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SOUTHWEST AIRLINES – ORGANIZATIONAL CULTURE

Bandaru Chaitanya Krishna

Anbarasan R

Sai Trilochan Chintakunta

Mukilan Sugumar

Mahima Karve

1

SOUTHWEST AIRLINES – ORGANIZATIONAL CULTURE

Introduction:

Organizational culture is an integral part of company’s internal environment because it

provides common goal that gels the entire network within the organization together. The

analysis of management and leadership style, employee empowerment degree, employee

motivation, level of communication, human resource selection and training, organizational

structures and conflict management help us arrive at the organisational behaviour of it.

Southwest Airlines began its service in 1971. Since then the killer-whale painted planes have

become familiar to their customers and to corporate America. Besides being profitable,

expanding constantly and defending its high place on the Fortune 500 list, southwest has a

very special trait: attitude. The Southwest perspective stems from CEO Herb Kelleher and

Southwest’s employee motivation. The purpose of this article is to discover the sources of

success of Southwest Airlines as a company with high employee motivation.

Three factors will be addressed:

(1) Southwest as an ―excellent‖ company;

(2) the source of employee motivation in this ―excellent‖ company; and

(3) whether lessons learned can adequately address potential future problems for

Southwest.

The airline industry has been in the forefront of the economic and ecologic turmoil in which

the United States and the world have been involved. This paper directs its concerns to the

organizational behaviour strategy practices of Southwest Airlines. Through an assessment of

Southwest’s overall design approach (mission, strategic overview of the leadership, glance at

the organizational structure, corporate culture and people systems), this paper will provide an

evaluation of the short and long-term effectiveness of the strategy, and the impact on

environmental, political, sociological, psychological and fiscal arenas on behaviour. The

ways in which Southwest illustrates theories of organizational design and behaviour will be

explored. This paper also explores how behaviour will influence Southwest Airlines‟ future.

The airline industry in the United States and all around the world has suffered severe losses

during the last decade due to increasing fuel prices, incremental overhead costs, a dramatic

reduction in the amount of passengers and the extraordinary events caused by the 9-11

incident which paralyzed flights for days. To survive, many companies have been forced to

fire employees, reduce the number of flights, close routes and the most recent action taken

was the merger between the British and Spanish giants British Airways and Iberia, becoming

the third largest airline of the world.

Nonetheless, there is an airline company that has demonstrated a steady growth, although the

majority of US airlines in the industry are just trying to maintain their operations. Southwest

Airlines, remembered for its slogan ―Come, fly the friendly skies‖, is an example of a well-

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executed business strategy working together with a strong organizational culture. ―Whereas

most U.S.-based airlines suffered extraordinary losses post-9/11, Southwest has prospered

and, more remarkably, grown. Much of the company's success is directly attributable to its

enduring corporate culture‖.

Southwest Airlines is not just a recent success story. ―Probably the most significant

development in the U.S. airline industry during the past decade has been the continued

expansion of Southwest Airlines and the resurgence of low-fare entry generally‖. The

company has a long and positive track record. ―Since its first flight in 1971, Southwest

Airlines (SWA) has captured new passenger traffic through timely and prudent entry into

markets where full-service carriers have historically accounted for a majority of the flights‖.

While the major airlines like American Airlines and Delta hub in the largest and most busy

airports, Southwest created a strong base offering accessible rates to commuters flying non-

stop from or to smaller airports. ―SWA has found a way around this problem by using

airports on the urban fringe of the metropolitan centres it does not serve‖. This strategy

helped Southwest Airlines develop, giving the strength necessary to compete and even

surpass major competitors.

The ability to fly has been one of man’s greatest achievements. From Leonardo

De Vinci to the Wright brothers, from Lindbergh to John Glenn’s orbit around the earth,

flight has fascinated and riddled humans. This paper explores the organizational design

behaviour that has allowed for the success of Southwest Airlines. According to Jones

organizational behaviour is a product of organizational design. ―Organizational

design is the process by which managers select and manage aspects of structure and

culture so that an organization can control the activities necessary to achieve its goals.

Organizational structure and culture are the means the organization uses to achieve its

goals; organizational design is about how and why various means are chosen. How have the

design components of mission, leadership, structure, culture and job design been a driving

force in the behaviour of Southwest Airlines with respect to external and internal influences?

What does this author think of Southwest’s ability to stay competitive and what

recommendations can he offer to better the organizational design that may provide for future

success to Southwest Airlines? Through an analysis of design theories this author will

evaluate if Southwest Airlines conducted research to develop its organizational behaviour

strategy. These are questions that will be answered in the forthcoming paper.

Autonomy and entrepreneurship:

Companies encouraging autonomy and entrepreneurship are characterized by innovators and

risk takers on all levels. Internal competition is encouraged, not suppressed, and management

fosters leaders on all levels.

―Southwest is a company that encourages its people to express their individuality. . .

Southwest’s culture also de-emphasizes hierarchy‖ At Southwest, every employee can

express opinions freely and make suggestions. For example, Southwest encourages

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leadership. As Jaffe explains: ―We want everyone to be a leader in his job; you’re a leader not

just in what you say, but in the way you listen and respond to others, in what you do, and

most importantly, how you do it‖. Internal competition at Southwest exists in a friendly and

motivating way. ―Departments shower one another with free ice cream, pizza, or other

goodies as tokens of customer devotion – or simple in appreciation of a job well done‖

Southwest also accepts failure as a natural and forgivable occurrence. ―A special attribute of

the success oriented, positive, and innovating environment is a substantial tolerance for

failure.

Southwest Airlines’ co-founders and subsequent leaders did not just establish and administer

an airline; they created a new travelling experience for the passengers and their employees.

―More than 38 years ago, Rollin King and Herb Kelleher got together and decided to start a

different kind of airline‖. According to Southwest.com from the beginning the purpose of

King and Kelleher was to offer passengers the lowest possible fares, on-time schedules and a

good time during all the travelling planning, buying, flying, and getting to the desire

destination process ―The source of Southwest’s caring and fun-loving culture is Herb

Kelleher‖.

King and Kelleher innovate and use their creativity to penetrate a complicated and an already

competitive industry. Tubbs and Jablokow ,indicate the results of a recent survey performed

by Business Week in association with the Boston Consulting Group, which ranked Southwest

Airlines among the world’s twenty-five most creative companies.

In contrast, Arnoult describes Skip Barnette, a thirty year Delta veteran in charge of another

commuter called Atlantic Southwest Airlines, as a more traditional and cautious leader.

Barnette’s vision was to become the best regional airline, basically by improving the

customer service. Although, improving customer service is a must in today business, his

major barrier was to inspire confidence between the management team. The problem was that

even Atlantic Southwest Airlines executives were not sure. ―Watts agrees, citing Southwest

Airlines, known for its cheery employees who spread the gospel of customer service

according to charismatic leader Herb Kelleher.‖Skip is not Herb," says Watts‖. Robbins and

Judge include Herb Kelleher (Southwest Airlines) as an example of a contemporary founder

and leader who has had a significant impact on their organizational culture.

Organizational Culture:

―There is a significant Indian proverb relevant to this issue: yatha raja, tatha praja (like

leader, like follower)‖. After reading this citation it seems so simple to understand why

Southwest Airlines’ organizational culture reflects its co-founder values and ―servant’s heart‖

attitude. ―The company´s relaxed culture can be traced directly to its CEO and co-founder

Herb Kellerher‖. Southwest culture is characterizes by its fun and enjoyable organizational

environment. Gary Kelly, actual CEO, as cited by Bryant explains that fun comes as a by-

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product after achieving success, working in an enjoyable place, with good people that value

the employee´s dedication.

While other airlines are focus in the economic issues of the operation, Southwest Airline’s

main concern is how to maintain a formal operation structure that offers flexibility,

empowerment and a notion of fun regarding the employees’ work environment and customer

service. ―By placing employees on an equal plane (no pun intended) with customers,

Southwest Airlines has built a culture that facilitates employee retention and satisfaction‖.

For Southwest Airlines’ employees, their work is not an eight to five job. The organizational

culture encourages employees to be prepared to offer their help at any moment. For

examples, pilots will help flight attendance check the passengers and off-duty employees, like

a foreman of ground equipment assisted a flight attendant tend a food poisoning passenger

and later helped her claim the baggage.

Southwest Airlines’ organizational culture seems more like a family oriented business, where

everybody is part of the family. Southwest Airlines is a different company that focus in

―business techniques‖ and more important, ―… on loving its employees, recognizing them

and having fun playing games and celebrating success along the way‖. A working

environment, like this, where the employee is consider as well as the customer will built, in

the long run, an emotional bonding and a strong organizational culture. ―Over time a

dominant set of norms will emerge, guiding the way in which work is accomplished within

the organization‖. Another of the benefits of Southwest Airlines’ organizational culture is the

incremental effect in productivity. The employees work better in a better environment.

Organizational Practices:

Hofstede and Bond ―suggest that the power behind the economic rise of the East Asian's

economy, which outperforms its Western counterparts, has more to do with its cultural

practices‖. Some of the Southwest Airlines’ organizational practices include

a) implementing an informal and fun atmosphere encourage by the CEO

b) recognizing employees’ special dates, duties, and personal activities

c) encouraging employees to pitch in where needed

d) a rigorous screening process for the selection of new employees.―They have found that

techniques and recognition must work together‖

Other practices that differentiate Southwest Airlines from the others include

a) its willingness to promotes a free to move philosophy between its employees

b) a workplace spiritually

c) high level of empowerment

d) selective hiring

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Free to Move philosophy :

―One way to ensure a consistent employee experience is to encourage employee development

and movement within the company‖. The organizational structure is a high formalization one,

similar to the other airlines due to the regulations and security measures after 9/11.

Nonetheless, Southwest Airlines strong organizational culture permits a high degree of

flexibility, especially, in matters related to consumer service. This strategy builds strong

leaders and improves the retention strategy.

Workplace Spiritually :

―An active spiritual life can help individuals find meaning and purpose in their lives and live

out deeply-held personal values. Employees demonstrate a high level of teamwork and a

natural desire to serve and act in the best interest of the company and its consumers. ―First,

SWA has a strong emphasis on community. ―There is a strong feeling among the employees

that they are part of a family and that the employees take care of each other as well as their

customers‖ ―Second, SWA employees feel they are part of a cause. Employees feel that being

part of an airline with the lowest airfares, personalize service, and characterized by a

humorous environment gives the opportunity to people that could not afford it to fly. ―A

sense of being a "rebel," independence, and liberty are associated with SWA's cause or

mission of offering low-cost, fun air travel‖

Design Strategy:

―An organization’s behaviour is the result of its design and the principles behind its

operation. It is a task that requires managers to strike a balance between external

pressures from the organization’s environment and internal pressures from, for example,

its choice of technology. Looking outward, the design can cause organizational members

to view and respond to the environment in different ways. Looking inward, an

organization’s design puts pressure on work groups and individuals to behave in certain

ways‖ The environmental, political, sociological, psychological and fiscal

elements of behaviour are influenced by the success of the organizational design. When

discussing the organizational design of Southwest Airlines, this author has chosen to

focus on mission, leadership, structure, culture and job design as these elements have

direct impact on organizational behaviour.

Mission:

An organization’s mission has a direct impact on organizational behaviour. Southwest has

divided their mission into two categories; that of what the customer can expect, and that of

what the employee should expect. For the consumer, the mission statement is short and states

―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‖. In

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addition, the leadership added a mission statement for employees of the airline that states

―We are 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‖ .These were written in 1988 and still hold

true today.

Strategic Leadership and Theories:

Leadership plays a key role in deciding what behaviours it wants the organization

to reflect. Over the past 3 decades Southwest has been in an expansion mode, growing

from a small business that served only three airports to the fourth largest airline in the

United States serving 64 cities. The current president is Colleen Barrett and the Chairman

of the Board and Chief Executive Officer is Gary Kelly. The decision making leadership

force is the Board of Directors. ―The Vice President of the People & Leadership

Development Department is responsible for establishing and monitoring the personnel

procedures to guide our Goals for Success. All Southwest Airlines Officers, Managers,

and Supervisory Personnel shall be responsible for affirmative action implementation

related to their individual departments. Providing Equal Employment Opportunity is an

important part of effectively managing people and successfully fulfilling our Leadership

obligations to our Employees, current and future, and the Company as a whole‖. The

leadership structure is rational. Scott (2003) tells the reader rationality resides in the structure

itself, not in the individual participants—―in rules that assure participants will behave in ways

calculated to achieve desired objectives, in cognitive decision-premises that guide individual

decision making, in control arrangements that evaluate performance and detect deviance, in

reward systems that motivate participants to carry out prescribed tasks, and in the set of

criteria by which participants are selected, replaced, and promoted‖

Organizational Structure and Theories:

The complex organizational structure of Southwest Airlines is a determining

factor in its organizational behaviour. Organizational structure is comprised of several

areas. Among the areas of structural concern are issues of authority and control,

communication, product division, team, geographic and market structure. Southwest

Airlines has defined all these areas and shows a strong capability in all issues. Jones

reminds the reader that all organizations start out as functional structures.

As Southwest Airlines expanded, so did its structure. The organization has a complex,

hybrid, multi-divisional structure that is based on increasing horizontal and vertical

differentiation, but also concerned with customer relations as a service driven business.

Southwest must contend with a number of factors that influence its design:

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different airports, consumer relations, different divisions (such as maintenance of

aircraft). One challenge Southwest faces in its structural design is taking into account

that airlines are a consumer driven industry. As Southwest operates in 64 different

locations, each location operates both as a business and as part of the corporate structure.

Jones affirms that each division is run separately and may use a product division

structure, while reporting to a corporate headquarters that uses a more diverse,

multidivisional structure. ―Each division in a multidivisional structure is essentially a

different business. Moreover, the responsibility of each divisional manager is to design

the divisional structure that best meets the needs of the products and customers of that

division‖. The positive aspects of multidivisional structure include

increased organizational effectiveness, increased control, profitable growth and an

internal labor market. In this structural theory, behaviour is controlled through internal

upward mobility. This means that divisional managers are often groomed to enter the

Southwest Airlines corporate world. ―Divisional managers have an incentive to perform

well because superior performance results in promotion to high office. A large divisional

company possesses an internal labor market, which increases managers‟ motivation to

work to increase organizational effectiveness .An additional challenge that

a business dominated by consumer demands is how to keep the customer’s happiness at

the forefront so revenue keeps flowing. One way to structure such an organization is to

put customers first and make decisions based on consumer reaction and satisfaction. A

structure that is consumer focused is unique in that the leadership makes many of its

decisions based on the reactions of the customers. Many airlines use this type of structure

as part of their design.

Corporate Culture and Theories:

Southwest is proud of the culture it has developed over the last 37 years. Culture

is a reflection of past behaviour. It has a history of innovation and growth. In 1987 the

Department of Transportation started a program tracking and rating customer satisfaction

as more people flew the different airlines. Southwest consistently led the industry with

―the lowest ratio of complaints per passengers boarded. Many airlines have tried to copy

Southwest’s business model, and the Culture of Southwest is admired and emulated by

corporations and organizations in all walks of life. Always the innovator, Southwest

pioneered Senior Fares, a same-day air freight delivery service, and Ticketless Travel.

Southwest led the way with the first airline web page—southwest.com, DING! the first-ever

direct link to Customer’s computer desktops that delivers live updates on the hottest deals,

and the first airline corporate blog, Nuts About Southwest. Our Share the Spirit

community programs make Southwest the hometown airline of every city we serve.

Southwest has succinctly defined their organizational culture. ―The Culture of Southwest

Airlines Co. (―Southwest‖) is often the yardstick for many American corporations.

Our Culture is unique because of the SOUTHWEST SPIRIT of our Employees.

Defining SOUTHWEST SPIRIT is difficult, but one of the important components

is an altruistic nature that places others before self. Our Employees are famous for

8

their warm hearts and giving nature, which is what makes Southwest a Company

with a conscience. The Employees of Southwest are committed to ―doing the right

thing,‖ which is why giving back to the communities we serve and contributing

positively to our environment is simply the way we do business‖.

One could theorize that the culture very strongly linked to the missions that the leadership has

determined. To work for Southwest one must follow a vision that is customer service oriented

and therefore, pleasant in demeanor and family friendly. The leadership of Southwest has a

special loyalty and commitment to its employees recognizing the importance of a competent

staff when in a public service-driven business. Since beginning business in 1971, Southwest

has thrived on a Culture which encourages an entrepreneurial SPIRIT in its Employees, and

has emphasized personal responsibility, initiative, and the use of independent, good

judgment. The Golden Rule is one of our core values, and we have had a ―top-down‖

insistence on the highest ethical standards at all times.

Job Design:

How an organization defines job design from the individual employee to a broader cultural

aspect can have a large impact on how the individual divisions relate with each other and the

organization. Southwest has shown an unusual ability to accept diversity and promote

creativity within its job design. ―Job design involves envisioning and defining specification

of work system related to a particular job. It addresses issues like the methodology of doing

the job, the person responsible for doing the job, and the place of accomplishing the job. The

activity of job design helps in making the prevailing jobs and work systems more challenging

and exciting for the employees‖ Job design includes many elements. Southwest Airlines is

very involved with employees and sees employees as key to the organization. ―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.

The way in which the airlines has interacted and been influenced by external

environmental factors is very important when studying Southwest’s behaviour. Southwest

Airlines was started in 1971 by Rollin King and Herb Kelleher.

The original name was Air Southwest Co., but when the company incorporated in 1971,

it formally changed its name to Southwest Airlines. Southwest began as a small service in

Texas flying between Houston, Dallas and San Antonio. When the airline industry was

deregulated by the FAA in 1978, it allowed Southwest to expand its service to include

California. Southwest kept expanding from there. Now the Airline is the fourth largest

airline in the United States with over 500 aircraft serving 64 airports with over 104

million passengers a year. Southwest Airlines celebrated 37 years of service on June 18,

2008. In 2007 Southwest had a net income of $101.9 million with a total operating

9

revenue $9.9 billion, so this expansion was not only geographical but financial, too.

―Southwest became a major airline in 1989 when it exceeded the billion-dollar revenue

mark. Southwest is the United States‟ most successful low-fare, high frequency, point-topoint

carrier. Southwest operates more than 3,400 flights a day coast to coast, making it

the largest U.S. carrier based on domestic departures‖ (Southwest Facts, About the

Company). When the stock market closed on June 20th, a share of Southwest Airline

stock (LUV) was selling for $14.11 with over 14 million shares on the market. (NYSE,

LUV).

Southwest must also contend with public opinion and preferences as the company is a

consumer driven business. The events of September, 11, 2001 are still affecting how the

public feels about the safety and security of air travel. The current rise in fuel prices is

having an added negative affect on the airlines industry as a whole. As fuel prices rise the

consequence is inevitable that customer fare will have to be increased. This puts pressure

to find alternative places where services can be curtailed so as not to lose business.

Evaluation of Effectiveness of Southwest Airlines Design:

This author has analyzed the design structure of Southwest Airlines and has

assessed that because of the willingness of the leadership to accept and listen to the

creative solutions and innovation proposed by employees, Southwest has been able to

stay successful and competitive. Leadership performed adequate research in developing

its organizational behaviour strategies. Imaginative administration and staff have created

many programs that have given Southwest a pricing edge over its competition and led to

a unique system of organizational behaviour. When analyzing environmental impacts,

Southwest Airlines favorably listened to the demands of the FAA and its customers. As

an example of how Southwest incorporated external influences into the design of its

aircraft, Southwest chose the colors of the aircraft (Apache Blue) because the colors are

representative of its western spirit and attract the eye of the consumer. Organizational

theories were properly incorporated and as a result innovative programs were created.

The programs offered included: frequent flyer programs (Rapid Rewards); purchase and

confirm flight online; removing first class seating and giving all flyers an equal chance to

sit in the front of the aircraft; and innovative ways to check baggage all offer the

customer an easier flying experience.

10

A COMPARATIVE ANALYSIS OF SOUTHWEST

AIRLINES AND BRITISH AIRWAYS

The comparative analysis of organizational behaviour is carried out by taking into

account two companies namely Southwest Airlines, a leading American airline and British

Airways which is United Kingdom’s leading international airlines in British Airways.

Organizational Culture

Organizational culture is an integral part of company’s internal environment because

it provides common goal that gels the entire network within the organization together. The

analysis of management and leadership style, employee empowerment degree, employee

motivation, level of communication, human resource selection and training, organizational

structures and conflict management resolution in both the originations will help us carry out

the comparison.

Management and leadership style

The management style of Southwest Airlines is a key factor which enables them to

continue their journey of success. It was the CEO of the company who has inculcated positive

attitudes to cerate a unique environment which get reflected in within the organization in the

shape of employee satisfaction and outside the organization in the shape of customer

satisfaction. The management style that can be observed at Southwest Airlines is no one

style but affine mix of balanced management approach. It works on the basic premise of

behavioural approach, i.e. believe in the concept of strategy implementation as more

important than strategy devising for higher success rate. In this regard, acceptance theory by

Chester Bernard is at a pivotal point which argues that no matter how well a strategy or a plan

has been devised but it the executioners of the strategy which affect the success rate of the

plan. Therefore top managers should identify the factors that affect their employees’

performance, morale and satisfaction. The top management at Southwest Airlines believes in

being friendly with employees, having a concern for employees who can make them feel

wanted. However, in adopting this approach the management does not ignore the need for

results and hence can be at times very tough with employees to make them achieve the level

of performance which they are expected of. Therefore the leadership style is again a mix of

autocratic and participative. It has been kept in mind that the situations dictate the style of

leadership which can produce the required results. Moreover the management at Southwest

Airlines believes in future scenario generation which enables them to carry out a sensitivity

analysis for the uncertain situations. As a result, the leadership inculcates the need of being

innovative and proactive into the organizational culture.

11

Management style at British Airways highlights the management’s inclination

towards instructions following and compliance with the rules. Autocratic style of leadership

is observed in the history of British Airways organizational behaviour. Their focus is mainly

on the customers but do not hold high regard or family like concern for their employees like

that in SW. the organizational culture at British Airways is regarded as authoritarian,

technically biased and the relationships within the networks are formal. This does not imply

that the management does not value its employees’ services but unlike SW the informality

within the networks is absent here. The management believes that instructions given and

followed in the appropriate manner has to be the bottom line of successful managerial

actions.

Southwest Airlines management believes in not only creating a positive culture but

sustaining it for the foreseeable future so that it translates into a competitive advantage. There

are various tools that Southwest Airlines management has adopted to achieve a healthy and

positive organizational culture. The following text will briefly highlight those:

1. Employee empowerment:

The management has decentralized system of decision making which allows the

employees to take initiatives which are innovative without having the fear of being punished.

However, the degree of freedom does not get into a shape of ignoring the strict airline

regulations and limitations of the industry. Employees are encouraged to make on the spot

decisions, particularly the managers and front line staff which is direct interaction with the

customers that can result in positive benefits to the company and in turn to the company.

They keep their focus on the fact that a satisfied and delighted customer base is the success

driver in this industry. Southwest practices POS policy that is Positive Outrageous Service

which encourages the employees to go out of their way to help customers A great and worth

mentioning example in this regard is the advent of September eleven, when the terrorists had

brought planes down and SW plan had to land on emergency basis, the management decided

to keep all the passengers in a hotel and the pilot took all the passengers out to the movie.

Examples like these fill in the organizational culture at southwest airlines to highlight the

degree of employee freedom and empowerment.

British Airways management however, does not support as high degree of employee

empowerment as that in SW. Undoubtedly it encourages its employees to be innovative but

the decisions have to be made in the board room with the three-fourth consent from the

majority. Its management believes that the more standardized the processes are, the better the

performance is. Unlike SW employees here are not highly supported to make abrupt or at the

spur of the moment decisions regarding any issue.

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2. Transparent and network wide communication:

The company believes that transparency is always beneficial because it translates in to

honesty and reliability. Hence a southwest airline has launched a blog known as ―Nuts about

Southwest‖ which is a forum where customers and employees communicate and discuss of

their issues. There is a cultural committee set which is comprised of 127 members from

different parts of the company. Through this the Top management makes it sure that a couple

visits each year are made to meet the employees. These meetings give management the

opportunity to learn about the concerns and problems being faced by their employees. This

action makes employees feel that the people they are working for care for them. A new city

committee is formed which is goes to every new city Southwest starts to serve and educates

its employees about company values and culture. ―Back to basics‖ was a team set to carry out

an essay contest to describe ―what makes Southwest work‖. These best written essays were

selected and compiled in to a book which is now given to every new employ of the company.

This initiative made the employees feel wanted and treasured. The basic channel for

employee input is the company’s open door policy which encourages employees to write to

the CEO about their concerns, issues, suggestions or questions. These are forwarded to the

top management on daily basis and appropriate responses are produced to each. Such a high

degree of ease in communication has resulted in outstanding employee satisfaction.

Southwest management also believed in making their employees act as owners. The company

provides daily news update on intranet, quarterly earnings performance in the shape detailed

financial information known as ―Knowing the Score.‖ It also publishes a 32-page magazine

every month and newsletter known as LUV line which not only rotates information within the

organization but also highlights outstanding employees’ performance which in itself becomes

a great source of motivation.

British Airways management focuses on the importance of communication within the

organization. It employs different tools to make communication easy and transparent for its

employees. Mainly, the news letters and meetings give employees a chance of

communicating their concerns. However, the focus of such meetings remains business and

unlike SW the management does not go out of its way to inculcate family like values. The

employees can not directly communicate their issues with the top management but are

allowed to put up issues in front of their immediate bosses. However, a major step by British

Airways to have a wider and more effective communication was to launch a program that

would make TV broadcasts to its employees daily.

3. Organizational structure:

The basic structure of SW is similar to that of the industry, which is highly

characterized by automated schedules, extreme emphasis on efficiency and consistency of

high performance, formalization and standardization of tasks and activities. The employees

are expected to behave like clocks and machines when it comes to flight preparation. The

bottom line to describe their structural strategy is termed as ―loose-tight policy‖ which

focuses on high degree of adherence to rules and procedures when it comes to operations but

13

at the same time adopting a customer friendly approach to make customers feel relaxed and

secure. The organizational chart is a simple one with three executive vice presidents of

Corporate Services, Customers and Operations reporting to the CEO and all the lower levels

report to them. Such hierarchy enables the management to keep their efficiency consistent by

being able to recognize the responsibilities and rights of each element in the network.

The organization chart of British Airways is relatively flat with one level of hierarchy

which separates top from the bottom line employees. The organization is divided into ten

departments Planning, Investment & Alliances, Commerce, Ground Operation, Engineering,

Flight Operation, IT, Finance, Law, and Human Resource. The departmentalization ensures

standardization and easy monitoring of performance. The departmentalization in British

Airways makes it evident that the management focuses on specialization of labor and strict

control on monitoring and feedback.

4. Employee Motivation:

Southwest has adopted Expectancy Theory as the basis for its plans to motivate its

employees. The theory argues that the power of a propensity to act in a certain way depends

on the degree of an expectation that the act will be followed by a given outcome and on the

degree to which the individual values that. The company has used Employee Stock

Ownership plans as a motivational tools fro its employees. This plan encourages employees

to own stocks of the company and have vested in the success of the company. It makes the

employees feel being in a partnership with the owners. Hence, they strongly believe that good

performance by the company will not only help the company to grow but its success will also

help them to grow.

At British airways, the management believes that employees can be highly motivated

if they are timely rewarded for their performance. The employee motivation tools include

excellence award for their employees. Bonuses for better performance and promotion based

on skills and performance have mainly led the workforce remain motivated to work with

British Airways. The management has taken these steps basically by keeping in mind the

Maslow’s hierarchy of motivation which lets people move from the lowest level of

physiological needs to the highest of self actualization. Hence managers at lower level are

encouraged to work effectively and efficiently so that they climb the career ladder high. For

the higher levels, it is the recognition that motivates them to perform well.

5. Human Resources:

Employees at Southwest believe that their management cares for them and tries hard

to ensure that they are being treated fairly. This works well for the company as many talented

individuals strive to be a part of Southwest workforce. The selection process at Southwest is a

rigorous and the kind of attributes that the management seeks in the employment candidate is

14

the spirit to serve. They management believes that the presence of spirit or attitude is the

prerequisite of a great performance because spirit cannot be breathed in. however, with the

presence of spirit and skills can be trained for. After the hiring, the candidate spends six

months under a mentor who trains him and makes him understand the cultural dynamics of

the company. In the initial six months, the hiring is on contingent basis, i.e. if the candidate

dose not fit well into the culture, he will be terminated. The training sessions apart form

mentoring include each employee’s self improvement program which he or she has to

complete each year at a suitable time.

6. Conflict management:

Southwest adopts negotiations as means to mange conflicts. To resolve cross functional

conflicts managers take an active role in making the parties get rid of conflict in win-win

situation. If the conflicts are not resolved by the parties through negotiations then the conflict

resolution called ―come to Jesus‖ is activated. Which includes gathering information about

the issue in hand and the top management then decides which action should be adopted to

resolve the conflict fairly.

Like SW, British Airways also employs negations as tools to resolve conflict among its

various functional units and elements in the network. They company’s use of the type of

negotiation varies from situations to situations. Most of the times, the management opts for

integrative bargaining which involves a win-win situation. However, its not always that the

management can do it, hence, on the basis of information collected about the issue in conflict,

a win-lose decision is also made.

Inference:

It can be verifiably said that organizational cultures like that of Southwest airlines

take its inspiration from the top management, the commitment and the spirit flows down from

the top to the bottom. Their culture is not a mechanized program but a way of life that gets

inculcated within the employees. The key factors that make their relationships long lasting

and productive are the shared goals and mutual respect. It is identified that the values and

practices of the company are inculcated and implemented not by formal structures and

stringent rules but by developing and nurturing a culture of employee empowerment and

family values. On the hand, the cultural dimensions and approaches at British Airways focus

performance and standardization more than their focus on employee empowerment and

nurturing relationships within the organization.

There can never be exactly the same culture in two organizations because each

management has its own vision, core competencies and goals to achieve. However there are

common elements between two organization cultures, like that in between SW and BA where

both the organization believes that customer is the king, employees must be motivated to

perform well, conflict management is done by adopting negotiations, and communication is

wider and more transparent in SW than in British airways. Lastly, the management style is

15

more autocrative in BA than in SW but more the organizations have been able to derive

above average profits maximizing its shareholder wealth.

Last but not the least, the analysis very strongly highlighted that it is the top

management’s ability to breathe soul in the organization. The culture is an intangible factor

which plays a very important role in financial performance of the organization, this can be

verified by the fact that satisfied employees give in their hundred percent efforts in turn

increasing their productivity which gets resulted in higher net income, and consequently

contented shareholder on getting expected return on investment. Moreover, the word of

mouth adverting by the satisfied customer base in a service industry is also a very important

factor that interprets company’s competitive advantage. Such delighted and satisfied

customer base is undoubtedly the result of sound strategies and highly motivated and skilled

workforce.

Summary, Recommendations and Conclusion:

Since the first flight of the Wright brothers in 1903 people have pursued and

reached for the skies. Indeed, flying has become so accessible that the public takes it for

granted, that they can fly virtually anywhere at anytime for an economically reasonable

price. Southwest Airlines was started in 1971 and filled a need in the southern plains of

Texas. Because of deregulation by the FAA it was able to expand dramatically its market.

But Southwest retained the ideals of a smaller organization and valued the input of its

employees, never taking for granted that it was a service driven company offering quality

care to the public. These small town ideals kept the organizational behaviour one that

stayed in tune with both customers and employees, continuing to innovate and create as it

continued to grow and become financially successful. The leadership of Southwest has

been very successful attending to the environmental, political, sociological, psychological

and fiscal areas of an organization that is heavily influenced by external conditions such

as paradigm shifts, inflation and fuel issues. The organizational design of Southwest has

been able to preserve the company‟s original mission. This author recommends that

Southwest Airlines continue to stay focused on that mission and dedication ―to the

highest quality of Customer Service delivered with a sense of warmth, friendliness,

individual pride, and Company Spirit‖, as this type of spirit will persevere in these tumult

16

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