A case study South west airline faces new challenges
South west airlines use the same methods and formula for its success even after 32 years of service in the airline industry. They maintain a position of being most profitable in US. They offer low fares, high frequency flights and good service and flies only Boeing 737 and also that they don't offer connecting flights, reserve seating and free meals. They rely on less expense and secondary airports. The employees are also hard working of which the airline is very proud off. It believe that its true asset are the work force which it has working along the airlines.
Other airlines available charge more than 100% of what the south west airlines charge. These charge the ticket on cost per mile basis. The airline compensates this cost by paying considerable less to its pilots and flight attendant and flying for more hours. Though the airline pay less to its employee, the airline comprehend this by the profit sharing with the employee and also with the stock option plans for them. In the 32 years of its service, the airline has seen a rapid growth in its service and due to which the company provides with job security to its employees, which other airlines don't provide to its employees. Because a large portion of the employee remuneration comes from the stock option plan, the employees have worked harder and flexibly for the company than compared to other peers employees in the other airlines. The pilots in the airlines also help their ground staff to move the luggage and with other works. The employees in the airlines are hard working and also the company make sure that they are having a good time in the airlines and due to this factor there are many employees who have joined the airlines in the beginning of the service and till continue to work with them. The HR department of the airlines has kept it as criteria while selecting the employees that they have a sense of humor in them.
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But in the last few years the company, the environment in the airlines industry is completely changing as the entrant of new airlines in the market. Firstly these airlines are The airlines like jetblue, frontier, airtrans, song and ted which had come out with the plans of the same nature to the southwest airlines. These new airlines are also providing the facilities of reserving the seats in advance and also free live-satellite TV. These are providing these facilties because they are newer and more fuel efficient planes and have young and lower paid workers. Secondly, in the 2001-2002 declines in the stock market which effected a lot the south west airlines stock. This stock which had lower there value didn't attract the employee any more of he company. Thirdly, south west has to deal with the reality that it is no longer the underdog. Till date the employees of the airlines enjoyed competing with the other airlines like delta, united, American etc. The employee used to love the work which they had to do and survive it. But the time changed everything , the employees started demanding more pay and less work hours. Earlier it was easy to motivate the employee and make them work for last hours. Finally, as the company has grown and matured, management has become more remote from rank and file. When the company has a few hundres employees, it was easy for management to communicate its messages but now its was difficult to communicate with the strength of 35000 employees.
The company then realised that the time has changed and now they face the question of whether they need to make changes in their strategy and if they do change the strategy and the effect this will have on the organisation culture. In the fall of 2003, the company was considering entertaining the in flight which would cost millions for the installation and maintaining them and they considering purchase of small jet flight for maintaining competitiveness in the market. The cost of which was 15-25 % higher than that the current fleet.
The case study brings out of question that how this airline sustained these competitions are the trust that the customers have on the airlines though the number of offers are made by the competitors in the market. The employees who are the back bone of the company since the start of the airline service the south west has started. The employee feels the trust and the satisfaction in the activities of the company and also the company provides them with all the benefits that can be provided to them as the airlines them a lower pay than when compared to the other airlines in the market. The employee also is made comfortable with their work and also the employee make the initiative of working more for what they are paid. They are happy in the work and also they select the employee the attitude that they are with a mentality of helping others in their work without considering the position in which they are. The services which are provided to the customers are trust worth with frequent flights and with low fare. The services provided in the flight to the customers are also satisfactory to them due to which the customers also prefer the airlines for their travel.
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The upstart airlines who are the competitors of the southwest will find it difficult to copy the strategies and the culture that it maintains in the company. Since the southwest airlines has been servicing for 32 long years which are not so short for a new infant organisation to compete with. An organisation coming to the market takes its own time to built up the trust and confidence of the customers in the market, once this level is achieved by any company then they don't have to look back in their journey. In the case the new airlines were providing the services of same nature as of the south west airlines which may attract so the customers to them for them to experiment how the services are provided. There are certain factors to which the customers stick on, they are the trust in the company, trust in the services provided by the company, quality which they are looking for in the market, the timely delivery of the services. All these are factors are included and built in the confidence of the customers.
Organisational culture is an important factor which helps the employee as well as the company to maintain standard in the market and also to sustain in the market with efficient employees. Organisational culture is a system of shared meaning held by members that distinguishes the organisation from other organisations. This system of shared meaning is on close examination, a set of key characteristics that the organisation values. There are certain primary characteristic that captures the essence of an organisation's culture: innovation and risk taking, attention to details, outcome orientation, people orientation, tram orientation, aggressiveness, and stability.
It is rightly said that we should move along with the wave in the ocean. This statement also means that the one should maintain a balance while moving with the waves. Like wise the organisation should move along with the market conditions and its demands but they should take care of the culture and the strategies which they apply in the organisation. It is highly important for them to make sure that the organisation is maintaining a balance between the market demand and the strategies which are followed by the company to achieve the profit level expected by the company. There are many ways through which the organisations makes an organisation can make the profit in the market and out shine itself but this strategy will definitely create problems inside the organisation as the employees will not be able to maintain a balance between the right and wrong the function the organisation is making use off.
2 Factors determining the successful performance of work organisation
Success in the performance of the work organisation is determined by the following factors, they are:
Quality of employees: human resource or employees are the most important factors in the success of work performance. Quality of the essential manager in the organisation is that they are able to solve the problems analytically creatively. They are should the clarity of thought in the self awareness. Quality of employee also refers to the ability of the employee to work for the organisation without any attitudinal problem about their designation and also the type of work they are taking in the organisation. The employee should be broad minded about the activities. The employees are the asset of the organisation and also the backbone with which the organisation communicates as a result of itself.
In the case study, the employee in the southwest are qualified and also of good quality. This help determine the effectiveness of he employee in the organisation. The southwest is proud of its employees who are hard working and most productive employees in the industry.
Motivation and morale: an organisation be able to motivate its employee so that they can be productive in every aspect of their job. The organisation and management should take care about the employees satisfaction and the employees should feel at home while working for and in the organisation. They should not feel a sense of insecurity in their job. Motivational of the employees should be high so as to make the employee work for the organisation in the manner in which the company wants the employees to work.
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The employee in the case study are motivated with the activities of the organisation, though they are giving a very low pay, the organisation take care of the employees with the stock option plan which will benefits the employee in the future and also with the increase in the market of the stock.
Group skills: it is the degree to which an employee can delegate and organise the activities in a team. The success of an employee in the team is when the members understands its team and coordinate the activities in the accordance to that. In the changing environment of the business the employee need to be sharper in accepting the changes in the business environment to cope with the future activites and strategies of the company.
Here in the case study the employee do the work other than their own work. A pilot also helps the ground staff in moving the luggage of the passengers, this shows the attitude of the employee with good position to help other employee, which inturns benefits the organisation.
Empowerment: the employee in the should feel that they are also a part of the organisation, with out which the organisation will not be able to retain its employee in the organisation. The employee in the organisation should be given the freedom to initiate the activites os that the employees can come out with a creative which is useful for the company.
Here in the case study the employee are encouraged to do hard work and at the same time they are also having good time enjoying the each activities of the organisation. This helps the organisation as well as the employee to build repo between the two and also work accordingly.
Strategies: the strategies which the company follows to market itself in the industry among the customers so that the product of the organisation is sold out and the company build in the trust and confidence of the customers and that the customers prefer the company's over the others.
Here in the case the strategies used by the southwest is that the various offers provided to the customers os that they are attract to the airlines. The offers made high frequency flights and good service and flies only Boeing 737 and also that they don't offer connecting flights, reserve seating and free meals.
3. Obstacles to effective organisational performance
Skills: the skills of the employee of the organisation should be of the right quality since this skills has to be used by the organisation in the right productive manner. Usually it happens in the organisation that the employee has the right skills and attitude required for the organisational growth but the unless and until it is used properly in accordance with the requirement, these are not useful for the organisation.
Here in the case the employee have skills but with the new entrants coming in and the stock price going they started to demand more pay and less work hours. This attitude of the employee is not as per the organisational requirement because the organisational want the employees to make the full utilisation of the activities to promote the organisation and also to make the already decided profit to the achieved by the company.
Future changes: the company must forecast the market activities to know its effect on the organisation. The company should be to predict the future changes and market demand for the product by making an analysis of the activities. If the organisation is unable to forecast the future or adopt the changes that are going to effect the future of the organisation. The research and development should be able to predict the changes in the market and make a note of it to arrange the activities accordingly.
Here in the case study, the company couldn't make the forecast on the declining of the stock price in the market which has effected the activities of the organisation in a great way.
Technology: the technology used by the organisation can be one of the obstacles to the effective performace of the organisation. The organisation using the outdated technologies in the organisation. This would definite help the competitor to utilise the opportunity and sell the product in the market than our products.
Here in the case study, the flights used by the southwest were bosing 737 and even after the new entrant with new planes and technology, the company then get thought about purchasing a new plane.
Financial problems: the company may face financial problem and to due the financial problem the company find it difficult to operate the day to day activities of the organisation. The company should prepare the account statement through it comes to know that the company is at loss or the company is not in a situation to make the payment of the dealings that have by the organisation.
Here in the case study, the organisation faces financial problem but not as a financial problem, only the company was using outdated planes for the operation the market.
4. To Overcome the obstacles
Motivation: the employee is the organisation should be motivated so that they feel comfortable and do the work properly. Motivating the employee not only means through the monetary basis but also in the form of kind. The perks should be provided should be provided to the employee. The employee should feel that they are a part of the organisation and not an outsider. The management make it a point to contact the employee who are performing in their activities so that they feel the appreciation and also other employee feel motivated by the management for them also to be contact when done a good job in the organisation.
Conflict management: the organisation should maintain conflict management which will be helpful in manner to resolve any issues that were generated in the past and also for the future. The conflict management helps the organisation to build the future of the organisation and the matter that are concerned with regards to the activities that are related to the organisation.
Cost cutting: the organisation cut its cost which is loss to the company. The organisation should cut the cost of the company which are unwanted to the company but the still the organisation may have identified that it useful or not. It is the duty of the finance department to identify the unwanted cost and also to reduce the excess that are incurred by the organisation. There are many situations were the company may require excess money but actually they are not required, at that time the finance manager should be able to sort the matter and make payment only to the required clause.
Technology updation: the organisation should update itself in the technology so that they are not taken aback due to the technology reason in the market while selling itself to the customers. The management should take special consideration regarding the technology details that they are going to update.
Strong R&D: the organisation should have a strong R&D for conducting the research activities to know the market scenario and adjusting the future activities of the organisation according to the forecast made by the research department.
5 Nature of modern work organisation
The modern work organisation can be referred to as the organisation with the latest technology upgradation, latest equipments, highly qualified man power etc are so of the factors considered for the modern work organisation. Earlier the work organisation was just was the manpower and files in the organisation. The man power of the organisation was the most important asset of the organisation, they were considered to be the most important but later as the time went on, the attitude of the organisation also changed in time. Apart from man power, their qualification was also considered while recruitment foe a particular job. Every organisation started asking the qualification of the employee or the employee were given training or the potential employees were sent for higher education and they are were given leave form the office to complete their qualification.
As the time passed on, the organisation started concentrating the technology during the end of the 19th century, as that called as boon period for the information technology. Every organisation start updating the softwares and the also the organisation started using the computers and reduced the paper nad converted them to the electronic form.
Now at last the scenario has reached were the organisations are updating and installing new technologies that are available in the market to ensure that their business will run smoothly and that their operation and details will be handled by the technology with out the use of much of employees. The modern work organisation prefers fewer employees and more of technology so that there will be perfection in the activities obtained by the organisation, because the human can mistake but the machines which are set for perfection will never make the mistake in the activities which are given to them. The software also helps the employee to make the work easier for them and with perfection so that the assignment or project taken up are completed with the complete requirement of the customers. These days the organisation hire employee with multi talent, who are taken different areas of work, that he or she should not be a specialist, they should master of none and jack of all trade. So that the organisation benefits with the less employee and skills of the different people which help the organisation to pay less to the employee and make them work for the different department or sections.
The organisation should be able to handle the details of the employee about the specific job that has been given to them. The organisation should be making the available the software to the employees and providing training for the employee who are new to certain technologies. The employee are even send to abroad for further updates of the software or technologies or course which will help them reproduce a new job profile and will be able to work according to the requirement of the organisation.
The major difference between the work organisation is that earlier man power and qualification were given the importance though they are important now also but the companies given much of importance to the technologies and software and earlier many employees were recruited in the organisation and they were given less pay but now the employees recruited are the well qualified and they are paid more then earlier and made them to work of the 3-4 people. The organisation need to deliver the right number of people for the work in the organisation.
Management is the cornerstone of the organisational effectiveness and the integrating activity that permeates every facet of the operation of the organisation. This statement is very much true, every activity in an organisation is managed by the management and they carryout an important role in making every activities a success.
The case study of southwest airlines also suggests the organisational culture difference that occurred due to the new entrant of the airlines and their competition by duplicating the same formula applied by the southwest airlines. Though the new entrant make the effort to the compete but the wont be success because the southwest is the market leader and making large amount of profit.
An organisation to run success there are many obstacles and factors important to the success of the organisation. The organisation should over come these obstacles and follow the factors for the success of the organisation.