Strategy Case Study BRITISH AIRWAYS still 2006

Résumé du document

Bob Ayling started to implement a large panel of audacious actions to produce BA as a world class company. First of all, he cut the top executive team from 25 to 14 to improve its efficiency and limit its cost. Then, he went on to establish an alliance with American Airlines to ensure that the two companies, together, could control 60 % of flights between the UK and the US. In 1997, he decided to make an identity change because the airline, carrying 60% of foreign passengers, had to portray as a "citizen of the world" rather than a national company.

Extraits

[...] Mistake He is awkward: He does not explain his strategy to the whole staff and seems to be disconnected to the rest of the firm. He reduces the number of his executive team from 25 to 14 people. He gets rid of strategic people within the firm. Indeed his communication is awkward and gets rid of director of communication and marketing. Indeed these both functions could have been used to improving the internal communication and the message of the boss by the staff. [...]

[...] Record profits of £585 million in 1996. A. Mistake The firm works well but Ayling demands always more to his staff. It is badly understood by the employees. The boss becomes the chief executive and sets up quickly his policy. He should have met the Trade Unions in order to explain them what he is going to do in term of management. B. Mistake The boss decides to reduce management cost (with the BEP) because he thinks that increasing competition will make profits fall. [...]

[...] They suffered from threatens like intimidation, dismissal, absence of promotion from the Management Instead of threatening the staff on strike, it would be necessary to know and to understand the reasons of this displeasure. To meet the Trade Unions To have more dialogs with the employees to understand the uneasiness of the strikers. The staff seems not to trust in Bob Ayling The employees Executive Management III. Enterprise experiment A. The 3 reasons why customers service has deteriorated by the end of the period 1996-2000: Culture . Radical change in attitude when Ayling became chef executive: culture, strategy, communication. Unnecessary risks taken whereas the situation of BA was good. [...]

[...] He reacted in a wrong way during the strike. He tried to punish instead of understanding the problem. His main failure was to sacrifice the corporate culture of BA to reach his objectives, reducing cost. Other points include: failure to staff at high level internally (too many non BA execs), hiring mistakes (lawyer for no challenges to his views (all execs nominated by him) failure to get low cost GO CY off the ground, etc Bob Ayling also decided the acquisition of 43 new aircrafts. [...]

[...] STRUCTURE Scrap of the in-flight catering division and the ground fleet services (sold in 1997) whereas they were the best strenghts of the BA customer service (lost of control of the quality service. The structure was not adapted to BA so the employees were disrupted,(low morale, no motivation) so they lost their efficiency and involvement. The centralized structure increased the risks and reduced the adaptibility of BA in its difficult environment. B. Why had Ayling a good image Experienced in the company Polyvalent Progressive evolution/meritocracy Had proved his efficiency in cost savings million) Won a difficult challenge (American Airline's) His measures were first successful ( service level, costs, share price . [...]