EMPLOYEE RELATIONS

Employee Relations



Employee Relations

To introduce the BA case we can call to mind the background of this company, which is /was the national British airline. BA was born in April 1972; it is the result of the merge between BOAC (British Overseas Airways Corporation) and BEA (British European Airways). At the beginning it was really hard for both team to work as a coherent whole because of the different management culture of each and it lead to tough problems. Since that, BA was the subject of a lot of speculations, it has been heard about the tremendous issues with its employees since the 1980's and it de-regulation. Furthermore, with the arrival of low-cost companies, BA had to make huge changes in it organisation.

Today BA record a loss of £292 millions and it's close to bankrupt. What are the causes of such evolutions? How BA has been evolve in the last 30 years? And how the changes that employee underwent impacted on their relations within the company?1/ The changes in employment relations

The 1980'sAfter the birth of BA in the 1970's, bad reputation follows the company. Furthermore the combination of recession and rising fuel price didn't help BA. Namely the pick of financial losses exceed £140 millions in this period. BA as only on option, cutbacks the number of employee, consequently 22,000 have been made redundant.

In 1979 Thatcher ministry is flooded by strike. (4,5 millions workers on strike at one time, 30 millions workdays lost). In the 1980's, the economical crisis pushes the government to reduce inflation and cope with high unemployment. Margaret Thatcher who was devoted to the principles of free enterprise launch a massive privatisation. British Aerospace,(1981) British Oil (1982), British Ports (1983) are privatised. BA is privatised in 1984. One of BA problem was the over-employment and the very low productivity compared to its competitors. Moreover, the cost of employees was also a problem because the earning of BA were declining.

However the real issue was the structural changes and the cultural one. Changing managing style in a deep-rooted cultural public organisation had been difficult for its top managers. BA changed the organisation structure to be more flexible and more individualistic. The power of collective bargaining was lightly reduced and the company have had to make a different approach with trade unions.

The 1990'sAfter the privatisation, the more important for BA was to « re-connect » with customers. It is important to recall that the employee followed a brand new style of management and that the whole old type changed a lot. It means that a lot of employee didn't really digest this change. But, after the reduction of employee before the privatization, from 1987 to 1995, the workforce increased of 37%. In the 1980's, BA was widely overstaffed and the big redundancies were necessary. Indeed, after the privatisation BA have had a much better reputation and a growing turn over. We can also add the when BA was introduced in the market all the shares increased sharply between ...