Organisational Structure

2383 Words Aug 23rd, 2010 10 Pages
5. Two confronting cultures

5.1 Organisational structure
The organisational structure of a company reflects its culture, its management style and its leader attitude in addition to the environment in which it has to operate. Without giving a full description of the two airlines structure it is worth saying that British Airways and Virgin Airlines mainly differ in two aspects: size and culture. Both companies have a structure which is mostly dictated by operational needs characteristic to every airline. British Airways has a more formalised structure with precise rules and procedures, due to its size and the global scope of its activity. A major change in the last years has been the reduction of its management layers, between the chief
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Middle management, which is key to the implementation of any strategy and the outcome of cultural change, is still ruled by separate functions and at the top all the weight still goes on the individualist functions of high finance and take-over. There is still some job to be done (see Illustration 5.2).

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Competitive Politicised

Functionalist Specialist

Co-operative Service oriented

Illustration 5.2 - British Airways’ cultures

The reason for BA’s success lies in the radical change of its culture undertaken in the 80’s and which is still going on, as Mr. Ayling stated recently. BA managed in the 80’s to change from the airline of last resort to the world’s favourite carrier. The airline was grossly overmanned, unpunctual and strike prone, with a very special disdain for passengers. It needed a coherent philosophy on how the customer can best be served. Most of the change has been prompted by a marketing orientation. Customers have been posed at the centre of the attention and individuals have been empowered to take initiative. It learned to respond to customers’ requirements and co-act on individuals’ initiatives. Ayling is now concerned about how to remove the last vestiges of bureaucracy.

A customer oriented culture is vary important for an airline. Its reputation relies mostly on
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