TQM in BA 0

A Report Presented in Partial Fulfillment of the Requirements for the Degree of Masters
of Business Administration

AMERICAN INTERNATIONAL UNIVERSITY-BANGLADESH

(AIUB)

A Group Project Report on

TQM in British Airways

Supervised by
Dr. MD. Mamun Habib
Assistant Professor
Faculty of Business Administration

Submitted by
Tanvir Hossain Tanmoy (10-94043-2)
Hossain Muhammad Kamal (10-93752-2)
A.N.M Tauhiduzzaman (10-94042-2)
Md. Ataul Gani (10-94044-2)
Nazmul Karim Talukder (10-94041-2)

Major in Operations Management

Date of submission: 24th July, 2011

 TQM in BA 1

LETTER OF TRANSMITTAL

24th July, 2011

Dr. Md. Mamun Habib

Assistant professor,
Department of Business Administration
American International University-Bangladesh, Dhaka.

Permission for submitting the Group Project Report

Dear Sir,

This is our great honor to submit the report of our Total quality Management course in
the British Airways (BA). The report titled TQM in British Airways under the
supervision of Dr. Md. Mamun Habib, Assistant Professor, and kind supervision. In this
endeavor, this report seeks to identify how British Airways maintains Total quality
Management in their operations.

We have gathered information as much as possible. We tried to gather secondary data.

Much of our secondary data came from different web sites and partly from Total Quality
Managemant books.
We enjoyed working on this report and hope you will find it innovative.

Thanking you

Sincerely yours,

Tanmoy, Tanvir Hossain

Class Id: 10-94043-2 ..

Hossain, Muhammad Kamal

Class Id: 10-93752-2 ..

Tauhiduzzaman, A.N.M
Class Id: 10-94042-2 ..

Gani, Md. Ataul

Class Id: 10-94044-2 ..

Talukder, Nazmul Karim

Class Id: 10-94041-2 ..
 TQM in BA 2

ACKNOWLEDGEMENT

All praises to the Almighty Allah, who has bestowed his kindness upon us by giving us
the opportunity, time, courage, strength and patience to carry out and complete the report
properly.

Firstly, we would like to remember the contribution of our parents for their proper
guidelines. Special thanks goes to our teacher Dr. Md. Mamun Habib, Assistant
Professor, Faculty of Business administration of AIUB who was with us like shadow to
advice us how to work.

Lastly, we also thank all of our friends who helped us instantly or via phone or e-mail.

Group: A
24/07/2011
 TQM in BA 3

Table of Contents

PARTICULARS
PAGE NO
Cover Page
Letter of Transmittal
Acknowledge
04-05
Chapter 1: Introduction
1.1 Definition of TQM 04
1.2 Scope and delimitation of the Study 05
1.3 Objectives 05
6-11
Chapter 2: Literature Review
2.1 TQM Six basic concept 6-8
2.2 Strategic Grid 8-10
2.3 Quality Statements 10-11
12-16
Chapter 3: Discussion
3.1 SWOT Analysis of British Airways 12
3.2 TQM Six basic Concepts 13-14
3.3 Strategic Grid analysis 15
3.4 Quality Statements of British Airways 16
17
Chapter 4: Suggestions
4.0 Suggestion 17

18
Chapter 5: Conclusion
5.0 Conclusion 18
Reference

1.0 Introduction

1.1 Definition of Total Quality Management (TQM)

 TQM in BA 4

TQM is a management philosophy, a paradigm, a continuous improvement approach to

doing business through a new management model. The TQM philosophy evolved from
the continuous improvement philosophy with a focus on quality as the main dimension of
business. Under TQM, emphasizing the quality of the product or service predominates.
TQM expands beyond statistical control to embrace a wider scope of management
activities of how we manage people and organizations by focusing on the entire process,
not just simple measurements.
TQM is a comprehensive management process which:

Focuses on meeting owners/customers needs by providing quality services at a cost

that provides value to the owners/customers.
Is driven by the quest for continuous improvement in all operations.
Recognizes that everyone in the organization has owners/customers who are either
internal or external.
Views an organization as an internal system with a common aim rather than as
individual departments acting to maximize their own performances.
Emphasizes teamwork and a high level of participation by all employees.

In a simple way Total Quality management means that the organizations culture is
defined by and supports the constant attainment of stakeholders satisfaction through an
integrated system of tools, techniques, and training. This involves the continuous
improvement (kaizen) of organizational processes, resulting in high quality products and
services.

1.2 Scope and delimitation of the Study:

Among the various departments of British Airways (BA), this report focuses on strategic
planning and implementation and service performance according to total quality
management (TQM) concept. Information has been collected from different websites.
 TQM in BA 5

The time frame for conducting this study is limited. Constraint of analyzing with the
primary data may have hindered this study from being comprehensive.

1.3 Objectives
Primary Objectives

Study on the TQM in British Airways.

Secondary Objectives
.
Analyzing the organizational TQM thought at BA.
Analyzing the strategic issues in terms of TQM at BA.
Analyzing their service array from the view of TQM.

2.0 Literature Review:

2.1 TQM Six basic concept

 TQM in BA 6

According to Besterfield(2003), TQM requires six basic concepts:

1. A committed and involved management to provide long-term top-to-bottom
organizational support.
2. An unwavering focuses on the customer, both internally and externally.
3. Effective involvement and utilization of the entire work force.
4. Continuous improvement of the business and production process.
5. Treating suppliers as partners.
6. Establish performance measures for the processes.

These concepts outline an excellent way to run an organization. A brief paragraph on each
of them is given below:

A committed and involved management to provide long-term top-to-bottom

organizational support:

Management must participate in the quality program. A quality council must be

established to develop a clear vision, set long- term goals, and direct the program. Quality
goals are included in the business plan. An annual quality improvement program is
established and involves input from the entire work force. Managers participate on
quality improvement teams and also act as coaches to other teams. TQM is a continual
activity that must be entrenched in the culture-it is not just a one shot program. TQM
must be communicated to all people.

An unwavering focuses on the customer, both internally and externally:

The key to an effective TQM program is its focus on the customer. An excellent place to
start is by satisfying internal customers. We must listen to the voice of the customer and
 TQM in BA 7

emphasize design quality and defect prevention. Do it right the first time and every time,
for customer satisfaction is the most important consideration.

Effective involvement and utilization of the entire work force

TQM is an organization-wide challenge that is everyones responsibility. All personnel

must be trained in TQM, statistical process control (SPC), and other appropriate quality
improvement skills so they can effectively participate on project teams. Including internal
customers and, for that matter, internal suppliers on project teams are an excellent
approach. Those affected by the plan must be involved in its development and
implementation. They understand the process better than anyone else. Changing behavior
is the goal. People must be empowered at the lowest possible level to perform processes
in an optimum manner.

Continuous improvement of the business and production process

There must be a continual striving to improve all business and production process.
Quality improvement projects, such as on-time delivery, order entry efficiency, billing
error rate, customer satisfaction, cycle time, scrap reduction, and supplier management,
are good places to begin. Technical techniques such as SPC, benchmarking, quality
function deployment, ISO 9000, and designed experiments are excellent for problem
solving.

Treating suppliers as partners.

On the average 40% of the sales dollar is purchased product or service; therefore, the
supplier quality must be outstanding. A partnering relationship rather than an adversarial
one must be developed. Both parties have as much to gain or lose based on the success or
failure of the product or service. The focus should be on quality and life-cycle costs
rather than price. Suppliers should be few in number so that true partnering can occur.
 TQM in BA 8

Establish performance measures for the processes.

Performance measures such as uptime, percent nonconforming, absenteeism, and

customer satisfaction should be determined for each functional area. These measures
should be posted for everyone to see. Quantitative data are necessary to measure the
continuous quality improvement activity.

The purpose of TQM is to provide a quality product and/or service to customers,

which will, in turn, increase productivity and lower cost. With a higher quality product
and lower price, competitive position in the marketplace will be enhanced. This series of
events will allow the organization to achieve the objectives of profit and growth with
greater ease. In addition, the work force will have job security, which will create a
satisfying place to work. In the next chapter we are trying to analyzing these concepts on
British Airways.

2.2 Strategic Grid

Samuel (2004) analyzed about the Strategic Grid; Strategy to be evolved in quality
management depends on both thinking and planning process. This is explained in
strategic grid below:

Strategic Planning
Good Bad

Good 1 2
Strategic
Thinking
Bad 3 4

Strategic thinking attempts to determine the what of corporate visioning while the
strategic planning looks at how to achieve that vision. The various possibilities are
explained as follows:
 TQM in BA 9

Strategic thinking and planning is well

done. In this quadrant there is a clear
Quadrant 1: picture of the organizations future.
Operational competency is exists. This is
practiced by successful companies
Successful strategic thinking but strategic
Quadrant 2: planning is poor. There is a clear picture of
the future, while implementation strategy is
ineffective.
Good strategic planning but poor strategic
thinking. In this quadrant ongoing
Quadrant 3: operations are managed successfully. But
the organizations are uncertain about the
future profile.
Strategic thinking and strategic planning
poor. This quadrant depicts the uncertain
Quadrant 4: vision of the future. Also incompetent in
operational functioning. Companies dont
survive very long following this strategy.

Companies in Quadrant 4 should bring in tremendous changes in the organization. The

organization need to relook at their organization structure, personnel and methods. People
who have a vision and who would work towards the vision have to be brought into the
organization. Inefficient process and ineffective methods have to be removed.
Organizations in Quadrant 3 are placed in a situation where manpower is available to
implement the directions. The need is for visionary leaders who can foresee into the
future and be proactive. Organizations in Quadrant 2 have good thinkers but rare doers.
The ideas and visions postulated have to be implemented by the members of the
organization. Quadrant 1 is the ideal situation which every organization needs to aim and
 TQM in BA 10

achieve. In our next chapter we analyzed the position of British Airways under this grid
concept.

2.3 Quality Statements

Besterfield (2003) also analyzed the Quality Statements. From his view; in addition
to the core values and concepts, the quality statements include the vision statement,
mission statement, and quality policy statement. Once developed, they are only
occasionally reviewed and updated. They are part of the strategic planning process. The
utilization of the three statements varies considerably from organization to organization.
In fact, small organization may use only the quality policy statement. Additionally, there
may be considerable overlap among the statements. Opinion regarding Vision Statement,
Goals and Objectives of Berterfield (2003) are as follows:

Vision Statement

The vision statement is a short declaration of what an organization aspires to be

tomorrow. It is the ideal state that might never be reached, but which you continually
strive to achieve. Successful visions provide a succinct guideline for decision-making.
Having a concise statement of the desired end provides criteria for sound decision
making.

Goals and Objectives

Goals and objectives have basically the same meaning. However, it is possible to
differentiate between the two by using goals for long-term planning and objectives for
short-term planning. The goal is to win the war; the objective is to capture the bridge.
 TQM in BA 11

Concrete goals are needed to provide a focus, such as improve customer satisfaction,
employee satisfaction, and processes. Goals can force changes in leadership style
from reward and punishment to identifying and improving system problems.

Goals must be based on statistical evidence. Without statistical knowledge of the

system,goals merely reflect the assumption that slogans, exhortations, and hard work
will miraculously change the system. Goals must be definitive, specific, and
understandable, using concrete results rather than behaviors or attitudes. The most
important characteristics of goals is that they be measurable. Only measurable goals
can be evaluated.

Goals must have a plan or method with resources for its achievement. If there is not a
cause-and-effect relationship between the goals and the method, then the goal is not a
valid one. In addition, a specific timeframe or deadline for achieving the goal should
be given.

Goal must be challenging yet achievable. Those individuals, work groups,

departments, and functional areas that are affected by the goals should be involved in
their development. Stretch goals are satisfactory, provided they are based on
benchmark data.

The characteristics of objectives are identical to those given here for goals. They are
operational approaches to attain the goals. We are trying to find the impact of the
quality statements of British Airways in the next part of the report.

3.0 Discussion

3.1 SWOT Analysis of British Airways

 TQM in BA 12

SWOT analysis is a strategic planning method used to evaluate the Strength, Weakness,
Opportunities, and Threats involved in projector in a business venture or project and
identifying the internal and external factors that are favorable and unfavorable to achieve
the organizational objective.

SWOT Analysis of British Airways

Strength Weakness
Reputable Brand Name Cost of Management
International Operation Labor strikes and poor employee
Employee Productivity relation history
Skilled Staff Cost of Flight

Heathrow Terminal 5 Outsourcing

Customer Loyalty program

Expansion of fleet Aircraft.

Opportunities
Global Airline Market
Skytrax Quality System
Establishing Manufacturing Unit
Emergence of New Market
Growing Asia-Pacific Market.
Threat
Government Interventions
Labor Market
Rising International Fuel rises
Rapid change in Technology
Consumer Behavior
Global Economic Crisis.

3.2 TQM Six basic Concepts

1. Management Commitment to TQM principles and methods & long term quality
plans for the Organization
 TQM in BA 13

British Airways applied TQM concept in their organization with a long term plan and by
the end of 1999 they started getting benefits of TQM concept. At different times the
management of British Airways took different plans for the improvement of their
company. BA spends a huge amount of money for the development of their employees.
They are merging with other airlines to provide better service. British Airways has
expanded its fleet aircrafts as recently in January 2011, the merger between British
Airways and Iberia will create the world's third-largest airline in terms of annual revenue
and the second largest airline group in Europe. Not only this, but British Airways has also
placed firm orders for 24 Boeing 787s, which will replace the oldest Boeing 767s in the
fleet from 2012. To change the organization culture BA took a very long term and
expensive training program for their managers.

2. Focus on customers- Internal & External

The aim of BA to provide a premium service to all their customers at every touch point,
providing comfort, convenience and reliability. The main focus of British Airways is their
external customer. They are always changing their old aircrafts so that they can provide
better service to their customer. They provide special privileges to their business class
passengers. BA provides special training to customer-facing employees to ensure
customer satisfaction. For their internal customers at different times they tried to develop
different types of payment structure. BA provides training to their employees to increase
productivity & efficiency of the employee.

3. Quality at all levels of the workforce

British Airways has been the first one to start Training centre program therefore its
employees are more productive and well trained in their specific jobs. To provide quality
service to their customers BA trains all the employees of the company. BA is spending
huge amount of money, effort and time to assure the quality of all levels of their
workforce. They design the training programs based on the tasks.

4. Continuous improvement of the production business process

 TQM in BA 14

British Airways is always trying to improve their quality. The target of BA is to provide
premium quality service to their customers. BA is always considering the customer
feedback and opinion with maximum importance and investing to those product and
services to improve product and service quality.

5. Treating suppliers as partners

BA had very long term relation with Boeing. They were a loyal customer of Boeing till
1998. Considering their requirement to provide quality service from 1998 they also
become a customer of Airbus. Now, British Airways a customer of both Boeing and
Airbus. BA is determined to build strong and trusted relationships with their supply
partners.

6. Establish performance measures for the process

British Airways has identified 5 indicators to measures their performance.

Colleagues
Customer
Performance
Excellence
Partnerships

After evaluating these indicators they measure the progress of the process. Then based on
the performance measurement they take further action.

3.3 Strategic Grid analysis

Strategic Planning
 TQM in BA 15

Good Bad

Good 1 2
Strategic
Thinking
Bad 3 4

Fig.: Strategic Grid

Quadrant 2: Successful strategic thinking but strategic planning is poor. Clear picture of
the future, implementation of the strategy is ineffective
The British Airways top management always gave emphasize on the continuous
improvement of the organization. They set clear picture of the future but because of
improper implementation of the strategy British Airways did not get the expected result.
Like, Top management of British Airways decided to build booking information system
to help the customer. But, later it was misused to attract customer. As a result BA faced
huge legal procedure and a large amount of penalty.
At different times British Airways developed different plans for improvement but the
plans were not communicated with the employees properly or the information flow was
not proper. It created conflicts between the employees and the management. As a result
BA is facing loss in the current years.
At different time the top management took different steps to expand the business and give
better service to the customer but because of poor implementation plan they were not
fruitful. Like, when they merged with other airlines to expand their business and increase
their market share they faced different problems after implementation. Because, they did
not consider all the factors in their implementation plan. Their vision was good but they
had problem in their strategic planning.

3.4 Quality Statements of British Airways

Vision Statement
To become the worlds leading global premium airlines.
 TQM in BA 16

Strategic Goal and Objectives

They have five strategic goal and objectives:
1. Be the airline of choice for long haul premium customer.
2. Deliver an outstanding service for customers at every touch point.
3. Grow our presence in key global cities.
4. Build on our leading position in London.
5. Meet our customers needs and improve margins through new revenue streams.

From their quality statements it seems that to attain their vision they fix up different
dynamic strategic goals and objectives. In a real circumstance it shows they are not much
more successful to meet their targets and the reasons already verifying in the previous
analysis.

4.0 Suggestions
After analyzing the various internal and external strategic factors would recommend
the British Airways to make their HR department more active in the process of
keeping the employees more motivated and training. It should introduce more flexible
 TQM in BA 17

grievances handling programme and adequate compensation plan which keeps the
strikes and blockages far from the process.

BA must diversify by entering into new business ventures and should go for to
manufacture their own manufacturing units so that their dependency on others
decreases more.

It has to keep a regular check on the quality review airlines system in order to attain
and retain its strong position in the dynamics of the environment.

It must have a good and defensive market strategy so that the rivals not out class them
by low fares.

BA has to keep a good review on the chain that where is the loophole or break in the
value chain, is it the customer analysis, employee relations, innovations or any other
factor that is creating a blockage in the progress.

5.0 Conclusion
To put it in a nutshell, BA is one of the most developed and well established Airlines in
the world today and it has the great potential to increase its market share. There has been
recent merger with Iberia and now it has 55% market share were as Iberia has 45% share
 TQM in BA 18

in market. BA has 13.5% stakes currently which shows its credibility. It is also planning
to have its merger with Air India in upcoming years. It has the skilled and developed
labor force which is good sign but they should develop some good solid plans to control
these strikes and picketing.

It has every opportunity to expand more and more by increasing its training units,
establishing its own manufacturing industries and diversify into other transports. BA also
has to develop a good plan to meet all the threats in an appropriate way.

To compete in 2012, this is the target and goals that BA has mentioned in its Annual
Report 2010. BA has a plan and it has classified how to meet these targets in the future.
 TQM in BA 19

Bibliography

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operations-management-and-british-airwayss-operations-management.html

Wikipedia. British Airways Retrieved July 15, 2011 on the World Wide Web:
http://en.wikipedia.org/wiki/British_airways
 TQM in BA 20

British Airways (2010). 09/10 Annual Report and Accounts. Retrieved July 15,
2011 on the World Wide Web:
http://www.britishairways.com/cms/global/microsites/ba_reports0910/corpgov/re
m_audit2.html

Rawlins R. A. (2008). Total Quality Management. UK: AuthorHouse UK. Ltd.

Anonymous (2011). New route to customer service. Retrieved July 15, 2011 on
the World Wide Web: http://www.slideshare.net/iipmff2/a-
tqmcasestudyinservicesector-british-airways

Bank, J. (2002). The Essence of TQM. UK: Prentice-Hall International