Employee Relationship of British Airways

Employee Relationship of British Airways (BA)

• Brief description of organisation

British Airways happens to be the ninth largest airline in the world, in terms of the number of passengers it carries. At the international level, it operates to more destinations than any other airline and therefore is considered as an airline possessing the strongest network in the international market. At present, it is operating to 167 different destinations in 87 different countries around the globe (British Airways Plc and British Caledonian Group plc, 2002).

British Airways has the major advantage of being based in a premier location, i.e. London Heathrow, which is considered the heart of the European air travel and is a major business hub. The primary advantage of being at London Heathrow is that the company can offer convenient and less time consuming connections to almost all the important destinations around the globe. Considering the rise in air traffic at Heathrow, British Airways has recently shifted some of its short haul operations to London Gatwick. The company faces a different form of competition in the international and domestic market. At the domestic front, its primary competitors are low cost airlines like Easy Jet. At the international level, it has to compete with giants like Lufthansa and American Airlines (Dalgleish, S, 2003).

The primary business of the firm is offering scheduled air services to passengers and cargo on international and domestic routes. On a note, BA’s scheduled passenger services and cargo services work independently and are therefore considered two major divisions of the company. Scheduled passenger services accounted for about 85% of the company’s turnover in the fiscal year ending March 2003(Social and Environmental Report, 2002/2003). Cargo services are considered a less profitable venture. The most important component of BA’s route network is the flight operating on transatlantic routes to a number of US destinations.

• Analysis of management methods

British Airways is a heavily unionised company with sound concepts of industrial democracy. In terms of the company being collectivist or individualist, it’s not apparent to say as the company ethos is geared towards customer care and great emphasis is placed on the employees as a large family. However, the company has remnants of individualism as its recruitment policies are geared towards seeking talent within the existing structure of BA and not from outside. This approach encourages employees to out-compete each other and move up the hierarchical chain. Subsequently, this means that managers have broad general management experience but limited knowledge in one particular area of expertise (Farnham D, 1993, p38-9).

 Types of individualism:

Individualism can be broken down into “high” and “low”. The former emphasises the resource status of employees, with employers wanting to develop and nurture their employees’ talents. This is shown in company policies and training programmes such as “Putting people first” Furthermore, the use of emotional processes is reflected in appraisal and reward systems such that performance is judged the way it is performed as well as against higher targets. Managerial bonuses can be as much as 20% of the basic salary (I Grugulis and A Wilkinson, 2001, p13). This concept of high individualism is associated with a “neo-unitary” approach to employee relations. At the other extreme, low individualism emphasises the commodity status of employees with employers concentrating on labour costs and profits. Although BA does appear to have the characteristics of both “high” and “low”, it’s wise to say that an intermediate station is occupied by the company, thus, referred to as “paternalism.” This synthesises caring, welfare policies with all employees in the organisational structure.

 The nature of collectivism:

Collectivism is the “extent to which the organisation recognises the right of employees to have a say in those aspects of management decision-making which concern them” Collectivism is operated through trade union organisations, which BA has strong links with (Transport and General Workers Union) thereby it gives employees a collective voice in company decision making. Collectivism, like individualism, has two extremes ranging from “willing cooperation at one end to a grudging acceptance at the other” (Farnham D, 1993, p36-7)

It is important to understand that no company is strictly individualist or collectivist and the links between the two employee relations