D1 Business Environment
British Airways stakeholders.Those indivivals who have interest to BA operations are BA’s stakeholders, or any individuals whose action can affect BA’s operation can be stakeholders of British Airways.Stake holder can be either internal or external.
Internal stakeholders: are those who are involved with business internally for example owners, shareholders, managers and employees. External Stakeholders: are those who are involved in business externally for example customers, suppliers, local community and government.
Owner: Since BA is public Limited Company so it belongs to its share holders. More control goes to that individual who has big share in the company so share holder have a major influence in directing and managing the company as well selecting the board of directors who run the company and set the goals and strategic planes. Every share is marketed in stock exchange market so BA’s share ranges from small to big values.
Therefore Shareholder wants their share to be valued higher and higher so, they can sell their shares in better prices if the company is in better economical condition. Shareholders and owners can facilitate and bring more high quality services by putting more money in the company; buying fuel efficient Air planes, investing in high tech technology, employing experienced and qualified managers can bring development in overall functionality of BA. In addition to this, ordering planes like dream liner Boeing 787 by owners of BA would attract and bring glory and reputation to BA.
Furthermore investing on fuel efficient planes, on one hand has profit to environment and on the other hand it reduces the expenses of fuel and consequently fares will go down by 20 % as result there will be more customers and more profit to the company and its shareholders. Moreover every measure in which there is intention either to upgrade the company or to down grade the company has its massive impact on the overall function of business by owners.
BA owners can select a hard working, honest and reliable directors on the annual general meeting so having an experienced and full of energy board of director can bring a prosperity and achievement to the company as chief executive of BA, Willie Walsh, told the Tories they would make a big mistake if blocking the third runway, we can see that a chief executive is arguing and want to win the argument in will of BA. Employees: are those who are internally and in some extent externally associated with BA.
Because we say externally, that local community some time supply the employees of a company. Employees like managers, pilots, flight attendants, IT workers, engineers and etc need a better working condition, secure jobs, suitable salaries, friendly environment from BA. In addition to this employees should be valued by the BA in order to get best result from them. But in return the employees should be hard working, enthusiastic, and polite with the customers, dedicated, committed and looking after BA’s prosperity and well being.
If the BA is prosperous and rich they will receive good rewards and salaries. If the BA is not doing well in the term of service which being offered to its customers as a result the company going to lose its fame and credibility and will not be able to support itself and its employees. AS we saw last year, that as result of industrial action by cabin crew which was supported by trade union made a loss of ? 510 million to the BA to which BA . n the other hand employees should be committed , dedicated and they must try their best to follow those rules in which BA’s objectives are set . additionally employees play a major role in progression of the day to day operation of the company by being committed and enthusiastic in what they are employed to . Having hard working and dedicated employees will take the BA toward the success and prosperity in contrast lazy and time killing employee will make losses not only for company but also for himself.
So having dedicated employees can going to change the company’s reputation and the way how it develops toward a better condition for example the cabin crew industrial action was taken and made a big loss to BA , if they had not taken that action the BA would not have made that much loss as result of action . Customers: are external stakeholders of the BA, they play a big role by paying to receive services from BA.
They want quality services, high standard and effective performance and they wants to be valued by the BA employees during the services being provided by BA. Furthermore customer needs reasonable prices along with quality and effective services, because the British people are so critic and fault finder of services which is being provide by companies. The customer feedback is very important to BA , it should be considered critically regarding the quality of food, quality of services during a flight . The way stewards are behaving with passengers all hese affaires going to be feed backed by the customers as result of all this if the company give a quality and effective services according to customers wish and will so the customers will be again and again with BA ,if the services are poor and short of quality and effectiveness so they will never return to BA any more . as we can see and assess that all BA’s revenues come from its customers through services ranging from cargo to individuals which is being transferred therefore the customers are integral and base part of BA’s stakeholders .
I am a regular and multi traveller with Qatar Airways as I have seen high quality hospitality and services during the flights beside cheap prices that every time they give me offers . consequently I am a regular and potential customer of Qatar Airways so in the same way every single customer needs and wants same like me, cheap price and good services. Every action and feedback of the customers going to change the way and performance of the company.The more customers are happy the more money and prosperity going to come to BA, so every action of the customers have its considerable effect on the business.
Happy customers mean good business and more profit distressed and unsatisfied customers mean that the company is not doing well it should reconsider about its operation and performance. Suppliers: Can be external stakeholders who provide what the company needs for its routine operation. Suppliers play an impressive role in overall performance of BA operation by providing Planes on which passengers being carried to tissues which are being used to clean and wipe onboard. All of these materials are being supplied and procured by suppliers along with coordination and procurement of BA.
As BA has saying that every year a total of ? 5. 2 billion is purchased goods and services from its suppliers. BA is determined to make a stronger relationship with its supplier as well as compromise with them on the payment and trade credit. The more time for trade credit is prolonged the more BA is convenient and determined to pay its supplier enough cash. As BA ‘s CEO said in the chartered institute of purchasing and supply in London “ Close co-operation between British Airways and its key suppliers will be vital in helping the airline to weather the economic storm. He emphasized on finding the new opportunity to seek cost reduction and cost efficiency ways with suppliers. As, BA has introduced some tough measures to its strategic suppliers in recent economic downturn. Now BA and its suppliers are supporting each other by introducing cost efficiency and price reduction scheme , but there would be no change in services ,which BA provide for the people . BA and its supplier have come to a term on how to eliminate wastes, improve efficiency and ways to find how to run business smoothly by coordinating within suppliers and BA.
The major suppliers who supply the fuel, engines have pledged to reconsider about tier prices in the tough economic recession and its good news for BA. Now a day BA is looking for other alternative fuel like bio fuels with engine suppliers but predicted slow progress. Suppliers need prompt payment as long as there logistical package is delivered or services provided and they want extended contracts and new offer. In addition giving value for supplier might bring more coherence relation between BT and its suppliers.
Trade Union: is an organization which supports the employees in terms of better working condition, hiring, firing, payments through bargaining by its leadership on behalf of employees by employers. In UK trade unions supply the workforce, skilled and qualified individuals to companies. For example the pilots, stewards ,engineers and other staff who are necessary for operation of BA is being provided and introduced by Trade Unions , so whatever comes to BA employees in term of salaries , working hours ,firing ,redundancies, job cuts and pensions Trade unions will take decision against BA’s action regarding the employees.
Trade unions made an election on which to find that who is going to vote for industrial action and who going to vote for strike, in long and puzzling negotiation between cabin crew, Trade Unions and BA officials finally they voted for a strike . As Consequence the BA revealed a steep loss for the April to June quarter after being hit by cabin crew strikes. Additionally the greatest losses come to BA as result of industrial action which was taken by staff. Finally the figures put the amount of money which BA has incurred as result of strikes and industrial actions cost it ? 44-191 million. For all this reasons Trade Unions has its own influence over the function and operation of the BA business as stakeholder. The above issues which happened on the verge of Ester brought some bad reputation for BA as well as lost some of its credibility among the people who would book for holidays, so BA would have suffered having lost its customers to rival carriers beside being hardly hit by loss of millions as result of strikes and actions by Unions.
Government: is an important external stakeholder of BA whose actions and decisions will bring some changes, which will be very useful but some time it can be very destructive for the BA and other companies as well. For instance putting flight bans on UK’s territory as result of ash cloud in which BA incurred an amount of ? 50 million each day. As result even The British Pilot Association called on the government to give a banking system bail out for the BA Company which is in verge of recovery from recession. 50 million loss a day had destructive impact on the economy of BA as result of government decision putting ban on domestic as well as international flights as due to ash clouds from Icelandic volcano on 2010. On July of 2007 BA had struggle with government over single-bag rule which put in place to prevent passengers especially those who wanted to land in Heathrow as transit passenger from carrying more than one bag which was very unfavourable and disliked by many passenger and made unattractive Heathrow airport for many visitors .
As a result the head of BA and its shareholder in AGM criticised the government policy which was a hinder over the way of BA and reduced the number of the passenger and visitor as result. UK government wants a blooming and blooming BA so that to be able to survive, develop and employ more people, pay taxes and carry the flag of the UK to all over the world. Having a successful and flourish BA going to contribute economically to government and gentle governments economical policy will be in favour of BA. Local communities: are the external stakeholders as well as internal because the employees can be local community . ocal community play a major role in the function and operation of a business. Local community supply the business with labour force and some time local community support the businesses in tough times but some time there have been rows and disputes between local community and businesses, as it has been running since a long time between BA and those who are opposing against building of third runway in Heathrow. The groups who are against the third runway are Local community, naked bike riders, and NO TRAGE and green energy supporters.
The Labour government wanted the third runway to be constructed to boost the economy by accommodating more flights and attracting more transit flights which are crossing Atlantic for American countries. All anti runway campaigners has been supported by local residents who were under flight path and more vulnerable to the consequences from flights. There is more flights in the London sky people doing want their sky criss-crossed by aircrafts and they say there was nearly a plane collision over the Londoners and human disaster and mid-air collision would have caused carnage in the capital.
Even Willie Walsh BA’s CEO attacked on the Tories blaming them that they would make their biggest ever mistake by not allowing the third runway to be build but Tories opposed against the third runway as well and saying that the third runway is a horrendous price for the environment. Even though Walsh explained that major businesses like to be connected more efficiently but his opinion was reused by the Tories.
As we can see that Local Community has more influence on the business For Example Extraction of third runway by BA and labour government was opposed by Local residents as well as other groups in order to have a good climate and environment. So if the local community had allowed the BA or BBA to build another runway there would have been more flights, more jobs for jobs for the people , more planes would have been ordered for suppliers , more planes would have landed and more and more profit would have gone to BA so in this case BA would have paid more taxes .
But Local community along other groups opposed the scheme and no one made the runway there is no job, no flights and no money ,but in return people have nice environment they enjoy living in the vicinity of airport and no longer have fear of bad environment and plane crashes. BY supporting no to third runway campaigners Tories won the attracted more supporter from people who were against the theory.