Southwest Airlines is the innovator in low-fare air transit and one of the prima American air hoses. In 2010, with a figure of 106.2 million riders carried, it was the USA ‘s largest domestic bearer in footings of boarded riders ( Centre for Asia Pacific Aviation and IATA, 2011 ) . Southwest was incorporated in Texas in 1967 and service started four old ages subsequently, in 1971. Originally, the air hose was merely functioning Texan metropoliss but the company has increasingly enlarged its service to other American provinces and metropoliss.
Until 2011, no international finishs were comprised in the air hose ‘s paths even though codeshare understandings permitted it to offer international flights operated by other air hoses as stated by the Southwest media web site, 2011. The acquisition of AirTran Airways by Southwest Airlines will let it to function some international finishs in Mexico and the Carribean. In 2010, the staff represented 34,901 individuals and the company owned 548 aircrafts ( Datamonitor, 2011 ) .
A PESTEL analysis of the planetary air hose industry by Xerfi Global ( 2011 ) will let us to understand that the macro environment stays exceptionally ambitious. Here is a brief sum-up of the analysis:
Public support actions
Political instabilities, struggles, terrorist act
Increasing demand for air transit
Oil and fuel monetary value fluctuations
Sensitivity of demand to monetary values and economic fluctuations
Expanding universe population
Economic and societal globalization
Aircraft efficiency sweetenings
Creation of new aircraft constructs make air go even more attractive ( e-commerce )
Chronic holds in aircraft bringing
Unfavorable conditions conditions
Natural catastrophes, pandemics
Environmental jurisprudence to cut down emanations ( C countervailing )
International understandings in favor of liberalization and globalization
Severe security and safety ordinance
High degrees of revenue enhancement
A market analysis of the planetary air hose industry ( Xerfi Global, 2011 ) reports several facts. First of all, political relations have a high impact on the air hose industry. It can be earnestly influenced when it comes to turning revenue enhancements, rigorous security norms or statute law supporting the environment. All these restraints impact the fundss and operations of air hoses. However, authoritiess offer regular fiscal support to help air hoses because of their significance for trade and touristry. Furthermore, economic and societal globalization leads to market deregulating and therefore enable the good development of the industry. The economic factor has besides a high impact on flag-carriers. For illustration, in 2009 during the planetary economic crisis, all the industry was affected as stated by Xerfi Global, 2011. Consumers were less likely to go because of the fluctuations of diverse economic factors like employment every bit good as income degree or more by and large planetary trade. As a consequence, the air traffic was extremely and quickly contracted.
Regardless of these issues, demand for air transit is increasing due to the turning demand in emerging markets ( Aviation Industry, 2009 ) . The changeless proficient advancement of the air hose industry by the development of plane with high capacity, inquiring a decreased care and a sensible ingestion made accessible this type of transit to several 100s of million individuals. Presents, it is cheaper to go by plane thanks to the engineering ‘s fast betterments and to a more active competition. The costs are significantly reduced and therefore let more people to utilize air transit.
After utilizing a PESTEL analysis, it is now necessary to acquire a closer expression on the internal factors. Here is a SWOT analysis of the Southwest air hose retrieved from a study made by Datamonitor ( 2011 ) :
Firm runing scheme
Robust fleet operations
Increasing hard currency flow from operations
Class action cases
Dependant on individual aircraft and engine providers
Poised to profit from the acquisition of AirTran Retentions
Positive mentality for touristry industry in the United states
Turning US air hose industry
Increasing fuel monetary values could strive borders
Rigorous authorities ordinance could increase operating costs
Table: SWOT Analysis of SWA – Datamonitor 2011
Focus of the study: pattern
Companies, following the illustration of the persons, possess their ain civilization. By and large, in a company managed by its proprietor, the civilization corresponds appreciably to the personal civilization of this 1. As reported by Kotter and Heskett ( 1992 ) , company with a strong corporate civilization is due to the laminitis or the early leader and his capacity to joint thoughts as a vision or concern scheme. In large organisations, several civilizations mix. Sometimes they can be incompatible because of the diverse personalities who compose the direction squad. Besides, the experiences and the society can besides act upon ( in a positive or negative manner ) the corporate civilization, sometimes even without the directors cognizing. In every type of organisation, a lacking civilization hazards to hold a demotivating consequence on the staff and to be beginning of dissatisfaction to the clientele – two factors which have a important incidence on the profitableness of the company. Organizational civilization is defined as: “ a form of basic premises that a group has invented, discovered or developed in larning to get by with its jobs of external version and internal integrating, and that have worked good plenty to be considered valid, and hence, to be taught to new members as the right manner to comprehend, believe, and experience in relation to those jobs ” ( Schein, 1990, p. 111 ) .
Southwest Airlines is a perfect illustration in footings of corporate civilization. Over the old ages, the company has imposed a strong and original civilization that has ever made the air hose even stronger. Today, SouthWest Airlines confirms its corporate civilization centred on a relation privileged with its employees and its patronage by diversifying the agencies to pass on with this one through assorted societal webs in which the company answers present and invites its employees to take part. This study will concentrate on the fact that Southwest air hose focuses its attending on its employees. For illustration, in 2001, Southwest Airlines had already thwarted the effects of the recession by seting in the foreground its employees. The company chooses to pull from its fiscal militias and to stress the advertisement to consolidate its placement as a low cost air hose in order to avoid the lay-off. The credo of SWA is absolutely organized: “ Treat your employees good, they ‘ll handle your clients good, the clients will go loyal, and your company will thrive. ” ( James Parker, former CEO of SWA )
Chapter 2 LITERATURE REVIEW – Theory
Theorical model used and grounds it was choosen
Schein ( 1992 ) emphasizes the importance to recognize a cultural analysis in order to win an effectual direction which can exceed the national and ethical frontiers. He asserts that this analysis represents a cardinal factor of success for the leaders, who are the individuals in charge for making, administrating, altering and even destructing an organisational civilization.
Schein ( 1992 ) has defined three basic degrees of a civilization which aid to gain such an analysis:
The first degree establishes the surface of a civilization and consists of artifacts, which are defines as “ seeable organisational construction and procedure ” ( Schein, 1992 ) . Artifacts are expressed either material presentations of a civilization, such as the physical construction of a company ( the architecture, the size of offices, presence or absence of barriers between offices, etc. ) , the frock codification of employees, the seeable behavior of the individuals, the rites or ceremonials, published lists on the values and the doctrine of the company, etc. The significances of these artifacts are merely known by people from inside the company, and are therefore hard to understand for an external perceiver. In the same spirit, Trompenaars declares that stereotypes are formed in this superficial degree: A«A biass largely start on this symbolic and discernible degree [ aˆ¦ ] each sentiment we voice sing expressed civilization normally saysA more about where we come from than about the community we are judgingA A» ( 1998 ) .
The 2nd degree of a civilization is constituted by expressed values “ espoused values ” as stated by Argyris and Shon ( 1978 ) ( as cited in Schein,1992 ) . It includes values and religions put together by a group of individuals. However, these can be merely “ avowals ” because there are expressed values which are non put into pattern in all the state of affairss confronted by an person. For illustration, the directors of a company can confirm that one of their chief values is the environmental protection, while in world, the company pollutes in secret the environment. In that instance, the averment of a value does non condition the behavior of the directors.
Trompenaars explains that this type of behavior is a consequence of a contradiction between the criterions and the values: “ while the norms, consciously or subconsciously give us a feeling of ‘ this is how one aspire or desire to act ‘ “ ( Trompenaars, 1997 ) . Nevertheless, Schein has identified a 3rd degree of civilization, in which the explicit values become internal values, which will find the behavior of the group which portions them.
This 3rd degree is the formation of basic implicit in premises. The procedure by which a shared value is transformed in one basic premise is introduced by the leader / laminitis of a certain group. For illustration the leader of a group can suggest a solution to a common issue ( based on one of its values or even on a religion ) . Then, the cogency of this proposal will be questioned and debated between the members of the group. The proposal will therefore be “ tested “ several times in order to measure it. Finally, if this solution works in a insistent manner, the value which is behind will be approved as correct and by consequent it will be considered as an absolute value and unconsciously it will be assimilated as “ shared basic premise “ , anchored in all the members of the group ‘s heads.
These “ shared basic premise “ constitute one of the foundations of the significances which the group portions in an inexplicit manner and which give a context of reading common to the group.
The theoretical account of Schein goes further than the theoretical account of Hofstede which presents the civilization ( including the organisational civilization ) as an onion “ onion diagram “ , with the values in the Centre, encircled by beds of presentations or patterns of the civilization, defines as the symbols, the heroes or the rites. Harmonizing to the theoretical account of Schein, the symbols, the heroes and the rites are all categorised as artifacts, and the basic premises are at the bosom of the theoretical account, with the explicit values between both degrees.
Schein ‘s organisational theory will be the most utile model to analyze this peculiar pattern within Southwest Airlines. The company is well-known for its strong corporate civilization. Since its creative activity, the company has shown undeniable success even during the economic crisis. Beside this of import fact, SouthWest Airline is besides good for its employees and they do non waver to state it: the company has been ranked 2nd best topographic point to work for in America in 2011 ( Glassdoor, 2011 ) . Therefore, it would be interesting to understand how such a successful company managed to travel through the old ages without losing any of its qualities. That is why a deep analysis of the company ‘s corporate civilization will be done utilizing the Schein theoretical account.
Chapter 3 ANALYZE OF THE PRACTICE OF SWA
Using the chosen theory
This portion of the study will be dedicated to an analysis of the “ employee-focused ” pattern of Southwest Airlines through the Schein theoretical account.
Schein organisational civilization degree is obvious in the instance of Southwest Airlines. At the first degree, civilization is seeable to those who are inside the organisation and foreigners through organisational artefacts. It is the most seeable and accessible degree of civilization. These are employees ‘s behaviour, Son of the company or mottos such as “ Just Plane Smart ” ( Southwest Airlines, 1992 ) . Kelleher provinces: “ We were ever really colourful and slightly promotive of a sense of wit. We have ever had that attack, in an informal manner ” ( Organizational Dynamics, 1992 ) . Each individual who travels utilizing a Southwest flight will pay attending to the attitude of the Southwest employees.
They characteristically are the friendliest, most willing to assist employees of any air hose. Southwest chooses its employees based on their societal accomplishments and their ability to be sociable and surpassing. Forces at Southwest must be happy to work and pass on with clients. That is why Southwest gives its employees the freedom to utilize any endowments or accomplishments they may hold in order to entertain and function the clients every bit long as they make them happy. This is one of the factor that contribute to Southwest ‘s first-class client service.
There are many illustrations that prove the fact that employees can move freely. For case, flight attenders might sing or state gags during the flight. In 2009, David Holmes became the most celebrated knaping flight attender and his public presentation became viral on YouTube ( “ Southwest ‘s Rapping Flight Attendant on Freestyle and Flying to Vegas ” , 2009 ) . This is one of the legion illustration that demonstrate that on Southwest ‘s flights, flight attenders make non merely serve clients by showing seat belts and functioning nutrient and drinks.
The in-between degree of a civilization includes values and norms put together by a group of individuals. Southwest has two chief values: temper and selflessness. They are defined by different beliefs of the company such as the importance of concentrating on the state of affairs, issue or behavior instead than concentrating on the individual. It means that a solution must be found alternatively of judging others. Besides, employees need to be originative and concerted. It is truly of import to keep the assurance and self-pride of others. That is why employees have to esteem all the different personalities in order to make one large “ household ” . The company besides insists on the importance of constructive relationships between employees. The success of the company depends on a good teamwork. Furthermore, people in Southwest have the responsibility to do betterments in order to do things better within the company. A “ LUV attitude ” is ever required and everyone should act in consideration of the company ‘s spirit but besides in consideration of others. The Golden Rule is “ Treat others as you want to be treated ” ( The Power of LUV: An Inside Peek at the Advanced Culture Committee of Southwest Airlines, 2008 ) .
Here are the values as stated by Kelleher ( as cited by Organizational Dynamics, 1992 ) :
VALUE 1: Work should be merriment… it can be play… bask it.
VALUE 2: Work is of import… do n’t botch it with earnestness.
VALUE 3: Peoples are of import… each one makes a difference.
A perfect illustration of Southwest ‘s corporate narrative that helps employees understand how they should act in a peculiar state of affairs could be the early old ages of the company.
The first nine old ages was the toughest portion of the company ‘s life. As stated by Lusk on the company ‘s web log, “ tradition here at Southwest Airlines that anyone hired during our first twelvemonth of operation is considered an Original Employee ” . In 2010, eleven of the Original Employees are still working at Southwest. Seven of them were on Southwest ‘s first flight as flight attenders ; one works as a director in flight operations, another is a member of Southwest ‘s land crew, one is a starter, and the last one plant in care ( Lauer, 2010 ) . On particular occasions, Southwest invites the Masters to come in to Southwest ‘s central office and speak about their experiences to current employees. Lauer ( 2010 ) indicates that the Originals state current employees about the battles of a new air hose working difficult to develop. They besides explain how the company managed to publicize without any money in the beginning. The flights attenders had to be originative because the company had no money to pass on advertisement. They would travel down to the streets of Dallas, Houston and San Antonio have oning their uniform and administer flight agendas for the air hose ‘s four flights to everyone they met.
This type of storytelling conserves the history of Southwest, while besides linking the company ‘s early corporate civilization to the lives of the existent and future employees.
Furthermore, corporate rites are repeating sequence of activities that express important values of the company.
There is one rite for what Southwest is celebrated for: its Halloween party. Every twelvemonth Southwest Airlines hosts a tremendous Halloween knock at its Dallas central office ( Southwest LUVs Halloween, 2012 ) . Herb Kelleher passed on his love of Halloween and made it go a tradition at Southwest Airlines. Once, the former Chief executive officer showed up dressed as Elvis driving a Harley-Davidson ( Lauer, 2010 ) . Once Kelleher retired in 2004, his replacement Gary Kelly proved his undeniable belief in and support of continuing the alone corporate civilization of Southwest by dressing up on Halloween as Captain Jack Sparrow from the movie The Pirates of the Caribbean. And he has been observing Halloween every twelvemonth since so. Halloween party shows that holding merriment in the on the job environment is an indispensable value of the company.
The 3rd and deepest degree is called basic premise degree. At this phase, the transmittal of civilization is done unconsciously or under the surface. As stated by Hill and Jones ( 2001 ) , basic premises help to explicate organisational values and these go shared premises that guide how employees interact with each other.
Overtime and through socialisation, the values are conveyed to and learn to new members of the organisation as the right manner to make things. Southwest employs two tools to socialise its values to new employees. They are both parts of the “ civilization commission ” maintained by the company ( Rebuilding the Social Contract at Work: Lessons from Leading Cases, 1999 ) . The first tool used by Southwest is the “ New City ” commission. The intent of this commission is to travel to each new metropolis Southwest serves so as to learn new employees about the values of the company. It facilitates the version of the new employees to Southwest ‘s civilization, so they can larn the Southwest ‘s ways of making things. The 2nd tool is called “ Back to Basics ” squad. This commission sponsored an essay competition to depict what makes Southwest successful. The squad chose a series of essays that were integrated into a book with an attach toing picture that is given to every new employee. One of import thing is that people of these commissions are all voluntaries working on their ain clip.
This study allowed to understand the impact of a strong corporate civilization and its relation to company public presentation. The instance of Southwest air hoses shows a company with a solid committedness to its employees. The company offers the same regard to its employees as it does to its clients. The mission of Southwest air hoses is alone in the fact that it recognizes the importance of its employees in the company ‘s scheme, which puts the accent on the great client service and the operational efficiency. In return, the employees show undeniable regard, trueness and trust. The exact same qualities that Southwest airlines demonstrates. Employees of the Southwest are known for their trueness, the dedication, the attitude and the invention. Employees are the factor of differentiation between Southwest air hoses and the remainder of the air hose industry.
Hill, C.W.L and Jones, G.R. ( 2001 ) A Strategic Management: An Integrated Approach.A Boston MA, Houghton Mifflin
Kotter, J. & A ; Heskett, J. ( 1992 ) . Corporate Culture and Performance. New York, NY: the Free imperativeness.
Lauer, C. ( 2010 ) . Southwest Airlines. Greenwood
Schein E. ( 1992 ) . Organizational Culture and Leadership. ( 2nd erectile dysfunction ) .Jossey-Bass, San Francisco.
Trompenaars, F. & A ; Hampden-Turner, C. ( 1997 ) Riding the Waves of Culture: Understanding Cultural Diversity in Business ( Second Edition ) London: McGraw-Hill.