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Appendix A

Final Project Overview and Timeline

Final Project Overview

The final project for MGT 245 is a 2000- to 2500-word research paper on the successful and/or unsuccessful application of organizational behavior concepts in any organization. Select and research three to five organizational behavior main concepts that, uniquely practiced, make your chosen organization either successful, unsuccessful, or a combination of both. The organization you select should provide you with ample opportunities for research, since you will be required to use five to seven references as part of your research. The final paper should be formatted according to APA guidelines, and contain the following elements:

• An introduction and a thesis statement

• A body with supporting evidence and in-text citations

• A conclusion

• A reference list with at least five to seven sources

Choose three organizational behavior main concepts. Your research should uncover how your selected organization successfully uses, or suffers by ignoring, any three of these concepts:

• Decision Making

• Motivation

• Group Behavior

• Communication

• Power and Politics

• Organizational Structure

• Organizational Culture

• Human Resources Practices

• Change Management

Be sure to provide multiple examples of the main concepts as practiced at the organization.

Many organizations use organizational behavior concepts, but not all organizations publicize their methods for success or missteps to embarrassing failures. Select an organization for which a good amount of research has been conducted and has been made publicly available.

Selected organization: Southwest Airlines

Word Count: 2142

Southwest Airlines Organizational Behavior

“Organizational behavior (often abbreviated as OB) is a field of study that investigates the impact that individuals, groups, and structure have on behavior within organizations for the purpose of applying such knowledge toward improving an organization’s effectiveness” (Robbins, 2003, p.8). Within this definition organizational behavior encompasses a number of concepts which can determine the success or failure of an organization. This paper discusses three such concepts including organizational culture, motivation in the form of a motivated workforce and human resources practices which have contributed to the ongoing success of Southwest Airlines.

Company Background

Southwest Airlines was originally founded as Air Southwest Company in 1967 by Rollin W. King and Herbert D. Kelleher. The company incorporated as Southwest Airlines in Texas, and began serving passengers on June 18, 1971. The airline was started with a simple idea: if we get our passengers to their destination when they want to get there, on time, at the lowest possible fares, and make sure they have a good time doing it, people will fly our airline (, 2009c).

In 1971 Southwest began service between Dallas, Houston, and San Antonio. By 1974 Southwest had served 1 million passengers. By 1977 Southwest carried five million passengers, and the New York Stock Exchange began listing Southwest’s stock as “LUV.” In 1979 flying Southwest made flying with them even faster and easier by the introduction of self-ticketing machines in 10 cities (, 2009c).

Organizational Culture

Organizational culture is the set of shared assumptions, values, beliefs, behaviors, practices, norms, and products that define an organization. One of the keys to Southwest’s success, as in most successful organizations, is the people focused organizational culture that is at the core of the company (Keim, 2006). In short, Southwest has painstakingly and diligently created a highly customer responsive culture (Robbins, 2003, p.540).

This company culture is evident in Southwest’s Mission Statement as well as in all its public communications. Southwest’s Mission Statement states that the company’s mission is “dedication to the highest quality of Customer Service delivered with a sense of warmth, friendliness, individual pride, and Company Spirit” (, 2009b). Throughout the longer description of the mission statement the company emphasizes its commitment to provide its employees with a stable work environment where everyone has equal opportunity to flourish and creativity and innovation are encouraged . Southwest puts particular emphasis on employees receiving the same concern, respect, and caring attitude from the organization that they are expected to share with every Southwest Customer (, 2009b).

Southwest’s culture employs a “put people first” strategy that is the mark of many successful organizations (Robbins, 2003, p.29). Southwest has the type of culture that understands that employees are people and they have an inner being that nourishes and is nourished by meaningful work that takes place in the framework of community. This concept is called workplace spirituality and organizations that adopt it grow their cultures around a strong and important purpose. For such organizations profits are important to an extent, but they are not the most important values of the organization. Southwest Airlines, for example, is strongly committed to offering the lowest airfares, being always on time with their services, and an enjoyable experience for customers. Southwest

is a spiritual organization because it appreciates the worth and value of people as evidenced in its Mission Statement. They are not just providing jobs. Instead they maintain a culture in which employees can constantly learn and grow (Robbins, 2003, p.542-543). In addition Southwest empowers its employees including flight attendants, customer service representatives, and baggage handlers to take whatever action they deem necessary to meet customer needs or help fellow workers, even if it means breaking company policies (Robbins, 2003, p.544).

Southwest’s case makes the best argument for having and nurturing a spiritual culture, because the company consistently demonstrates one of the lowest employee turnover rates in the airline industry and regularly has the lowest labor costs of any major airline per miles flown. Southwest consistently beats its competitors for achieving on-time arrivals and fewest customer complaints. As a result Southwest has proven itself to be the most consistently profitable airline in the United States (Robbins, 2003, p.544-545).

Motivation: A Motivated Workforce

It is no wonder then that Southwest enjoys a sterling reputation as a good place to work. This reputation gives Southwest Airlines a big advantage in getting and keeping high-performing employees (Robbins, 2003, p.3). Because it puts people first Southwest Airlines has a more dedicated and committed workforce. This, in turn, translates into higher employee productivity and satisfaction. Southwest’s employees are willing to give the extra effort and to do whatever is necessary to see that their jobs are done correctly and completely. Southwest’s people first strategies also equip the organization to be able to recruit more intelligent, conscientious, and loyal employees (Robbins, 2003, p.29).

Southwest Airlines’ highly motivated employees did not materialize out of thin air. The culture that nurtures them began with Herb Kelleher, the former CEO of Southwest Airlines who is by all accounts a very charismatic leader. Southwest’s winning culture started with Kelleher’ vision for the company and continued as he successfully articulated that vision to the company at large. This ongoing vision provides a sense of continuity for the company as the company moves forward to meet its challenges. It was Kelleher who communicated Southwest’s high performance expectations to the employees and expressed his absolute confidence that they could attain those expectations. This continued expectation enhances Southwest employees’ self-esteem and self-confidence. Kelleher also communicated his people-centered values through both words and actions, and set an example for employees to follow by his own behavior. Finally, Kelleher stuck to his unconventional vision with such courage and conviction that he convinced employees to stay with the company and give their best. There is an increasing body of research that shows a significant correlation between Kelleher’s charismatic style leadership and high performance and satisfaction among followers. People working for charismatic leaders like Kelleher are motivated to put forth extra work effort and, because they admire and respect their leader, express greater job fulfillment (Robbins, 2003, p.341--342).

Kelleher’s vision is the basis of Southwest’s successful culture and it continues to motivate employees even today. His interpersonal skills are closely tied to Southwest’s ability get and keep high-performing employees. This is particularly important in a tight labor market where attracting the right kind of employees can have a big impact on the company’s success (Robbins, 2003, p.3).

In addition evidence indicates that especially in service organizations satisfied employees increase customer satisfaction and loyalty. This is because, customer retention and defection depend heavily on how front-line employees handle customers. In fact happy customers and happy employees are mutually interdependent. Southwest has satisfied employees who are friendly, upbeat and have a can-do attitude which customers appreciate. These satisfied employees are less susceptible to turnover, so customers are more likely to see familiar friendly faces each time they fly and receive experienced service. This builds customer satisfaction and loyalty. The reverse, however, also holds true. Dissatisfied customers can add to an employee’s job dissatisfaction. Employees who have repeated contact with rude, thoughtless, or unreasonably demanding customers report that this constant contact negatively affects their job satisfaction. Southwest Airlines is one of a number of companies that are acting on this evidence. Being a service-oriented business Southwest has adopted the approach that employee satisfaction will go a long way toward contributing to its goal of having happy customers. To that end, Southwest seeks to hire upbeat and friendly employees, who the company trains employees in the importance of customer service. Southwest also rewards customer service, provides positive employee work climates, and regularly tracks employee satisfaction through attitude surveys (Robbins, 2003, p.83).

Human Resources Practices

“The place to start in building a customer-responsive culture is hiring service-contact people with the personality and attitudes consistent with a high service orientation” (Robbins, 2003, p.541). Southwest Airlines is an exemplary company in the way that it has focused its hiring process on eliminating job candidates whose personalities are not people-friendly. Job applicants at Southwest undergo an extensive interview process during which company employees and executives carefully evaluate whether candidates have the outgoing and fun-loving personality that the company desires in all its employees (Robbins, 2003, p.541).Southwest Airlines screens job applicants not only for job-specific qualifications but also to establish whether their personality and attitudes fit the Southwest idea (Robbins, 2003, p.491).

Guaranteed merit based upward mobility can motivate top candidates to come to work for a given organization. Furthermore it will go on to motivate them to stay and continue working at that organization because they see that their efforts are being recognized and rewarded with upward mobility within the organization. Another motivational benefit is that it will inspire individuals to work in a dedicated and efficient manner toward achieving organizational goals.

At Southwest has established human resources management policies that have succeeded in promoting equal respect for all employees and promotion policies that fill 80% of higher echelon Southwest positions from within ranks of existing employees. 84% of Southwest’s employees are unionized .In addition the company pays its employees wages at mean industry levels and offers them good benefits by industry standards (Hallowell, 1996). Table 1 below shows a chart of airline industry average wages compiled by the Aviation Research Group/US (ARG/US) for the year 2005.

Legend for Chart:

A-

B-Captain: Salary

C-Captain: Benefits

D-First Officer: Salary

E-First Officer: Benefits

F-Maintenance Technician: Salary

G-Maintenance Technician: Benefits

by Aircraft Category

A

B C D E F G

Class 1

$59,367 $18,623 $43,200 $12,900 $43,906 $11,063

Class 2

$69,216 $16,753 $50,636 $11,975 $52,223 $12,854

Class 3

$77,973 $21,175 $51,556 $12,690 $53,750 $15,383

Class 4

$88,829 $22,881 $66,533 $18,738 $61,175 $17,380

Class 5

$105,270 $25,229 $79,224 $21,260 $69,376 $17,228

Class 6

$126,412 $25,609 $88,920 $22,730 $78,213 $18,325

Table 1 (Mason, 2005)

All of the company’s aircraft are in class 5 in the highlighted portion of Chart 1 according to ARG/US guidelines (Mason, 2005). The pay levels on the chart put Southwest Airline’s captains in the upper class, the first officers who co-pilot the airplanes in the upper class and the maintenance technicians who repair and maintain the airplanes in the middle class (Weller, 2006). There is no research evidence which shows that Southwest Airlines pay wages that puts any of its employees at or below the poverty level. The work values show a steadfast dedication to the company and its success by all employees regardless of class (Hallowell, 1996).

Southwest does exceptionally well at recruiting and retaining employees due to its two main human resources strategies as embodied in the nicknames “LUV” and “FUN”. LUV corresponds to one of Southwest's core values regarding how individuals treat each other. LUV includes having respect for individuality and a sincere caring for others. LUV encompasses Southwest’s spirit of community which says that individuals cannot achieve personal success without participating in bringing success to the entire group. Compassion toward internal and external stakeholders is a leading value at Southwest. FUN, as its name indicates, promotes a carefree attitude at Southwest that says success does not depend on being uptight and is instead related to being light hearted and informal. This informality encourages a relaxed work environment and dress codes that employees frequently report as one of the reasons they love their jobs (Hallowell, 1996).

Southwest is exceptionally committed to showing respect for individuality and a sincere caring for others largely as a result of the abovementioned central philosophy nicknamed LUV for which the company is renowned throughout the business world. Union leaders have repeatedly extolled the virtues of Southwest’s fun and inclusive culture on camera. Because of its fairness in negotiation with some ten regional unions, Southwest has managed to deal fairly and effectively with changing regional needs and labor practices (Hallowell, 1996).

Southwest is generous in its employee health benfits. According to the career section of Southwest’s website, “Employees may choose from several different medical plan options depending on their lifestyle, needs, and priorities through a cafeteria style flexible benefits program. PPO Network and HMO plans are included. Most medical plan options are available to employees at no cost and family coverage is available at minimal cost (Southwest Airlines, 2009a).

Conclusion

Positive organizational behaviors by individuals, groups, and the organizational structure itself can have a great impact on a business as they can drive it toward enormous success. Southwest Airlines is an organization that has achieved such positive paths of organizational behavior in the crucial areas of organizational culture, motivation in the form of a motivated workforce, and excellent human resources practices. Southwest continues to succeed in business despite tough economic challenges because of its unfailing diligence in creating and supporting a highly customer responsive culture, highly motivated and dedicated employees and building an organization that inspires commitment and loyalty from stakeholders through always putting people first.

References:

Keim, G. (2006, October 25). Effective Leadership: Building a successful

corporate culture. Retrieved January 29, 2009 from

Hallowell, R. (1996, winter). Southwest Airlines: a case study linking employee

needs satisfaction and organizational capabilities to competitive advantage. Human Resource Management, 35(4), 513-34. Retrieved January 31, 2009 from EBSCOhost database.

Mason, S.J. (2005, August). Outlook: Salaries. Business & Commercial Aviation,

97 (2), 93-93. Retrieved January 31, 2009 from EBSCOhost database.

Robbins, S.P. (2003). Organizational behavior (11th ed). Upper Saddle River,

N.J: Pearson Education, Inc.

Southwest Airlines (2009a). Benefits: The freedom to pursue good health.

. Retrieved January 31, 2009 from

(2009b). The mission of Southwest Airlines. Retrieved

January 30, 2009 from

(2009c). We weren't just airborne yesterday. Retrieved on

January 29, 2009 from:



Weller, C. (2006, January/February). The middle class falls back. Challenge, 49(1), 16-

23. Retrieved January 31, 2009 from the EBSCOhost database.

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