Organizational structure: analysis and comparison across selected organizations

¶ … firms, the organizational structure will have an impact on how well they are able to achieve operational objectives and increase profit margins. In the case of Southwest Airlines, they have redefined the way carriers are interacting with customers and the kinds of services that are provided. This is illustrating how the kind of structure will influence the way a firm is able to reach out to stakeholders. To determine the kind of model that Southwest is utilizing requires looking at: the organizational structure, how it functions and the design. Together, these different elements will show how Southwest Airlines is able to use them to increase revenues and meet the needs of various stakeholders.

Describe the organizational structure of Southwest Airlines. Compare and contrast that structure with two different organizational structures.

The organizational structure that is used by Southwest Airlines is a hybrid model. This is where the firm is utilizing functional and divisional structures in correlation with each other. The reason why, is to allow each segment the ability to function independently. While at the same time, is helping each unit to coordinate and communicate more effectively with the others. (Writing, 2012) ("Southwest Airlines," 2012)

Under a functional model, each segment is subdivided based upon their ability to perform specific functions. This means that each unit will be functioning independently without communicating and coordinating with everyone else. In general, this approach is designed to work for small businesses which have a number of areas they are operating in. (Writing, 2012)

The divisional structure is when each unit is grouped together under an umbrella of firms called a division. In general this is used, by large multinational firms that need constant amounts of communication between each segment. This is different from the hybrid model as there is divisional structure in place. Yet, each unit has the ability to work independently in achieving specific objectives. (Writing, 2012) ("Southwest Airlines," 2012)

Moreover, in contrast to the functional model, there are greater amounts of communication and collaboration. As a result, Southwest is using the hybrid matrix in helping them to achieve a host of objectives and maintaining effective communication. In many ways, one could argue that this is one of the keys that are making the firm successful over the long-term. (Writing, 2012) ("Southwest Airlines," 2012)

Evaluate how organizational functions (such as marketing, finance, human resources, and operations) influence and determine the organizational structure of your selected organization.

Southwest Airlines is focused on providing customers with: high levels of service, the lowest fares, friendly support staff and different kinds of experiences (which provide value). The combination of these factors is designed to ensure that the company is able to keep their cost structure down. While at the same time, they want to provide various stakeholders with the services they needs. ("Southwest Airlines," 2012) The below graph is illustrating how the different departments work in conjunction with each other.

The Hybrid Organizational Structure for Southwest Airlines

Air Tran Sales

Airport Affairs

Legal

Control

Admin / HR

Financial Planning

Customer Service

Cargo / Charters

Marketing

Labor Relations

Operations

Sales

Maintenance

As a result, each department will ensure that the customer receives good value. Whereas, other areas (such as: Human Resources) are focused on addressing the needs of employees. This makes certain that staff members are willing to go the extra mile for passengers. Over the course of time, this will have a positive impact on the bottom line results of the firm. ("Southwest Airlines," 2012) ("Organizational Structure of Southwest Airlines," 2010)

When this happens, the company's shareholders will realize an increase in the value of their investments (with the price of the stock increasing). This is showing how the various units will work independently to achieve a host of objectives. Once this takes place, is when their role will support the larger goals of specific divisions and the firm itself. ("Southwest Airlines," 2012) ("Organizational Structure of Southwest Airlines," 2010)

Explain how organizational design (such as geographic, functional, customer-based, product, service, hybrid, matrix, marketing channels, and departmentalization) helps determine which structure best suits your selected organization's needs.

The organizational design that helps Southwest to achieve the various needs of the firm is the customer-based model. This is because the company has built its reputation in offering shareholders greater value in comparison with other carriers. To achieve these objectives they will use various tools to: motivate employees and offer competitive compensation packages. ("Organization Structure and Design," 2009)