The management of British Airways

Investigate and Evaluate the contribution of structure and culture to the management of British Airways British Airways is one of the world’s leading international airlines, operating international and domestic scheduled and charter air services. Its revenues are generated primarily from business and leisure passengers, cargo and mail. British Airways headquarters are located at Heathrow airport in London, and have several airports situated around the world, making it a multiple plant and multinational company.

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On 25 August 1919, its forerunner company, Aircraft Transport and Travel Limited, launched the world’s first daily international scheduled air service between London and Paris. In 1935 several smaller airlines merged to form the original privately owned British Airways Limited, which became Imperial Airways’ principal UK competitor on European routes. Imperial Airways and British Airways were nationalised in 1939 to form British Overseas Airways Corporation (BOAC). This company had a monopolistic position on international routes.

The airline under its current name was formed as a result of a merger in 1974 between the United Kingdom’s two publicly owned dominant carriers, British Overseas Airways Corporation (BOAC) and British European Airways (BEA). This marked the initial change from a state owned and subsidised entity towards the privatisation of British Airways on 30th January 1987, and slowly changed the structure of the industry from being virtually monopolistic towards becoming a competitive oligopoly. British Airways is completely privately owned; with 265,000 shareholders including 49% of the company’s own employees. Also read about British airways organizational structure

Currently British Airways is the world’s biggest international airline as measured by the number of routes and destinations under its control. It carries more passengers from one country to another than any of its competitors. The company is comprised of 373 aircrafts that now travel to 574 destinations in 134 countries; the airlines two main operating bases are London’s two main airports Gatwick and Heathrow (the world’s biggest international airport). Recent developments have seen it enter into alliances and agreements with other airlines, where costs and revenues have been shared in order to increase network coverage.

(www. britishairways. com). This report will identify both the organisational structure and the culture of British Airways, and discuss and evaluate their contribution towards the management of the company. The success of any business usually depends on the type of management style used. The style should make the employees work in the correct way to suit the objectives of the business and the type of management style chosen should make the business work successfully. A business also has to have the right culture to suit the way the businesses objectives are met.

Culture combines the beliefs and values of the individuals and the extent to which they rely on the organisation’s rules and procedures. An organisation structure is the way the business is set up. This includes lines of communication, chain of command and span of control, which affect the efficiency and success of a firm. Within each organisational structure there are different chains of command and spans of control (Rollinsson 1998). The organisational structure at British Airways is hierarchical as well as divisional.

A hierarchical structure has many layers, with the layer at the top having direct control over the people below them, who in turn control the people below them and so on. A divisional structure is where the organisation is broken up into divisions of different areas (Dessler 1986). This works well for British Airways, as each division is managed by a director and then several managers. This ensures that everyone knows whom he or she is responsible for and whom he or she is responsible to.

The advantages are that each division can have specialised employees. “Simple, routine tasks can be centrally programmed and closely monitored through a hierarchy; they can be standardized, formalized and allocated to specialist functions and jobs. ” (Hales 2001 p. 134). There is also more motivation among workers, as the bureaucracy has gone. With fewer employees to tend to, this results in a smaller span of control leading to closer bonds between managers and their subordinates, boosting both morale and job satisfaction (Rollinsson 1998).

The negative side of this hierarchical and divisional structure is the chain of command, as each division may not know what the other is doing, causing problems and slowing down communication and efficiency within the firm due to the intervening layers of management. A further problem could occur, if communication is poor between divisions, which could have a detrimental effect on the overall performance of the company Also because the lines of communication are quite long it may be possible for messages to get lost or distorted.

This is why it is important for British Airways to have an autocratic management style as every employee must be kept alert and task focused so that problems do not occur. The style of management at British Airways clearly has a large effect on the performance of their employees, so with their hierarchical structure within the company, the autocratic approach to management is most likely to be implemented to make sure all the employees are following the strict guidelines set by British Airways.

This keeps productivity high, however the motivation of the employees may not be very good. As a result the democratic style of management maybe considered by British Airways, which involves leaders consulting their subordinates about decision making while still maintaining control of their division. Within this hierarchical and divisional structure, British Airways must utilise a style of management that maintains a good level of communication throughout the company, so that it can perform efficiently, this is crucial to British Airways as it has a long chain of command.

They must watch out however, as a democratic leader, may become unsure of him/herself and offload all of his or her decisions to subordinates, which would result in a lack of leadership and tasks taking longer to be solved, with possible disputes between employees (Dessler 1986). Culture can affect the performance of a business in a good and bad way “Culture is clearly an important ingredient of effective organisational performance. ” (Mullins 1999 p. 808). The culture of an organisation is the collective total of believes shared by employees in the business.

It refers to a way of conducting work within the organisation, and is based on traditions, past history, communication network, employee behaviour and the environment of the organisation. The individual employer is able to influence the culture by adhering or not to company rules, as well as adding their own individuality to the culture. All organisations have a culture and part of the manager’s role is to look after that culture, nurturing and encouraging alteration to it when necessary, if this role is not carried out, damage to the organisation may occur. The result could be deterioration in the company’s reputation.

The maintenance of an acceptable organisational culture is therefore an important managerial concern (Fineman 1993). At British Airways, there is mostly a role culture based on many of the ideas of bureaucracy, that is keen on routine and procedure, making sure every employee works to the objectives set by their managers. Employees are therefore more task focused, as they have a set job to be completed, this very importantly reduces transaction costs within the company. These are the costs of decision making, coordinating and arranging, that are very significant towards the efficiency of the company overall.