BAA is the largest single airport operator in the world, a major commercial landlord, retailer and developer.

4. Productivity. Some organisations may wish to focus on maximising the amount of returns they receive from their workers.  The amount of productivity can affect the business’ performance in a good or in a bad way.

5. Innovation.  This can sometimes be a separate target of an organisation, but then again can be part of productivity in some cases.  Businesses will want to attempt to increase efficiency in any way, which they can, so when they get the chance to introduce new equipment, they’ll do so.

6. Manpower.  Some businesses may wish to maximise on their work force by ensuring they employ the highest skilled staff for the particular job, some times they will only employ staff who are well educated.

7. Resources.  Some businesses may wish to ensure that they have the most reliable source of raw materials, so if there are any problems with supply, they will still be able to carry on with their work.

8. Management.  Most business want to have the best management available.  This could be in terms of their efficiency, knowledge or basic management skills.

Satisficing Objectives.  These are the objectives where the business can say they are satisfied. It could be because they business have reached a target, which was set and they have reached it by meeting their objectives.  The following can be included:

1. Survival.  This may be the only objective of a small business, as their first few months they will just need to survive, so this objective is crucial to them.  When they have reached this objective to survive, they may make more objectives.

2. Breaking Even.  This is the point in the business where revenues are equal to costs.  This will also include wages and the drawings of the owner.  At this point, it means that the business is making a living.  This could be all the owner wants, and will be pleased when the business is at the point of breaking even.

3. Reaching a certain level of income, profitability or return on investment.  ICI has set a satisfying target of 20 per cent return on investment and will be satisfied if this minimum level is achieved.  However, when a business has reached this level, there’s nothing stopping them attempting to reach higher levels.

Minimising Objectives

These are the objectives where a business wants to make the least, rather than the most out of something.  For example, a business may want to minimise the rate of returned damage goods this will save them money.  Many older bureaucratic organisations may want to limit any risk, which they might have.  These so-called ‘risk averse’ businesses are slow to respond to change and reluctant to innovate in any way.

For example, if you look at BAA Airlines, they have five main objectives

1. Climate change objectives > Industry good practice in the management of direct and indirect CO2 emissions associated with airport site energy consumption by:

• A reduction in absolute CO2 emissions of 5% on 1990 levels by March 2010. This is equivalent to a 60% reduction per passenger and a saving of approximately 110,000 tonnes of CO2 on our forecast emissions by 2010.

• Increased use of renewable electricity to 10% by March 2010, in addition to the standard mix from the national grid, together with three renewable energy demonstration projects.

2. Local air quality objectives > industry good practice in airport air quality management, in accordance with corporate guidelines, local circumstances and development strategies.  This will include:

• Local air quality management strategies, measurement and action programmes, including the promotion of alternative fuels and emissions abatement technology for vehicles operating on airport.

• The development of incentives to encourage low emissions technology for aircraft, together with the trial of operational measures and active lobbying for improvement in aircraft emissions performance through more stringent manufacturing standards.

3. Noise objectives > Industry good practice in airport noise management in corporate guidelines, local circumstances and development strategies, together with:

• A 10% reduction in overall noise per passenger within the area of the 1998 57 Leq contour by March 2005.
• Year on year reductions in infringements of the night noise limits in force in April 2000 to zero by March 2005.
• A reduction in the number of Chapter 3 ‘high’ aircraft (those which only just qualify for the most stringent international noise classification) to less than 1% of total aircraft movements (ATM’s) by March 2005.

4. Waste objectives > Producer responsibility for waste minimisation in line with the Government’s vision for sustainable waste management through:

• A reduction in overall waste generated per passenger by airport operators and managed through BAA contracts by March 2005 on the base established at April 2000.
• A 60% reduction in waste sent to landfill through BAA contracts by March 2010 by increasing recycling, composting and waste to energy.

5. Transport objective> the development of airport strategies and company travel plans in line with government policy on sustainable transport, including the establishment of local improvement targets by each airport.

All of BAA Airlines objectives are supported by SMART

Specific

Measurable

Achievable

Realistic

Time bound

Annual Targets are audited and verified elsewhere.

From comparing BAA’s objectives with the different types of business objectives, I can now say that BAA focus on maximising objectives.  They seem to concentrate on the issues of the environment and their local community (all of the objectives show this).  Looking after the environment seems to be their main concern, as well as their customers.  

BAA would have chosen these particular objectives, as being one of the world’s top airlines, they need to show to an extent concern for the environment as they could be causing damage to the environment with the aeroplanes fumes.

BAA would have rejected other objectives such as, ‘Satisficing Objectives’ because objectives such as those would be to easy for them to meet, this may cause them to lack motivation as they wouldn’t need to do much to reach the objectives.  However, using maximising objectives motivates BAA at a great level, which they need to meet the objectives set in order to be successful.

Objectives can be ‘quantitive’ or qualitative’.

BAA’s objectives are qualitative.  This is because they are more concerned of providing a good service to the public, rather than setting objectives to make a profit and gain a larger share of the market.

Most businesses also have a mission statement aswell as objectives.  A mission statement outlines its general aims and the context in which it operates.  It provides the framework for the activities of the business.

BAA also has the following mission statement:

‘Our mission is to make BAA the most successful airport group in the world,

This means:

1. Always focusing on our customer’s needs and safety.
2. Achieving continuous improvements in the profitability, costs and quality of all our processes and services.
3. Enabling us to always give of our best.
4. Growing with the support and trust of our neighbours.

How they will achieve their mission.

Safety and security:

• Provide a healthy and safe working environment
• By giving safety and security the highest priority at all times.
• We will systematically assess and manage our risks through audited best practice management systems.

Customers, suppliers and business partners.

• Encourage investors to believe in our company by giving shareholders strong continuous growth in earnings and dividends.
• And by generating the funds to deliver our mission.

People and leadership

• Inspire people to excel through demonstrating the highest levels of personal performance,
• Clear leadership and recognition of significant achievement.
• We will create an innovative environment which encourages teamwork,
• Sharing and learning, and open communication and which produces measurable performance improvement.

Community and the environment

• Work in partnership with local communities.
• Setting challenging environmental targets.
• Auditing our performance against them.

Strategy

• Develop our core airport management competencies and our property and retail potential.
• We will grow the value of our no regulated business and develop our business worldwide.
• We will achieve world-class standards in capital investment.
• Will become excellent in the use of information technology. By doing this we will continuously improve the profitability, quality and growth prospects of a prudently financed business which is adept at managing diversity.

BAA Airlines Statistics (over a period of 10 years)

Have BAA been successful in fulfilling their objectives?

From looking at the statistics from the past 10 years, I would have to say that BAA Airlines have been very successful at pursuing their business.  From looking at the figures from each year, starting at year 1991/92 up to 2000/01, there has been a large and positive increase in the number of passengers flying with BAA over the year.  Over all, from all seven airports owned by BAA Airlines the largest increase in passengers was 7.9% over a one-year period.  This shows that BAA must be improving all the time and meeting their objectives continuously.

Also, if they had been failing to meet their objectives, there wouldn’t have been such a large increase in passengers over the years.

As their objectives are ‘qualitative’, you can also see from the figures that they have been meeting the set objectives as their passenger frequency has increased, where as, if their service was poor and not improving, then they would not have as many passengers.

BAA Management

BAA Airlines are a Public Limited Company (PLC).  There are both benefits and constraints of this type of ownership.

Having a Public Limited company, means that the shares of the company are available to any one and you do not need to be invited to buy the shares from the company.  Public Limited Companies is run by its directors, and it’s publicly funded e.g. when shares are bought with in the company.

The Government do not run public limited companies, the only way in which they are involved is when the ask for the accounts to be produced, so they can check that no fraud or tax evasion is taking place.

Below is the organisation of BAA Airlines:

Board of Directors

Marcus Agius,                 Chairman
Mike Hodgkinson,                 Chief executive
Mike Clasper CBE,                 Deputy chief executive
Mark Clare,                         Non-executive director
Brian Collie,                         Group retail director
Margaret Ewing,                 Group finance director 
Dr Chris Fay CBE,                Non-executive director
Colin Green,                         Non-executive director
Valerie Gooding CBE,         Non-executive director
John Hoerner,                 Non-executive director
Janis Kong OBE,                 Chairman, Heathrow Airport Limited
Mike Toms,                         Group planning and regulatory affairs director
Tony Ward OBE                Group services director

Executive committee members

Mike Hodgkinson,                 Chief executive
Mike Clasper CBE,                 Deputy chief executive
Brian Collie,                         Group retail director
Tony Douglas,                 Group technical director
Margaret Ewing,                 Group finance director 
Andrew Jurenko,                 Chairman of BAA Lynton
Janis Kong OBE,                 Chairman, Heathrow Airport Limited
John Stent,                         Managing director Terminal 5 programme
Mike Toms,                         Group planning and regulatory affairs director
Tony Ward OBE,                 Group services director

Structure

BAA would be considered as being structured hierarchical – chain of demand.  This is because they have many different levels of importance.  They may have at the top the main director, and then there are other levels, so it is a very tall structure, which goes down as far as the cleaners or baggage staff.  Each level of the company will have a narrow span of control, depending on the number of people directly under its authority.  Managers will have sub-coordinates under them, which means that they are in charge of the sub-coordinates.

The chain of command is the direct path of how the orders or instructions are passed through the company itself.

The only problem with a hierarchical structure is that there’s less efficiency when the commands or instructions are being passed from top to bottom because half way through, some one may add to the commands, which means they are being changed.

Below is an example of a hierarchical structure from Pitney Bowes:

This organisational structure shows the company from top to bottom.  At the top is the most important person who sends down the commands or instructions.  Not all hierarchical structures are exactly the same as this, some times they can be small, with fewer levels, or exactly the opposite, it may be larger and have more levels.

Culture

Depending on the business, there are various types of business culture, such as role culture, which means the jobs that people do – their roles – are more important than the people themselves.  There’s also Power Culture, who are those that are dominated by influential individuals.  Task Culture, this is where the individuals focus on getting the job done.  The groups or teams involved are not fixed.  Where as, for BAA they are multi cultural.  This is because they will have multi cultural people working for the company such as stewards or pilots.

Balance sheet

Below is an example of a balance sheet, which is from BAA Airlines.  The balance sheet shows how much a business is making, and shows the changes of sales (flights) over so many years, in this case, they show you the end results over two years.

Communication within BAA Airlines

BAA Airlines are a very large company, and they are all over the world.  Therefore, each place where there are BAA staff, there needs to be some form of communication between all sections of the BAA company.  As they are so large they need some sort of efficient communication technology.  BAA use various ways of communicating with every one else.

BAA mainly use e-mails to contact each other, which is very efficient and is free to use.  Whereas, they still use the post to contact certain sections of BAA, the pot isn’t nearly as efficient as e-mails.

Recently, BAA have started to use global phone conferencing to communicate with each other.  The only problem with phone conferencing is that it is costly. For example, for one line to another country it can cost 22 pence per minute, it doesn’t seem much, but if the conference was to go on for a couple of hours, then it will cost a lot.  Another problem could be that when you phone BT to book the phone conference, you have to say how long you need the line for, so you only have a limited amount of time.

With in one BAA branch, to communicate within one place they use a local intranet and internal phone lines.  These are both reliable unless there is a system breakdown.  

I would say that BAA do have a good communication system.  It seems to be efficient and there are no problems with any of their forms of communication.  As they have more than one form of communication, if one type fails they have always got another form of communication to use.

Quality services

 

Bibliography

        

Kelly Furlong – employee at Pitney Bowes