The Structure Of British Airways Management Essay

British Airways is the largest international airline in the United Kingdom and is assigned in the operation of international and domestic carriage of cargo and mail, and the auxiliary services The British Airways Group comprises of British Airways, British Airways Holidays Limited, BA Connect Limited, Deutsche BA, and British Asia Airways, amongst others. Since privatization in 1987, British Airways have persisted to develop as competition in the market becoming the world’s first airline to reduce greenhouse gas emissions and to let passengers to print online boarding passes.

Structure of British Airways:

As explained British airways flat structure encourages the company to have a corporate culture which can be described by applying the McKinsey 7S s model which includes Staff, Skills, Style, Shared Values, Systems and Structure and strategy.

Before the privatization, British Airways had a more formalized bureaucratic structure with rules and procedures, as a result of its size and its activities. But a main change in the last years has been the decrease of its management levels and it now has a formal structure with responsibilities across different functions. Therefore the structure of British Airways is flat type because it has only one level of hierarchy that separates managing directors at the top of bottom-line employees. The organization has segregated management-level positions into ten departments and each department has own subordinates. British airways structure is shown in figure 2 in which its departments include Planning, Investment & Alliances, Commerce, Ground Operation, Engineering, Flight Operation, IT, Finance, Law, and Human Resource. (British Airways, 2010)

Figure 2: British airways organization structure, (British airways 2010)

Description: Management structure diagram

Sources: www.britishairways.com

However market influences created a leaner, structure at the top of the management. As illustrated in figure 1, British Airways have a flat hierarchical structure that needs them to cooperate within all the levels of as strategic where the board of directors take a decision on the long term objective the information which flows to the managers in the tactical who furnishes the information to the operational level and the operational level (front office staff, flight stewards etc.) drives the data into meaningful messages to be operated conveniently and efficiently.

Culture of British Airways:

Mission Statement:

            “To be the most exclusive and first choice airline for all airline travelers”

We recommend a new mission statement after a consultation process involving our group members. The mission statement can replace an existing statement, which had been drawn up in 1997 in the run-up to privatization, and many employees have received training in its meaning for their particular jobs.

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Their mission statement clearly shows that in every person’s mind the first thing to come from traveling by air should be British Airways. Whatever it is called, a vision, mission or strategic intent, its purpose is to provide a guiding light for the future. Companies without a mission are prone to opportunistic. A unifying mission is especially important in large companies where staff and managers are expected to take decisions themselves, without constant referral back to headquarters or to their seniors.

Aims:

British Airways is to become the world’s first ‘global airline’

Objectives:

Like all businesses one of their objectives was to maximize profits however after September 11th they had to change their aim of having an increase in  security as this was the main issue globally and they needed to keep their customers safe after the horrific terrorism attacks in the USA.

Objective:   To increase security to combat terrorism

Specific – To increase security for the safety of passengers and staff

Measurable – Hand luggage of passengers was reduced to a ‘plastic bag’, ‘stop and search’ was also put into place and metal detectors as well as a regular ‘anti-terrorism drills’

Achievable – More security staff will be in place and they have the finances to do so.

Realistic – This objective is realistic as terrorism is a threat and they also have the finances to do so to ensure that all passengers and staff are fully protected.

Objective: To increase profits by the end of the tax year 2009

Culture:

The organizational structure of a company reflects its culture, its management style and its leader attitude in addition to the environment in which it has to operate. . British Airways have a more formalized structure with precise rules and procedures, due to its size and the global scope of its activity. A major change in the last years has been the reduction of its management layers, between the chief executive and the front line who interface with customers, from nine to five. It now has a small ad hoc group working in parallel with the formal structure, with responsibilities that cut across different functions, or in any case duplicated these functions.

Corporate culture

The organizational culture consists of the deep basic assumptions, beliefs, values and norms which are shared by members of an organization, arise from the organization’s history and tradition and are modified by contemporary events.

Management style and leadership at British Airways

As clearly stated above, British airways had been bureaucratically, between functions and hierarchies. It has changed to a style of employees empowerment. This means management gets help from employees outside the formal structure and across functions.

British Airways used to have a more autocratic style but at the moment company is delegating responsibility directly to key individuals. The management at all levels mutually responsive to relationships created with customers and stakeholders. In other words’ company is experiencing democratic leadership style.

Interrelationships of functions with processes:

The business process is a collection of interrelated activities and tasks that will create a service as well as products for the consumers of business. There are three types of business processes involve in British airways and they are management process, operation process and supporting processes. The management process of British Airways is all about the operation of a system which includes the strategic management and the corporate governance. Strategic planning in management process is very important because it includes business plans, risk assessment, risk management, financial objectives, management responsibility, continuity planning, quality control, IT threat, contingency plan, disaster recovery, and fulfillment.

Operations:

Another type is the operational process which is the most essential among all the types of the business processes. It generally comprises the core business of British airways which is transporting passengers fast, safely and comfortably. In addition to this, it also generates the primary value stream. Purchasing, sales, manufacturing and marketing functions are usually included in its operational process.

These three types of business processes of British airways have their own distinctive attributes which add value to its service delivery process.

SUPPORT ACTIVITIES FIRM INFRASTRUCTURE

Structured hierarchy permits BA to build a massive amount of specialist knowledge in order to get a competitive advantage over economized firms.

HUMAN RESOURCE MANAGEMENT

Invested in the expansion of customer service training in 2007 drawing attention of the best employees.

Speak Up view survey persuades employees to offer feedback (British Airways, 2008).

TECHNOLOGY DEVELOPMENT

BA has included value in this group over smaller companies by reason of lack of resources that can be employed to create the service in an innovative way. (e.g. Individual LCD screens).

PROCUREMENT

As a result of the size and chronological business relationships and alliances, BA is able to influence suppliers and during economies of scale make efficiencies where competitors may fall short.

PRIMARY ACTIVITIES:

INBOUND LOGISTICS:

Stock Control

High quality training given by City & the Guilds (British Airways, 2008).

A continuous relationship with suppliers (e.g. Gate Gourmet.

OUTBOUND LOGISTICS:

Customer Service

Large database of airport slots facilitates passengers to contact the majority of destinations from preferred airport. MARKETING & SALES

Marketing communications to all stakeholders.

Brand consenting to for large budget to be spent in this field.

POST SALE SERVICE

The loyalty club card is offered.

Bringing up to date communication on other services

Interrelationship between the processes and functions of British Airways

British Airways is one of the world’s largest aviation companies. Its portfolio of aviation transportation in which it is a global leader in air transportation The company’s aviation operation and extensive airplanes of growth projects are located in all over the world, South America, Australia, North America and Asia. The purpose of the organization is to set out in a mission statement.

‘To be the leading global aviation company – through the operational excellence of world class assets in the most attractive commodities and a resolute commitment to safe and sustainable air transportation.’

In 2008 there was a downturn in world economic activity. This resulted from a loss of confidence in the world financial system. The downturn has led to a steep fall in aviation travelling prices such as airfares. By late 2009 these prices started to rise again as demand for aviation transportation increased.

Sustainability

Although Airline companies are affected by changes in economic activity, aviation is a long-term investment business. Firms like British Airways have to take a long term view of the business. This involves creating more routes which is a sustainable way over a long period of time. The company focuses on those routes in which it has a favorable position. It concentrates on various routes where sales of air tickets will be possible for many years into the future. It also looks at aviation projects where costs can be kept to a minimum but where there are opportunities to expand operations.

There are several issues of sustainability facing British Airways. Key ones are:

Securing energy supplies, such as airplanes and resources including fuels, for the future

Managing emissions to minimize harm.

British Airways uses large quantities of energy in its operations. It also generates the potential for energy, e.g. by purchasing the very latest planes which are eviromental friendly. A key aim of the company therefore is to do more with less. It must achieve maximum efficiency with minimum waste.

British Airways believes that by operating in innovative and socially responsible ways it can do things better than its rivals. Doing things better in business is referred to as competitive advantage. Social responsibilities are those duties to all the stakeholders of a business, not just the shareholders. Embedded within social responsibility is the concept of sustainable development. Sustainable development involves using resources so that:

Resources are available to meet the needs of people now

Resources can be available to future generations

The needs of the natural environment are respected.

The success of British Airways is the best value comfort service provides for its passengers. And to build up this solid foundation in the marketplace, British airways utilizes its resources effectively and efficiently. In that manner operations management of British Airways plays an important role in transforming inputs (labor, capital, equipment, land, buildings, materials and information) into outputs (goods and services) that offer superior value to customers.