An Analysis of the Culture of an Organisation - Case of Southwest Airlines - Essay Example

AN ANALYSIS OF THE CULTURE OF AN ORGANISATION ………………………….. College ……………………………… ……………….. Words count: 3001 Table of Contents Table of Contents 2 Introduction 3 Focus of this paper 3 Southwest Airlines: Company Overview 4 Organisational Culture 5 Schein model of organisational culture 6 Rationale for choosing Schein model of organisational culture 9 Southwest’s practices of Organisational Culture 10 References 14 Introduction For many companies including Southwest Airlines, a strong organisational culture is a true asset in the real economic sense and a form of organisational human capital in the accounting sense. Organisational culture, as a metaphor of organisational life, has emerged to become a significant factor that strongly influences the performance of the firm. Organisational culture is gaining increased attention among managers and business experts due to that it can help a firm meet the industry needs for greater effectiveness and the material as well as social needs of employees to create a constructive work-environment to foster high performance working. Focus of this paper Organisations are increasingly focusing on developing the ‘right culture’, or ‘culture with quality’ or a ‘culture of customer service’ with a view to inculcate certain values and norms in their organisational settings. It is widely assumed that better, stronger and more importantly the right culture can largely influence the effectiveness and success factors of the organisation (Schein, 2004, p. 7). Southwest Airlines is an outstanding example for best cultural practices within the organization as its dedicated employees do more than delivering the friendly and high-quality customer services for which the company is widely known and this is the way its people and culture bring result. This paper presents a brief description about organisational culture and describes the theoretical framework in relation to Schein model of organisational culture based on the empirical evidences from the application of organisational culture in Southwest Airlines. This paper mainly focuses on the unique culture of Southwest Airlines to deliver highest quality customer service and its impact on organisational performance. Southwest Airlines: Company Overview Southwest Airlines, the Dallas-based airline carrier, continues to differentiate itself from other carriers with exemplary customer service delivered by more than 45,000 employees to more than 100 million customers every year (Investor relations, 2013). The company was founded by Herb Kelleher and Rollin King in 1971 as a low cost airline service in busy markets of less than 500 miles. In 1980, the company adopted its mission as “dedication to the highest quality of Customer Service delivered with a sense of warmth, friendliness, individual pride and company spirit” (Smith, 2004, p. 27). Even after 32 years, Southwest Airlines perceives its people to be the highest valued assets and asks them to be highly dedicated to continually providing highest quality of customer service. This has been one of the major success keys of the company. The company is committed to provide its people a stable work environment with equal opportunity for learning and individual growth. The company always encouraged creativity and innovation. Employees are always provided with the same concern, respect and caring attitude with the organisation that they are expected to share externally with customers (Smith, 2004, p. 27). With this unique cultural values, Southwest airlines has become the No-1 in DOT’s top ranking for customer satisfaction and the highly profitable company continually for more than 30 years. Organisational Culture Organisational culture is a system of shared values, actions, norms, beliefs and assumptions that are developed and established by the organisation to be practiced for its people to influence them to shape and guide their behavior (Schermerhorn, Hunt and Osborn, 2005, p. 436). It refers to the basic pattern of shared values, assumptions and beliefs that represent the right way of thinking, perceiving and acting on problems and opportunities facing the organisation. As organisational culture is a very powerful template and strategic tool that can shape and structure what happens within the organisation, it can be referred as the DNA of an organisation. It is the personality of organisation and therefore it varies from firm to firm (McShane and Von Glinow, 2004, p. 476). The organisational setting, more specifically the work-environment and general environmental factors that influence people would normally differ from one firm to the other and therefore the culture and sub-cultures within the organisation are also found to be different from each other. An organisation may be employee-friendly whereas the other may be performance-oriented or customer-focused. An organisation may concentrate on organisational learning, but the other may be externally-adaptive or internally-integrated. Culture involves certain level of structural stability in the group of people. As Schein (2004, p. 14) stressed, culture has distinct entity in the firm because it survives even if some members depart from the firm. An organisation with specific culture is very likely to succeed in achieving its business objectives since the human capital represents the most valuable assets and their behavior as well as attitude can be shaped, designed and restructured towards achieving the organisational objectives by enhancing organisational culture. Schein model of organisational culture Edger H Schein was one of the early researchers in the field of organisational culture. He advocated that organisational culture is pattern of basic assumptions and internal integration within the organisation (Cheung, Wong and Wu, 2010, p. 34). He stressed that culture in an organisation represents the group of beliefs and assumptions that members share over which is the best way to do things based on certain vision the company has for itself and its surroundings (Sanchez-Canizares, Munoz and Lopez-Guzman, 2007, p. 413). Edger H Schein contributed the functionalist perspective of organisational culture through his work ‘Organisational culture and Leadership’ first published in 1984 (Schultz, 1995, p. 21). According to the functionalist view, the emergence of organisational culture is explained in terms of functions that the firm performs to internal integration and external adaptation rather than in terms of its meaning to the people. Schein (2010, p. 14) noted that organisational culture, as a concept, points to specific phenomena that are below the surface, that are powerful in their impact but are invisible and that are unconscious up to a considerable extent. Culture creates mindsets and values in people of the organisation and therefore it is the personality of the organisation. Culture is the identity of a firm as is the personality for an individual. In Schein’s words, culture is “the pattern of basic assumptions that a given group has invented, discovered or developed in learning to cope with its problems of external adaptation and internal integration, and that have worked well enough to be considered valid, and therefore, to be taught to new members as the correct way to perceive, think and feel in relation to these problems” Based on Schein’s definition of organisational culture, Drenth, Thierry and Wolff (1998, p. 118) emphasized the very basic three aspects about organisational culture. Firstly, the culture concerns critical assumptions regarding how people perceive, think and feel about things. Secondly, culture belongs to a group and thirdly it is learned. The Schein model of organisational culture illustrates three basic levels of cultures in an organisation. The three levels included in the culture are artifacts, espoused beliefs and values and basic underlying assumptions. Artifacts are the visible, tangible and audible results of activities that are grounded or based on values and assumptions. Values are social principles, philosophies, standards and general objectives considered to have intrinsic worth. Assumptions are beliefs that are taken-for-granted about reality and human nature (Hatch, 1993, p. 659). As illustrated in the depiction above, at the surface of organisational culture is artifacts that include all the phenomena that one can see, hear, and feel when he encounters a new group with an unfamiliar culture. People can identify the artifacts from visible products of the group, the physical environment of the group, or its language or technology or artistic creations, or its style embodied in clothing, manners of addressing, emotional displays and stories conveyed about the organisation etc (Schein, 2004, p. 24). Moreover, artifacts include observed behavior and organisational processes. Structural elements such as charters or formal description about how the organisation functions or the detailed organisational chart are also parts of artifacts (Schein, 2004, p. 24). In short, artifacts are visible and tangible structures and processes that are easy to observe and hard to decipher. Schein (2004, p. 26) described espoused beliefs, the middle level of the organisational culture, as a group learning. As he noted, certain values and beliefs are initially promulgated by leaders or great personalities, but later found to ‘work’ in the sense of reducing uncertainty in certain critical areas of the group’s functioning. He identified a kind of ‘transformation’ from an individual’s belief or value or ideal way of resolving certain issues to ‘shared values’ of the group for resolving the same or similar kind of issues. He explained this transformation with the example of declining sale in an organisation and taking advertising as a solution for that. The manager, in order to increase sales, tested with ‘advertising’ and when he is found to be correct in doing his way, it becomes the shared-value or belief of the group and they later will practice in similar way for resolving similar issues. Newberry (2008, p. 42) found that Schein model of organisational culture hypothesized empirical validation results when a leader’s or manager’s proposed solution based on his belief or idea produces satisfactory tangible results for organisational followers. According to Schein model, social validation in organisational culture occurs when certain values are confirmed by shared social experiences of the group. The third level in the Schein model of organisational culture is basic underlying assumptions that are unconscious or taken-for-granted beliefs, perceptions and thoughts that ultimately drive organisational behavior. Schein (2010, p. 28) suggested that basic underlying assumptions, being similar to theories in use, are very likely to be non-confronting and non-debatable and therefore they are extremely difficult to change. The basic underlying assumptions are well manifested truth or values and therefore it requires reexamining and changing some of the more stable portions to learn something new in this realm. Basic underlying assumptions are axiomatic values or beliefs in the organisation and human mind may feel anxiety or defensiveness when there is challenge or questioning of the basic assumption. Shared basic assumptions are the major elements that make up the culture of a group, because culture at this level provides the group members with a basic sense of identity and defines the values with self-esteem (Schein, 2010, p. 30). Rationale for choosing Schein model of organisational culture Schein’s three level model of organisational culture has been chosen as the main theoretical framework for analyzing the cultural practices in Southwest Airlines, because, this model provides a mechanism for utilizing artifacts, espoused values and basic underlying assumptions for richly describing the organisational culture. This model clearly defines the different levels in the creation, transformation and establishing the culture in an organisation. The three levels, namely artifacts, espoused beliefs and values and basic underlying assumptions accurately describe culture as a pattern of shared basic assumptions that are invented or discovered or developed by a specific group as and when it learns to cope with its problem of external adaptation and internal integration. Schein’s three level model of culture is related to the discipline of social psychology, whereas other model such as Alvesson, Siehl and Martin, Pettigrew and Hofstede described the sociology, psychology, business and social science disciplines respectively (Bellot, 2011, p. 31). Culture is created and established in an organisation when people interact and they learn from shared experiences and therefore it is very important to explain ‘culture’ in terms of ‘social psychology’ discipline. Southwest’s practices of Organisational Culture Southwest Airlines has always been thriving for enhancing unique organisational culture for continually improving the performance through high valued service and increased customer satisfaction. Since it adopted its mission statement in 1980, the company until now has been maintaining stronger commitment to ‘highest quality of customer service delivered with a sense of warmth, friendliness, and individual pride and company spirit’. Its organisational culture is deeply rooted in providing highest quality service and the company always perceives its people to be the high-valued assets for the firm. Employees are the No-1 customer for Southwest airlines (Emerald Publishing, 2005) and this can be understood form the fact that the company is largely committed to provide its employees with a stable work environment with equal opportunity for learning and personal growth. Even after 32 years, the company carefully follows its mission that is at the very heart of its culture. Companies recruit its employees in a variety of ways. Some give more importance to qualification and certificates whereas some others on ability or knowledge or experiences. Hiring is quite different at Southwest. Its leaders never worry about hiring trained employees, but they make them experienced through training. Its training programs provide organisational learning through knowledge sharing and knowledge creation. Its leaders concentrate on hiring employees with right spirit- which is the ‘southwest spirit’ as mentioned in its mission. Leaders are looking at personalities who can work hard with fun and can enjoy the playful work style together with humor, laughter and cheerfulness in to their job. Preferred are those who are whimsical, open to new ideas and zany (Middaugh, 2007, p.193). Its employees are hired on the basis of attitude and those who are hired will be screened by future peers to see whether they demonstrate a sense of humor. In 1995, it accepted 124,000 applicants, interviewed 38,000 and hired only 5473 of them (Box and Byus, 2009, p. 24). Southwest’s culture is traced back to its CEO Herb Kelleher when he encouraged informality and wanted his staff to have fun at their job. Being the founder and leader, he valued every employee by acknowledging births and marriages by notes and cards (ProQuest, 2002). As Schein (2010) noted, the values and beliefs are initially promulgated by CEO or leaders and later found to work in the sense of resolving issues. When it comes to Southwest airlines, the company from its very beginning valued its people and made them have fun at works. The company always maintained this value and cultural aspects throughout its history. It hired people for attitude and those who exhibit right spirit. Its training and organisational learning programs provided means for new people to identify, learn and develop the espoused values. Organisational culture of Southwest is related to its nine-strategic focuses. They are; 1) hire attitude and train skills, 2) immerse everyone in the culture immediately, 3) keep them learning, 4) people give good as they get, 5) find the kid in everyone, 6) do more with less, 7) love them in touch times, 8) do what is right and 9) nurture the corporate family (D’Aurizio, 2008, p.89). The second and third strategies highlight the importance of ‘transformation’ that Schein emphasized in relation espoused values. People are hired at Southwest for attitude and they are provided with training for skill development and for learning the culture. New people coming to the firm will come to experience the shared values that are deeply rooted in providing highest valued services to the customers. Southwest believes that its people will provide supreme quality services as they get the same from the company and managers and this is its another strategic focus-‘people give good as they get’. The artifacts of Southwest culture can be recognized from the way its people provide services to its customers. The warrior spirit, leading with a servant’s heart and fun-loving attitude are some of the major distinct elements of its service. The high valued customer service provided by its people always helped the company get records of performance in the industry. It has been recognized as No # 1 and No-2 by Fortune 100 best companies to work in America. The high valued services delivered by its customer in warmth, friendliness, individual pride and company spirit has also made it the No #1 for fewest customer complaints and thus to become highly profitable firm consistently for more than 32 years. Southwest has been founded by Herb Kelleher who has been very successful in gaining trust and loyalty of his people through years. The loyal relation has been the backbone of its organisational culture. They were treated always honest and well and they did almost same to its customers. High valued customer services through people who are always high-valued. This is the taken-for-granted beliefs about the culture of Southwest. According to Schein (2010, p. 28), the third level of organisational culture represents the basic underlying assumptions that are taken-for-granted assumptions and beliefs. Culture and Performance Organisational culture is the identity of the organisation and that is positively correlated with performance. McShane and Von Glinow (2004, p. 481) stressed that culture is one of the most precious things that organisations have and that is the reason why managers work harder on it than anything else. Ogbonna and Harris (1998, p. 274) found that a very large numbers of literatures have premised on the argument that organisational performance is heavily dependant on the proper alignment of organisational culture. Organisational culture is the sum total of certain shared values and norms that people are expected to follow when they deal with customers and other stakeholders. People are most influential assets as their interaction and functioning influence customers’ responses and satisfaction and thence organisational performance as well. The unbeatable success that Southwest gained in fortune ranking and profitability constantly for 32 years can be reckoned as the direct results of its unique culture. Evaluative Conclusion This piece of paper presents a case analysis of organisational culture of Southwest Airlines in relation to the theoretical framework of Schein model of organisational culture. Southwest Airline’s culture is deeply rooted in its stronger belief that people are highly valued assets and they provide high valued customer service as they are treated by the company too. Schein model of organisational culture is based on three levels of culture, namely artifacts, espoused beliefs and basic underlying assumptions. This paper described these elements and applied these concepts to the real examples of Southwest Airlines. 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