British Airways Human Resource Problems - Case Study Management Assignment Help

Assignment Task:

Read the case study below and answer the questions that follow:

British Airways’ human resource problems have disrupted the travel plans of thousands of its consumers. This latest industrial action at BA must have left its management particularly distressed: surely this is someone else’s battle? The supply of in-flight catering was provided by a third party, so why has an employee dispute in that organisation brought BA’s Heathrow Airport operations to its knees?

The unofficial sympathy action by BA’s Transport and General Workers Union staff in support of their 600 colleagues sacked by Gate Gourmet reveals how an outsourcing contract can have huge implications for all concerned if not managed properly.

In 1997, BA evaluated its core activities and sold its catering arm to Swissair. During the collapse of Swissair, Gate Gourmet was sold to Texas Pacific Group. At that time, BA evoked a change-of- ownership clause that allowed it to cut the cost of the contract. This is where the first mistake was made. It was at this point that BA should have ensured that its own labour supply came from more than one source.

The key to any outsourcing agreement is to understand why it is being made and to have a realistic view of what the outcomes and benefits will be. Outsourcing does not work for all companies.

There may be particular reasons – cultural issues, technological barriers – and these must all be fully explored before the decision is made. The right reasons for outsourcing include improving productivity and service, creating extra capabilities and more flexibility through using multiple sources, and outsourcing for innovation.

Traditionally, the focus of outsourcing is cost reduction. Those who buy services often fail to review important attributes of prospective suppliers, which may come back to haunt them. There are processes whereby suppliers can demonstrate their responsible treatment of stakeholders, including their employees, which can be independently checked.

The key to avoiding pitfalls in any outsourcing agreement includes getting independent advice and consulting all stakeholders at the conceptual stage. Companies must ensure they communicate appropriately with their employees and negotiate fairly with all parties. Companies must have an exit strategy plan for the unexpected, and should develop contingency plans.

Regardless of the blame, BA and Gate Gourmet have let themselves, their employees and their customers down and in the process have damaged the reputation of outsourcing.

1.1 What went wrong in this outsourcing process?
1.2 Could a Service Level Agreement (SLA) have prevented this problem?
1.3 What would you include in the SLA in this case?

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