Exploring the impact of recent union strikes to the corporate image and share price of the company

 

Exploring the impact of recent union strikes to the corporate image and share price of the company

 

1.0  Title

The working title of the study is initially drafted as – Exploring the impact of recent union strikes to the corporate image and share price of the company. According to the Office for National Statistics, there are more workers in Britain that are willing to strike with 29% of workers belonging to a union three in five of which works in the public sector and one in five in private companies. One of the recent and widely celebrated unionism in 2010 is that of British Airways’. Having said this, the study will focus on the airline industry and how it is being affected by the recent union strikes and how it is addressing the said issue.

2.0  Background

            Conceptual design for this study is as follows: 

Figure  SEQ Figure \* ARABIC 1 Share Price – Corporate Image Model for British Airways

            There are four elements to the framework which are share price, corporate image, recent union strikes and British Airways. Share price simply refers to the price of a particular company’s — in our case, British Airways — shares at a particular time. On the other hand, corporate image refers to how a corporation like British Airways is perceived. As such, the framework depicts the effects and impacts of union strikes related to British Airways to its share price and image as a company.

British airline industry

Union strikes in British airline industry

Effects of union strikes to airline companies

            Bamford and Xystouri (2005) noted that union strikes are one reason for service interruptions. The authors said that the diffusion of a single union 20 years ago and the eventual creation of several others is in fact ““the power to influence events in the hands of an uncompromising few”. As such, employees who felt that their needs were not taken into serious consideration used their union to make demands. Bamford and Xystouri (2005) claim that weak management support, combined with discontented employees can result in continual strike action that gives an impression of a disorganised company.

Effects of union strikes to airline companies’ corporate image

Effects of union strikes to airline companies’ share price

3.0  Industry background

            British airline industry, according to the Guardian (Milmo, 2010), is in profit but the UK is singled out as the weakest performer in Europe. Reasons behind this are the weaker economy and the impact of passenger taxes apart from the series of strikes to its flag carrier. British Airways has generated a pre-tax loss of nearly £1bn over the past two years while also being locked in a dispute with cabin crew as it strived to pare down costs (Milmo, 2010). 

            Basically, staff working for British Airways are represented by thee key trade unions namely British Air Line Pilots Association (BALPA), British Airlines Stewards and Stewardesses Association (BASSA) and Unite the Union, representing pilots, cabin crew and employees, respectively. According to Milmo (2009), cabin crew at British Airways went on strike in 1997 and then in 2009 because of the cost-cutting programmes implemented during those times. Milmo (2009) believed that the staff morale never recovered hence the unrest within the company ever since.

            While there are union strikes in 2005, 2006 and 2007, industrial relations is most turbulent between British Airways and Unite in 2009 and 2010. The global financial crisis had taken its toll in the UK airline industry, forcing companies to propose changes to the working conditions.  Strikes occurred in December 2009, February 2010, March 2010 and then May 2010. British Airways is seeking an injunction and the company withdrew travel perks of those who participated in the strike (BBC News). 

4.0  Research aim, research questions or hypotheses and objectives

            The main aim of this study is to investigate the effects of the recent union strikes in the airline industry in the UK. Specifically, the study aims at exploring the effects of the recent union strikes on the corporate image and share price of UK’s national carrier which is the British Airways. In lieu with this, the following questions will be given answer to:

1) In what specific ways do the recent union strikes affect the share price and corporate image of the airline industry?

2) To what extent do the recent union strikes are affecting the share price and corporate image of British Airways?

            Further, to answer these questions, the following objectives will be addressed:

• To explore the implications of the recent union strikes in the British airline industry as a whole


• To analyse the effects of the recent union strikes on British Airways’ corporate image and share price


• To recommend different strategies that British Airways can implement to remedy the negative effects of the recent union strikes

5.0  Significance of the study

This study is undertaken to advance the awareness in various effects of union strikes to the corporate image and share price of companies. Understanding the impacts of such meant to uncover how the different UK industries can address the situation more proactively and advantageously while also avoiding the similar event in the future.

            Based on the findings of this research, the corporations will be provided with guidelines/recommendations in addressing union strikes that will minimise its negative effects on the image and reputation of the company. Union strikes can be avoided if the corporations are educated enough on what specific strategies will provide them with much efficiency in addressing such. The study is also important as it can relate the factors affecting the likelihood of success in every corporation/company-union relationship. 

            On a more personal note, I am expecting a role in the business environment in the future hence it is my role to contribute to literatures concerning understanding strategic relationships or how relationships can be made strategic internal to the corporations. In addition, this study will be important for corporations because it will increase their understanding of unionism and how important unions are for the success of the business.

6.0  Research methodology

Research philosophy

            The research philosophy adopted for this dissertation is interpretive epistemology which simply refers to the philosophical underpinning of the research. Interpretive epistemology has a basic assumption that knowledge can only be created and understood from the point of view of the individuals who live and work in a particular culture or organisation. Therefore, every individual acts in situation and makes sense of what is happening based on experiences of the situation and the expectations people bring into it. This means that there may be different understandings and interpretations of reality and interpretive epistemology leads to accessing meanings made by others and describe how they come to make those meanings (Hatch and Cunliffe, 2006, p, 14). The choice of this philosophy is important because it guides the research design, the research approach, choice of methods, analysis of the findings, and even the presentation.

            Further, an instrumental case study approach would be used since this enables the researcher to make generalisations based on the findings although only one case study organisation will be considered. In an instrumental case study, the particular case is less important than the insight it can provide into a specific issue of theory.  Thereby, the goal of this case study is to understand something more general than the case but nothing generalisable to other contexts (Colwell, 2006, p. 331). Denzin and Lincoln (2005), however, contend that the case, although it is of secondary interest, plays a supportive role and facilitates the understanding of important concepts. Investigating the case in-depth has a purpose of pursuing an external interest (p. 445).

Research strategy

Descriptive research will be used in the study. A descriptive research intends to present facts concerning the nature and status of a situation, as it exists at the time of the study (Creswell, 1994). It is also concerned with relationships and practices that exist, beliefs and process that are on-going, effects that are being felt or trends that are developing. In addition, such approach tries to describe present conditions, events or systems based on the impressions or reactions of the respondents of the research (Creswell, 1994).

Basically, a descriptive research utilizes observations and surveys. It is for this particular reason that this approach was chosen by the researcher, whose intention is to gather first hand data from managers and/or supervisors from different corporations who recently had experienced union strikes. Moreover, this will allow for a flexible approach that when important new issues and questions arise at the duration of the study, a further investigation can be conducted. Also, with this type of approach, the researcher will be allowed to drop unproductive areas of research from the original plan of the study. Another advantage is that with this approach, the research will be fast and somehow cost-effective.

Data collection

Different methods for collecting data will be used. In this study, primary and secondary research will be both incorporated. The reason for this is to be able to provide adequate discussion for the readers that will help them understand more about the issue and the different variables that involve with it.     The primary sources of data will be the interviews that will be conducted by the researcher to the representative(s) of an airline company in the UK who had recently experienced union strikes. British Airways is chosen as the setting of the study. After the data had been gathered, these will be analysed to determine their specific differences in the nature and dynamics of union strikes, as well as how these strikes affect the corporate image and share price of the company which is now identified as the British Airways. It is hoped that by conducting a survey and then interviews based on the survey results, the researcher will be able to gather the pertinent data needed in the fulfillment of the research objective.

Survey is the chosen means to collect data because it is valuable in understanding the audience, and in the definition of the existence and magnitude of the problems, and the survey data are also helpful in determining cause and effect relationships between variables (Commonwealth of Learning, 2000). Further, the preliminary descriptive survey results can prove to be useful for planning more sophisticated survey studies with a view to identify areas where problems occur or where changes are required, to understand why people behave in a certain manner and what can be done to provide alternate solutions to the problems, where an attempt is made to understand the relationships between different variables, and the purpose of survey to diagnose or analyze the situation rather than just describe the situation (Commonwealth of Learning, 2000).

Meanwhile, the secondary sources of data will come from published articles from business and international g journals, thesis and related studies on unionism particularly in the UK. For this research, the researcher, after gathering the relevant data needed, will collate them together with published studies from different local and foreign universities and articles from business journals, then afterwards render a critical analysis on the collected documents and verbal materials. Online libraries such as Emerald, Oxford and Highbeam will be another relevant source of data. A summary of all the information gathered will also be provided by the researcher, as well as a conclusion and insightful recommendations.

Data analysis

            The data obtained will be analysed with descriptive statistics analysis using SPSS version 14.0. The data results of the study will be analyzed by determining their corresponding frequency, percentage and weighted mean. The interview data would be presented, with emphasis on the discourse that took place to illustrate the main points being made by interviewees. To build on this and provide a structured qualitative approach, the use of discourse analysis would be employed. Discourse analysis generally refers to a number of approaches to analyse written, spoken or sign language use.

7.0  Resources

            The only concern of the researcher is conducting the interviews with organizations which should provide the primary data of this research. I assume that it would not be very easy to access interviews with bank executives, but I will ensure that I will exert all my effort and negation skills to organise these interviews. Nonetheless, as the researcher I will assure them the commercial confidentiality to informations disclosed (or to be disclose) so as not to jeopardised the internal processes and might eventually lead to consequences such as industrial espionage and other business ethical dilemmas.   

8.0  References

Bamford, D & Xystouri, T 2005, A case study of service failure and recovery within an international airline, Managing Service Quality Journal, vol. 15, no. 3, pp. 306-322.

BBC News 2009, British Airways cabin crew vote for Christmas strike.

BBC News 2010, British Airways cabin crew back strike action.

BBC News 2010, BA Strikers to forfeit cheap travel perks.

Colwell, R 2006, Handbook of Research Methodologies, Oxford University Press, US.

Creswell, J W 1994, Research design: Qualitative and quantitative approaches, Sage Publications, Thousand Oaks, California.

Denzin, N K & Lincoln, Y S 2005, The SAGE handbook of qualitative research, Sage Publications Inc, UK.

Hatch, M J & Cunliffe, A L 2006, Organization Theory: Modern, Symbolic, and Postmodern Perspective, Oxford University Press, Oxford.

Milmo, D 2009, BA Strike: conflict that was always on airline’s flight path, The Guardian

Milmo, D 2010, Airline industry in profit but UK carriers hit by disputes, The Guardian.

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