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According to British Airways annual report from 2008/2009, the airline carried more than 33 million passengers. It earned nearly ? 9 billion in revenue, a 2. 7 percent increase from the previous year. At the end of March this year, it has 245 aircraft in service. It shows that the BA financial performance is improving after the financial crisis and the fluctuated oil fuel prices changes (British Airways – Annual Report and Accounts 2008/2009).

However, it is a unfortunate fact that in the 2008 report of scheduled international passengers carried, which is based on International Air Transport Association, indicated that British Airways was ranked in the fifth place while the Ryanair, Lufthansa, EasyJet and Air France ranked above the BA. It was shocked to them because they were always first ranking to investigation about airlines. This figure pointed out that BA needs to plan long-term strategies in order to compete with those four airline companies in Europe and in the all world.

The British Airways now tries to establish itself as a high-performing, marketfocused and global premium airline. In this paper, we focus on the structural perspective of the BA? s company in these recent years. Depending on the three different CEOs in BA, they are the Robert Ayling, Rod Eddington and Willie Walsh respectively, this paper divided into three periods of analyzing the structures of BA. Thus, this paper it is about the basic information of the theoretical perspective. Then, it is about the History of British Airways.

Thirdly, it is about the analysis part. At the end, we will have the conclusion and discussion part about every subject that we mentioned. 1 2 – Purpose of the paper When you begin a business or start working, you begin your own projects, your own challenges, your own fights and you give your first steps in a new way of life. Organizations are where you will start your steps. They mean today, but also mean tomorrow and future, wherever we are. Nowadays it is very important for organizations to develop a deep self-knowledge.

People and human activities need to know how to make the most from their global presence. The main goal of this paper is to analyze how organizations work according to its Structure, Human Resources, Symbol and Political perspectives and define what challenges and threats are faced daily. The company? s history can be acknowledged by everybody, but the tricky part of the analysis is to define the cause of the company? s profits and losses, to point out the key success factors and build new goals and strategies based on this analysis.

Thus, the paper is a good way to get more knowledge about basic organizations theory to know more about one real world company and to learn more about the various subjects connected to theoretical perspectives as well as to improve our ideas, written and oral. 2 3 – The theoretical perspective – Structural Perspective Stuctures are formal and informal framework of policies and rules, within which an organization arranges its lines of authority and communications, and allocates rights and duties.

Organizational structure determines the manner and extent to which roles, power, and responsibilities are delegated, controlled, and coordinated, and how information flows between levels of management. 1 The structural view has two creators: Frederick W. Taylor (1911) and Max Weber (1922). Despite, they saw this issue about different perspectives both of them wanted to improve maximum efficiency and performance in that time organizations.

The structural perspective aims to defeat lack of activity periods, doubts and dissatisfaction of employees about their role in works and companies in order to make organizations achieve short and long-run goals and results, increases their efficiency and maximize performance through specialization and division of labor and suitable forms of coordination, control and working best ways. Overall, the structure frame is the key element for profitable and sustainable organizations.

Organizations works best when rationality prevails and they are ready to anticipate and deal with environment issues and other uncertainty problems. As mentioned, the main goal is create coordinate, balance and efficiency organizations which can thrive for many profitable years. Therefore, structure will work as a “blueprint” (Bolman and Deal, 2008) inside organizations. First of all, it is not possible to take one structure as ideal, whereas the structures are different from organization to organization, because each one has their own identity and strategy.

Today, all of them face pressures of globalization, competition and other environment pressures outside and inside the organizations, therefore, organizations cross times where they have to “rethink” and reconsider new approach, perhaps through restructuring. These restructuring pressures, conducted by elements of the company environment should be considered as a main source of reaction to fight the organization? s threat and avoid its crystallization.

People are all different as well as the employees, therefore, some of the big problems for organizations involve resource allocation and division of responsibilities, or how to deal with differentiation and integration. This problem can be really hard and weary for companies, if it leads to suboptimization. Thus, according to Mintzberg (1979), people works in units, which needs coordination and control. This kind of frame must be done based on knowledge and skills and respecting product, place, process, time and customers.

Although “there is no such thing as an ideal structure” (Bolman and Deal, 2008), they share issues as well as imperatives, because companies have the same kind of common parameters. Thus, it is very important and imperative to consider: age and size, 1 http://www. businessdictionary. com/definition/organizational-structure. html 3 core process, environment, strategy and goals, information technology and nature of workforce. Complexity and formality increase with size and age as well as core process needs to update when new materials, process activities or technologies evolve.

Different structures should be implemented depending on the degree of certainty or uncertainty in environments, goals and strategies. Progress made in technology of information will provide more flexible and decentralized structures. Finally, a better-educated workforce expects more autonomy, discretion and approval to report professional doubts to colleagues, improving their sense of belonging and importance within the organizations. Managers have a constant and permanent struggle against the structural dilemmas that undermine organizations.

First of all, efficient strategies for deal with differentiation and integration troubles are needed. Thus, about integration and differentiation the new members should be integrated as soon as possible and starts to feel part of the “team”. The tasks, goals, roles and activities should be clear and understood by all to avoid conflicts, opportunity costs and financial costs. Balance roles and tasks are very important to avoid stress, absenteeism, conflicts and pressures as well as free times and all costs from it. The team and its members should work for a common purpose.

However, structures should be loose or tight enough to hold everyone on the organization, to avoid inefficiencies and uncertainty. Goals within the organizations should “entice” and motivate everybody to do more and better, and develop a proactive sense of responsibility about all procedures, policies and rules created to achieve a harmonious environment within the organization. Organizations may be hierarchically vertical or lateral. Under a vertical organization, the key elements are authority, rules and policies and planning and control systems, therefore, managers and supervisors have to eep a good performance aligned with goals and objectives of the organization. Through the use of rules, policies, standards and procedures, superior authorities handle with the “organization behavior”, without forgetting important factors as equality and fairness. This kind of control is very important to maintain a specified level of quality as well as to make the performance control and action planning works. On other hand, Lateral Coordination is not so formal and strict. Lateral coordination consists on providing to employees space and opportunities where they can improve themselves and the organization.

Generally, the employees use to work as teams and project teams, developing networks, skills and structures within and between organizations departments. Thus, here, it is possible to find Meetings, Task Forces, Coordinating Roles, Matrix Structures and Networks. Finally, about coordination methods it is possible to say that “lateral coordination is often more effective but costlier than its vertical counterpart” (Bolman and Deal, 2008). Vertical organizations are more effective in stable environments, while Lateral organizations are more effective in complex environments.

Also, “lateral coordination is often more effective but costlier than its vertical counterpart” (Bolman and Deal, 2008). Mintzberg? s Five is presented as one of the best explanation of structural possibilities. So, there are five key elements: operation core, administrative component or middle line, strategic apex, support staff and technostructure, where each one of 4 them had a different task and weight. According to these elements, five different types of configurations can be obtained: Simple Structure, Machine Bureaucracy, Professional Bureaucracy, Divisionalized Form and Adhocracy.

The differences concerns about key component, degree of formality, centralize and decision, dimension and environment. Each structural configuration should be established to answer the organization? s needs and aspirations and apply each particular situation. 4 – Description of the company – British Airways British Airways is established in 1974, and it was privatized in February 1987. After that they were bigger and bigger due to mergers, take-over and franchising operations and code sharing partner? s agreements. Thus, it became the largest airline in the world.

Actually, British Airways has 245 fleets, more than 33 million passengers and employees 40627 people (2008/2009 Annual Report and Accounts). Nowadays, British Airways is one of the companies in the world which collects four stars in five possible, according to the Stytrax rankings which evaluate products, performances and quality of airlines2. Mention British Airways is to mention your story, your route, your excellence and your magnitude 3 . Since 2005, the CEO of the organization is Willie Walsh. British Airways has its headquartered in London, and its hubs are Heathrow Airport and Gatwick Airport.

British Airways have 78 routes in Europe, 35 in Pacific area, 20 in Africa and 35 in America networks, totally 102 countries and 255 cities. In 2009, British Airways is ranked number five in scheduled international passengers carried. They also have many different kinds of charter program to make a round-the-world trip, Europe air pass, and cooperation of mileage with other airlines. This range of services satisfies the customers? needs. In February of 1999, BA entered in the biggest airline alliance oneworld, with American Airlines, Cathay Pacific, Finnair, Iberia, Japan Airlines, Lan Airlines, Malev, Qantas and Royal Jordanian.

It offers discounted fares, expanded customer choice and convenient connection. They pursue to provide more comfortable facilities to use airlines, such as being able to go to other country directly using oneworld systems, and to travel all around the world with low prices. British Airways motto is “Offering best services and best qualities to customers”. For example, they have a special system of seats: Club world class, World traveler class, and World traveler plus class. They spend five hundred million pounds to develop good services and goods.

For instance, they introduced new technology, “wireless internet services” in aircrafts and airports. It makes people travel in an easier and cozier way. They have already upgraded bed-seats for first class passengers, many different kinds of meals and a snack bar. However, when they upgrade too much the price rises and some people cannot buy the tickets. Nevertheless, they are still focused on business class and first class passengers. 2 3 http://www. airlinequality. com/StarRanking/ranking. htm IBM: case studies – British Airways: Self-service check-in improves customer service, gives competitive advantage 5 – Analyze Nowadays, as it was mentioned British Airways is one of the companies in the world which collects four stars, in five possible. The story of British Airways is one of the most widely used inspirational accounts of changing culture, strategies and structure (Heller, 1992), thus is important to reflect about how these factors has changed over the times. British Airways pursue and lead its imperatives, following these guidelines: 1. Size and age: Founded on 1 September 1974, it was formed from the two air companies, BOAC and BEA. It has 245 aircrafts and serves nearly 150 destinations. 2.

Core process: The main service is people transport using the available aircrafts and airport structures. Thus, it needs to consider the seating capacity, range of maximum takeoff weight, the fee for different airports for landing and taking off and the size of fuselage of the aircrafts. 3. Environment: BA is always facing a wide range of uncertain environment, for instance, the oil price changes, plague and terrorist attacks. It established the goal “responsible air travel” 4 to fit the environment and the organization. Meanwhile, it has competitions with other airlines, like Air France, Ryanair, Lufthansa and EasyJet.

It needs to face the consolidated market in Europe. These issues directly affect the profit. 4. Strategy and Goals: Trying to offset its losses in the U. S. and Europe, the BA shifted its focus to the Chinese market via a sales promotion and mobile phone check-in service designed for this market. To increase the competitiveness with other airlines, BA moved to London Heathrow Terminal 5 in 2008, which costing ? 4. 3 billion and5 also improve the service on board, customer attendance, environmental responsibility and customer trust. 5.

Information technology: In order to keep in pace with in the technology changing every day, BA integrated different technology in the daily processes. For instance, BA worked with IBM 6 to integrate a modern self-service check-in in the airport, which helps the costumer and reduce costs, and IBM also helped BA to introduce a new facility that enables the passengers to use their mobile phones to check in the flight. 6. People: nature of workforce BA needs variety in its workforce to deal with the daily routine. Some jobs need to work with the machines, pilots and engineers, while other jobs need to deal with the customers, flight attendances.

Recent history suggests an organization which walked connected to different perspectives, to different leadership styles and to different structural configurations in these recent years. Therefore, it is possible to point-out three different times. It is also 4 5 One destination – The Corporate Responsibility newsletter British Airways – Annual Report and Accounts 2008/2009 6 IBM: case studies — British Airways: Self-service check-in improves customer service, gives competitive advantage 6 important to mention that British Airways is one of the members of oneworld alliance since 1999.

The main goal is to fight against the competitors Star Alliance and Skyteam, alliances which already achieved support for anti-trust immunity (ATI) and also improved “customer service, discounted fares, reciprocal frequent fliers benefits and more flexible and geographically extensive deals7” and shareholders benefits. British Airways has different employees with different tasks and purposes, confirming a strong differentiation of the jobs. Firstly, some of the jobs require high skill and knowledge, such as pilots and engineers.

Secondly, as the flights are fluctuating all the time and the flying hours are quite different which depend on the distances, some of the workers like flight attendants and pilots are the basis of the time shift to work. Thirdly, the BA needs to service the customers all over the world; the cooperation department needs to make better flight routines to suit the customers. In the beginning, BA was a company with ups and downs which Colin Marshall had to defeat when he lead the airline for the first place in the 1990s, but there were certainly structural reasons for BA? s success. Colin Marshall? “emphasis on putting people first and caring for one another had been preceded by the rule of fear” (Grugulis, I. , Wilkinson, A, 2001). After that, between 1997 and 2000 British Airways could be generally described as a company with a Machine Bureaucracy structure, using Mintzberg? s Five as guideline. During this period BA was employing a more expressive vertical method of coordination than lateral, as we explain further ahead on this text Robert Ayling lead the whole organization with his own decisions and strategies through a top-down chain of rules, policies, plans and control systems.

Subordinates did not have any chance or right to discuss and argue about the top decisions, thus, they were limited to obey and do their work. Still, about the employees Ayling said: “I want them to feel inspired, I want them to feel optimistic, I want them to feel that this is a good place to be” (Dangerous Company, BBC 2 April 2000). Robert Ayling, has the responsibility to coordinate all the efforts efficiently. Meetings, task forces, coordinating roles and networks are always necessary among those who have the obligation to manage the company and their strategy, goals and roles.

Strategic decisions need to be discussed within the top management, and it is not reasonable to think that only one man can lead British Airways himself. However, this kind of coordination can be much criticized, because the operation core is not allowed to discuss and present ideas or suggestions about these issues. As a result, a solution from the strategic apex “may not always match the needs of individual units”(Bolman and Deal, 2008). Furthermore, conflicts between CEO and middle managers could happen, creating tensions and dividing the organization.

Nevertheless, this is very hard and a great challenge to face every day, because besides customers satisfaction, employees fulfillment and sense of belonging is also required to achieve and improve. 7 Report – “American Airlines, British Airways and Iberia sign joint business agreement”, August 14th, 2008 7 As it was reported, British Airways was an example of a Machine Bureaucracy structure. Thus, the most important decisions were made on the top, by Robert Ayling and his team.

Machine Bureaucracy structure allows to achieve efficient and effective on day-to-day operations, therefore, operation core needs to be motivated and focused in their work. However, despite the fact that procedures and tasks were a little bit different within the operating core, the main objective of providing a great service for customers remained unaffected. Between Robert Ayling period, he used “belligerent management style”8 to face the challenges for British Airways. The CEO adopted some measures which were unacceptable and unsuitable for the employees as well as to the costumer? s rights.

Perhaps, one of the most unacceptable was when he decided to turn BA into a “virtual airline” (The Economist, July 3rd, 1997), outsourcing catering, engineering and maintenance, in order to reduce and cut costs. Thus, it was necessary to decrease the work force and to cut in some support staff activities, which meant restructuring or structural adjustments. These elements inefficiency were reflected in all services provided by British Airways as well as in all structures inside of it. But the structure of the company was not flexible enough to resist all of these changes. By trying such change, Mr.

Ayling faced lots of strikes, opposition and, especially, huge losses of profits, market-share and customers trust. However, the effects were very destructive to British Airways, its partners, associate, merged and taken-over firms. Nevertheless, Mr. Ayling has merit, because he identified some structural problems and tried to fix them. However his weak position was much criticized, ending in his replacement by Sir. Rod Eddington. Between 2000 and 2005, he fought against several and deep problems such as 09/11 terrorists attacks, crisis about fuel prices and the largest financial black hole in British Airways history.

Generally, it was a dark period to the airlines business, because of the consequences of the 09/11 terrorists attacks. But, against all odds, using the same cost-cutting programme of Mr. Ayling with some changes, he did a big financial recovery. Through the use of a different leadership style, which was both vertical and lateral, and a “modified” Machine Bureaucracy, which had then a small staff support and reduced operational core, he could face a pretty much turbulent situation, but besides this there were troubles and threats that he had to deal with.

In 2005, Willie Walsh arrived to British Airways and since then, he has “headed the airline during a time of unprecedented turmoil and industrial-relations problems”. He arrived with a new behavior and plans to restructure British Airways. Through of a “breath” leadership and coordination style, he has tried to win the first airline position back. Using a more balanced strategy, he has won support inside and outside the airline, developing strategies for customers and shareholders, but also for employees. He 8 http://www. economist. com/business/printerfriendly. cfm? story_id=182530 8 romoted an open minded spirit and a sense of belonging inside the airline, where everybody was important in his/her way. Actually, to enhance the performance of the aviation services, British Airways looks forward to allocate the jobs into different units appropriately, as the pilots responsible to control the airplane; the attendances responsible to service the customers; the engineers help to repair the machines. Thus, all units need to have the same goal: provide a good flight to all the customers. And to integrate the jobs, BA offers different kind of training courses to the workers to ensure that diverse efforts work well together.

Moreover, to improve the efficiency of the job, the British Airways keeps in pace with the new technology in the surroundings, for example, it uses the self-service check-in in the airport to save more time and lower the cost of check-in centers. Besides the decisions are still taken from the strategic apex, and now the teambuilding and breadth spirit are much urged. In order to achieve these aims and goals, Walsh pursued a “buy and cooperative” strategy. He has looking forward for partners to cooperate with win-win strategies and other airlines to take them over.

Therefore, the structure of British Airways has been changing and today it assumes a Divisionalized Form. The networks always had been a key element, because airlines companies cannot remain alive without networks. As it was already mentioned, British Airways is one of the members of oneworld alliance, a direct competitor of Star Alliance and Skyteam, which is in disadvantage against them. Thus, to try to compete and achieve those goals, British Airways is now as a Divisionalized structure with three main parts: BA, Franchise Partners and Codeshare partners9.

Franchise partners such as Comair Pty Ltd and SAS act using BA “name, livery and flight code” and their “high standards of costumer services, quality and hospitality”, while Codeshare partners “offer codeshare services on selected routes”. 10 This type of structure allows that the “bulk of the work is done in quasi-autonomous units” (Bolman and Deal, 2008), offering economies of scale and significant decreasing costs. However, it could create other tensions between all members within the organization.

The strategic apex should be prepared to face conflicts between headquarters and divisions and to face situations where it could lose the operations control. Divisionalized structure demands control and awareness in order to avoid chaotic situations and deep structural problems. Its success will depend on the companies? networks and ability to deal with restructuring issues. Nowadays, the customers are not only aware of the services that the company provided, they also pay more attention to the environment issues. As a result, the British Airways has established the goal, called “responsible air travel”. 10 , http://www. britishairways. com/travel/baalliance/public/pt_gb? gsLink=searchResults 9 6 – Conclusion and discussion This case-study about the British Airways and their structural changes is a casestudy about how the leaders define the best way to achieve the main goals of the organizations. It is a fact that without structural interventions the British Airways is unable to achieve its goal and gain a better reputation in the competitive aviation industry market as well as become the first class airline in the world, and become one the most profitable airlines worldwide.

The airline market is one of the most competitive markets in the world, therefore, any shift has a different impact and brings a new challenge for which organizations should be ready to face and deal with. As we mentioned before, there are three main periods in the British Airways history. For the first period that we analyzed, between 1995 until 2000, Robert Ayling has to fight against the fluctuation of oil prices, a period of financial turbulence and strong pound. In the second period, between 2000 and 2005, Rod Eddington has to face the most devastated airline attack of all times ever.

This terrorist attacks had huge influence in the airline business, because they made strongest changes about the way passengers are traveling. Lastly, the actual CEO Willie Walsh has to deal with the grown competition of low-cost carriers, the consolidation market in Europe, the cost of the move to Heathrow Terminal 5 and the enormous pressures of globalization. There is no doubt that British Airways needs to restructure constantly, because during these three periods, it has to change their structure to answer the environmental shifts, technology changes, leadership changes and organizational growth.

Moreover, the need for restructure is different from company to company, and from businesses to business. Mention British Airways is to mention one organization which is inside of one the most turbulent businesses. Nevertheless, the success or failure of the restructuring is dependent on how the leaders deal with the goals, employees, customers and shareholders. Thus, we think that splitting the different “eras” was the best way to make our analysis. Thereby, we decided to use the Mintzberg? Five structural model as a guideline, although it was an old study, therefore, we used it as a tool and not in an imperative way. Thus, we used Mintzberg? s Five as start-line to design and drawn the different British Airways structures. First of all, we did not have doubts to identify the structure of British Airways as a Machine Bureaucracy in Robert Ayling period. However, since that, the structural imperatives changed a lot. So, we thought in that structure, but in a “modified” way, because with the outsourcing and the cutting-cost programmes the operational core and the support staff suffered some changes.

Then, we decided to create a “modified” Machine Bureaucracy for the period of Sir. Rod Eddignton leadership. Actually, the cooperation with the partners is increasing both in oneworld alliance as well as with franchise and codeshare partners. Therefore, we decided to describe British Airways as a Divisionalized Structure with BA in the strategic apex. 10 So, the rest of the components are the operational core, technostructure and support staff which can be identified with Codeshare partners, Franchise partners and BA itself.

The different leaders, although they are different, shared concerns and strategies. Indeed, the problems are similar in the way how they deal with those marks, either successful or unsuccessful. For instance, Robert Ayling started the outsourcing strategy which one of the next CEO? s has to deal with. It is very hard to decide which leadership style is better. The situations were different as well as the needs, the hopes and the people. However, we consider that Robert Ayling was not very successful.

He faced a lot of strikes, opposition and huge losses. He also lost the title of “the most profitable company in the world”11, and instead of this, he lost the market-share, but he also lost the most important thing when you are in the business world: customers trust. Thereby, we consider that the correct leadership style would look as the two next CEO? s: Eddington and Walsh. They also faced hard and concerning situations. However they preferred to focus their strategies in what people need and profits, instead of on their personal interests.

Both of them, prefers to assign a more important role to the employees and customers, because they realized that without them there is no success on profits, goals and market-share. Thanks to their success, we consider their “breadth” or open minded leadership style as correct to deal with the airline business and everything that the airline business involves. We also consider that people can understand Rod Eddington and Willie Walsh as symbolic leaders, able to defeat the organization’s challenges, because both of them used a balanced strategy of coordination which is focused in people, inside and outside the organization.

The debate about what perspective is more important, when we analyzed the organization as whole, could be very beneficial for structural perspective. Therefore, our ideas and our position are quite simple and reasonable, because we think that our position is not the best one, but, instead of this, we think that the structural perspective is the point of departure or the main base for the organizations. Actually, we argued that without structure there are no efficiency and efficacy inside the different business and the different organizations.

It is also true that without people there is no organization, but the important questions are: What people? How they do have to work? Where should you put the best resources? What are the costs and the revenues? The structure is the vital element which allows connecting people and organization in the best way, in this case, in the profitable way. It is impossible to allocate people without a structure behind saying how you should work. The structure and their parts are also major tools to deal with the political questions.

Organizations that compete in turbulent environments, as it is the case of British Airways, need to have structure configurations that could provide real time answers that meet the costumers, the employees and the shareholders enthusiasm. In this case study, there is good evidence that organizations need structures that fit with political questions, as we could experience with the three 11 http://www. economist. com/research/backgrounders/printerfriendly. cfm? story_id=15… 11 different leadership styles of Ayling, Eddignton and Walsh.

As we mentioned in our paper, each handled differently with the political and competition problems around the British Airways, even thought it was the shape how they did it which marked their own image and the organization financial results. About the symbols, it is also hard to start to create some references symbols without considering the structure as key element. The British Airways motto is: “Offering best services and best qualities to customers”, but how can they do that without a structure ready to answer?

The British Airways as well as the other companies need a structure which works as bedrock for everything, such as: Human Resources, Symbol and Political Perspective. Employees will be influenced by their own personal work experience as a whole. Restructuring is also important and Mintzberg Five? s are only landmarks, because, nowadays, it is very different to choose properly one structure, using the five structures created thirty years ago. Organizations, as British Airways, cross times where they have to “rethink” and reconsider new approaches, perhaps through restructuring.

We argued that the “open-minded” leadership style is also the most fitting within the airline business. Finally, we support that the structural perspective is not the most important one, but rather that it is the bedrock for the most successful organizations about profits, prosperous strategies and goals as well as customers, employees and shareholders satisfaction. We should think about the organizations as complex systems from the perspective of Structure, Symbol, Political Perspective and Human Resources, in order to achieve the organization? imperatives, goals and mission. If managed correctly, everything must work in a perfectly integrated and effective way.

accounting;The ACC2002/ACC2063 Assignment

accounting;The ACC2002/ACC2063 Assignment.

The ACC2002/ACC2063 Assignment requires you to use OLS linear regression analysis to estimate two models – a demand function and a multivariate demand function, and answer the questions in Part B.

Graphics, tables, diagrams need to be referenced and created.

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