Analysis of Organizational Culture South West Airlines - Case Study Example

Analysis of Organizational Culture – South West Airlines All organizations being artificially created entities should have uniform organizational culture across. The reality however is far from it. There have been numerous and multiple discussions on the subject of organizational culture. Organizations do not exist on an isolated island. They are amidst society and people. Walls of organizations are semi-permeable and influences beyond those walls influence the work culture within the walls. Naturally the culture of society around seeps in and affects the way organizations work. The discussion about organizational culture is discussion about the culture people bring with themselves and merge it together. If this is the case then organizations would not have their own identities and language, they would not have stories of their own people to share and pass on to new employees. They would not have norms, ethics and values to share, bind and hand over, which essentially convey two aspects of organizational culture. One is the culture people brings with themselves to the work place and other is culture that is created and imbibed by the management of the organization as per specifics of the organization. Definition of organizational culture Schein, E. (1985) A pattern of basic assumptions – invented, discovered or developed by a given group as it learns to cope with its problems of external adaptation and internal integration – that has worked well enough to be considered valuable and therefore to be taught to new members as the correct way to perceive, think, and feel in relation to those problems. Martin, J. (1992) As individuals come into contact with organizations, they come into contact with dress norms, stories people tell about what goes on, the organization’s formal rules and procedures, its formal codes of behavior, rituals, tasks, pay systems, jargon and jokes only understood by insiders and so on. These elements are some of the manifestations of organizational culture. Joanne Martin further adds – when cultural members interpret the meanings of these manifestations, their perceptions, memories, beliefs, experiences and values will vary, so interpretations will differ- even of the same phenomenon. The patterns or configurations of these interpretations, and the ways they are enacted, constitute culture. Flamholtz E. & Randle Y (2011) There are several specific reasons corporate culture is of vital importance in an organization: Culture does influence organizational success Culture is a strategic asset (a source of competitive advantage), and it can even be the ultimate source of sustainable competitive advantage Culture functions as “organizational glue”, especially in siloed organizations. Culture affects financial performance. Culture is a driver or strategic building block of organizational success. Culture influences success of people in organizations. Culture is more important factor than “strategic fit” in mergers and acquisitions. After analyzing these definitions, one can get a fair idea about what elements constitute organizational culture. Organizational culture can be seen by observing following factors – Observable artifacts – these are physical manifestations of organizational culture such as acronyms, awards, myths, uniform etc. These also include stories which are shared about people in the organization. Espoused values – these are set of values followed in an organization. Every organization has its own set of values which are sometimes adopted as a response to change or are core integral values which form basis of organizational structure. They are passed on from on old members in the organization to new ones. Enacted values – unlike espoused values enacted values are values converted in employee’s behaviour. Ideally there should not be a gap between enacted and espoused values however there could be set of values that would have differed over a period of time as a necessary measure. Analysis of South West Airlines Known for its fun loving and disciplined approach to work South West Airlines have consistently achieved higher rank as the most preferred company to travel with and the most preferred company to work for. There have been conscious efforts by the management to inculcate the culture South West is proud of and has delivered results for the organization. Keyton, J. (2011) organizational systems is dynamic because an organization must be responsive to and interact with its customers and clients, suppliers, and regulatory and economic environments. Although an organization has a target audience, or public, for its products and services, other stakeholders interact with and influence the organization. Keeping this in mind it is a great credit that South West Airlines is synonymous with compassionate customer service, proactive staff and for having fun while giving the best one has to the job to be delivered. The airline was founded by Rollin King and Herb Kelleher in the year 1991. It is said that the concept of the airline was explained on a paper napkin by drawing a triangle between Dallas, Houston and San Antonio. The simplicity of the concept was in itself the surety that it will work but it was not easy to implement amongst legal battles that took place for three long years. The airline today employs a very large workforce. The pilot union at South West is the larger than Air Line Pilots Association and eighty seven per cent of the work force is unionized. South west recognizes employee contribution and was the first one to start profit-sharing initiative. Through this initiative employees were able to own about ten per cent of airline stocks. This has also given rise to the attitude of taking ownership of work and delivering to the best of the capacity. The study of organizational behavior stemmed from the realization that a happy worker is not necessarily a productive worker. However at SW Airline the theory is absolutely opposite. Gary Kelly CEO of SWA has stated that “Our people are our single greatest strength and most enduring long term competitive advantage”. The mission statement of SWA to its employees says, “We are committed to provide our Employees a stable work environment with equal opportunity for learning and personal growth. Creativity and innovation are encouraged for improving the effectiveness of Southwest Airlines. Above all, Employees will be provided the same concern, respect, and caring attitude within the organization that they are expected to share externally with every Southwest Customer”. Herb Kelleher stated that if he has to choose between employee and customers then he would choose his employees, primarily because if his employees are happy they will surely deliver the best to the customer and which will help customer retention in the long run. This philosophy has now percolated till the last layer of management in the organization. As stated by Kelleher, customer today prefers to come back to SWA because of the heartfelt service provided by the happy and satisfied employees of the airline. There are many heartfelt appreciations and gratitude posted on the blog of the airline. If we go through the posts we realize that the customer is genuinely touched by the service they have received. It is compassionate and heartfelt enriching customer experience which makes customers choose the airline again commuting. These posts indicate that the employees have inculcated the values of warrior spirit, a servant’s heart and a fun loving attitude. These are not only espoused values in the organization but also enacted values. Organizational culture thrives and sustains over a period of time when espoused and enacted values have least or no distinction. SW has been successful in implementing these values as a part of daily lives of its employees. If we look into details of these values mentioned we see – 1. Warrior Spirit – Work hard, Desire to be the best, Be courageous, Display urgency, Persevere, Innovate 2. A servant’s heart – Follow the Golden rule, Adhere to the principles, Treat others with respect, Put others first, Be egalitarian, Demonstrate proactive customer service, Embrace the SWA family 3. Fun-loving attitude – Have fun. Don’t take yourself too seriously, Maintain perspective, Celebrate successes, Enjoy your work, Be a passionate team player These details explain that employees are expected to deliver to the best of their capacity, with compassionate heart towards customer but also follow disciplined approach. SWA has been ahead of its competition due to its various strategies such as maximum flights on any route, high compensation to its employees etc. However culture of SWA is not unique to its people management strategies only, it is also inculcating and creating right attitude in the people. As Kelly CEO of the airline rightly states that SWA hiring is stringent and out of approximately ninety thousand applicants only seven to eight hundred get the job at the airline. Besides SWA management firmly believes in hiring the right attitude and imparting skills, making it even tougher for the aspirants to get in the organization. Although SWA organizational culture can be analyzed mainly from people management perspective, various models of organizational culture analysis can also be applied. We are primarily going to consider Hofstede model of organizational culture analysis. Geert Hofstede was responsible for conceptualizing organizational culture and designing parameters for analyzing it. He gave the basis on which organizational culture can be analyzed. There were many extensions of this model such as GLOBE mode which added few more dimensions to the original model suggested by Hofstede. Societal dimensions have become progressive today but these basic assumptions suggested by Hofstede have remained largely unchanged. For ex. Today people as employees would appreciate empowerment but also are aware that they would hold a certain place in organization hierarchy. This may add a fresh perspective to parameter of power distance but makes the basic dimension all the more relevant to study. Traditional base of a society does not undergo a sea change although flexibility and acceptance of a society could increase. Keeping this in mind organizations may apply new strategies to keep employees happy and engaged however the basic structural changes do not radically change. Hence organizational behavior researchers have expanded the model suggested by Hofstede adding new dimensions to it, rather than changing the dimensions altogether. Hence we are going to apply Hofstede model for better understanding and analyzing culture at South West Airlines. Hofstede’s dimensions of analyzing organizational culture Power Distance – This dimension refers to distribution of power in the organization. This reflects the way people who do not have power accept distribution of power and expect the degree of inequality in distribution of power. The acceptance of hierarchical structure of the organization depends on this mind-set. Employees assume their role and place in the organization and do not dispute that. The acceptance of decisions also becomes easy for an employee once he or she accepts the power distance in the organization. Employees coming from societies with low power distance try to equalize the distribution and expect to be a part of decision making process. They also seek empowerment in the organization. This is a story narrated by David Ridley who retired as VP Marketing and sales at SWA. It was a story about a gate agent who had dealt with an impatient passenger during a weather delay. Later the passenger wrote a letter to the airline complaining that the Southwest employee had been rude and unhelpful. "A lot of companies would automatically assume guilt and automatically fire off two free tickets to the customer," Ridley said. Southwest, however, investigates. This time it turned out that the gate agent was an exemplary employee with a pile of commendations in her file. It was the customer who had been rude. Result? The customer received a letter inviting him to fly another airline, and the gate agent received a copy. At that moment, Ridley said, the gate agent understood that the company would stand behind her. Ridley said South West has a name for the quality they are seeking: a warrior spirit. That means people who "understand hard work and sweat on the brow," he said. These folks are looking for a job, not a "position," he said; they are looking for work, not a "role." In reciprocation company supports the employees in the decisions by empowering them and accepting the decisions made by the employee to provide exemplary and enriching customer service and experience. Ridley further stated that there are no Big Shot leaders at SWA. One has to genuinely love people and have interest in people to become a leader at SWA. This indicates creation of power in the right spirit and flow of power in the right direction. Uncertainty Avoidance – While organizations have clear framework and planning to function, there are multiple factors acting simultaneously causing disruptions to previously laid plans. It is given that planning and strategizing in management is subject to constant changes within and outside the organization. Uncertainty avoidance indicates employee’s capability and comfort level with these constant changes and ambiguity caused due to same. Rigid societal structures enforce stringent behavior codes and frameworks to avoid uncertainty as much as possible whereas flexible societal structure imbibes welcoming of ambiguity and being less disturbed by it. In the example mentioned above by David Ridley weather conditions are a major cause of uncertainty in the planned departure or arrival of the flights. Rather than getting irate and disturbed herself the employee displayed a presence of mind and good customer service thereby leading to organization taking a firm stand in her favor. Individualism versus collectivism – In Asian societies an individual is expected to be accountable and responsible for himself, his immediate family and also his distant as well as close relatives. In some cases he is also an integral member of the village or sect of the society rules or structure of which he or she is expected to follow unconditionally. Wherein in western societies we observe individuals who are expected to look after themselves from a very early age. These values inculcated play a huge role in an individual shaping as a team player in an organization. This factor also impacts loyalty quotient of an individual towards the organization he or she works for. Stronger the ties felt with people and the organization higher the degree of loyalty towards the same. SWA has pilot union at which is the larger than Air Line Pilots Association and eighty seven per cent of the work force is unionized. The airline has almost nil attrition and pays its staff higher than any other airline in the industry. It has values such ‘Be a passionate team player’ and ‘Put others first’ incorporated in value system of its culture. The real reward comes in the form of appreciation letters written by customers who have had a wonderful flying experience with the airline. (South West Airlines 2013) One such experience was shared by Belinda Burton whose eight year old daughter flew to fulfill her wish made through make-a-wish foundation when she was fighting cancer. Upon arrival at the airport, we were greeted by friendly Southwest Employees who knew we were with Make-A-Wish and took extra-special care of us!  When we landed in Denver our three youngest children each got to sit in the cockpit with a pilot who explained the different instruments. Alli even got to try out where the flight attendants sit! The experience would not have been delivered without excellent commitment and respect of team members towards each other and as well as towards the organization. Masculinity versus femininity – This dimension refers to traits categorized as masculine and feminine. Society preferring achievement, material rewards for work, heroism is said to have inclined towards masculinity while caring attitude, cooperative mind-set are signs of feminine society. These values manifest themselves in the way employees choose to dissolve disputes or problem situations while working in an organization. Taking the problem head with responsibility and leading through the front are the traits displayed in case of external emergencies while choosing to let go to establish peace within departments displays cooperation and care. The customer care at SWA starts right from the moment of customer booking the ticket and lasts till the customer completes the journey. (South West Airlines USA 2013) Gary Kelly in his communication has stated these two instances. On one occasion, an Employee saw a tweet by a Customer saying that she was flying with us into Nashville, Tennessee, and that the only thing that could make her trip better was a hot breakfast served on a silver platter. Our Nashville-based Employee bought the Customer a breakfast of pan­cakes and OJ and was waiting for her when she got off the plane. While it was a small gesture, I’m sure it made a lasting impact on our Customer. Another Customer could not find his wallet and was in the pro­cess of telling a Flight Attendant about it when one of our Houston Captains overheard their conversa­tion. He immediately stepped in to help. The Customer determined that he must have left it at a restaurant in the Burbank airport. Our Captain called the airport with his personal phone, tracked down the wallet, and gave the Customer $40 of his own money to help him out with the rest of his trip. Moments like these are a perfect balance of masculine and feminine traits to make culture extremely successful and creating moments of truths for employees as well as customers. Long term Orientation – (Geert Hofstede, 2013) The long-term orientation dimension can be interpreted as dealing with society’s search for virtue. Societies with a short-term orientation generally have a strong concern with establishing the absolute Truth. They are normative in their thinking. They exhibit great respect for traditions, a relatively small propensity to save for the future, and a focus on achieving quick results. In societies with a long-term orientation, people believe that truth depends very much on situation, context and time. They show an ability to adapt traditions to changed conditions, a strong propensity to save and invest thriftiness, and perseverance in achieving results. The strategy of SWA is multifold. Some of the key aspects of the strategy are – 1. Low fare airline – a few key customers are small time businessmen, cost conscious senior citizens and luxury travelers 2. Standardized fleet of 737 aircrafts which enables large seating capacity and ensures safety 3. 15 minute turn around – where airline industry standard is 55 minute turn around for the flight SWA achieves 15 minute turn around which allows the airline to have maximum number of flights on the route. 4. High compensation of employees – SWA pays higher than any other airline in the industry which is also a contributing factor in retention of employees 5. High level of employee ownership – although the structure of the organization is traditional, the management if need be allows circumventing of layers of management. In spite of the framework employees are given complete freedom to go out of their way to cater customers. 6. Recognition – employees are continuously encouraged to celebrate successes and have fun while working. Efforts and service attitude is recognized and employees are rewarded for their contribution. Conclusion Organizations today take deliberate efforts to create culture which is friendly, induces learning and brings out the best in employees. It is a sustained, ongoing and conscious effort on the part of management. Employee brings his or her own value systems, beliefs and upbringing to the working environment. These individual values and beliefs either help them adjust or disturb them when they want to adjust themselves in the working environment. Organizations which respect these individual differences attempt to create an employee friendly culture which helps an employee to settle down and give his or her best to the organization. Organization culture is not creating organization structure. It directly involves people and hence is supported by people and also developed by people over a period of time. Even when management creates a value system for people to follow enriching those values over a period of time is done by people who work for the organization. (Witte & Muijen 1999) Managing the deepest layers of organizational culture clearly requires a participative approach, which results in overt commitment and covert acceptance. Participative approaches to changing underlying assumptions are difficult and time consuming to implement, but are likely to result in changes that last and are felt in everything the organization members do. South West Airlines successful organizational culture can be summarized best in the following chart. Gittell, J. H. (2004) This chart is a comparison between American Airlines and South West Airlines. Relationships American Airlines South West Shared Goals Ninety per cent of the ramp employees don’t care what happens, even if the wall falls down, as long as they get their check I have never seen so many people work so hard to do one thing. You see people checking their watches to get on-time departure. . Then it’s over and you are back on time. Shared knowledge Participants revealed little awareness of the overall process. They typically explained their own set of tasks without reference to the overall process of flight departures. Participants exhibited relatively clear mental models of the overall process – an understanding of the links between their own jobs and the jobs of other functions. Rather than just knowing what to do, they knew why, based on shared knowledge of how the overall process worked. Mutual respect There are employees working here who think they’re better than other employees. Gate and ticket agents think they’re better than the ramp. The ramp think they’re better than cabin cleaners – think it’s a sissy, woman’s job. Then the cabin cleaners look down on the building cleaners. The mechanics think the ramp are a bunch of luggage handlers. No one takes the job of other person granted. The skycap is just as critical as the pilot. You can always count on the next guy standing there. No one department is any more important than another. Communication Here you don’t communicate. And sometimes you end up not knowing things. Everyone says we need effective communication. But it’s a low priority in action. The hardest thing at the gates when the flights are delayed is to get information There is constant communication between customer service and the ramp. When planes have to be switched and bags must be moved, customer service will advise the ramp directly or through operations. If there’s an aircraft swap operations keeps everyone informed. It happens smoothly Problem-solving communication If you ask anyone here what’s the last thing you think of when there’s a problem, I bet your bottom dollar it’s the customer. And these are guys who work hard every day. But they are thinking, “how do I keep my ass out of the sling?” We figure out the cause of the delay. We do not necessarily chastise, though sometimes that comes into play. It is a matter of working together. Figuring out what we can learn. Not finger pointing. In this context SWA has been immensely successful. By putting employees first management has created a unique bond between organization and its employees. Employees at SWA have a sense of ownership towards the job they deliver and hence deliver it to the best of their capacity. This aspect of organizational culture is unspoken and yet achieved successfully. Every organization would want the employee to be happy and productive. Few realize how to establish connection between happiness and productivity. South West Airlines is one of those few. References Barnes, C., Blake, H. & Pinder, D. (2009). Creating & delivering your value proposition: Managing customer experience for profit. Philadelphia, USA: Kogan Page. Keyton, J. (2011). Communication and Organizational Culture: A key to understanding work experiences. (2nd ed.). 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