Case Study – Chapter 7

A Tale of Two Cultures

Nadia Abu Kwaik – No. (8190302)

Discussion Questions

1. List the reasons why Southwest’s and Value Line’s cultures differ so sharply.

Although both Southwest and Value Line companies operate in the same industry and both
companies have a competitive advantage based on low-cost, high-quality service, but every company
has different instrumental values to follow in their behavior.

Also, every company has developed its own specific norms, SOPs and rules which lead to different
culture at the end.

Next I will list the reasons of differentiation between both cultures within this table:

Southwest Value Line

Created these terminal values : Created instrumental values

- created a culture of excellence in the concentrated on:
organization - reducing costs and improving efficiency
- Provide excellent service to customers at the expense of employees’ satisfaction
-frugality and economy that poisoned
Created instrumental values based on: employees’ attitudes
cooperation of all organization members
from top management to the low-level
employees and encourage them to do
their best to achieve the terminal value
Tactic used Individualized role orientation which: Institutionalized role orientation which:
to shape role -Allows and encourage individuals to be -It follows the strict and rigid formal way
orientation creative & develop norms and values to to deal with employees
solve problems. -An everyday reports for tight monitoring
- Do all they can to help one another of employees
-It follows the informal way to deal with
employees
-Uses all ceremonial rites to share
information and communicate with
employees, which lead to a cooperative
culture

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The four 1- Characteristics of people within
factors that organization
develop CEO’s and top managers’ values and
culture : norms affect the org’s culture :
-They play roles of other employees to feel
their problems
-They encourage cooperation in the
company
-The informal norm makes it possible for
employees to communicate with CEO
every Friday
- As for workforces, employees dress up
on special days like Halloween and
Valentine’s Day and wear “fun uniforms”
every Friday to satisfy customers and
ensure achieving the org goals
2- The strong property rights given
to employees
-All employees participate in a bonus
system that bases rewards on company
performance
- Employees own over 22% of the airline’s
stock.
-The entrance hall is full of plaques earned
by employees for their performance.
3- Organizational ethics
Cultural values came from personality &
beliefs of CEO & Top managers as they:
-Encourage employees to be creative
-Develop rules and norms to solve their
own problems
-Try to develop innovative ways to
improve customer service and satisfaction
4- Structure of an organization
They keep the organization as flat and
informal as possible, within an organic
structure and mutual adjustment and
flexibility.
Results -The culture of excellence has been
successful and lead to increasing its
operating routes and profits every year
-It is the most profitable airline flying
today
1- Characteristics of people within
organization
CEO’s and top managers’ :
- No culture of cooperation between
managers and employees exists
- Hostile atmosphere produced by
“economical” values and by work rules
that devalued employees
- As for workforces, employees couldn’t
communicate with CEO, so bad feelings
between employees and CEO increases
so they tried to make them hear their
complains by putting up a notice on their
bulletin board criticizing top management
style and suggesting changing leadership,
but a significant stakeholder group
responds by removing the bulletin board.
2- The weak property rights given to
employees
-Salary increases were as small as possible
-The company’s bonus and health plans
were under tight control
3- Organizational ethics
Cultural values came from personality &
beliefs of CEO & Top managers as they:
-Encourage obedience & conformity to
rules & norms
-Develop a culture that the company’s
employees apparently hated
4-Structure of an organization
They keep the organization as formal as
possible, with mechanistic structure, fixed
with highly centralized
Many highly trained professional workers
left
Turnover generated dissatisfaction and
complaining among the customers
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2. Could Value Line’s next CEO copy Southwest’s culture?

It is a huge challenge to copy Southwest’s culture and increase effectiveness by the next CEO of
Value line, but it is not impossible.

There are many points that should be changed to succeed, such as the 4 factors that produce culture
interact.

CEO should first change people, especially the top management, as the culture is established by
them and they affect all values and norms that are applied in the org.

Workforce should learn through following their superior’s actions and morals in the org as models for
their behaviors.

CEO should change the instrumental Values that had been used to reach terminal values, and train
employees and make them internalize the new values.

Then he has to redesign the structure as the structure is very important in effective cultures. He must
make it more organic, less formal and flat, concentrates on delegating authority and encourages team
work and more cooperative methods among employees to reduce the need for monitoring and control.

Also, changing the property rights used to another motivate one, that gives employees incentives to
do their best like giving them stocks in the org and reward best performance.

Another important thing is to facilitate communication between employees and CEO and top
manager to hear their problems in work and make good relations free of pressure.

Socialization should be encourages so that newcomers feel comfortable and work environment is
stable and fun to work.

All of these things can lead to satisfied employees, low turnover, and better services available for
customers, then satisfied customers and achieved goals.

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