INTRODUCTION TO TERMINAL 5:-
Heathrow AirPort Terminal 5 (T5) opened on 27th March 2008. It was a 4.3bn building that took nearly two decades in the making. British Airway's (BA) and British Airport Authority (BAA) were the two Organizations involved in Constructing Terminal 5. Collin Matthews was the Chief Executive of BAA, and Willie Walsh was the Chief Executive of BA.
However on the very first day British Airways was forced to cancel more than 30 flights due to problems with the Baggage system, Car Parking, Security Searches and aspects of building itself. The reasons can be attributed to improper Communication between management and staff, Lack of Training, Gaps in Leadership and Control and other technical problems. In this assignment I am going to discuss in detail about what went wrong in Terminal 5 and measures/recommendations which can be taken/given to avoid such mishappenings in future.
ROLE OF LEADERSHIP AND CONTROL:-
The problems in leadership and control were:
- Lack of precautionary measures: Precautions were not taken though the management had already been through such a situation earlier. Willie was aware that the opening of a new airport or terminal carries a significant degree of risk. He even knew the failure of many major openings such as Denver Airport, Kuala Lumpar's airport and Hong Kong international airport and the problems related to baggage handling system. BAA is such a large organization and they cannot afford to make mistakes because it involves money, market value, goodwill from the stakeholders.
- Autocratic Leadership style:-
- Lack of foresightedness among the leaders: Though two big leaders were a part of the project but they failed to predict any shortcoming which might have happened. When the disaster happened only then they started analyzing the after effects which could have been avoided if they previously gave it a thought.
- Low involvement of stakeholders - There are additional stakeholders such as communities, suppliers, and the like who were never informed. Management should have strived to understand how these groups view the deal and how they might react to changes such as new pricing, the elimination of vendors, and adjustments in service and personnel. One situation was such that though the Government has expressed support for the construction of a third runway, but there was no attention paid to environmental protesters and local authorities.
I hate to say that about my own airline, but culturally the existing management structure is one where you cannot tell emperor that he has no clothes, you have to say that his clothes are beautiful. No supervisor or person can tell his or her boss that the system will work. If you do you are not a team player, you are sidelined, so for that reason you say that it works and the emperor has beautiful clothes.
THE INDEPENDENT Saturday, 8 November 2008 ,9th paragraph
The leaders were dominating due to which there was lack of Communication and mutual understanding between CEO'S and Trade Union. The decisions were taken without any involvement of the line management and the Trade Unions had to obey them. Airport operators were seldom consulted properly by the BAA about the facilities they require; the facilities tend to be imposed without any prior consultation, whether or not they reflect what is actually required. If they had been permitted to examine the facilities at the terminal before the opening day, this disaster could have been avoided.
THE DECISION MAKING PROCESS:-
The drawbacks of the decision making process was:
- No collective meetings: There was no committee which comprised of members both from senior and junior management to discuss the initial stages of operations. Generally before launch of any operations there is a review committee which discusses the pros and cons of the situation and plan accordingly.
- Lack of Evaluation of Alternatives: The officials knew that there would be initial hiccups before the launch and it was advisable to scale down the operations. A four phased plan was chalked out however there was no implementation. In the discussions between the senior management there was no question raised on the plan of scaling down.
- No contingency planning:
- No Planning of Strategies - There are additional stakeholders such as communities, suppliers, and the like who were never informed. Management should have strived to understand how these groups view the deal and how they might react to changes such as new pricing, the elimination of vendors, and adjustments in service and personnel. One situation was such that though the Government has expressed support for the construction of a third runway, but there was no attention paid to environmental protesters and local authorities.
The people who allocated the task are somewhere else and you do not see them ...they are probably somewhere in Delhi.
THE INDEPENDENT Saturday November 8,paragraph 11.
There were major software issues with the airline's automated work allocation system, where duties were assigned electronically: The people who allocated the task were somewhere else and the people who operated were based in India. There were issues getting into car parks, which delayed the passenger's arrival at the terminal building, delayed getting through the central search area which is the security search for system for land side areas of the terminal to the air side. There was no alternative if the software failed. In the first few days of operation in T5 around 23,205 bags were misconnected.
EMPLOYEE RELATIONS AND CONFLICT:-
- No Institutionalization of employment rules: There was no network of formal and informal employment rules which provide both employers and employees with a series of interdependent, individual rights and obligations emphasizing the mutuality of their relationship and are aimed at reconciling any potential conflicts. These include union rules, collective agreements and negotiating and consultative procedures.
- No third party agency to resolve conflict: These are state owned bodies which are created to influence the decisions of the primary and secondary parties in the employment relationship to ensure fair play or changes in the balance of power. The absence of such a body led to high handedness by the management and an array of controversies and wrong decisions
- Rustic employer and employee relation: Management is the authority system who is responsible for enterprise effectiveness, corporate efficiency and employee relations. In T5 case the management was more concerned with profits and efficiency in the market sector. They never paid attention to the fact that their employees were their first customers.
Decisions were taken in an autocratic manner without any involvement.
ORGANISATIONAL CULTURE IN BA/BAA WITH REFERENCE TO SEMCO:
The culture at SEMCO was unique in the sense that there were no power-packed job titles where as in BA/BAA it's just vice versa the employees in BA/BAA have different culture respectively, so it's very difficult to concentrate on the project they handle together hence their culture doesn't match each other. In SEMCO including top managers themselves did the photocopying, sent faxes, typed letters, and made and received phone calls. Where as in BA/BAA for each and every section they had different employees to perform their own assigned job rather than like SEMCO there is no top level manager's participation.
In BA/BAA they had very normal organisational culture where they implicit strict rules and regulations for the employees in terms of work and other internal and external facilities, where as in other hand in SEMCO there were no executive dining rooms, and parking was strictly first-come, first-served. In SEMCO Organizational profits were shared with the employees and the salaries were set by the employees themselves, where as in BA/BAA the salaries were being given as usual with general organisations as it's because it is a government aided projects. Behind this "maverick" organization was Ricardo Semler (Semler), the CEO of the company who referred to himself as the Chief Enzyme Officer. In BA/BAA there is no individual to make themselves to put effort to come forward to hold the responsibilities that made a major drawback and lead to a great disaster. But if there is a innovative organizational culture in BA/BAA they might have eliminated the failure to a fewer level, but at the end they could not able to do so.
TRANSFORMATION OF SEMCO MANAGEMENT SYSTEM TO BAA and BA SYSTEM:
SEMCO Management system has a bottom level to top level management. Where decisions regarding the projects are been carried in the bottom level management itself as because they have the freedom in decision making also they are not controlled by any higher officials. They assign their job for themselves and complete it successfully. Where as in the case of BAA and BA it has a vice versa process when compared to SEMCO (i.e.) it has a Top Level to Bottom level approach. Where the projects are been Initiated by the CEO of the organization.
Then these projects are been divided amongst the Trade Unions. Then the Trade Unions will assign the projects amongst the Subordinates based on the operations among the categories of division. The Subordinates divide the projects to each Teams Based upon the operations they needs to perform. These projects are further carried by the employees based upon the instruction of the Subordinates.
Transformation can be made in terms of giving the employees the right freedom to assign their own section of the project work followed by submitting the report to the Subordinates where as this transformation process has a great impact that it eliminates the management Process as the decision are been carried by the lower level management (i.e.) employees itself. The other project based decision making are done by the Trade Unions followed by the CEO of BAA.
ACTIONS TO BE TAKEN:
The recommendations from my end to the BAA team would be as follows:
- SEMCO management practices should be implemented in BAA in a step wise process.
- Regarding technical issues the changes should be made with technical experts and the employees should be made technically sound to make the least errors. Therefore investment should be made in trainings.
- A BA/BAA crisis management team should be formed to handle crisis situations. Well trained consultants should be hired to handle such situations.
- Weekly meetings should be organized to review the performance of the staff. Weekly one on one interaction with the manager and the staff will help tremendously.
- Decision making process should be planned well and discussed with all levels of the management before implementation.
- Try to bring down the leadership to democratic leadership rather than an autocratic leadership. Decentralization of power is a must.
- Introduce bonus payments or some incentive schemes like employee of the month which would keep the employees motivated financially.
- Quarterly based meetings with the top officials can be arranged over the web conferencing which should highlight the strengths and weaknesses of the current process and the organization. If the employee is well aware of the organization he/ she develop a sense of belongingness for the organization.
- Case Study used for Introduction
- House of Commons Report
- The Independent
- Chapter 8: Learning and Development. Introduction to Human Resource Management, 2000, p181-215, 35p; (AN 12062862)
- The Treatment of Organizational Learning in Management Science. By: Pawlowsky