ORGANIZATION BEHAVIOR MMS-I (2011-2012)

Case Study: A Tale of Two Cultures

Submitted By: Sweta J Math (655) Date: 5th December 2011

Analysis: This case study gives us the idea about the two culture followed by two companies Southwest Airlines and Value Line, Inc and the impact of the same among the employees and the organization as a whole. Company Southwest Airlines following a decentralised and flat organization structure is compared with the company Value Line Inc having a centralised and tall organization structure. As we all know that an organisations internal structure contributes to examining and predicting behaviour. In addition to individual and group factors, the structural relationship in which people work has a bearing on employees attitudes and behaviour. A strong organisation culture provides stability to an organisation. List the reasons why Southwests and Value Line cultures differ so sharply?

Southwest Airlines being an airlines company is known having competitive edge based on low-cost, high quality service. Its culture is envied by its competition because of its terminal and instrumental values developed. Managers supervise employees closely to ensure there are no deviations. Work activities were designed around individual. Both managers and employees are committed to the success of the organisation by giving customers. CEO Herbert Kelleher followed a decentralised form and kept the organisation flat and informal. Employees were given freedom to be creative and to develop rules and norms to solve their problem following Democratic leadership, encouraged risk taking and rewards taking and change. Innovative strategy was adopted were the employees were allowed to develop innovative ways to improve customer service and satisfaction. The company pride itself on being market driven and rapidly responsive to the changing needs of its customers. It is known to be a good place to work, were employees are encouraged to interact with people across functions and authority levels. They have a CLAN culture, where the organization is the
best and friendly place to work and here Leaders act as Mentors and sometimes work as baggage handlers, ticket agents and flight attendants to feel the problem faced by other employees. Southwest Airlines and Value Line differ so sharply is because the companies have different priorities in their operations, which leads to difference in management styles, culture, and methodologies. Value Line followed a bureaucratic and centralised form of organisation were no freedom was given for innovation and asked to only flow the managers. Autocratic or authoritarian style leadership were creative decisions that incur change were not encouraged. The extensive rules and regulations had got hatred for the company in employees mind. The managers dint bother about employees morale or turnover. Work activities designed around individual and employees are

expected to minimize formal contact with other employees outside their functional area or line of command. Performance evaluation and reward was to the minimal and the companys bonus plan and health plan was under tight rein. Its final output was high frustration and slow decision making.

Could Value Lines next CEO copy Southwests culture?

Southwest Airlines and Value Line differ so sharply is because the companies have different priorities in their operations, which leads to difference in management styles, culture, and methodologies. So completelely copying the organisation culture will not be a good suggestion but rather can take guidelines and try to incorporate some culture change in organisation. Southwests advantage is based on high quality service and low cost. They believes in final product but with that also maintained the culture and given equal importance to employees. Value Line can follow an innovative strategy were employees are given freedom to innovation. The restriction should be reduced to let them breathe and enjoy work rather than hating and not one envying. Value Line follow a formalization structure where the degree to which jobs within the organization is standardized. Formalization can be reduced a little where job behaviour are relatively unprogrammed, and employees have a great deal of freedom to exercise discretion in their work. Standardization not only eliminated the possibility of employees engaging in alternative behaviour, but it even removes the need for employees to consider alternatives. Organization culture in Value Line should be changed where the employees perceive the characteristics of an organization which in turn will improve the organization climate. Dominant cultures should be known to the employees and should be followed. Socialization should be encourages so that new employees feel comfortable and work environment is stable and fun to work and work towards attaining the organization goals.