Change Management British Airways

Change Management at British Airways

Change Management British Airways – In liquid times (Bauman, 2007), the market is characterized by growing complexity and the capacity to innovate is essential to survival of the firms, as there are more competition. In this context, the traditional factors of production become obsolete fast, and the human resources emerges as the flexible factor that gives dynamism to the firms, been more than a strategic asset , but the competitive advantage (Barney and Wright, 1997) , as it can responds quickly to these changes.

As an important factor of production, human resources must be applied efficiently under the framework of business administration theories and practice, as a controlled and guided process within the firm, known as human resources management.

In the 1970s, the economics structure was being transformed towards the transactions, due the development of the Euro Market and the entering of Oil Dollars. The increase in those financial operations and the development of the Lean Management by Toyota enabled the multiplication of financial services, making the financial markets grow more than the GDP through lending (Schiller, 2008). This led to the abandonment of the Bretton Woods and the oil crisis, disrupting the market. At same time, the developed world faced stagflation and the Keynesian policies were de-legitimized towards the neo-liberal ones (Krugman, 2009).

The British Airways, a State owned firm back then, was hit hard by the oil crisis which increased its operational costs. Notwithstanding, the recession lived by the United Kingdom were paired with a rigid management system, making the firm lose market share and revenue. A cultural shift was proposed in the 1980s, transforming the company, which became the world leader of the aviation market in just one decade and a paradigm both of the cultural change and the change management of strategies. For that reason, it was the elected case to present the present Report, where it will be analyzed the cultural change, the management of change strategy and the consequently performance of the firm.

British Airways Human Resources in Practice: towards the flexibility of Human Resources Management through the cultural shift

In 1983 British Airlines was losing almost 140 millions per year and the saying of the time defined it as “Bloody Awful” . Few years earlier, in 1980, a survey conducted by the International Passenger Association put the BA as the wort airliner carrier. The culture of the company was internally driven, as demonstrated by one of its seniors managers which said in 1984 that they could run a good airliner if it werent for the passengers. The uncertain environment was completed with the privatization which would be carried during the 1980s (Carleton and Lindenberry. 2004).

In this unstable environment, a new CEO assumed in 1983, aiming to recover the company. Its most relevant decision was the transformation of the culture of the BA, which would not be in the “transportation business” but in the customer services market, re-orienting it towards the external driven framework. This change management would allow to focus in the client and provide a quick response to the markets needs, as the customer became the center of the management policies. Although, the company faced the challenge to re-adapt the thinking of 50,000 employees towards this new values, changing their concepts about the BA, their jobs and objectives, essential to align the operational aspect of the HRM (group) to the intangible (culture), keeping the organizational processes coherent ( Schein, 2013).

The change of culture at British Airways aimed to transform the organization towards the customer, with costs and benefits approach, from a profit perspective. The leadership role was relevant, as the CEO was present in all operational processes, from the flying crew to the sessions of the program Managing People First (Turnbull et al, 2001), though, the most relevant changes in the culture, in the period from 1983 to 1995, were, the following:

  • Putting People First (1983) –It was aligned to the culture change towards the externally driven company, consisting in the mandatory of attendance to all staff members of the BA worldwide. The CEO, Colin Marshall, was present in more than 9 in 10 of those events, aiming to describe his vision of the new company structure to the staff.
  • A Day In The Life (1984) – BA had a rigid management style, where hierarchy was one of the core values. The Day in the Life program was a one day training which were mandatory to all the staff worldwide, aiming to improve the communications among the sectors, by familiarizing the staff with other departments. The objective was to create empathy towards the others employees and customers in general, by the accountability of the staff.
  • Terminal Supervisor Development Program (1984-1985)– It consisted of a thirteen-day residence program directed to all the supervisors of the company´s terminals, as the new customer centric approach required all supervisors working in the provision of customers services to the re-trained. The program required also that supervisors who wished to keep their positions after the training program, to re-apply to their jobs.
  • Managing People First (1984-1990)– It was a five program developed for the training of all managers worldwide in the executive levels, in terms of the leadership organizational behavior. The managers reviwed their careers and were encouraged to develop acting lines to adapt their behavior in the new cultural approach.
  • Performance Appraisal (1985) – As the company was changing, with new jobs and management practices, the performance appraisal estabilized the cultural change, which still needed to be defined through the practice. The performance appraisal, thus, became important in embedd and evalue and new culture adoption, as the bonus was tied to the use of the new organizational values within the company.

The change management processes, through the culture defined by the CEO Colin Marshall was continued by the appointed CEO in 1985, Robert Ayling, which proposed the following:

  • Customer Service Leadership Programs (1988-1989) – Creation of a brand through the five class services,aiming to attend the customer´s demand through extensive market research. The program was developed in 5 days, destined to the ground management staff which added value to the customer, to all ground managers worldwide.
  • Winning For Customers (1990) – It was a one day program destined to all the staff to reiterate the cultural shift towards the customer satisfaction, using computer-based simulations of different customer consumption behaviors (British Airways Report, 2010).

Attained Results and the impact of the culture in the Change Management British Airways

The BA Change Management applied into practice the organizational culture from the behaviorist theory, adding a fluidity approach, in terms of flexibility. The HR organizational project aims to model the right behavior to the company, and is particularly focused on ensuring that behaviors to support the change on direction of the customer attention are embedded throughout the organization.

Change Management British Airways
Change Management British Airways

Although, as the Organizational Behavior, traditionally, divides organizational mechanisms as the structure and the culture, and, group mechanisms as leadership behavior and team functioning, for a result to be achieved, there is need to coordinate organizational mechanism with group mechanisms, as they are interdependent, one being the object and the second being the action. Notwithstanding the perceived change was at the cultural level, the leadership was reinforced and emphasized in the Change Management strategy, aiming to direct behaviors through the alignment to the new culture. In this sense, the approach of the BA group can be understood from a systemic perspective, as it conceives both organizational and group mechanisms. The leadership, management training and other programs demonstrates the equilibrium weight between the HRM mechanisms. The culture change was allied to the structural change of the company, which had passed through wage cuts and reformulation of compensations.

As the company determined what it wants to be in terms of culture (results, in the case be more customer oriented), it identified the behaviors it need to follow to attain those results, trained the leaders in the skills needed to achieve those behaviors and rewarded those who achieved, the control of protocols furthered the reaching of the strategy of the culture shift, through a coherent Change Management program, transforming the BA in the most profitable airline company in 1996.

Though, the focus in the culture must be counterbalanced with the other organizational aspects of the firm which were also relevant in the reinvention of the BA in the market (Turnball et al 2001). According to Schein (2013), the real culture, is embedded in the behaviors, values and practices of the group mechanism, being a multidisciplinary approach more proper than the classification of the BA change in terms uniquely or more relevant of the culture. This is because the cultural change supposes a series of inferences which are linked by the behavior of the group according to its values, thus, although companies modifies and creates subcultures in the long run (Avolio, 2011), the leadership and fellowship training programs and strategies, and, the structural change, also were fundamental to enable the cultural shift of the organization, consolidating the BA position in the market in the 1990s. The flexibility and quick response to the markets through the redirection of the firm towards the customer services only were possible because the practices of the company already were being transformed, before the new culture be developed (Tushman et al, 2006).

References

Avolio, B. et al. (2011). An Integrative Process of Leadership. American Psychologist. V. 68, n.6.

Barney, J. and Wright, P. On Becoming a Strategic Partner: The Role of Human Resources in Gaining Competitive Advantage. Cornell University ILR School, 1997.

Bauman, Z (2007). Liquid Times, living in an age of uncertainty. Kindle version book, Paperback.

Carleton, R. and Lineberry, C. (2004). Achieving Post Merger Success: a stakeholder guide to due diligence, assessment and integration. San Francisco: Pfeiffer.

Chomsky, N. (2005) Profit over people: neoliberalism and global order. Seven Stories Press, New York.

Hirsch, A. (1992) Milton Friedman: Economics in Theory and Practice. University of Michigan Press.

Jeffery, R. (2014). What you can learn from Santander.

Maslow, A. (1992) Maslow on Change Management.

Schein, E. (2013). Change Management, Organizational Culture and Leadership. San Francisco: Jossey-Bass.

Schiller, R. (2008) The subprime solution: how today´s global crisis happened and what to do about it. Princeton University Press, Princeton.

Turnball, P. et al (2001). Strategic Choice and Industrial Relations: a case study of British Airways.

Tushman, M. et al (1996). Managing Innovation and Change Management British Airways. London: Sage.

Warner, M. (1994). Japanese Culture, Western Management: Taylorism and Human Resources in Japan. Organization Studies July 1994 vol. 15no. 4 509-533.

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Project Management Standardization

Standardization of Project Management

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Poor project performance has led to industry calling for Standardized Project Management tools, yet it is the organizations themselves who have chosen to overlook or ignore the tools while implementing organization strategy that exists for their assistance. This paper investigates the implications change management practices have on individuals as a result of strategy change, whilst challenging the poor Project Management knowledge and understanding of individuals within project based organizations. It also identifies the currently poor application of Project Management theory including the alarming levels of academic qualifications many practicing Project Managers currently hold. The purpose of the dissertation was to explore this call for standardization by conducting a review of the knowledge, understanding and opinions of individuals regarding: change management implications of organization strategy implementation; and organizations? application of Project Management theory.

Project Management Standardization
Project Management Standardization

However, while conducting the review, offering discussion points or arguments, it is important to recognize when talking about Project Management Standardization, it is not an exact science and there are several fundamental floors such as the theory is relatively abstract and many parameters are difficult to be measured as they are usually based upon the opinion of industry personnel with predetermined beliefs. The aim of the dissertation was to identify and understand evolving management theory and how it aligns with organization strategy as it was believed that with such a large amount of capital being spent on projects, organizations did not place a high enough level of priority on Project Management processes or academic qualifications. Whether this is a result of ignorance, or just a pure lack of understanding of the implications on the behalf of executive level management, was the basis for discussion throughout the dissertation. Finally projects are aimed solely at either increasing profit in line with organizational mission requirements or increasing efficiency through productivity. So the dissertation is written with the intention of raising awareness to improve project performance and not just to highlight organizational short comings. The dissertation aim is to investigate how evolving Project Management theory, organizational strategy and change management implementation and Project Management academic levels influence individual’s perceptions and actions within project based organizations.

Project Management Standardization Dissertation Objectives

  • To identify and introduce evolving management theory
  • To analyze the role that Project Management has within organizations strategic management processes
  • To investigate the level of understanding individuals within organizations have of Project Management processes
  • To investigate the academic levels of individuals within project based positions
  • Conduct a questionnaire based on the aims, objectives, and literature review formulating a strategic set of questions to challenge senior managers with an interview in relation to the concerning trends

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Organizational Change Management

Organizational Change Management

The purpose of this report is to analyse the case study on D2 which is an auto-components manufacturer undergoing major structural changes to minimize costs and implement innovation and technology. While managing the change, the organisation had to face different kinds of issues. Thus, the report would be identifying the issues and proposing relevant solutions and their implementation to manage change effectively, by using the 5D-Framework which comprises of definition, discovery, dream, design and destiny.

Definition

When a company undergoes change, there are a series of opportunities and challenges that it has to face. Change is not a onetime occurrence but rather could take years to be implemented. When an organisation is undergoing strategic change, it needs to re-formulate its mission and strategies and thereafter align all its business operations with the overall strategy (Cummings and Vorley, 2009). While managing strategic change, implementation is more challenging than just designing the change.

Lack of Communication Alignment

Therefore, one of the primary issues witnessed in the D2 case was that the management would have difficulty in implementing the change due to improper communication channel used for communicating the strategy to the rest of the employees. Apart from this, having a balanced strategic change is also a significant challenge since in order to achieve the balance, the organisation needs to assure that its internal management and resources are aligned with each other and with the external opportunities (Bordum, 2010).

Environmental Pressures

Apart from this, environmental pressures are another reason why organisations undergo change. In order to be aligned with the environment, there is a certain organisational structure and a strategic positioning required. One of the key issues in the case was that there has been an outpaced growth of technology over the years and in order to meet that pace it needed to undergo significant innovation and get rid of the obsolete technology. This required greater strategic flexibility which then bore a cost to the organisation since the employees resisted the change and job insecurity arose (Skordoulis, 2013). Moreover, owing to the environmental pressures, it was significantly cutting costs and thus, had to face a trade-off between lowering costs and smooth flow of work. The smooth flow of work would be disrupted since to lower costs, it would have to shut down some of its manufacturing facilities that are not producing enough and would have to redeploy staff to other geographic regions which would require a lot of planning and control. According to Alessa and Kliskey (2012), responses to environmental change management is required which can be done through change agents. These agents can be of three types: the initiators, the supporters and the opportunists. These environmental change agents would assure that the company’s strategy is in correspondence with the changes in the external environment. In the case of D2, the changes in technology were an environmental pressure which required a change agent to manage it effectively and efficiently.

Leadership Issues and Resistance to Change Management

Change management can be of many types, varying from a change in structure to a change in culture, leadership style, operations, systems and strategy. At times one change may lead to another change and while doing so, organisations encounter a number of issues. Another key issue evident in the case was the autocratic leadership style and a centralized management as a result. In identifying the change management areas, the management itself first made decisions and formulated the strategy, and then later informed the employees. As the case stated that the decision was yet to be announced and the workers in UK might be shock to hear it since the firm had made heavy investments in the manufacturing plants. Moreover, while redeploying the employees from one geographic region to another, cultural issues might also be faced which would require heavy investments in training. Thus, a greater resistance might be expected from the employees since they were not part of the decision making process and the organisation’s interests might then be in conflict with the interest of the employees (Banutu and Shandra, 2007).

Trade-off between managing change management and maintaining core competency

Lastly, and most importantly, since the company’s operations are dispersed geographically and one of its core competencies is the pace and quality of its product development, in change management , the company might lose out its current strategic position or the core competency it has, thus, assuring that the pace and quality product development remains the same while re-structuring its manufacturing operations, would be very challenging for the company. Furthermore, change management is not following a planned approach. This might cause D2 to lose out its competitive position in the market which would then be difficult to re-obtain since by focusing on cost reduction rather than value addition, maintaining the sustainability of operations is less likely to happen.

Leadership Issues and Employee Resistance to Change

Discovery

The underlying problem chosen for in-depth discussion is the employee resistance to change and the leadership issues in bringing about the change. As stated in the case, D2 required an urgent need for change management therefore it cannot go slow in bringing about the change and would require major transformations in its structure and human resource. While deciding which operations to shut down and which ones to expand, it has been taking into account the external environment and the returns it would get out of it. However, in doing so, it has neglected the reaction that might be expected from the employees, and which could majorly impact and hinder any change management process that happens in the organisation. Resistance to change usually occurs when employee needs are not addressed; their goals and organisational goals are not aligned; there is communication gap between the different hierarchical levels as well as in horizontal communication; when there is downsizing and mistrust is created among employees; when there are major cultural issues to be faced as a result of change management ; and when employee participation in decision making is lacking (Bovey and Hede, 2001).

5D-Cycle Organizational Change Management
5D-Cycle Organizational Change Management

Furthermore, when the leader fails to apply a transformational leadership style where he articulates the vision and re-defines the strategy, the resistance increases further as employees are unclear about the goals and objectives they need to achieve as individuals as well as collectively (Eisenbach et al., 1999). The management needs to keep a balance between the organisational needs and the human needs since ultimately it is the human resource that needs to implement the change (Griffin and Moorhead, 2011). The key issue in the case of D2 was that a feeling of mistrust and insecurity was occurring not only in the U.K. region where it plans to close its facilities but also among the employees working in other subsidiaries located in Spain since the change management process is not communicated effectively and the decision making authority is vested in the hands of a few senior managers indicating that bureaucratic leadership style is more evident in the organisation which means that the increased level of formality between the management and the employees and the lack of communication would result in a decrease in employee morale, and hence, a decline in performance.

In order to address the issues, the leadership styles need to be changed. According to Bamford and Forrester (2003), using a middle-out approach would be of significant advantage in addressing the issue. This would involve giving the middle management the authority to lead the change under the supervision of the top management. In doing so, employee needs would be addressed in a better form since the line managers are more closely linked with the operational level staff and thus would be able to provide adequate feedback to the top management of how to create a link between the overall strategy and the needs addressed. Greater teamwork and participation of the workers would also be required to increase their motivational level and making the flow of communication more efficient. Leadership issues are also one of the reasons why organisations fail in managing the change. Uncertainty often accompanies change and as a leader, one needs to minimize the uncertainty levels and create an environment of greater employee commitment and trust. According to Ahn et al. (2004), globalization and change of technology at an accelerating pace requires that effectiveness in leadership has become immensely important, which is demonstrated through the leader’s adaptability to different management styles that involve greater coordination and engagement among all members of the organisation. According to Ashman (2012), ‘redundancies have become an unwelcome necessity across all sectors of the economy’, and while strategy and procedure in change management are important, the third element, psychology, is not given much attention which focuses on how employee emotions need to be dealt with to prevent any resistance to change management. Thus, this requires that to avoid such issues the message is communicated accurately while the sensitivity of such messages is taken into account adequately (Ashman, 2012).

Dream

One of the ways in managing the issues is to adopt a planned change management approach. The 3 step model of Lewin is applicable here which suggests that the organisation needs to plan change management in three stages: unfreezing, moving, and re-freezing (Burnes, 2013). In the case of D2, a sense of urgency was created and the change was seen more as an emergent one rather than a planned one. However, to make the change more sustainable, carrying out the planned approach would decrease employee resistance, since the unfreezing stage would first help in abandoning the old ways of doing work and preparing the employees for change. For instance, D2 could have addressed the issue of mistrust among its employees in other regions as well as in U.K. by defining the need for change and how it would benefit the organisation as a whole. It should then also point out the alternative employment opportunities available and how these would be a better platform for their growth. The moving stage then would involve applying the change process such as re-structuring, changing leadership styles, re-articulating the vision or changing the strategic position. This is when D2 should start shutting down its facilities and redeploying the staff where expansion is happening. The moving stage would then be followed by the re-freezing stage where the new practices would be adopted in a more permanent basis by providing training and aligning the new behaviors with the organisational strategy and culture (Bamford and Forrester, 2003).

Another potential solution of managing organisational change would be to conduct training programs and adopt situational leadership style. The situational leadership theory states that there is no one best style of management and the leader would have to either adopt a relationship-oriented style or a task-oriented style depending on the situation being faced (Griffin and Moorhead, 2011). Similarly, motivational levels of employees would also have to be taken into account and the purpose of the chosen leadership style would be to boost employee morale and assure that they have a positive attitude towards the change.

Also team building should be the ultimate focus of the organisation. This should involve self-managing teams, cross-regional/cross-cultural teams and cross-functional teams (Sisaye, 2005). The purpose of having such teams would mean greater diversity and flexibility among employees as well as greater coordination between different divisions and manufacturing facilities. By having cross-cultural teams, the employees would be more familiar with the cultural differences between Spain, France and U.K., thus, any issues arising as a result of change in culture could be better handled through cross-functional teams. The team performance model suggests that in order to create a team there needs to be orientation, trust building, goal clarification and commitment; and in order to sustain that team there needs to be implementation, high performance and renewal (Cooperrider and Dan Whitney, 2001).Therefore, the employees and the management should get involved in formulating the teams before the change management process and since this change is more about implementing new technology while cutting down the costs, the teams may focus on how the technology can be implemented. This would also be accompanied with extensive training to avoid any ambiguity among the employees.

The firm’s strategy of achieving cost leadership while maintaining the pace and quality of product development requires that it should, it focuses on value addition. This would mean cutting down costs by minimizing any wastage of resources and streamlining processes. At the same time, it would also be adding value through the innovative tools and technology used. This strategy would have to be defined by the leader after taking employee opinion and feedback using the bottom-up approach and would then have to be implemented across the organisation.

Design

In order to implement the proposed solutions, careful planning and formulation would be required. The use the planned change model can be implemented by having a leader who first identifies the potential areas that require change in terms of employee attitude and behavior Also, while addressing the need for change, the leaders should first conduct a field force analysis to identify the factors that are for and against the change (Schwering, 2003). The leader could then use the forces that can help in driving change as an advantage. This would include the consumer demand for more innovative auto components, availability of technology, upgraded technology in the other two manufacturing facilities and the identification of a new strategy. The drivers against change management would include employee resistance due to increased mistrust, decrease in morale in case of deployment and fear of exploring the new methods of working. Thus, once the forces are identified, in order to overcome any barriers, training programs should be conducted throughout the change process, that is, the unfreezing, moving and re-freezing stage. These training programs should involve two way communications which would mean delivering the new company strategy to the employees and also taking their feedback on what concerns they have and how they think it can be improved further (Hoag et al., 2002).

Apart from this, in helping leaders being aware of different leadership styles, leadership workshops should also be conducted. These might include assessment centres and activities where the management can be given different scenarios and asked to adopt an appropriate leadership style (Cummings and Vorley, 2009). The workshops would then be concluded with feedback and suggestions. Also while change management is being implemented, the performance should be monitored and measured more frequently in order to understand employee behavior and their progress. In case of teamwork as well, the leader would have to assure that there is no group think that could result in in-group conflicts, and the goals of the team are aligned with that of the organisation (Raza and Standing, 2011). The management would have to be more decentralized in its approach by practicing open door policies and being on the floor to address employee needs. The alternative employment opportunities available for the employees need to be clearly identified before the change process in order to conduct the implementation smoothly. Similarly, while communicating the new strategy to the employees, the opportunities available to them should be delivered first, which could act as a buffer to the disappointment they might have on hearing the shutting down of operations.

In order to cut down costs while maintaining the core competency, the organisation should align its operations with the new strategy. This would mean implementing change management simultaneously. The firm should first start expanding its operations in France by investing in new technology and setting up the production design, it should then plan out staffing requirements and communicate the strategy to the employees in the U.K. as well as Spain regarding how the expansion could help organisation grow and how the operations in U.K. might decline the overall progress of the organisation. Online video conferencing or virtual teams can also be formed where there could be cross-regional communication to assure that all its units are at the same pace and the goals of the organisation are communicated clearly across. Also by using internet as a platform for communication, organisation would be further saving on its time and costs in coordinating the teams.

Destiny

In implementing the proposed solutions, the possible limitations that might be faced include the heavy investment costs associated with training. This would conflict with the overall strategy of the firm of cutting down the costs. Therefore, in order to minimize the training costs, the management can focus on more informal ways of training such as in-house training where the costs of additional trainers and location can be saved. Similarly, the organisation could identify change agents who are trained and competent enough before the change takes place and then these agents could help other employees in carrying out the change (Griffin and Moorhead, 2011).

Furthermore, in identifying leadership styles, one of the factors that have been ignored is the number of cultural issues. For example, the effectiveness of relationship-oriented style is not only dependent upon the organisational situation but also on the culture where it is operational. There might be differences in terms of collectivism and individualism, and power distances (Kirsch et al., 2012). To overcome this limitation, the leader can identify the similarities in culture that can help employees adjust in the other two regions and make them aware of the differences to avoid any cultural shock.

While implementing the solutions, another possible limitation is the effectiveness of the feedback. Employees might be reluctant to speak up any negative feelings regarding the process or the feedback might be unstructured and more intuitive rather than formulized. To overcome this limitation, the management can take anonymous written feedbacks and then re-evaluate performance after the feedback is taken into account, in order to measure its effectiveness.

Thus, by strategizing the change process and aligning the structure, the culture and the processes with the overall strategy, implementing the change process would be more effective, reducing any potential resistance of the employees through greater involvement and empowerment in decision-making. Also by applying the three-step planned approach to change, the employee attitudes would be more positive towards change, removing any ambiguities that might exist regarding the strategic change.

References

Ahn, M.J., Adamson, J.S.A. and Dornbusch, D., 2004. From Leaders to Leadership: Change ManagementJournal of Leadership and Organisational Studies, 10(4), pp. 112-123.

Alessa, L. and Kliskey, A., 2012. The Role of Agent Types in Detecting and Responding to Environmental Change ManagementHuman organisation, 71(1), pp. 1-10.

Ashman, I., 2012. A New Role Emerges in Downsizing: Special Envoy. People Management and Change Management, pp. 32-35.

Bamford, D.R. and Forrester, P.L., 2003. Managing planned and emergent change within an operations management environment. International Journal of Operations and Production Change Management, 23(5), pp. 546-546.

Banutu, M.B. and Shandra, M.T.B., 2007. Leadership and Organisational Change Management in a Competitive Environment. Business Renaissance Quarterly, 2(2), pp. 69-90.

Bordum, A., 2010. The strategic balance in a change management perspective. Society and Business Review, 5(3), pp. 245-258.

Bovey, W.H. and Hede, A., 2001. Resistance to Organisational Change Management: The role of cognitive and affective processes. Leadership and Organisation Development Journal, 22(7), pp. 372-382.

Burnes, B., 2013. Kurt Lewin and the Planned Approach to Change: A Re-appraisal. Journal of Change Management Studies, 53(8), pp. 111-134.

Cooperrider, D.L. and dan Whitney D., 2001. Change Management A positive revolution in change: appreciative inquiry, on Robert T. Golembiewski (ed.), The handbook of organisational behavior.2nd ed., New York: Marcel Decker.

Cummings, T.G. and Vorley, C.G., 2009. Organisation Development and Change Management. 9th ed. Mason: Cengage Learning.

Eisenbach, R. et al., 1999. Transformational leadership in the context of organisational change.Journal of Organisational Change Management, 12(2), pp. 80-88.

Griffin, R.W. and Moorhead, G., 2011. Organisational Behavior: Managing People, Change Management and Organisations. Mason: Cengage Learning.

Hoag, B.G., Ritschard, H.V. and Cooper, C.L., 2002. Obstacles to effective organisational change: The underlying reasons. Leadership and Organisation Development Journal, 23(1), pp. 6-15.

Kirsch, C., Chelliah, J. and Parry, W., 2012. The impact of cross-cultural dynamics on change management. Cross Cultural Management, 19(2), pp. 166-195.

Raza, S.A. and Standing, C., 2011. A Systemic Model for Managing and Evaluating Conflicts in Organisational Management Change. Systemic Practice and Action Research, 24(3), pp. 187-210.

Schwering, R.E., 2003. Focusing leadership through force field analysis: new variations on a venerable planning tool. Leadership and Organisation Development Journal, 24(7), pp. 361-370.

Sisaye, S., 2005. Management control systems and organisational development: New directions for managing work teams – Change Management. Leadership and Organisation Development Journal, 26(1), pp. 51-61.

Skordoulis, R.T., 2013. Strategic flexibility and change: an aid to strategic thinking or another managerial abstraction? Strategic Change Management, 13(5), pp. 253-258.

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Business Strategy BT

Development Strategy for Business Resilience and Sustainability through an Incremental Strategy – A Study of British Telecom

This report discusses the comparative analysis of three strategies namely incremental, renovate and inventive within the context of the internal as well as the external environment of a company such as BT (British Telecommunications Limited) which is a multinational telecommunications services company headquartered in London. It also evaluates a change management programme that can bring about strategic change within this organisation. BT has a global services as well as a retail division. Its operations span 170 countries throughout the world.

Company’s Internal and External Environment and Its Strategy Type

In the current business scenario, intense competition, integration across global markets, changes in technology and the advancement of the telecommunications sector are some of the external factors that influence the change management program of BT. the Company’s managerial talent and the level of the motivation of its workforce are some of the internal factors influencing strategic management. In order to improve the effectiveness of the organisation, strategy is the key because it leverages the capabilities of the individuals and the institution in a cohesive manner. The ideal development strategy for a company like BT that seeks business resilience and sustainability throughout its line of operations is an incremental approach.

Strategic Capabilities

Incremental strategies are effective within the current dynamic environment. Regulatory convergence is a key factor in the selection of incremental strategy for handling change and sustaining profits. The challenges of global competition have to be seen within the broader regulatory framework for effective strategic management. The incremental approach to strategic management is in response to the complex and ever changing corporate environment. Consequently, the strategic process moved in an incremental manner adapting to changes in the internal and external environment of the company. Decisions will then be driven by multiple goals. BT has low levels of business resources with respect to its telecommunications services though it is steadily expanding in the field of broadband communications. BT has reported a fall in sales though it experienced a healthy profit in 2013. Moderate or high business resources imply greater strategic capabilities which enable the company to excel using innovation or denotative strategic management. Annual pre-tax profits of BT were up by more than 40% but sales fell by 4%.

Business Strategy BT Competitive Analysis

The major feature of the incremental strategy is that it is decentralised and it responds to dynamic environmental challenges. BT is facing a changing socioeconomic milieu wherein the incremental approach accounts for this variable. An incremental strategy enables the organisation to fulfil its mission by closing the divide between long as well as short term goals within a changing environment. Organisational design followed a contingency approach since landmark research was conducted by Emery and Trist (1965) as well as Lawrence and Lorsch (1967). When a company faces a challenging environment, incremental strategy is far better than inventive or renovate strategies on account of the challenging environment faced by the company. As a British MNC which has to face global competition, BT should opt for an incremental strategy to boost its prospects and sales.  The degree to which the environment of a company is globalised also influences its development strategy. Porter has proposed the five force model for analyses of competition presented below:

Porters 5 Force Model
Porters 5 Force Model

Figure 1: Porter’s 5 Force Model from Michael Porter, “Competitive Strategies”

Porter’s model elucidates how competition from different sources can create industry rivalry. Competitive analyses in the context of an incremental strategy is suitable for organisations such as BT which want to cope with competition from different sources, as discussed in Porter’s model.

Business Strategy BT Competitive Advantage

BT needs to consider the complete gamut of competitors through an incremental approach to change management. Porter (1980) has argued that organisations should consider the behaviour of firms that are producing same/similar products as well as the action of suppliers, competitors producing substitute products and the customers themselves. An incremental strategy enables companies such as BT to develop a holistic view of the market to promote business resilience and boost profits. Competitive advantage has been discussed through a model proposed by Porter discussed below:

Porters Generic Strategies Model
Porters Generic Strategies Model

Figure 2: Porter’s Generic Strategies Model (Porter, 1980)

Ansoff (1985) has discussed how companies should also develop the strategy keeping in mind the flow of critical resources for production. They should also consider how they will impact non-market actors. Nonmarket actors or strategic interest groups also have an important role to play in influencing the development strategy of a firm. BT should follow a cost leadership strategy for low cost rather than aiming for product uniqueness as there are many rivals offering advanced services in this sector.

Culture

The culture of an organisation also plays a key role in influencing the strategy it adopts. The company’s abilities revolve around the resource, skills and procedures as well as its competencies. Attitudes and other cognitive factors reflect an organisation’s culture. The work culture at BT is unique. It focuses on completion of projects and garnering of crucial contracts. The organisational culture of a company influences its success in current times. BT needs to follow an incremental strategy whereby it adapts to changing global and domestic environment so that it can keep up with its competitors. The choice of a strategic management approach is based on several critical considerations such as an organisation’s strategic capabilities, competitive analyses, competitive advantage and culture.

An organisation must have a strategy that can meet the challenges of its internal or external environment (Ashby, 1961). Therefore, an incremental strategy would be ideal for enhancing the sustainability of business practices and the resilience of British Telecom. Consider the personnel, structure, systems and financial resources to be important factors in any strategy for change management. An incremental strategy follows a contingency approach which is ideal for British Telecom.

The organisation’s culture as reflected by collective values, experiences and beliefs of its members also has a critical role to play in its success. An incremental strategy for development and change management incorporates this effectively, making it the viable and effective choice for BT which has skilled employees. An incremental strategy is ideal for bringing about small but important changes in the organisational functioning compared to inventive or renovate strategies which focus on large scale change.

In order to possess business resilience and sustainability in its operations, BT needs to follow an incremental strategy to bolster its current organisational culture. Companies need to be proactive to cope with changes such as economic slowdowns, increased global competition and massive amount of technological advancement. BT would do well to adopt an incremental, contingency oriented approach to strategic management to cope with this.

Critical Evaluation of the Incremental Strategy

Incremental strategy is ideal for British Telecom.  An incremental strategy enables the company to have flexibility in coping with uncertainties in the field of policy regulation and governance.

People

There is a need to bargain with stakeholders and integrate human and organisational capabilities to catapult the company to the path of success. Renovate and innovative strategies can only be effective in environments where there are less regulation uncertainties (Lindblom, 1979). Each of the different resources within a company plays a critical role in its success. Through an incremental approach, British Telecom can impact its employees in a positive way. By instilling coping skills and out of the box thinking to manage dynamic and changing situations, BT can boost its profits.

Employees also differ in terms of their personal knowledge, perception, limitations, and it is due to this inherent complexity that incremental strategy can be the perfect tool for change. Diversity is one of the chief features of the workforce at BT. Therefore; development strategies followed here should take advantage of this versatility. Incremental approaches to strategic management can accomplish this.  Top managers within the same company can approach the same problem with different solutions (Bower & Doz, 1979).

Operations

Operations system provides guidance regarding how work procedures must be carried on and provides the framework for performing the work People are the key resources of any company. They are the prime assets which spur the growth and development of the organisation. Operations are a key area where rapid changes have to be kept pace with. The internal as well as external stakeholders also play a central role in the company’s success (Lindblom, 1959; Mintzberg, 1919). Balancing the goals and interests of stakeholders is the key to organisational success (Ansoff, 1985). BT should adopt an incremental strategy to improve operations.

Finance

Financial resources are necessary to accomplish goals and provide rewards. Money is one of the primary motivators for obtaining optimal performance from employees in the work setting. Annual pre-tax profits were up 42% to £2.4bn, last year for BT while sales were down 4%. An incremental strategy is ideal for a company such as BT which has ample financial resources.

Technology

Technology sets the stage for the company to maximise its capabilities if it keeps pace with it. Effective utilisation of resources is a must if a company has to progress and make healthy profits. An organisation’s culture is maintained and transmitted by its workers. Leaders of internal stakeholder groups are the key assets to instil positive change within an organisation. For companies such as BT that are facing moderate to heavy environmental turbulence, an incremental strategy for strategic management is needed (Mintzberg, 1973).

Several comprehensive reviews have been conducted by leading researchers in the field of strategic management (Hofer, 1976; Vancil, 1976; Armstrong, 1982). Research has found that degree of formality centralisation, hierarchical structure and comprehensiveness of any company is influenced by its environment, and complexity (Armstong, 1982, Hofer, 1976). In current scenario, an incremental strategy is optimal for BT.

Change Management Programme

A change management programme for British Telecom must incorporate an incremental approach. This is because its external and internal environment is more suited to an approach that makes allowances for sudden and rapid changes. Whether it is people, financial aspects, technological advancements or  organisational culture, all aspects of an organisation’s functioning need to be taken into account for effective change management. A conventional approach towards change management will not be successful. In 1995, John Kotter published his landmark paper “Leading Change: Why Transformation Efforts Fail”. This paper cited how only 30% of change programs are successful.

The biggest advantages of a change management programme for British Telecom through an incremental strategy is that it will make allowances for the rapid changes in technology and competition that are taking place in the Indian telecommunications sector. Colin Price and Emily Lawson (2003) suggested that the conditions which must be met for employees within an organisation to embrace change include their agreement to the change, effective role modelling for inculcation of change oriented behaviours, and reinforcement systems that encourage the behaviour and the skills required for change. The structures, systems, processes and incentives within a change management program should be conducive towards a positive transformation of the company into a reliable and sustainable business.

An incremental approach to strategic management can bring about this transformation for British Telecom. But change management processes should have an appeal for employees. Businesses that want to do more than survive have to remodel themselves to match up to competitors. Change management programmes have incorporated various methods such as total quality management, rightsizing, restructuring, cultural change and turnarounds in a bid to improve their profit margins. British Telecom needs to follow a change programme that pursues innovation in a way that is flexible and keeps in line with the incremental strategy of adapting to changes. Too many companies fail to progress beyond a certain point when it comes to garnering market share because they do not anticipate change due to factors such as advances in technology and industrial competition. Even a change management programme based on the incremental approach can have a few pitfalls though. Anticipating change is not easy. Many times, market analysts may be predicting a trend which is short-lived. Kotter’s 10 year study of more than 100 companies found unsuccessful change management programmes failed to generate the urgency or formulate a vision that could be communicated well to bring about a complete transition.

Companies need to be practical and realistic in their aspirations. Only then can change management programmes succeed in a complete sense. Obstacles to the change management programme suggested in this paper include rapid changes in the regulatory framework, unforeseen innovations and advancements in the field of technology and lack of market foresight. Genuine transformations require game changing ideas which can bring about creative solutions to problems. A change management programme based on an incremental strategy can only succeed if company personnel have the objectivity to view successes and failures in accurate ways.

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