matrix below is stakeholder relationship with BA is as under.
Passengers – customers:
Customers of British Airways are primary stakeholders without whom there is no existence of this aviation industry. no customer no industry and thus no business at the end. So passengers satisfaction should be BA’s main strategy which they are fulfilling with satisfaction and comfort with the motto of value for money. They provide service as per required and promised. Then only as a result getting loyal customers. So passengers categorized in high interest high power category and deserve high importance as their decision power affect the industry the most.
The shareholders and management:
Shareholders are the people who invested major share of money in the business. They are the one who design vision, mission and objectives through which company get the way to get along. These group of investor recruit set of people who manage the company according to vision and achieve set goals and earn profit to company. This group of people is as important as first group as without investment company formation is not possible thus this fall in to high: high level too.
The members of staff:
These set of people live the vision, mission and objective of company set by investor with their skills, knowledge, hard work and intelligence. They are employee of the company and normally they are the people who normally take decision to make it happen.
Government is mainly interested in public benefit which is possible by tax regulation. When organization pay right amount of tax which is normally used by government in the benefit of infrastructure. On the other side it also concerned about environment disaster so there are certain rules and regulation formed by government to prevent damage to environment.
The larger community:
Here the larger community is the society which is basically host of the company. Which look after how company is carring its social responsibility to community. Sometimes few decision of company which can make adverce effect on community face oppose of the community.
Creditors and debtors as well:
They are the financer of the company so from both side decision directly affect the organization. This can be either financial or nonfinancial too. This group can creat a big problem to company.
The aviation industry:
Other competitor and authority falls under this group. And all the airlines has to follow rules set by the aviation authority so growth of BA depends on those rules which set the boundaries for BA to how far they go.
Presence of these group make industry competitive. Some time the stronger one put down weaker company by introduction of promotions. They are very strong as stake holders as they share profit of the same industry. BA got competitor such as air france, Lufthansa, Canada airways and many more.
Low + Low: Small customers, Small Shareholders
Low + High: Employees, Environmental Groups, Local Community
High + High: Institutional Investors, Local Planning Authority
High + Low: Major Customers, Central Government, Media
According to the company website jetairways.com Jet Airways has come a long way since its first flight in 1993. It’s one of the fastest growing airlines in the world, and now it’s all set to change the way you fly – for the better!
Jet Airways operates flights to 24 international destinations and 43 destinations within India, thus offering you a better choice in the skies.
With 67 destinations, we connect a place every 5 minutes.
To be the most preferred domestic airline in India.
To be the first choice of carrier for the travelling public and set standards which still other competitors are trying to match by offering high quality of service and reliable, comfortable and efficient operations simultaneously ensuring consistent profitability, achieving healthy returns on long base for their investors and healthy environment for the employee too.
Jet Airways will be the most preferred domestic airline in India. It will be the automatic first choice carrier for the travelling public and set standards, which other competing airlines will seek to match.
According to the company website www.canadianairline.com/aircanada.com, in the Canadian market Air Canada is largest airline and flag carrier founded in 1936 provide cargo and passenger to 178 destination worldwide. Toronto Pear son International Airport in Ontario is the largest hub. Montreal-Pierre Elliott Trudeau International Airport in Quebec is the main base. It is world’s 7th largest passenger airline .
The mission statement of this airline is ‘connecting Canada and the world’
The vision statement of this airline is ‘building loyalty through passion and innovation’
Mission and vision statement give guideline to follow the goal.
Safety first and last: 100% all the time safety is company’s priority.
Working together: with customer, community and employee
Customer is valuable: all customer treated in the same way with values
Employee is valuable: we respect we listen we act
Drive for excellence: with new skill and innovation, motivation
PRESENTATION ON BRITISH AIRWAYS PROBLEM
WITH RECOMMEDATION ON THE
MANAGEMENT STRATEGY / STRUCTURE
CONSIDERING ALL STAKEHOLDERS PARTICIPATION
Strategic management is a art of planning your business at the highest level done by company’s leader. It builds a solid underlying structure by application of corporate strategy. The concept came up in 1970s. It brings changes in organization structure and corporate culture at all the level directors to employee.
It depends mainly upon 3 questions.
What is the objective?
How to achieve it?
What is required to achieve it?
Identification of the Stakeholders for the Company and Challenge.
List and Identify the Resources required making the Strategy Successful.
Extend the Strategy Presented in the Presentation.
Report the Outcome to the Management.
STAKEHOLDERS FEEDBACKS AND PARTICIPATION IN STRATEGY.
The following are the stakeholders for British Airways:
The stakeholders in British Airways include:
Passengers – customers
The shareholders and management
The members of staff
The larger community
Creditors and debtors as well
The aviation industry
Each of the afore-mentioned stakeholders is involved in solving the challenge to British Airways as follows:
Passengers – customers:
Passengers are BA’s primary stakeholder. There will be no business without Customers of British Airways. Thus customer satisfaction should be BA’s main strategy. So best service standards are the key to business. Once they are satisfied and patronize/loyal to airline then only they will recommend friend and family which in long term help the BA.
The shareholders and management:
Shareholders are the people who are major investor in the business. They help the business by providing fund, introducing right issue, buying shares as IPO. Whereas the management organize the issue accordingly in challenging time and give away bonuses and ready to work extra mile.
The members of staff:
They are the main work force of company who are the main part in realization of vision, mission and objictives. It depend on management skill how manager deal with labor force as if they are not satisfied they rebel and do strike and stop working to put forward their demands but if they are managed properly they also get ready to work on half pay rate duing tough time for company.
The best example of that is assistance offered by government to banking sector due to which recession effect is there. Thus here Government play important role as in normal time industry pay to government in form of tax but in difficulties government offer help to industry too.
The larger community:
Here community acts as a host to the organization. In other words it keep eyes on company’s act if company is beneficial to society then society gives full support but any adverse step by company which is causing damage to surrounding is challenged by community.
Creditors and debtors as well:
Creditor lend money to company and other form of finance. And company carry out business with their help. Debt forgiveness or extension of due date can save the company’s reputation in other words it can help company a lot.
The aviation industry:
Here mainly aviation authority plays an important role as if they change some laws then some competitor who are losing their business can again come up in market which can be biggest threat to BA. Competitors like easy jet, ryanair have very low fare which can also be threat to company and Affect Company’s growth.
POSSIBLE OPTIONS AND OUTCOME FROM THE STRATEGY
The following two options would be looked into:
Pest analysis stands for political, economical, social and technological analysis. It is useful for company’s present and future which identifies company’s strength and market position.
This factor effect when the government changes, at the time of war, emergency, or budget. It can be tax changes, law changes, or inter governmental issues.
There are so many economical factors which make impact on business. Which include economical growth, change in labor cost, globalization, inflation, recession and many more.
This factor depends on social issues like health, education, population, employment, other public issues.
Impact of emerging technologies, impact of Internet, reduction in communications costs and increased remote working, research and development activity, impact of technology transfer are all issues attended to under the technological environment.
Human resources Management
Human resources in organization is used to explain workforce hierarchy and its capacity to achieve target according to strategy
Human resources management suppose to look after following criteria.
Regular review of staff benefit.
Proper recruitment and training
Structured and regulated pay
Strategic pay rise
RESOURCES THAT WOULD BE NEEDED TO ENSURE A SUCCESSFUL STRATEGY
In last few decades human resources is categorized among one of the most valued asset in organization. It’s a very simple strategic approach which concludes people working for organization and their individual and collective role in the company. Term used for coordination and effective management method to mange a project team. This include whole team of BA which include ground staff, air based staff and top level management.
Market segmentation means division of market into different group according to customer or product or service to meet the need of the customer. In other terms dividing large homogenous market into segments. Market segmentation carried out mainly on four basic factors.
Identification of segment
Measurability of segment
Accecibility through promotional offers
Appropriateness in terms of policies and
BA can achieve benefit with strategy in terms of merger with American airline, Indian airline, Canadian airline and some more which they are already planning for.
Merger is the combination of two or more company, where one company offer the stakeholder of other company share in the acquiring company in exchange of surrendering their stock, and property. BA is doing talk with different airline such as Canadian and American airline which might help BA in this struggling condition.
Additional capital Investment:
This term indicated purchase of new asset to survive or expand the growth by capital investment.
This refers to cost cutting, which means to make such a frame work of activities by which one can check on all areas to minimize the expense and reduce the cost.
There are mainly four type of stakeholders according to mendelow’s matrix which is already mentioned in task 1.
On the base of above matrix one can explain relation between power/interest in term of stake holders.
The stakeholders and management:
Stakeholders are the key players in the company. business run by their funding so their interest is always high
.Passengers – customers.
Like any other business customer is crucial part of aviation industry as without customer there is no need of business/industry. If BA don’t have loyal customer than it’s hard for company to survive. Thus customer put in stakeholder with high power and high interest.
They recognized as key player too. As government role is vital for company in sense of existence in country or community. Impact of government policies and laws established as well as can demolish the company too.
Employer of BA:
They are very important for the company as man power in organization plays a vital role. At the same time they have high interest in company but relatively low power as they can redundant any time during job except some some higher level management who have power as well as responsibility.
Creditor and debtor:
This category includes buyers and suppliers. Suppliers who mainly provide funds and other recourse to run the company as per company’s credit is the creditor where as buyer are the main debtor. Organization runs with pace when both of them are supportive.
The larger community and aviation industry:
Aviation industry place major role by setting up rules and regulations while BA have some corporate responsibility towards community failure in this leads to opposition by community which lead to major issues to company which can demolish the company too, thus community classified in low interest high power group as they play vital role in company’s existence but don’t have any interest in profit.
CORE VALUES THAT BRITISH AIRWAYS
NEEDS TO POSSESS
Identify the Core Values of British Airways
SWOT and PESTEL Analysis of British Airways
Ethical Cultural Social and Environmental Background of British Airways
Short Report on Company Values.
BRITISH AIRWAYS CORE VALUES
The core values of BA mainly have three component mission, vision and goal to achieve its target which is mentioned in BA’s corporate report. This divide core value in mainly 4 groups.
MARKET PLACE: For sustainable business BA try to work closely with suppliers and customers.
BA supplies world class service which make British airways world safest and most service oriented website.
WORK PLACE: provide more healthy and sustainable work environment to all the worker. As professional work determine reputation of company.
ENVIRONMENT: BA adopts this policy in 1990s. in this competitive aviation industry due to air fare war between company it’s important to minimize negative environmental effects like air pollution, noise pollution and wastage discard. BA working hard in this to reduce impact on our planet. To check how BA performs it conclude regular environmental audit. To reduce this pollution BA invested in new technology aircraft to reduce air and noise pollution. Proper training provided to staff to reduce food wastage in catering department. And continuously research and training is done in this matter.
COMMUNITY INVESTMENT: by supporting conservation project and community
BA is in favour of sustain community, these projects are based in the countries where BA flies. Since 1984 sponsors trip to people involved in conservation of animal and also funded research on subject of impact of tourism on environment.
STRENGTHS, WEAKNESSES, OPPORTUNITIES AND THREATS (SWOT)
SWOT analysis is used for understanding of an organization and its environment. Its mainly used for planning and helps organization evaluation of important issues. SWOT stands for strengths, weakness, opportunities and threats. Strength and weakness are internal others two are external. Internal can be resolved internally. Whereas external issues are difficult to face.
The Strengths of British Airways includes
One of the leading airline group in aviation industry
Very big and recognized brand
Latest technology to provide best customer service
Service provided by employee/ good recruitment standards
Wide range of business location
Weakness could be:
Delays and cancellation in means of punctuality
Marketing strategy deformity.
Lost luggage/ high charges for extra luggage
In SWOT, opportunities and threats are external factors.
An opportunity could be:
Acquire over some other failed competitor and their assets
Increase demand of airline, domestic as well as international
New sitting arrangement/ standing arrangement
New strategy for marketing
Reduction in cost due to recession and other factor
British Airways threat include
Strong competition Power in the industry.
Weak distribution network.
Increase in tax rate by government for aviation industry
Increase in fuel cost
REPORT ON COMPANY’S VALUE
The company website explain that a recently some work was carried out on a culture change programme which will transform British Airways into an organization with innovative ideas, growth and customer focus are the main qualities.
The programme has five main themes:
â€¢ Colleagues – engaging staff to make British Airways a high performance workplace;
â€¢ Customers – focusing all staff to deliver consistent customer service;
â€¢ Partnerships – development and maintenance of world-class partnerships with all key stakeholders, both internal and external;
â€¢ Performance – creating a performance-based culture; and
â€¢ Operational efficiency – through continuous improvement, short and long-term.
This work, led by the Leadership team, involves and engages employees right across business.
NEW VISION STATEMENT
NEW MISSION STATEMENT
To generate a vision statement the first step to look at company’s current status and then give direction to company for its future, in other words points where company wants to go in future. It should be achievable, motivational, and agreed by all team members. Which lead company to something greater than the present status. It gives new direction by stretches capabilities and image.
The main task here is to generate new mission statement and new vision statement for British airways.
To generate new vision statement for British airways
BRITISH AIRWAYS’S CURRENT VISION STATEMENT
‘To be the world’s best responsible airline’
BRITISH AIRWAYS NEW VISION STATEMENT
‘To become the world’s most responsible airline with the utmost customer and stakeholders’ satisfaction’
Mission statement is formal writing which shows organization core purpose for trading. mission statement should be short and precise which show way towards goals.
BRITISH AIRWAYS CURRENT MISSION STATEMENT
Current mission of BA is to be the undisputed leader in airline industry for the next millennium.
NEW MISSION STATEMENT FOR BRITISH AIRWAYS
According to BA organization needs new vision to deal with current problem and to lead the company towards new direction. For that it has to redesign its current strategy in a ways that it change work structure fundaments.
Therefore, the new Mission Statement of British Airways reads:
‘British Airways is aiming to set new industry standards in customer service and innovation, deliver the best financial performance and evolve from being an airline to a world travel business with the flexibility to stretch its brand in new business areas.’
BENEFITS OF VISSION AND MISSION STATEMENT
Mainly Vision and mission meant for creating a leadership role, loyalty among employee gives ways to efforts and build alignment which should me very clear and precise.
The benefits of clear vision and mission statements will be understood if they
Establish core value of company and make clear in employees mind what is the core value of company and i
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