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Strategic Choice and Industrial Relations: A Case Study of British Airways
Peter Turnbull, Paul Blyton,
John McGurk
and
Miguel Martínez Lucio
Cardiff University
British ALPA,
Leeds University
Abstract
Although strategic choice theorists have d
eveloped sophisticated accounts of the
interplay between structure and agency, there is often only passing reference to the
impact, and interaction, of industrial relations. Conversely, many industrial
relations specialists reject strategic choice theory b
ecause much of the research on
management action ignores the exercise of power and the incidence of conflict in
employment relations. By integrating industrial relations into the theory of strategic
choice developed by Child (1997), Whittington (1989) and
others, we analyse the
changing competitive fortunes of British Airways (BA) over recent years. We
demonstrate that the political processes which defined, redefined and subsequently
tempered the implementation of BA’s business and industrial relations stra
tegies
led to the gradual erosion of ‘first mover’ advantages in the marketplace and
precipitated a shift from innovative to adaptive competitive behaviour.
Introduction
In 1996, British Airways (BA) surpassed
Singapore International Airways (SIA) to
be
come the world’s most profitable airline.
By the end of the millennium, however,
BA was losing money, recording its worst
financial results for 18 years in 1999
-
2000.
Robert Ayling, BA’s Chief Executive,
appeared to put the blame on everything
from the eco
nomic crisis in Asia and rising
fuel prices, to North Atlantic over
-
capacity, the value of sterling and cut
-
throat pricing. In contrast, the press, the
City of London, and eventually the BA
Board of Directors blamed Mr Ayling.
When BA announced the resigna
tion of the
Chief Executive in March 2000, the Board
maintained that the company’s business
strategy was still the right one, but Mr
Ayling was the wrong man to implement it
(
Financial Times
11 March 2000). The
Board was forced to acknowledge,
however, tha
t ‘there is a need for a greater
emphasis on the employee relations side of
the business’ (BA Press Release 11 March
2000).
If we asked a strategic choice theorist to
explain the changing fortunes of BA over
the past decade, no doubt the emphasis
would fa
ll squarely on the company’s
senior management team and the
constraints and opportunities they faced in
terms of internal legitimacy and external
markets. Organizational theorists such as
Whittington (1989) have developed
sophisticated accounts of the inte
rplay
between structure and agency at various
levels of analytical abstraction as it shapes
the organizational forms through which
social reproduction and transformation are
realized (see Reed 1997, for a recent
review). In many such accounts, however,
the
re is only passing reference to labour
and whether, or to what extent, industrial
relations constitute an important constraint
(or opportunity) in the formulation,
implementation and realization of strategic
choices. To be sure, strategic choices
remain th
e privilege of an élite, but as
Whittington (1989: 297) himself
acknowledges, strategic choices are
ultimately dependent upon the
organization’s domination of employees
and consumers.
The (undue) emphasis on management and
managerial prerogative constitut
es one of
the main points of criticism of strategic
choice theory in the industrial relations
Peter Turnbull, Paul Blyton, John McGurk and Miguel Martínez Lucio
literature (see,
inter alia
, Edwards 1995:
20
-
21; Hyman 1987; and Sisson and
Marginson 1995: 93
-
94). If asked to
explain recent events at BA, an industrial
relati
ons scholar would no doubt focus on
the 1997 cabin crew strike and subsequent
events, which precipitated a marked
decline in employee morale and customer
satisfaction. The inability of BA managers
to dominate employees would serve to
illustrate, in the eye
s of many industrial
relations specialists, the limitations of a
strategic choice perspective. Thus, when it
comes to industrial relations, most
managers appear to behave in a distinctly
non
-
strategic manner: for most firms,
‘industrial relations only beco
mes a
consideration when it becomes a problem’
(Keenoy 1992: 97) and management action
is invariably found to be ‘opportunistic,
habitual, tactical, reactive, frenetic,
ad hoc
,
brief, fragmented and concerned with
fixing’ (Thompson and McHugh 1990:
137). A
t best, industrial relations and other
policies linked to employment relations are
conceptualized as ‘third order’ choices that
are constrained or influenced by ‘first
order’ choices to determine the general
mission or purpose of the organization and
‘seco
nd order’ choices on organizational
form and related control mechanisms (see
Purcell 1991).
For many industrial relations scholars, the
most critical oversight in much of the
strategic management choice literature is
deemed to be the exercise of power and
the
incidence of conflict in industrial relations
(Kelly 1998: 19). According to Edwards
(1995: 20), ‘Strategic choice is industrial
relations with much of the politics
removed’. This assessment is somewhat
ironic, and unfortunate, because the
foundations
of strategic choice theory,
according to Child (1997: 44), are
political
processes
: change is accomplished through
social interactions both within
organizations and in relation to the
environment, which are political in the
sense that outcomes emerge thro
ugh
persuasion, negotiation and at times
imposition (Child 1997: 70). Clearly, there
is far greater scope for a cross
-
fertilization
of ideas than hitherto acknowledged.
In the following section, we incorporate
industrial relations into the theory of
strat
egic choice, drawing in particular on
the work of Child (1997), Whittington
(1989) and Lazonick (1991). This
synthesis involves a form of ‘structural
contextualization’ in which macro
-
level
theories identify the structural and
developmental parameters with
in which
lower (meso
-
and micro
-
) level analyses
are to be located (Reed 1997: 32
-
33). Our
empirical focus is British Airways, which
is analysed from a ‘firm
-
in
-
sector’
perspective in the first instance (see
Whittington 1989: 294). This facilitates an
exam
ination of the three central issues in
strategic choice theory, namely: (i) the role
of agency and choice within organizations,
(ii) the nature of the organizational
environment, and (iii) the relationship
between organizational agents and the
environment
(Child 1997: 43).
The relationship between industrial
relations and strategic management choice
is then explored in more detail through a
case study of BA. The case was conducted
in the tradition of workplace bargaining
research (see Brown and Wright 1994
),
focusing on power relations and drawing
on a range of documentary evidence (e.g.
company reports and trade union minutes),
interviews with senior BA managers and
officials from the five major unions, semi
-
structured interviews with BA staff at
Heathrow,
Gatwick, Birmingham,
Manchester and Glasgow, focus group
discussions with maintenance workers, and
a questionnaire survey conducted by
telephone with pilots, cabin crew and
ground handling staff. In total, more than
100 interviews were conducted between
1
997
-
2000. Observational research was
also undertaken with flight operations,
ground handling, engineering and
Peter Turnbull, Paul Blyton, John McGurk and Miguel Martínez Lucio
telephone sales, as well as via occasional
travel on scheduled BA flights. At the
micro
-
level, actors’ own interpretive
understandings assume grea
ter prominence
and some interview data are reported
verbatim. However, these data are still
subject to critical scrutiny and may be
corrected and/or amplified (Whittington
1989: 90).
Theoretical sampling was based on BA’s
role as a ‘trend setter’ in the i
ndustry (see,
for example, European Commission 1997:
203; and ITF 1996), a potentially
proto
typical rather than
a
typical case. A
widely
-
held view in the civil aviation
industry in the early
-
to mid
-
1990s was
that BA’s strategy constituted ‘best
practice’ m
anagement (see Colling 1995)
which determinist accounts might attribute
either to environmental factors (e.g.
liberalization of the product market which
compels airlines to embrace a cost
-
based
approach to human resource management)
or the ‘mind set’ of se
nior managers whose
internal assumptions about how to succeed
within their environment prompts them to
a programmed response (i.e. cost
-
cutting)
(see Whittington 1989:
2
-
3). The
limitations of environmental determinism,
however, are readily demonstrated vi
a
comparison with BA’s major rivals such as
Lufthansa. Thus, although we focus on
BA, passing reference is made to other
major airlines to highlight both the range
of potential choices available to BA and
the indeterminacy between strategic intent
and impl
ementation.
Even if BA managers had ‘read’ the
market correctly and developed an
appropriate business and human resource
(HR) strategy, the response of (organized)
labour effectively put paid to management
plans. The limitations of action
determinism are
readily demonstrated
through a discussion of the events
surrounding the 3
-
day cabin crew strike in
1997. This dispute encapsulated workforce
opposition to the cost
-
cutting mantra of the
B
สลับแถบข้าง
ค้นหา
ก่อนหน้า
ถัดไป หน้า: จาก 17
รูปแบบการนำเสนอ เปิด พิมพ์ ดาวน์โหลด มุมมองปัจจุบัน
เครื่องมือ
ย่อ Out
ขยาย ย่อ-ขยายอัตโนมัติ ขนาดเท่าจริง พอดีหน้า ความกว้างหน้า 50% 75% 100% 125% 150% 200% 300% 400%
Strategic Choice and Industrial Relations: A Case Study of British Airways
Peter Turnbull, Paul Blyton,
John McGurk
and
Miguel Martínez Lucio
Cardiff University
British ALPA,
Leeds University
Abstract
Although strategic choice theorists have d
eveloped sophisticated accounts of the
interplay between structure and agency, there is often only passing reference to the
impact, and interaction, of industrial relations. Conversely, many industrial
relations specialists reject strategic choice theory b
ecause much of the research on
management action ignores the exercise of power and the incidence of conflict in
employment relations. By integrating industrial relations into the theory of strategic
choice developed by Child (1997), Whittington (1989) and
others, we analyse the
changing competitive fortunes of British Airways (BA) over recent years. We
demonstrate that the political processes which defined, redefined and subsequently
tempered the implementation of BA’s business and industrial relations stra
tegies
led to the gradual erosion of ‘first mover’ advantages in the marketplace and
precipitated a shift from innovative to adaptive competitive behaviour.
Introduction
In 1996, British Airways (BA) surpassed
Singapore International Airways (SIA) to
be
come the world’s most profitable airline.
By the end of the millennium, however,
BA was losing money, recording its worst
financial results for 18 years in 1999
-
2000.
Robert Ayling, BA’s Chief Executive,
appeared to put the blame on everything
from the eco
nomic crisis in Asia and rising
fuel prices, to North Atlantic over
-
capacity, the value of sterling and cut
-
throat pricing. In contrast, the press, the
City of London, and eventually the BA
Board of Directors blamed Mr Ayling.
When BA announced the resigna
tion of the
Chief Executive in March 2000, the Board
maintained that the company’s business
strategy was still the right one, but Mr
Ayling was the wrong man to implement it
(
Financial Times
11 March 2000). The
Board was forced to acknowledge,
however, tha
t ‘there is a need for a greater
emphasis on the employee relations side of
the business’ (BA Press Release 11 March
2000).
If we asked a strategic choice theorist to
explain the changing fortunes of BA over
the past decade, no doubt the emphasis
would fa
ll squarely on the company’s
senior management team and the
constraints and opportunities they faced in
terms of internal legitimacy and external
markets. Organizational theorists such as
Whittington (1989) have developed
sophisticated accounts of the inte
rplay
between structure and agency at various
levels of analytical abstraction as it shapes
the organizational forms through which
social reproduction and transformation are
realized (see Reed 1997, for a recent
review). In many such accounts, however,
the
re is only passing reference to labour
and whether, or to what extent, industrial
relations constitute an important constraint
(or opportunity) in the formulation,
implementation and realization of strategic
choices. To be sure, strategic choices
remain th
e privilege of an élite, but as
Whittington (1989: 297) himself
acknowledges, strategic choices are
ultimately dependent upon the
organization’s domination of employees
and consumers.
The (undue) emphasis on management and
managerial prerogative constitut
es one of
the main points of criticism of strategic
choice theory in the industrial relations
Peter Turnbull, Paul Blyton, John McGurk and Miguel Martínez Lucio
literature (see,
inter alia
, Edwards 1995:
20
-
21; Hyman 1987; and Sisson and
Marginson 1995: 93
-
94). If asked to
explain recent events at BA, an industrial
relati
ons scholar would no doubt focus on
the 1997 cabin crew strike and subsequent
events, which precipitated a marked
decline in employee morale and customer
satisfaction. The inability of BA managers
to dominate employees would serve to
illustrate, in the eye
s of many industrial
relations specialists, the limitations of a
strategic choice perspective. Thus, when it
comes to industrial relations, most
managers appear to behave in a distinctly
non
-
strategic manner: for most firms,
‘industrial relations only beco
mes a
consideration when it becomes a problem’
(Keenoy 1992: 97) and management action
is invariably found to be ‘opportunistic,
habitual, tactical, reactive, frenetic,
ad hoc
,
brief, fragmented and concerned with
fixing’ (Thompson and McHugh 1990:
137). A
t best, industrial relations and other
policies linked to employment relations are
conceptualized as ‘third order’ choices that
are constrained or influenced by ‘first
order’ choices to determine the general
mission or purpose of the organization and
‘seco
nd order’ choices on organizational
form and related control mechanisms (see
Purcell 1991).
For many industrial relations scholars, the
most critical oversight in much of the
strategic management choice literature is
deemed to be the exercise of power and
the
incidence of conflict in industrial relations
(Kelly 1998: 19). According to Edwards
(1995: 20), ‘Strategic choice is industrial
relations with much of the politics
removed’. This assessment is somewhat
ironic, and unfortunate, because the
foundations
of strategic choice theory,
according to Child (1997: 44), are
political
processes
: change is accomplished through
social interactions both within
organizations and in relation to the
environment, which are political in the
sense that outcomes emerge thro
ugh
persuasion, negotiation and at times
imposition (Child 1997: 70). Clearly, there
is far greater scope for a cross
-
fertilization
of ideas than hitherto acknowledged.
In the following section, we incorporate
industrial relations into the theory of
strat
egic choice, drawing in particular on
the work of Child (1997), Whittington
(1989) and Lazonick (1991). This
synthesis involves a form of ‘structural
contextualization’ in which macro
-
level
theories identify the structural and
developmental parameters with
in which
lower (meso
-
and micro
-
) level analyses
are to be located (Reed 1997: 32
-
33). Our
empirical focus is British Airways, which
is analysed from a ‘firm
-
in
-
sector’
perspective in the first instance (see
Whittington 1989: 294). This facilitates an
exam
ination of the three central issues in
strategic choice theory, namely: (i) the role
of agency and choice within organizations,
(ii) the nature of the organizational
environment, and (iii) the relationship
between organizational agents and the
environment
(Child 1997: 43).
The relationship between industrial
relations and strategic management choice
is then explored in more detail through a
case study of BA. The case was conducted
in the tradition of workplace bargaining
research (see Brown and Wright 1994
),
focusing on power relations and drawing
on a range of documentary evidence (e.g.
company reports and trade union minutes),
interviews with senior BA managers and
officials from the five major unions, semi
-
structured interviews with BA staff at
Heathrow,
Gatwick, Birmingham,
Manchester and Glasgow, focus group
discussions with maintenance workers, and
a questionnaire survey conducted by
telephone with pilots, cabin crew and
ground handling staff. In total, more than
100 interviews were conducted between
1
997
-
2000. Observational research was
also undertaken with flight operations,
ground handling, engineering and
Peter Turnbull, Paul Blyton, John McGurk and Miguel Martínez Lucio
telephone sales, as well as via occasional
travel on scheduled BA flights. At the
micro
-
level, actors’ own interpretive
understandings assume grea
ter prominence
and some interview data are reported
verbatim. However, these data are still
subject to critical scrutiny and may be
corrected and/or amplified (Whittington
1989: 90).
Theoretical sampling was based on BA’s
role as a ‘trend setter’ in the i
ndustry (see,
for example, European Commission 1997:
203; and ITF 1996), a potentially
proto
typical rather than
a
typical case. A
widely
-
held view in the civil aviation
industry in the early
-
to mid
-
1990s was
that BA’s strategy constituted ‘best
practice’ m
anagement (see Colling 1995)
which determinist accounts might attribute
either to environmental factors (e.g.
liberalization of the product market which
compels airlines to embrace a cost
-
based
approach to human resource management)
or the ‘mind set’ of se
nior managers whose
internal assumptions about how to succeed
within their environment prompts them to
a programmed response (i.e. cost
-
cutting)
(see Whittington 1989:
2
-
3). The
limitations of environmental determinism,
however, are readily demonstrated vi
a
comparison with BA’s major rivals such as
Lufthansa. Thus, although we focus on
BA, passing reference is made to other
major airlines to highlight both the range
of potential choices available to BA and
the indeterminacy between strategic intent
and impl
ementation.
Even if BA managers had ‘read’ the
market correctly and developed an
appropriate business and human resource
(HR) strategy, the response of (organized)
labour effectively put paid to management
plans. The limitations of action
determinism are
readily demonstrated
through a discussion of the events
surrounding the 3
-
day cabin crew strike in
1997. This dispute encapsulated workforce
opposition to the cost
-
cutting mantra of the
B
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