British Airways-Usair: Structuring a Global Strategic Alliance (a)

Abstract

This case presents the issues faced by the BA-USAir coordination team as it struggles with creating a management structure to facilitate the development of a newly announced alliance. The team has six weeks to design a blueprint and present it to senior management. Students and executives find that this case opens up significant issues related to implementing alliances. The B case is OB-0585.

Excerpt

UVA-OB-0584

BRITISH AIRWAYS–USAIR:

STRUCTURING A GLOBAL STRATEGIC ALLIANCE (A)

Within a week after having this whole alliance laid out, we were at it. At that point, I would say I was a little bit dazed. We basically had in front of us six weeks to engineer how we were going to go about this. What were the principles, what was the tone, how are we going to motivate people, how are we going to control the process, how are we going to get information to our respective officers—an awful lot of anticipating and engineering.

This would all lead up to the first senior officers meeting between the companies in March 1993. This was where we were going to be asked to lay out what we called the “blueprint” for the coordination effort: here's how it should work, here's how our management should be formed into teams to work together, here is how their recommendations and findings should be passed forward for review.

This was how Rich Wilson of USAir, one of the four members of the team charged with implementing the recently initiated strategic alliance between British Airways and USAir, described the challenge that lay in front of him and his three colleagues on the BA–USAir Coordination Team. The team was scheduled to begin its work in January 1993 and would have just a few weeks to create the blueprint for how the alliance would be operationalized and governed. In March 1993, the team was expected to present its recommendations at a meeting of the senior officers of the two firms. Both sides had high expectations, but neither was quite clear how the two airlines would be brought together into a structure that would facilitate the business of the alliance. Yet Sir Colin Marshall, chair of British Airways, and Seth Schofield, chair, president, and chief executive officer (CEO) of USAir, would definitely expect an answer in six weeks.

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Keywords: strategic alliance, airline industry, international management, organization structure