The shambles at Terminal 5 shows what happens when bosses are ignorant of economics. Here's the Times:
BAA claimed that the baggage system was working properly but had become clogged with bags because BA had too few staff to unload them from conveyor belts. BA said that BAA had provided too few security staff to process its baggage handlers as they arrived for work.
And the Telegraph:
British Airways said the system was provided by the airport, while BAA said it was the airline which was responsible for getting bags from the aircraft to the belts.
Now, this is cretinous. Baggage handlers are obviously complements to a baggage handling system - one's useless without the other. And it's a basic principle of economics that complementary assets should be run by the same boss, to ensure that they work together. And yet BAA and BA have contrived to ignore this; BAA runs the system whilst BA provides the staff.
This is not a sophisticated principle. It's grasped perfectly well by the Archers, for example.
Which, I guess, shows just how low management has fallen. Rather than apply basic organizational principles, BA managers prefer to live in a purely imaginary world of visions. As I say, management is not a technical function aimed at making things work, but an ideological process used to justify bosses' status and salaries.
It's as if it was set up to facilitate blame-shifting!
Posted by: Ian | March 28, 2008 at 01:17 PM
The blame is with the government regulations not BAA or BA.
Posted by: Kit | March 28, 2008 at 03:17 PM
In what way is it the fault of government regulations rather than BAA or BA?
Posted by: Planeshift | March 28, 2008 at 04:33 PM
Am I alone in being amused by Mr Dillow's inclination to attribute to "Economics" all manner of widely appreciated commonsensical observations?
Posted by: dearieme | March 28, 2008 at 06:00 PM
You are not alone.
Posted by: mat | March 29, 2008 at 06:18 PM
classically Kafkaesque cock up with every department blaming each other... brilliant.
Posted by: promethean | March 30, 2008 at 11:26 AM
The shambles at Terminal 5 shows what happens when bosses are ignorant of economics.
Stange - many have attributed it to the great British disease, not so much to managerialism, Chris.
Posted by: jameshigham | March 30, 2008 at 12:10 PM
Isn't there some overlap there, James?
Posted by: Ian | March 30, 2008 at 10:48 PM
Presumably, if government regulations are to blame, we're talking about the obsession with infrastructure and operations being owned by separate companies, as with the railways. Or is it the belief of both BAA and BA management that one blue collar person can do the job of two, while five management consultants are needed to do the job of one?
Posted by: DBX | March 30, 2008 at 11:54 PM
Good old fashioned people management is what's gone wrong here. Avoiding (and sorting out) the T5 mess would be easy if it was in everyone's interest to pull together etc. But baggage handlers are a 70s-style union stronghold, with overmanning and work-to-rule galore. They were so busy congratuating themselves about their shiny new building that BA management totally overlooked the issue of how their workforce would react to the inevitable changes that the shift to a new terminal would create.
Posted by: Bruce | March 31, 2008 at 01:05 PM
'And it's a basic principle of economics that complementary assets should be run by the same boss, to ensure that they work together. '
Isn't this contrary to Coase's theorem?
Posted by: james c | March 31, 2008 at 04:31 PM
So, management is a waste of time? So, why don't you set up a company without any managers? You'll make a fortune.
Posted by: Patrick Crozier | April 05, 2008 at 02:01 AM
Who every said, "No-one ever got fired for buying IBM"...
Not BA. In a terse statement, BA announced that operations director Gareth Kirkwood and customer services director David Noyes "will be leaving the company".
Posted by: David Haughton | April 20, 2008 at 09:19 PM