Organizational management principles and practices

Organizational Management

Southwest Airlines was started in Texas and began flights in June of 1971, with three Boeing 737 aircraft. It served the three cities of Houston, Dallas, and San Antonio. "Today, Southwest operates more than 550 Boeing 737 aircraft among 72 cities. Southwest topped the monthly domestic originating passenger rankings for the first time in May of 2003. Yearend results for 2010 saw Southwest's thirty eighth year of being profitable. Southwest became a major airline in 1989 when it surpassed the billion-dollar revenue mark" (About the Company, 2011). Southwest is the United States' most triumphant low fare, high-frequency, passenger carrier. Southwest operates more than three thousand flights every day and is the largest U.S. carrier in terms of passengers hauled. In May of 2011, Southwest acquired Orlando-based AirTran Airways and expects to complete the incorporation of the two airlines throughout the next several years (About the Company, 2011).

Change is a frequent thread that runs through all businesses despite their size, industry and age. The world is changing fast and, as such, companies must change just as quickly. Companies that manage change well flourish, while those that do not may have to fight to endure. The notion of change management is a common one in most companies today. but, how these companies manage change and how successful they are at it differs a lot depending on the environment of the business, the change and the people concerned. A key part of this rests on how much people within the business understand the overall change (Change Management, 2010).

In recent years Southwest Airlines has undergone a lot of change and anticipates a lot more to come in order to remain competitive in the current airline market. When Southwest Airlines goes about implementing change in their organization it can be seen how Kotter's 8-Step Change Model is utilized. Management has to work diligently in order to change an organization effectively. When they plan cautiously and construct the appropriate foundation for putting change into, it can be much easier, and they will improve the chances of success. If one is too impatient, and if they expect too many results too soon, their devices for change are more likely to be unsuccessful. According to Kotter the best plan is to "create a sense of urgency, recruit powerful change leaders, build a vision and effectively communicate it, remove obstacles, create quick wins, and build on the momentum" (Spector, 2010). If a company does these things, they can help make the change part of the organizational culture. That's when they can announce a true conquest and then sit back and take pleasure in the change that was envisioned all along.

When the airline industry became very competitive and low cost airlines were being forced out of the market, Southwest decided that they had to do something that was going to set them apart from the rest of the competition in order to survive. The change that Southwest has implemented is that of building their internal culture into an entity that can't be duplicated today. Southwest Airlines' mission is to be "dedicated to the highest quality of customer service delivered with a sense of warmth, friendliness, individual pride, and company spirit" (the Mission of Southwest Airlines, 2010). They are committed to provide their employees a steady work environment with equal opportunity for education and personal growth. Creativity and originality are encouraged for improving the efficiency of Southwest Airlines. Above all, employees are offered the same concern, admiration, and caring approach within the organization that they are expected to share externally with every Southwest customer (the Mission of Southwest Airlines, 2010).

The beginning of the Southwest culture was created in 1971. Southwest was having cash flow issues in its first year of operation. The management team faced a big quandary of either selling planes or laying people off in order to save cash to meet their short-term cash responsibilities. Management met with the ground service people and explained the financial dilemma that the company faced. The ground service people were asked to reduce the turnaround time at the airport gate from 55 minutes to 15 minutes in order to improve the income producing potential of the airplanes. The ground service personnel agreed to the goal and accomplished it in no time. The end result was that not employees were layed off. This attitude was the groundwork for the company's later emphasis on people that began in the early 1980's. It was then that Southwest began focusing on people as people and recognizing them as priceless assets of the company (Culture is the key at Southwest Airlines, 2005).

This scenario shows very plainly how Southwest has used Kotter's change model in the past. Management created a sense of urgency by laying it all on the line with their employees. Their powerful change leaders built a vision and then effectively communicated it to the line employees. They provided these employees with the tools that they needed in order to create a quick win and then they built on the momentum that it created.

The momentum that was created was to build a corporate culture that functions today like no other. The management team emphasized an easy going relaxed corporate style that provided employees with extensive operational independence. The culture emphasized employees as the airlines first customers and the passengers as the second. Southwest wants to offer a unique and fun experience to each customer (Culture is the key at Southwest Airlines, 2005). The culture has evolved over time from an environment that was different and based in the Southwestern part of the U.S. To a culture of shared goals, shared knowledge and mutual respect for a national company with over 43,000 employees (Fact Sheet, 2011).

Every business entity has a culture that serves as an operating system of framework for the organization. In some organizations, culture is conscious, intentional and tangible. In other organizations, culture is unconscious and intangible, but impactful nonetheless. What an organization assumes, believed, values, accepts, and promotes, produces and the way in which behavior occurs frames its corporate culture. Corporate culture shapes the work environment in which performance occurs and performance drives the bottom line (Young, n.d.).

In some companies, culture develops by default. In others, culture develops in ways that are conscious, intentional and tangible. This was definitely the case for Southwest Airlines. It is organizations like Southwest that put themselves in a position to have a competitive advantage by designing work environments that allow people the freedom to be their best selves and consistently outperform the competition. Corporate culture is important because it shapes the work environment in which performance occurs. Ultimately, not paying attention to culture undermines an organizations profitability and sustainability. The good news is that corporate culture does not have to emerge by default; it can be designed and developed in thoughtful, intentional ways, which is exactly what Southwest Airlines has done (Young, n.d.).

Many businesses in the U.S. utilize performance measurements in order to monitor actual performance. These companies maintain these metrics by functional area to ensure functional accountability. Southwest's philosophy is shared goals and shared knowledge. Southwest uses team metrics rather than functional metrics. In many companies, job descriptions clearly define responsibilities between employees and departments. Southwest's expectation is that each person's job includes helping colleagues with the work whenever necessary. By providing greater job flexibility Southwest believes it improve labor productivity which gives them a competitive advantage (Culture is the key at Southwest Airlines, 2005).

There have been numerous companies that have implemented formal quality management programs over the years all to have them fail. Realizing quality throughout a company is not the consequence of a formal program, but is the result of a cultural change in the way that things are done on a daily basis. The condition of doing it correctly the first time must be incorporated into the culture of the company. Upper management must establish the tone of quality in not only what they say but in what they do everyday. Quality must be ingrained. "Overall Southwest is very effective in integrating the importance of quality in its overall business model, strategic plan and its daily operational activities" (Culture is the key at Southwest Airlines, 2005).

The New Year has brought out a new list of initiatives for Southwest. Management's top priority is protecting the more than 43,000 employees and nurturing a culture that excites them to come to work. In turn, the employees are expected to have a passion for serving the customer and delivering world class customer services on a daily basis. The company is promising the accomplishment of several initiatives in the upcoming year to improve the customer's experience and keep the airline competitive in the market. The first is the installation of Internet connectivity across the entire fleet. A second initiative is to refresh the cabins on their aircraft. They also intend to take delivery of a brand new aircraft type (Boeing 737-800). This aircraft is more spacious, carries more customers and will allow the airline to fly longer routes, which will open up the door to new destinations. Another initiative is to continue the work of integrating AirTran. This will allow the airline to expand their network to fly to more destinations and spread their low fares even farther (Gary's Greeting, 2012).

Southwest's initiative to refurbish their cabins is being called "Evolve: The New Southwest Interior." For the average customer, the differences probably won't be so obvious which is why Southwest is calling this an evolution rather than a revolution. The tones of brown and blue will be familiar, but with a closer eye, one will be able to see the changes. The changes will include:

Modern Cabin Design: The new design incorporates natural, earthy tones combined with Southwest's iconic Canyon blue and clean, aluminum accents for a more modern, fresh appeal. The redesign is inspired by Southwest's past with a nod to the future.

Lighter and More Comfortable Seat: The redesigned low-profile seat is more durable, made of eco-friendly products, is lighter, and more comfortable.

Increased Under-Seat Space: The new design allows for more under-seat room for carryon luggage and approved pet carriers.

Customer Living Space: Reducing the recline from three inches to two inches preserves onboard personal living space while still allowing for ample seat adjustment for Customer comfort.

Seatback pockets: The new netted seatback pockets are streamlined to provide more knee room.

Headrest: The fixed-wing headrest provides better neck and head alignment with side-to-side support for sleeping.

Improved Ergonomics: The combination of the low-profile cushion and fixed wing headrest improves ergonomics by positioning Customers "down and back" into the seat, allowing for better lumbar support, armrest alignment, and increased personal living space (Southwest Airlines Evolves Their Interior -- More Seats, but for the Better, 2012).

The new interior will allow Southwest to put in six additional seats on each aircraft. This is due to reducing the seat pitch from 32? To 31?, using skinnier seats and reducing the recline from 3? To 2?. This will allow Southwest to increase their profit, without having to add fees. The seats are made with eco-friendly materials and are designed to last longer, reducing replacement costs. Each seat weighs six pounds less than their predecessor, meaning real fuel savings for Southwest Airlines. The new carpet, which is made out of recycled materials, is put in by squares where a section can easily be replaced instead of taking out the whole carpet (Southwest Airlines Evolves Their Interior -- More Seats, but for the Better, 2012).

The company is preparing now for the next 40 years with a fleet modernization plan that includes the new interior, the Boeing 737-800 which is scheduled to come online beginning in March this year, and the 737 MAX, which is expected to join the Southwest fleet in 2017. The evolutionary changes that they are making with the new interior will uphold their low-cost roots and historic focus on Customer Service. The cabin upgrade also allows them to create significant revenue opportunities without adding unwanted fees (Southwest Airlines Evolves Their Interior -- More Seats, but for the Better, 2012).

The reason that Southwest Airlines has been so successful over the years is because they have managed to keep their costs low. Southwest has branded themselves a low-fare airline and it has worked. When looking at the prices of other airlines, Southwest is leading the air transportation market. By offering such low fares Southwest is a foremost competitor for a lot of airlines. In addition to its low fares, Southwest is the only airline that has not put into practice a fee for bags. In the airline business, Southwest is alone in putting customer service first. "Southwest allows each passenger to check two bags for free as long as it adheres to their weight requirements. Southwest also allows two carry ons per passenger, while many other airlines charge for more than one carry on" (Lester, 2010).