Thursday, December 12, 2013

Managing Aviation Cultures Organization cultures of airlines can have positive or negative consequences on their safety and financial performance. You are required to identify and describe in detail examples of airline organization cultures and illustrate the potential impact on their safety and financial performance, and explore managements use of organization culture as a competitive strategy.

Organizational culture is a very important and integral part of any organisation. The organizational culture defines the workplace environment, the bond employees share with one another to achieve organizational goals. The top management has the higher responsibility of cultivating the organizational culture and achieving the growth of the company. The culture of a group can now be defined as A pattern of shared basic assumptions that the group learned as it solved its problems of external adaptation and internal integration, that has worked well enough to be considered valid and therefore, to be taught to new members as the correct way to perceive, think, and feel in relation to those problems (Schein, 2004 p17). Schein has rightly stated the formation of the culture where the people learn and adapt to the external and internal conditions of work which has proven to be successful which is taught to the new entrants as the method to proceed with their job. The goals and objectives of the airline industry can only be met with hard work, planning, investment and execution which require a strong organization culture.

Culture is defined as a complex pattern of beliefs, expectations, ideas, values, attitudes and behaviours in an organization that binds members together and influences what they think about themselves and what they do (Adams, 2003). Organizational culture in the airlines industry is mission critical as it has not only a direct impact on the growth of the airlines financially but also has an impact on the safety of the passengers on board. The airlines industry needs to assess the positive and negative impact its organizational culture has on the passengers and how effectively and efficiently are they able to provide top class service.

The most important aspect is for the top management to realize where they stand culturally and whether it is good for the organization. If not then they should take proactive steps to change the way their organization works and make it a better workplace for the employees to work with. It is not that easy to change the organizational culture as it needs a change in the employees varied cultural backgrounds. Therefore examples need to be set by the top management to be seen as a trend setter for the employees to follow. Southwest airlines are a good example where the organizational culture has been stemmed with the efforts of their senior and top management. The top management has been effective in gaining the trust and confidence of the middle managers ensuring smooth operations and efficiency in management practices.

The question which will come to the observers mind is that how the organizational culture in airlines have a direct impact on the safety of the passengers. Organizational culture comes from the employees of the organization who are directly or indirectly involved in conducting the principal operations of the company which is to provide smooth and safe passage to its customers and be their carrier from one place to another. If the airlines company employees are not co-operative due to their internal problems then it lends a very bad image to the company which cannot compromise on customer service.

This can even lead to a more serious safety issue on board as a result of a tussle or wrong behaviour or action on the part of the crew. A recent example happened on an Air India Flight in October 2009 where the pilots and crew members had a mid air fight where they were exchanging blows at 30000 feet. The Times of India reported that crew members threw punches and hurled abuse at each other on the flight from Sharjah in the United Arab Emirates to Delhi after a female attendant accused the pilots of sexually harassing her. The fight spilled out into the galley of the plane as about 100 passengers looked on, the paper said under the headline Pilots, crew slug it out at 30,000 feet. (Traveller, 2009) This kind of instances can seriously damage the credibility of an airlines company where such practices can risk the lives of passengers. This is a serious case of safety being endangered by pilots and cabin crew. The dent which has been put in such a case where safety has been compromised will lead to the doom of such an airlines company and speaks volumes of its negative organization culture.

Airlines industry companies operating in this highly competitive and dynamic world needs to raise their standards of dedication by giving the highest level of customer service to be one of the best in the world and compete with its competitors. To achieve this they should lay emphasis on organizational culture and behaviour which are determining factors in providing service to customers. Airlines industry companies are totally customer oriented and their staff needs to be well cultured, sober, well mannered, humble and helpful. These basic qualities will induce a sense of self cultured growth and when put in to a team and group environment will further supplement the culture of the organization. Gaining respect and providing respect to fellow workers and staff lead to a congenial environment where the employees enjoy working with each other and they are motivated enough to carry out their tasks with due diligence and efficiency. Edward H. Schein has stated in his book Organizational culture and leadership that culture is to a group what personality or character is to an individual. The role of a groups culture is grown from the conditions they work in and the shared norms they follow while working. Employees newly recruited into the organization have a direct impact on the existing organization culture and in most of the cases they blend according to the group culture and carry out their duties. Higher management leads by example which has a direct impact on the rest of the employees who follow suit.

Impact of Airlines Organizational Cultures on Safety and financial performance, - there can be a huge impact of Organisational Culture on the safety and financial performance of the airlines companies. Safety culture originated by the International Atomic Energy Agency (IAEA) in 1986 identified the concept of a poor safety culture. The most dramatic turning point for safety culture in the United States was when NTSB member John Lauber filed a dissenting statement concerning probable causes of a fatal airliner accident near Eagle Lake, Texas in 1991 (Meshkati, 1997 as cited by Dyke, 2006). He said that that one of the probable causes of the crash was that the airlines did not have adequate corporate culture which adhered to approved maintenance and quality assurance procedures.

A few examples of airline companies and the organizational cultures they have which have a potential impact on their safety and financial performance. The first example will be that of South West Airlines. South West Airlines started its operations in 1971 where their vision and mission was to be one of the leading low cost carriers in the United States of America. The company started doing well from 1978 when an airline deregulation act allowed them to fly further than Texas and the fact that they started lowering the cost to meet their vision with a definite mission. The organisational culture that the company has promoted over the years deserves great appreciation, as the top management starting from the CEO to the grounds level employees have shown great determination and application. The organization culture has been a top down approach with the top management emphasizing the need and putting the root for organizational excellence. The senior management has ensured that the employees have easy access to them for any issues at workplace.
This hand on approach has done a world of good to South West Airlines as the lower level workers and staffs are also associated with the top managers where they share a good understanding and mutual respect for one another.

There mission statement stresses the need of organizational culture, The mission of Southwest Airlines is dedication to the highest quality of Customer Service delivered with a sense of warmth, friendliness, individual pride, and Company Spirit (Southwest, 2010). The Airline has always paid minute attention to every detail which includes safety measures, strategic planning, quality measures, proper maintenance of airliners with the best engineers and ground staff working on it. Southwest Airlines through its thoroughly efficient services and the constant strive to be the worlds low cost carrier has made a mark for itself in this ever demanding and competitive airlines industry.  The CEO had indicated in his statement in 2006 that the airline success factor is attributed to the corporate culture and attention to customer service. It is a success story for an airline industry which had constantly strived to giver greater attention to each and every detail, create a friendly and dedicated work environment, and devise price strategy for the customers.
In the aviation sector, strategy is based on certain key factors which are mainly the global concern over safety and customer service excellence. Accidents and poor service records are attributed mainly to socio-technical problems where the people involved have shown below par results as far as customer service and technical knowhow is concerned. Management commitment, customer centric and employee involvement are the three critical success factors that is a driving force for the airlines. Communication is the most important aspect of a good customer service. The age old practice of business has changed where the employers and the employees had a distance maintained where communication channels were not proper. In todays world the communication bridge has lessened down with employers and employees having a pro-active role to play with one-another.

The age old hierarchy structure needs to die away with modern communication coming into the forefront for achieving higher customer satisfaction and organizational growth. Jan Carlzon of Scandinavian Airline Systems (SAS) points out that hierarchy creates environments where those higher up legitimate their roles only by issuing instructions, setting controls and carefully monitoring behaviours (Fewster  Appelbaum, 2004).  This kind of leadership gives way to low employee moral and low performance. Things have changed substantially now with changes in the way hierarchies worked. Top management is now more focused on cultural issues. The Airlines industry is one of the service industries which needs to have a broad cultural background with different customers of diverse ethnicity, diverse political views. The airlines employees need to maintain apolitical and, diverse ethnic views and moreover good conduct to have an excellent customer orientation. Low moral and low job satisfaction can endanger the cultural growth of the company leading to multiple problems like lack of communication, respect, and distrust among co-workers which can severely affect the services of the company.

A good way to overcome these issues for the airlines is to conduct surveys and feedbacks from employees to understand them and their problems. Southwest Airlines are a prime example of this practice as they have regular surveys conducted with employees, employees unions where they stress the need of getting a proper employee feedback to bring in organization change and cultural growth of the company. According to Libby Sartain, Vice-President of the People Department if were not getting feedback, we wont know whats going on (Ellis, 2001).  The employees also feel a sense of purpose and that the company cares for them. This makes them have the feeling of ownership of the company which makes the work environment a lot better and understanding which leads to world class services being offered as everyone has the motivation to work and has mutual trust and respect.

Financially the airliners have a tough time with sluggishness in the market, cut throat competition between various airliners, personnel turnover, and surprise in operating demands, and adverse economic circumstances are grave issues which are equally important and needs to be addressed. Though there has been a growth in the passenger segment for Southwest Airlines but still with rocketing fuel prices it was forced to raise prices. Gary Kelly, the CEO of Southwest airlines in 2006 had said that even with increase in fares temporarily the companys goal of being the low cost carrier still prevails. The airliner has always recruited very high esteemed professionals who have done a world of good to the organization values where each and every staff believes in what they do. Libby Sartain, Vice President of the People Department at Southwest Airlines had said Southwest was way ahead of its time in recognizing that its success was due to the efforts of its people (Ellis, 2001). This has made their services be remarkably of a very high standard which has made them the industry leaders financially even on slow markets which is highly commendable. External conditions like market recessions and poor economic conditions also attribute to financial loss for the airliners but good, strong and focused teams can see the turbulent times through.

The HR management has a huge role to play in nurturing the culture of an organization. Libby Sartain had mentioned if we hire people who dont have the right attitude, disposition and behavioural characteristics to fit into our culture, we will start to change that culture. The recruiters primary role is to make sure its a good cultural fit (Ellis, 2001). This is the primary evidence of how much a culturally fit organization can do to the performance of an airlines company. With excellent HR skills the company is able to drive the purpose of having a good cultural background. This reflects on the security, safety and financial results of the company.

Safety Culture, - industry experts are of the view that there are so many instances and write-ups where safety measures technology wise have been dealt with in great detail, but, ironically, there is very little which has been mentioned about the safety culture of airlines.  Few phrases occur more frequently in discussions about hazardous technologies than safety culture. Few things are so sought after and yet so little understood (April, 1997 as cited by Dyke, 2006).  Safety culture is regarded as one of the key elements of corporate culture. The staff should be carrying out their duties at the right place at the right time. The employees should be thoroughly competent in carrying out the safety exercises by following the basics which are a) Adherence to published procedure and established best practice, b) Thinking about safety measurements and c) Seeking constant improvement.

An Evolutionary model showing range of safety cultures from the pathological through the reactive to the calculative to the proactive to the generative has been shown in the Appendix section at the end of the document. In the diagram Hudson had tried to emphasize the fact that how safety would be judged amongst different organization. Start-up operations are more reactive in nature, as they act after an accident has happened. Then there are organizations with a calculative approach where they place systems to tackle any hazards and where complacency might exist. Proactive model works on the problems they find which leads to the generative. The airlines workforce should be motivated and culturally adapted to work on the safety measures and ensure non complacency in these matters.

The management needs to identify safeguards and take responsibility at strategic levels. Methods and Procedures needs to be identified. Safety culture is a continuous process where it depends a lot on the organizational culture rather than technology. At various levels of management the management needs to ensure that healthy organizational culture is maintained. The human resource department has a huge role to play where they constantly thrive to group ethnic religion and cultures in one group and have a balanced mix of the two.

The first known attempt to develop a safety culture was in 1978 when an accident killed 19 people when a helicopter struck a platform crane. Then a Helicopter Safety Advisory Conference (HSAC) was formed. Authorities realized that there was a huge communication gap between oil companies, ground staff, helicopter operations and staff. The HSAC took significant steps to resolve issues and induct a safety culture. To achieve this purpose there needed to be a clear communication between all parties to minimize the hazardous risk.

Safety Training mitigates risk,  the airlines industry needs to have a proper training program to reduce the element of risk. Several researchers believe that training is crucial to not only decreasing risk taking but also reducing cultural differences in attitudes and between grade levels of employees (Adams, 2003). Helmreich as cited by Catherine Adams (2003) had clearly specified that training is such a tool that minimizes the risk factor as well as goes one step ahead in reducing the cultural differences in the attitude and ranks of employees. The employees need be trained in all the departments including understanding and respecting the culture of another fellow worker. In the training it is emphasized that team leadership, team co-ordination are important steps in achieving the cultural role of an organization. The employees and staff should be trained in maintaining co-ordination with each other, have mutual trust and respect and have the ability to take decisions based on their causes. For this an open line of communication is very important for the strategic safety requirement of the airlines industry.

Safety culture is imperative for the people to realize that cultures of the airlines industries employees are extremely diverse with different nationalities or sub-cultures within an organization. Safety culture is the need of the hour as it reduces the potentiality of risk factors. However there needs to be a proper guidance of how the airlines industry will go about achieving the safety culture and to have all parties participate and construct the safety program with a better understanding.

The Positive or Negative Influence of Organization culture on the financial performance of the company - organizational culture has a strong impact on the financial performance of an organization. On the positive side a good organizational cultural background can do wonders for an organizations growth. An organization having a strong cultural background means that the employees have a high degree of comfort working with each other and have a good understanding with one another. This leads to mutual trust and reliability amongst each other. As a group the unit starts performing to their optimum ability and together they have a very strong team who can scale new heights and bring the best from each of them. As a result the customer service orientation becomes very good as each and every employee work as a single unit with the sole purpose of achieving the summit in the airlines sector. This point has been aptly illustrated by Schein when he mentioned that in this context, managers speak of developing the right kind of culture, a culture of quality or a culture of customer service. (Schein, 2004p7) This approach not only gives result to the organization but a great deal of market share as far as trust and competitiveness is concerned. The result is that the organization grows at a phenomenal rate financially as it achieves a good customer base with excellent customer track record. A good organization constantly takes feedback from its customers and takes note of grievances if any.

On the other hand if the organizational culture is not so bright and is in fact on a very low scale then it means that the employees are not at all motivated to carry out their day to day operation. This leads to low trust, low motivation levels, lack of respect amongst individuals, undue preference to local fellow employees, non co-operation. These terms can spell disaster for an organization as the fellow employees are not even committed to their daily work. The sufferers would be the customers as they will not get the services they deserve. This means that the company will have a bad reputation which will hit it financially and its competitors will soar above the rest.

Culture is a deeply rooted thing which involves a great deal of investment of time and resources to get it going. The human resource team has a huge task cut out as they have to go about with a definite plan in mind of setting up an organizational culture which will act as a catalyst for the growth of the company. The airlines industry being a service industry needs to deal with people and a good communication base sets the tone for a good service to the customers. Schein had said we see communication problems and misunderstanding between group members that should not be occurring between reasonable people (Schein, 2004p9). For achieving a good communication base, the employees should be respectful, humble and honest of each other. They should be sharing a professional and friendly congenial atmosphere which will make way for good communication and cultural growth.

There were instances where racial discriminations have prevailed which have resulted in tension, conflict and undue discrimination infuriating the employees of the organization. Race should not be brought into the purview of any organization and merit amongst employees should only prevail.

Organization culture has its roots in the history of the organization in itself. The older the organization the better should be its culture. There are proven methods from which the diverse manpower of such an organization has performed in the past be it the external factors or be it the internal factors within the organization. When the company is competitive and successful in the market, the employees feel the external demands and the need for maintain internal stability to the company. New employees learn from hands on experience but also have relevant inputs to the persistent norms, values and assumptions amongst current employees.

Organization culture as a competitive strategy - the key factor of managing and maintaining a corporate strategy is to have a sustainable competitive advantage. Competitive Strategy helps the business fight its competitors over a long period of time. Key business managers are always trying to devise methods and procedures for having a cutting edge strategy where organization culture plays a very important role. In yesteryears management people were always devising strategies to overcome business issues but always used to neglect the social and human edge which is a boon to business. Management gurus and business managers have realized the importance of a human resource management team who help the in building a team who has been trained to be organized and cultured. With the passage of time, companies have stressed the proper training and induction of culture in the day to day business affair of the company. Organizational culture is not a single days phenomenon. It is a time consuming thing which evolves on past history and how the top management blends the culture of the organization. It requires great effort in building the organizations culture. The effort put in it is a very important component of building business competitive strategy. An airlines company will gain considerable edge if the corporate has an effective organization culture where all the players work as a team instead of individuals and cohesively they work towards a better result oriented customer service company.

JetBlue is a good example where organizational culture is the key to competitive advantage of the firm. The organizational culture has stemmed the growth of the airlines with the hierarchy leading from the front. The group CEO, David Neeleman, travels once a week to know about their customers, their grievances as well as the internal staff and crew members.  Taking care of the employees has always been on the top agenda for the airlines. Just like Southwest airlines, JetBlue has never laid off any employee.

Neeleman (2010) takes a feedback from the customers as to their flying experience and the ways their staff can further improve services. Proper employee incentive and rewards keeps the employees motivated to give their best and give a competitive edge to the other airliners.  Training of JetBlue employees remains a top priority as this is regarded as the stepping stone for the culture of the airlines to be followed. The training involves the taking care of fellow employees, have a nice attitude towards work, the employees follow suit which makes it a very pleasant experience for both the employees as well as the customer base. Training and accountability are important measures of organizational culture and growth where customer feedback, employee feedback plays an important role in analyzing the cultural growth of the airliners. The success theme of the organization culture to grow is to recruit and train efficient, honest and humble people, develop a sense of purpose and vision in them. This helps cultivate the organization structure and gives competitive advantage over the rest.

In this report we have covered the impact of organizational culture in the safety and financial performance of an airlines company. We have taken examples of Southwest Airlines and JetBlue airlines where the organizational cultural growth has been seen as a proven methodology for pure success. This has opened the doors of a strong team committed to its work where safety concerns are addressed, executed with acute precision where there is absolutely no room for complacency to sneak in from the back door. With effective leadership quality and a strong cultural history these airlines have proved that not only can they maintain very high standards but they can be a big fish in the sea even in turbulent waters with excellent financial performance. Though financial performance has other influencing factors like market conditions, recession in markets and global economy as a whole which does affect the airlines but maintaining stability in tough conditions with full support from employees, crew members, engineers and ground staff are tough asks.

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