Types Of Organization And Challenges Faced By British Airways
Write a report on British Airways by providing a thorough analysis of the Business Environment in which the company operates.
There are different types of organization and the structure of the organization is completely dependent on the type of the organization. Few of the types of organization are discussed below.
The formal organization will help all the activities to be very well planned. If an employee in the organization is planning to get something done then it will include lot of formalities. A lot of formalities will be in place so that the employees can follow a process. Apart from that, a formal organization will also be well guided by the set of legal formalities that they need to follow so that all the activities are well planned in advance.
Informal organization is another type of organization and this is generally formed by a small group of people. This organization is not dependent on the legal formalities or processes. This is more dependent on the trust that members in the organization share with that of each other. Grape vine communication system is followed in the organization and it is considered to be perfect only when the number of employees in the organization is very less.
Matrix organization is the third type of the organization. In this organization, every employee in the organization will receive commands from one senior. This helps the employees to be clear regarding what needs to be done and what needs to be avoided. The processes are clearly defined and the employees are also aware of the seniority in the organization (Coppola 2001).
Project organization is another type of organization wherein the management of the organization will be sure regarding what they need to do and the also the ultimate goal of the organization. This organization is completely dependent on people who are skilled and also people who have the capability in them to help the organization to reach the ultimate goal.
Virtual organization is something that is dependent on the modern technologies that are widely available for the purpose of communication. This organization operates exactly like a formal organization but the employees in the organization may be present at different locations and they will communicate with each other via various communication technologies (Otley 2013).
The main objective of British Airways is to focus on aviation business, help people to move from one location to that of another and they will also help their customers in also moving the cargo. The organization will also look for ways by which they can develop new products and services so that the satisfaction of the customers can be increased (King 2001).
Most of the countries in the world are aware about the presence of British airways but the management of BA wants to be an organization that is known throughout the world. They will try to motivate people from different corners of the world so that they can opt for BA whenever they are planning to fly.
The organization will also look for ways by which they can justify the premium price that the customers will be paying. This will motivate the customers to pay rather than that of thinking that the airways are charging extra (Segal 2009).
The challenges that are faced by the organization will create an impact on the stakeholders. Few of the challenges that create an impact on the shareholders of the business are discussed below.
If the price of the services associated with flying with British Airways is increased then this will directly create an impact on the customers. The customers will have to shell out more from their pockets and hence, there are also possibilities that the customers may opt for some other airways over BA.
It is very important to consider the expectations that the employees have from the organization. If the organization doesn’t look for ways to satisfy the requirements of the employees then the employees may leave the company. It will be very expensive for the company to train the new resources and hence, it is always better to retain the existing customers.
Government will come up with various norms so that the company can be in line with the requirements of the society. It is the responsibility of the management to comply with the government policies. If the company doesn’t comply with the government policies then they will be fined and in severe situation, the organization will also be forced to shut down (Eugene 2003).
There are different types of economic systems in the world and each economic system will create a different impact on the British Airways. Each economy has its own advantages and disadvantages so it is the responsibility of the management of British Airways to make decisions accordingly. The impact of each economic system is discussed below.
Command economies believe in understanding the demand of the product or service and then they accordingly plan their production. This economic system does create an impact on the business of British Airways. British Airways can increase the number of trips during the peak season. During the peak hours, British Airways can also hire more contract employees so that they don’t end up paying to excess employees, throughout the year.
Free Market economy is an economy wherein the government doesn’t interfere in the decisions of the business. Such an economy doesn’t exist for British Airways. The decisions of British Airways need to be in line with the government policies of the particular government.
Mixed economy is being adopted by many countries. In this kind of economy, the government makes regulations and at the same time, it gives freedom to the organization as well to make decisions. British Airways believes in working with such economies rather than that of forming their own policies.
Transition economy is the economy in the form of transition from one economy to that of another. These kind of economies can be really problematic to the business as they may not have a stable policy and hence, businesses will suffer.
There are different group of stakeholders for British Airways and each group of stakeholder has a different of expectation from the company. Few of the stakeholders and the challenges associated with various stakeholders are discussed below.
First and foremost, British Airways is concerned about the customers who like to travel through British Airways. Providing value for money is one of the most important things that the organization does. British Airways provides premium service to the customers so that the customers are satisfied with the services and products that they receive from BA (Dana 1999).
The second customers would be employees. Employee satisfaction survey is conducted at regular intervals so that the employees can express their expectations to the management. The management analysis the expectations of the employees and then change in the policy are made accordingly. This allows the employees to feel important while they are associated with the organization.
Government of different countries is concerned about the policies and regulations that are associated with the organization. British Airways takes a note of various policies that they need to follow in each of the country so that they can fulfill all the requirements and at the same time, this will help the company to be free from all the legal complexities. Apart from that, British Airways has a legal department that will take care of the legal formalities that they need to complete (Prassl 2011).
The change in the regulatory policies, competitive policies and the legal policies creates a direct impact in the airline industry. To stay ahead in the competition, British Airways also needs to fulfill that. Few of the places wherein one can see the impact of change are discussed below.
As British Airways is a government establishment and hence, any change in the regulatory policy will have to reflect on the policies of British Airways as well. If the wage policy of the government employees to be changes then British Airways will have to change the wage structure of all the employees in the British Airways. This will create a huge impact on the management and also the budget that has been prepared for the particular year (Swickard 2003).
Apart from sticking to the government policies those are in place, the management of British Airways also needs to keep a track of the other companies which are considered as a competitor by British Airways. If one of the airways reduces the price of their ticket fares then there are possibilities that the customers would opt for that particular airline over British Airways and hence, the management of British Airways will have to continuously track the performance of competitors in the industry.
Just like all the companies, British Airways will have to stick to legal policies that are in place. If the organization will have maintain a particular set of documents for record keeping then British Airways will have to maintain it rather than that of being ignorant. If the requirements of the legal policies aren’t met then the government will be forced to change the management (O’Leary 2002).
The market structure of airline industry is oligopoly in nature. There are few airline companies but all the companies are trying hard to attract and retain the same set of customers. The competition among the companies in the airline industry is very high as they know that they will have to be competitive enough so that they can survive in the market. Each company in the airline industry has the power to decide on the prices at which they would like to offer services but at the same time, the company cannot just randomly set anything that they think is appropriate (Ellis 2011).
Talking about the price in oligopolistic market, it is the responsibility of the management to decide on a price that will be accepted by people. If pricing of the company is more than that of the other companies in the industry then all the companies will ultimately boycott the company that has high price. If airway looks for ways to justify the price that they are charging then there are possibilities that the customers would like to be associated with the business.
The demand for the airways is also dependent on the market structure. In airlines industry, there are multiple companies which offer the same service and hence, if the customer is not satisfied with the service provided by one of the companies then there are possibilities that they will boycott that particular company and will look for some other company that will meet up with their requirements. The demand for flying is high but there are plenty of companies in the airline industry and hence, the customer may opt for some other competitor (Arnold 2008).
It is responsibility of the management of British Airways to track the different players who are available in the market. Each of the players in the market will come up with some or other creative ways so that they can survive in the market. The management of British Airways will have to look for ways by which they can come up with strategies that are competitive enough to compete against the contenders in the market.
The government regulations create a direct impact on the organizational responses of British Airways. British Airways is a government owned airlines and they will have to look for ways by which they can be in line with the requirements of the government. Slight deviation from the government policies may be seen in some private companies but that will create a direct impact on British Airways (Mannion 2011).
The continuous improvement in the technology also creates an impact on the changes that create an impact on the organization decisions. With the help of technology, British Airways can help the customers to gain complete knowledge about the products and services that are available with them. This knowledge will help the customers to better choice and hence, their customer satisfaction will improve. There are plenty of internet applications that is helping the passengers to check in through the mobile. The mobile screen can be used as a boarding pass and at the same time, the live status of the flight can also be known to the passengers and also the airlines employees through an internet based application.
Before 1995, British Airways was one of the most profitable organizations that were available in the industry but time changed as the number of competitors in the industry increased. After the recession in 1995, the profit margin also reduced as the sales of British Airways reduced. Plenty of low cost operators came into picture and hence, British Airways had to look for ways by which they can reduce the cost and at the same time, they also had to look for services that can justify the price that they are charging (Arnold 2008).
The management of British Airways tries to maintain a culture that can satisfy all the employees in the organization. At the same time, the satisfaction of the employees shouldn’t create an impact on the financial goals of the organization. Cultural training is given to all the employees in the organization so that they can be in sync with each other and at the same time, this training helps the employees to develop an attitude that will motivate them to stay longer with the organization.
In the past, all the employees in the organization were wearing a uniform which had a cross in it but now, they know that they have their presence in different countries. People in different parts of the world follow different religions and hence, the have allowed the employees to emboss Sikh symbol or Allah symbol so that they can be connected with their religion. This helped all the employees at the workplace to feel equal (Arlow 2009).
All the managers on the floor are motivated to be active in helping the employees. The managers at British Airways are trained to be friendly so that the employees can share their problems and concerns with the management rather than that of creating grape vine in the organization. British Airways believes that grape vine is one of the unhealthiest modes of communication and it should be avoided at any cost and hence, the management is designing its policy accordingly.
Training the employees with regards to the attitude that they hold about the organization is one of the things that will decide about the success of the organization. The employees are motivated to understand the expectations of the customers so that change in the policy can be made accordingly. The management ensures that the employment policies of the organization are also changed at regular intervals so that the employees can believe that the management is concerned about the betterment of the employees and not just in making profits. Employees are motivated to express the multi skills that they hold as this helps the employees to be motivated to try new things and at the same time, these employees will stay back with the organization for a longer duration (Moyer 2006).
Global changes are creating a direct impact on British Airways. Different organization in different corners is creating an impact on the different policies that prevail. WTO has various policies in places with regards to the airline industry and it is the responsibility of every airway, including British Airways to understand and implement the policies that are decided by WTO.
WTO has let down norms regarding the maintenance repair, ticket distribution and franchising. Due to the new policies, British Airways will have to ensure that timely repairs are done to the aircrafts and the repairs with regards to the aircraft maintenance will have to be sent to WTO so that they can be safeguarded from the legal complications that they may face (Graham 2014). If British Airways is planning to give franchising rights to an organization in some country then they will have to ensure that all the WTO policies are fulfilled by the franchisee so that standardization can be maintained in the airlines industry throughout the
Open skies policy is in place throughout the airlines industry. The airlines industry is looking for ways by which economies of scale can be achieved and hence, British airways cannot randomly choose timing for their aircraft. They will have to communicate with the officials and take approval from the concerned authority so that they can fly their aircraft. Open skies policy is introduced to avoid air traffic (Caswell 2012).
Various regulations will create an impact on the policies of British Airways. It is the responsibility of the management of British Airways to ensure that all the policies are in sync with the regulation. Few of the regulations that create a direct impact on the operations of British Airways are discussed below.
Federal Trade Commission is in place to ensure that British Airways sticks to the advertising policies. Many companies have started with unethical marketing by way of displaying benefits of services and products which wasn’t offered at all. This is when Federal trade commission comes into picture so that companies can follow ethical marketing that will show only the right things to the customers.
Employment laws are one thing that changes frequently. It is the responsibility of management to ensure that the British Airways is in sync with the employment laws that is in place. The wages of the employees at British Airways is revised at regular intervals so that the management can be rest assured that they are in sync with the government policy. Apart from paying wages to the existing employees, the organization also ensures that the retirement benefit of the organization is in sync with that of the industry standards.
It is very important for British Airways to look for ways by which they can be competitive enough in the market. First and foremost, British Airways should stay ahead in the competition because there are plenty of airways. Even if the customers are slightly disappointed with any of the service that they receive from British Airways, they will look for some other airways. British Airways should develop a strategy wherein the customers are given utmost importance. This will help the customers to be associated with British Airways for a longer time.
British Airways is a renowned name in the industry and hence, they can connect themselves with some charity organizations from around the world. These charity organizations will help British Airways to build a reputation in the market. Apart from that, the employees at British Airways should also be motivated to be a part of charity programs. The management should motivate the employees to undertake various charity programs.
Pollution created by British Airways is quite high and hence, the management should look for ways to reduce it. The noise pollution created by aircrafts should be reduced by 15% by 2020. Carbon efficiency should be increased by 25% before 2025. Apart from that, the company should also concentrate on recycling so that the organization can be overall termed as an environmental friendly organization (Ledwidge 2007).
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