Seven Part Model Applied to Southwest Airlines - Essay Example

PART The organization development model- seven part model is composed of hard and soft elements which work in alignment to each other. The hard elements include strategy, structure and systems while the soft elements include shared values, skills, style, and staff. Absence of one element will render the application of the entire model futile as all the elements go hand in hand. The 7S model is used for different situations where an alignment perspective is useful, for example to help you improve the performance of a company. It is especially helpful when there has to be a change implemented in the organization. In the following case the seven part model is applied to Southwest Airlines Strategy: Southwest Airlines has been in a business of low cost carriers operating .Their mission is to “To operate in a cost-effective and environmentally beneficial way while conserving environmental resources.”The mission of Southwest Airlines is dedication to the highest quality of Customer Service delivered with a sense of warmth, friendliness, individual pride, and Company Spirit. The competition included United Airlines and Continental Airlines. Although, railway and buses can be a substitute too. The strategy of Southwest thus revolves around this mission. It follows a low cost niche strategy with frequent flights in underutilized places and close in to a metropolitan. Southwest has simpler and cheap travel plans. The low cost strategy is followed by flying just one type of plane, the Boeing 737 series. That saves Southwest millions in maintenance costs, which includes spare-parts inventories, mechanic training and other nuts-and-bolts airline issues. SWA follows point-to-point flying. Most of the time it flies nonstop between two points. Costs are cut by less time that planes sits on the ground and also allows the average Southwest aircraft to be in the air for more than an hour longer each day. Southwests avoid-the-hubs strategy also pays dividends in the case of on-time operations. SWA has simple on-flight service. There is just one class of service on flight with no assigned seats. There are no meals just beverages and snacks SWA also follows a no frills, no fees. The airline only sells one-way fares and only in a few ranges of price. It keeps costs down and saves cost as complex fare structures are expensive to manage. Structure: The HR dept forms the bridge between all department ensuring cooperation and coordination between them. The department does an amazing job in continually feeding back information to employees such as on time performance, turnaround times. The effort reflects the concept of integrating the organization toward the common goal of customer orientation. New hires are made to go through an intensive orientation program so that they are able to breathe the Southwest principles, values and culture of the company. In all, training is laid a lot of emphasis on aiming toward team building and teamwork, time management etc. In a meeting called the Front-line Forum, the more experienced management meets up to see how the company overall is pacing. Systems: The systems followed at SWA reinforce the philosophy of friendliness and fun. Customers were voluntarily helped; there are startling instances. In order to entertain the customers’ flight attendants and even pilots do amusing stuff e.g. singing or making funny announcements.SWA has very open and friendly environment. Even the CEOs have had history of spending few hours working with machinists. Teamwork is considered the key to success. Dedication to hard work, even if the pilots were asked to load bags. They won’t refuse it. Celebrations and contests were organized really seriously. But they were full of fun. Humor, skits, mimicries are appreciated and encouraged. Appreciating each other by working with each other is a norm of the organization. Shared Values: The shared values at Southwest centre around 3 things: Warrior spirit which urges the employees to work hard, desire to be the best, be courageous, display a sense of urgency, persevere, innovate. Second, Follow The Golden Rule which is a value shared among the employees and urges the SWA employees to Embrace the SWA Family, treat others with respect, put others first, be egalitarian, demonstrate proactive Customer Service. The third shared value is to have FUN, be a passionate team player, enjoy work and celebrate successes. Style: Business Week, in partnership with The Hay Group, has released the results from the Best Companies for Leadership Survey.  On the 2009 Top 20 Best Companies for Leadership list, Southwest Airlines ranked #2.  As for the style of leadership adopted, Southwest possessed with the charismatic leadership of its CEO, Heb Kelleher - tremendous hard work he put in with his employees, his ability to gel with them and breaking the usual close door policy. The public face of Southwest Airlines for a generation which consisted of hard-drinking, chain-smoking, always-leave-em’ laughing Herb Kelleher, finally stepped away from the carrier earlier this year. Kellehers bonhomie masked the discipline that Southwest had practiced throughout its history. The airline has always avoided fads and eschewed anything that increased costs or complicated the basic travel proposition. When it has changed—last year it ended its infamous cattle-call boarding process to favor its most frequent fliers and highest-fare customers—it has done so without slowing down the movement of aircraft Staff: The staff is composed of airhostesses, pilots and the crew on ground. The brilliant success of SWA over the years points to their capability and competencies. Management ranks are lean, but well compensated which is why they are so productive.87 percent of SWA’s employees belong to a union. The staffs to management relations have been so good that Southwest has never had a strike. And even now that the network carriers have skimmed salaries and benefits, Southwest staffers are generally the highest paid in the industry. Thus the attractive compensation structure for the staff and seniority based rewarding in case of a union employee keeps healthy union-management relationships. The disparity between top management and lower levels is lower than most other corporate giants in terms of compensation that keeps out the feeling of unfairness amongst the employees. Stock options are a salient feature of compensation. Although Southwest encourages a diverse young workforce the traditional gap between the levels of management is low Skills: In Southwest Airlines, the emphasis is more on the development of attitudes more than skills. According to the management, skills can be easily acquired, it is the attitudes that require special attention and which are of importance. Training and Skill development is targeted towards customer service. Training, just like working at Southwest, is a fun exercise. Skill development/Training is an internal job done only by internals. The management states that the insiders of the company are the ones that know best about it and therefore they should be the ones to train new recruits and subordinates.     PART 2 Technical: For a hotel that is upgrading its services will have to take into account its resources related to technology such as tools and machines which will either have to be rented or bought as fixed investments. Physical resources will have to be changed. A designated area has to be ensured for the addition of new services. Technical knowhow will have to be utilized. Either existing or technical people from outside will have to be hired for installation and maintenance. This will require training. On the control side management will have another division for control that might become a cost centre. A new team will have to be formed that will take care of sauna complex, swimming pool and gym. This will entail controlling costs so as to produce maximum revenues out of the new services. Control: When adding new system to your product portfolio new costs and revenues have to be considered. Gym, sauna complex and swimming pool will require fixed cost for installation plus variable costs that will emerge as the new services will be used. The objective of the management should be to minimize these costs. This will be achieved hand in hand with other sub systems of the organization, people being most important here. The number of people designated for the new services should be optimal. The equipment should be of quality so that it doesn’t break down very often which will result in controlling variable cost. The human resource employed with the department will take care of this. The management should communicate to the new staff of the importance of efficient operations so as to control costs. The staff should be equipped with technical knowledge to maintain and run the new services. On the human and social context of the systems work rules laid down by management will ensure real time control. Communication will have to be strong enough so that everyone in the department knows his duty and plays his part in control of the department. Line of authority with the department and the authority management exerts on it also has strong bearing on controls. Within the department line managers will be responsible to see whether everything is in place and whether his subordinates are fulfilling their duties so as to give best services to customers. Outside of the department the management sitting in the top tier of the hotel has a responsibility to oversee the workings of new services see services given are as good as other services provide by the hotel. Management: Management will be responsible for initiating the addition of the new services in the portfolio of hotel. The feasibility and profitability of the new services will have to be ascertained by the management. Management will have to allocate resources to the new services and account for the pay back on investment of them. In resources the amount of monetary investment the new services will need will be determined by the management. Sources of funding will be sought by the management. Deployment of human resource will also be another important area management will have to take care of. Technical sub system will effect management in a way that if management doesn’t have the knowhow to bring in a new function and does not know the financial and operational issues that need to be dealt with to get it rolling the new services will not perform well. Lack of know how might put an unfeasible project in rolling without producing good revenues for the hotel. Social subsystem will affect Management sub system in a way that if the project doesn’t earn enough support from the rest of the departments efficient operations will not happen. Political: The entire placement of the new services will also be strongly affected by the political system of the organization. In the smooth functioning of the process of installation and driving new services there will be bureaucratic elements that will make the process slow. Approvals from the top management, flow of approvals up the hierarchy will affect the length of processes. Control will have the most profound effect on political sub system. It is basically the control of information that drives the political information within an organization. Also control is vested in authority and power an individual has in the organization. So as long as individuals feel their control is not diluted in the organization they will support the new project. Human and social subsystems depending on their perception of the new project will support or discourage the project. Human and social: Embracing a change such as the addition of a new facility in an organization requires flexibility and motivation on part of the human resource there. If the human resource feels the change will positively affect them they will welcome the change. A motivated working style in the hotel will make the employees embrace the change. Flexibility in people and their recognition of the change being a positive. Conclusion As shown above all subsystems will have to work in tandem with each other for the success of new services. Each one will have a domino effect that will energize the other subsystem. Technical knowhow affects social subsystem as it will determine how they run the new services. Management will influence political subsystem by using informal means to control bureaucracy which will affect the degree of control in the hotel. Bibliography About SWA, our mission http://www.southwest.com/about_swa/mission.html?int=GFOOTER-ABOUT-MISSION Business Week, Best Companies to work for: the top 20: http://www.businessweek.com/careers/special_reports/20100216best_companies_for_leadership.htm Organizational Sub Systems, http://www.slideshare.net/abhishekmittal05/organizational-sub-systems Southwest Airlines Seven Secrets for Success by Joe Brocatelle, Portfolio.com updated 07.08.08 http://www.wired.com/cars/futuretransport/news/2008/07/portfolio_0708 The organization as a political system Robert B.Denhart http://www.jstor.org/pss/447105 Read More