British_Airways

Introduction In July 2003, British Airways (BA) attempted to introduce a swipe card system for its employees. This was at a time when BA was reporting large financial losses, while still recovering from the effects of the Iraqi war, 9/11, SARS and competitive threats from budget airlines. In 2001, BA began implementing a restructuring system called the “Future Size and Shape Recovery Program”, including the implementation of the swipe card system. From the program’s inception in 2001 until July of 2003, almost one in four jobs had been cut within the airline. Morale was poor, with staff noting such things as fear, mistrust of management, lack of transparency, poor or no communication of changes or involvement in decision-making. BA announced that ground staff would use the electronic swipe cards to check in and out of work five days prior to the proposed date for the implementation of the new system. There had been no fruitful discussion with the ground staff in relation to this new system. As a result of the announcement, and with staff feeling they had no other options, 250 check in staff held a wildcat strike, which lasted for 24 hours. Although the catalyst for this strike was the implementation of the new swipe card system, the case suggested that this change was merely the straw that broke the camel’s back. The underlying tensions between management and staff had long been festering. The initial impact of this strike lasted for three days with 60 flights grounded and 10,000 customers left stranded. BA later reported that this strike contributed to a loss of over 40 million pounds, a further loss of 100,000 customers and its public image being severely damaged. This case study will examine organizational change and through the theory, explore the reasons for BA’s failed implementation of the swipe card system. The following discussion and analysis will examine how the actions of BA’s management, including inadequate planning and a lack of communication, led to resistance from staff. The causes of resistance to change and other employee responses will also be examined. Discussion and Analysis It is evident from the case that the reason the introduction of the BA swipe card system was a failure was due to a myriad of poor practices by management. These included, inadequate planning, lack of appropriate timing, a lack of understanding of the psychology and morale of their staff, also a lack of communication with stakeholders. This led to fear, mistrust and resistance from the staff of BA. This section of the case analysis examines these issues. Inadequate Planning This section will cover the management planning aspect of both the case study and the theory and show the importance of the people aspect. While BA was planning the implementation of the swipe card system it had shown its largest ever-quarterly loss. As a reaction to this, BA abandoned talks about the system and decided to ‘force’ its implementation, even though it was grossly underprepared to do so. It is estimated that approximately 70% of change initiative fail and that negative employee reactions are most common in the context of organizational change (Scheck and Kinicki 2000). The statistics show that companies are more likely to fail rather than succeed when changes are implemented (Scheck and Kinicki 2000; Pellettiere 2006; Oakland and Tanner 2007). BA management was “aloof from the mood of its employees” and this was its first miscalculation. Its failure to recognize the importance of the need to get staff on board with the introduction of the new swipe card system was a critical mistake, which led to the eventual strike. As the literature demonstrates, a short, straightforward view of leadership is: getting a task accomplished through people and BA did not plan enough for the people aspect of the change (Cangemi 2008). Another aspect in BA management’s lack of planning is its “massive miscalculation of the workforce’s mood,” this was a rocky foundation on which to attempt to build change. Change efforts are much more successful when not only the strategic advantages but also the “people aspect” and their environment is explored (Woodward 2004; Marques 2007; Eaton 2010). While management was trying to “modernize BA” by looking for a “system to manage people,” the very people they were trying to manage were “at the end of their tether” and wanted “respect.” BA management failed to involve many levels of the organization in the decision making process. This failed to give staff a feeling of belonging, which in turn did not help them adopt change efforts with ease (Marques 2007). The “lack of consultations with affected staff” that caused the strike could have been foreseen had the proper preparations and communications been made (Eaton 2010). Management rushed the implementation to “the start of the summer quarter when the airline makes all its money.” This was a time where staff were already under stress and therefore more likely to resist changes to the status quo and nothing upsets people more than upsetting the status quo (Woodward 2004; Eaton 2010).With BA making huge losses they felt pressured to change quickly and this is often the case in conditions of change (Meyer 2007). This section has shown, however, that BA management did not adhere to the appropriate preparation and planning processes and therefore the change process, according to the theory was destined to fail. Change is adopted more easily when employees feel that they have been closely involved in the process. In BA’s case, management had “abandoned talks” and implemented the system within days. This lack of communication incited not only anger amongst the staff, but also fear and resentment, which will be covered in the sections below. Lack of Communication The following section will explore how the management of BA communicated with affected staff prior to the implementation of the smart card. In the case study, management failed to effectively communicate the reasons or goals behind introducing the swipe card system. This left staff ”wondering why” and led the employees to jump to assumptions about BA “manipulating their working hours, and splitting shifts.” The perceived motivation of the management for implementing change is critical to the attitude and cynicism of the staff (Stanley 2005). BA failed to articulate their business vision clearly to affected staff. As a result, it limited its abilities to have employees buy in and thus significantly reduce its chance for success. Leading change cannot be commanded and is much more effective when there is commitment from all involved (Harper, 1998). In the BA case study, “a lack of adequate consultation with affected staff was cited as the key reason for the strike.” Employees are ultimately responsible for the execution of changes and initiatives, and that depending on employee behavior, leading employees to ensure that they support the changes is critical for the success of the change initiative (Armenakis and Bedeian 1999; Eaton 2010). Even when management feel it has developed the right strategy to be proactive and sensitive, if the employees, as implementers or change recipients have a lack of knowledge or confidence in management decisions, then the change strategy is likely to fail. The more information people receive about change, the less they will resist it (Wanberg 2000; Weeks 2004). When BA’s managers gave “contradictory statements on the use of the smart cards” it further fueled the opinion of confusion and “fomented mistrust” amongst staff. The focus of management and staff during this time were poles apart. While management were interested in systems and efficiency, staff were concerned with working hours and “respect”. This misreading of the workforce doomed BA’s plan (Woodward 2004). As in the BA case, when management’s dealings with lower level employees are less than completely honest and open and are typically disrespectful, it causes cynicism from those employees and will inhibit change efforts (B., Brief et al. 1996; Stanley 2005). Weick (1995) states the importance for staff to be able to make sense of organizational changes, structures and procedures and in particular the changes that they are faced with in order to develop commitment (Eaton 2010). BA management did not take these things into consideration prior to the communication of their change effort (Weick and Quinn 1999; Eaton 2010). BA management failed to prepare its staff for the change process, which requires individual sense making. This can be facilitated by monologic change communication- ie: top management describe why the proposed changes are important (Frahm and Brown 2005). If this communication is clear and concise it leads employees to feel a part of the change effort and will aid its implementation (Eaton 2010). BA failed to use any of these strategies to deliver its message about the changes to the staff. Rather, they delivered their decision to implement the changes as a “forced imposition at just five days’ notice.” BA disregarded the need for further talks with staff; this lack of communication was a key reason the change initiative failed. Employee Fear and Trust This section of the case study will explore employee fear when confronted with change and their levels of trust (or distrust) of management. In the case study it states that “almost one in four jobs” had been cut in the two years preceding the swipe card implementation as part of BA’s broader restructuring, the “Future Size and Shape Recovery Program.” This left the staff feeling uneasy, fearful and that they were “being turned into automata” thus causing real barriers to successful change efforts. Although change is common in today’s business world it is still held in a state of fear. It striped BA employees of knowledge and took them into the unknown where they felt they had no control (Weeks 2004).BA management failed to take into account that fear of the unknown is common and can become a barrier to successful organizational change efforts (Zimmerman 2004). BA’s “absenteeism” was well over the norm and literature shows that organizations that change fundamentally and rapidly can subject their people to additional pressures and demands. Those pressures can be translated into stress, and there is evidence that the cost of occupational health and stress to organizations is considerable (Woodward 2004). Too many simultaneous changes could have repercussions on staff feeling withdrawn, stressed, unmotivated and reduced job satisfaction all of which are seen within the case study (Meyer and Stensaker 2007; Stensaker, Falkenberg et al. 2008). As discussed earlier, it was said ”managers gave contradictory statements on the use of the new cards, which seems guaranteed to foment mistrust.” For change efforts to be successful senior management having their words and actions in alignment is a crucial function (Eaton 2010). Proposed change causes fear and fear limits trust and trust is an important leadership function to try and create a shared objective between management and staff (Zimmerman 2004). Fear is a major reason why employees do not accept changes in an organization. Workers often feel a loss of control as management makes decisions and impose them onto staff (Weeks 2004; Waddell, Cummings et al. 2007). As we see in the case with BA’s insensitivity to both the timing of the change and the perceived eventual outcome of restricting their staff. Given the history at BA in that approximately 13,000 staff had been made redundant since 2001, the case shows that people were already feeling insecure about their position at BA and questioning the management’s motives for change. To motivate staff in change efforts it helps if they are dissatisfied with the current situation. It would also assist if employees perceive that being involved in the change causes little or no personal risk, including factors such as loss of reputation, or career prospects. Moreover, change recipients may feel secure that suggested changes will not appear to cause unacceptable disruptions to personal aspects of their lives such as spending time with their families or on their hobbies (Eaton 2010). “Women in particular” were stated as feeling vulnerable. Staff were quoted as believing BA was introducing the new system to “manipulate working hours” which is hugely concerning for women especially who were trying to juggle such things as child minding, etc to suit their current shifts. When organizations are going through periods of change and instability, employees reexamine their role in the organization and try to understand the organization in terms of its relational significance for them (Scheck and Kinicki 2000). This section explained employee responses that affect people when undergoing change, particularly when it is done with limited information. The literature suggests that employees are likely to respond negatively when quality and timeliness of information is poor. Resistance to Change This section will examine resistance and the factors that influenced BA employee’s resistance to change, including initial attitudes of cynicism and how BA handled this aspect of the change program. The literature states that resistance is to oppose or withstand, and suggests that resistance to change comprises both cognitive and affective components that come into play at different stages of the resistance process (George and Jones 2001). Piderit (2000) also suggests that resistance may often involve a sense of ambivalence whereby employees’ feelings, behaviors, and thoughts about the change may not necessarily coincide. Accordingly, she proposes that resistance be viewed as a multidimensional attitude towards change, comprising affective, cognitive, and behavioral components (Pidetit 2000). Resistance in the case of BA was shown by the employee’s wildcat strike. While management were concerned with issues like losing money and “containing costs”, its workforce were considering “childcare schedules” and “balancing the demands of work and home.” The manifestation of the employee resistance cost BA over 100,000 customers. BA “push[ed] through a scheme without realizing the extent of the resistance by those involved …a management aloof from the mood of its employees.” For the change effort to be successful managements knowledge of their staffs psychology, morale, culture and climate of employees and their environment is crucial because the recipients of change will only implement the change successfully if they are, as a minimum requirement, indifferent but preferably, supportive of the change (Schneider, Brief et al. 1996; Coetsee 1999). The case study quotes employees as saying, “we know BA breaks its agreements” which indicates mistrust and cynicism, a precursor and reason for resistance. Cynicism can be described as the belief that others lack integrity and cannot be trusted (Brown and Cregan 2008; Watt and Piotrowski 2008). BA failed to build commitment resulting in resistance by any initiative to prove to individuals that the organization itself was ready for the change (Weeks 2004). BA managers failed to manage resistance to change and build support for its change effort. Even the best-planned and executed change intervention will run the risk of failure without this. Most people are reluctant to change, especially if it involves learning something new that risks failure, and may see them being left behind. The BA employee’s “wildcat strike” was a show of highly aggressive resistance, the strongest form of resistance (Coetsee 1999; de Jager 2001). When BA’s staff were “forced” to conform to change they had not been engaged in discussions regarding the timeliness, implementation processes and the change itself, therefore it was reasonable to suggest that resistance and a strike of a workforce was a foreseeable course of action, due in part to that group feeling they had otherwise run out of options (Peus 2009). BA were already experiencing “a high rate of sickness” amongst staff, causing the airline “to hire in aircraft and crew to fill in gaps.” This was a symptom of the negative climate, rarely a successful place to implement new systems. This section broadly explored aspects of resistance to change, which is an extensive area of research beyond the scope of this case study. It also demonstrated the manifestation of the employee resistance and some employee reactions. Reasons for Resistance This section will, through the literature, examine reasons for resistance including lack of involvement in the planning process, lack of adequate communication and a lack of understanding the reasons behind proposed changes. The case study reveals that the introduction of the new swipe card system was seen as a way BA could “manipulate their working hours”. This caused resistance. As Coetsee (1999) explains, there is a continuum from resistance to commitment; meaning that the eventual strike, a show of highly aggressive resistance was a foreseeable outcome. The employee’s show of resistance inhibited their ability to commit to the change effort (Coetsee 1999). Change within the organization caused intense emotional reaction, because of the elements of risk and uncertainty. The changes to the way staff hours were recorded heightened the emotional reactions and response from employees as the changes would not only effect staff, but it would also effect their families given that staff were looking at such things as loss of jobs, split shifts etc (Woodward 2004). With BA’s management being “aloof from the mood” of its employees it missed vital information about how a workforce may react when faced with change at times with low morale. As morale was low it was likely that staff were unwilling to endorse almost any new initiative suggested and particularly ones that were forced by management and the perceived management attitude of ‘do-it-or-else’ (B., Brief et al. 1996; Meyer 2007). BA gave up on talks and rushed the implementation of the swipe card system to begin before the holiday season, showing employees that the organisations’ level of readiness for change was not what it should be. From the theory we find when an organisation shows it has a high readiness for change then it is likely, on an individual basis to also occur with staff (Weeks 2004). Employees who perceive innovations as congruent with their own values are more likely to internalize these changes, thus becoming more committed and enthusiastic toward them, unfortunately for BA the reverse is also true. (Klein 1996) This section explored the reasons for employee resistance including BA’s timing error, management implementation strategy and emotions caused by the proposed change. Recommendations BA should have involved an external Organizational Development (OD) consultant and engaged them to use the action research model of planned change. Through the change agent it could have gathered data and analyzed the current system and processes including staff culture and morale. Once this data was fed back to BA management they should have discussed with the change agent if it was still a good idea to attempt to implement the change. Timing could also have been discussed. The OD consultant should have engaged the employees so that they had “buy-in” which would create commitment rather than the resistance of the wildcat strike. Management should have engaged staff in this change process by encouraging them to become actively involved in ways of discussion and inviting them to contribute their opinions through open communication on ways in which the implementation of the new system should take place. Staff should have been given a forum, which would have allowed them to voice their concerns in which to elevate their fears of BA manipulating their working hours and splitting shifts. Collective sense making is very important, and should be encouraged by dialogic communication, meaning communication directly with supervisors where staff have a chance to become more interactive i.e.: ask questions, stimulate discussions among colleagues. If BA included employees as part of the implementation process then it would have increased the likelihood of staff commitment, thus limiting resistance. Simply put, employees must have some incentive to embrace a change effort, the “What’s in it for me'” should not be overlooked by management if the change effort is to be successful. Conclusion In conclusion, for change efforts to be successful many things have to go right. BA rushed its implementation of its swipe card system without fully considering important factors such as timing, employee resistance and communication. Overlooking these things cost the company millions of pounds and over 100,000 customers. Successful change efforts are difficult to achieve and can only be done so with diligent planning, open communication and buy-in from all stakeholders. References: Armenakis, A. A. and A. G. Bedeian (1999). "Organizational Change: A Review of Theory and Research in the 1990s." Journal of Management 25(3): 293-315. B., S., Brief, et al. (1996). "Creating a climate and culture for sustainable organizational change." Brown, M. and C. Cregan (2008). 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