KochIndustries and Southwest Airlines possess distinctive organizationalcultures in their daily operations. Both companies have successfullymanaged to maintain their profitability for a couple of yearssuccessively. Southwest Airlines assumes a fun workplace thatencourages humor and socialization. Koch Industries, contrariwise,features a culture exclusively guided by market-based managementprinciples. The company lays key interest on revenue growth andperformance. According to Whatley (2013), former boss of SouthwestAirlines, administrators and leaders should be keen on establishingstrong business ethos that spurs profitability. An establishment`sculture is the basis of success, and a thriving workstation is arequirement to being able to unravel and solve problems.
SouthwestAirlines is the pearl of the aviation industry boasting a fiscalperformance that doubles that of top five competitors. Their secretis in a culture that encompasses activeness, fun and supportiveness.Airline management and staff not only talk good about their work butalso walk the talk.Southwest’s business ethos mirrors itsdogmas, but then it radiates out from every single worker (Klein,2011)
Thesecret to establishing and maintaining a business culture thatpromotes profitability anchors on a people-oriented organizationstructure. The process begins with finding and hiring the rightpeople. Southwest Airlines places great emphasis on the selectionprocess. Every year, the Southwest Airline management receivesthousands of application, but they end up recruiting about a hundredof them. Attitude is the key attribute that Southwest Airlines baseits recruitment exercise (Whatley, 2013). Consequently, SouthwestAirline employs not for skills but rather people with the rightattitude. For them, people can acquire skills through learning.
Theairline is largely devoted to the welfare of its employees. Theycontinuously build a stable workplace setting that provides equalopportunities for both learning and individual growth. SouthwestAirlines believes that strengthening personal welfare commensurate toknowledge increase in the business, which eventually benefits theairline (Whatley, 2013). The general impression of Southwest airlineis that clienteles come second to staffs. There exists no instancewhere Southwest Airline has retrenched its staff. Furthermore,Southwest’s typical compensation is among the highest in theairline industry.
Southwestinvestors and executives are anticipated to restore an assurance inequity capitalism. The executives ought to adhere to principles ofvalue leadership. Value-leadership banks on a healthy rapport withemployees, investors, customers and community individuals. Employeesof Southwest airline are inculcates with a warrior`s spirit. Thespirit means that they are fearless in delivering their product tothe target market. In addition to the warrior`s spirit, the companyalso gives workers all the necessary tools they require in supportingcustomers. The company assumes a client-oriented strategy where thecompany’s schedule is flexible to the needs of the customers.
Theworkspace and work environment across the airline offices is veryrelaxed and fun. Such an environment coupled with good remunerationis enough motivation to be part of the company. For instance, the CEOregularly arrives at board meetings on dressed with jeans andt-shirt. At times, he hosts barbeques at 2 am for the company`smechanics. Furthermore, the company annually sponsors employeeoutings. The workers, therefore, clad in relaxingwork attire,promote team-building get-togethers and ensure mutual-respect (Klein,2011).
Forthe overall branding strategy, Southwest airline engages its workersto agree to take the slogans of the business further than just beingdocumented. The greatest mistake that most corporations make isfailure to do an internal marketing. Internal marketing ought to besimilar to the external marketing in its strategies. Workers are notonly made to understand what branding is, but they understand how tomaintain the brand strategy. A classic example is the way mostemployees display the Southwest Airline license on their vehicles.The employees go further and own the brand. The airline formerly runcommercials centered on the subject “we love your bags.” Unlike its competitors, Southwest Airline doesn’t levy any charges fortwo bags belongingto a passenger. This marketing strategy givesthem a competitive plus over their competitors (Klein, 2011).
KochIndustries is presumed to be an energy company, however that is amisnomer. Their primary business advantage is in the manufacturingsector the conversion of raw materials into finished valuableproducts (Koch, 2007). Charles Koch was able to establish and overseethe most profitable global company by applying the principles of aliberalized market to the society. The company anchored itsoperations on market-based management strategies.
TheKoch industries are more interested in ling-term investment thananything. They probe their managers with tough questions of how tosteer the company into durable securities. For instance afteracquiring the Georgia-Pacific company, they put in place severallong-term decisions in order to cater for their market-based strategy(Hitt, Ireland and Hoskisson, 2007). They invested heavily in turningback the company into good profitable margins. Drastic measures suchas staff downsizing and financial incentives were inevitable.
Itis important to note that Koch Industries doesn’t adhere to acentralized wage scale. Employee bonuses are not pegs on individualeffort and not on the company`s wide profitability, and even machineoperators are remunerated according to how efficient they are withthe machines they oversee. The wage scale is therefore defendant onthe market. Managers can get bonuses that exceed their basic salarydue to the return on the investment they make. The company,therefore, evaluates the value that an employee adds to the companyand rewards accordingly. Employees can, therefore, earn more byturning around afaltering entity than playing safe with aprofitable one.
Theinternal culture of Koch industries revolves on the ten principles ofmarket-based management. These include integrity value creation,compliance, customer focus, respect, humility, principledentrepreneurship, customer focus, knowledge, fulfillment and change.The combination of the ten elements culminates in a positive andvibrant organizational culture. Koch industries analyze its progressthrough five key dimensions. Through the dimensions, problems arediagnosed, and appropriate remedy instituted. They include vision,knowledge processes, virtue and talents, incentives and decisionrights. Each dimension provides a lens that provides understanding ofcomplex challenges that impede the successful running of the company(Koch, 2007).
KochIndustries and Southwest Airlines relatively share the same traits inits economic quests. Southwest Airline though features a laid backapproach that promotes a friendly approach towards achieving businessgoals and ultimately profitability. On the contrary, Koch industriesuse a forceful means to achieving its business needs. The companyallows even for illegitimate ways of acquiring wealth. Unlike theSouthwest Airlines that is purely business centered, Koch Industriesmore than often involve themselves in politics with the aim ofinfluencing decisions to their advantage. The pay scale for Southwestemployees is well structured, and everyone is relatively wellremunerated. Koch industries pay scale is arrogant and relies on theperformance on the market (Bird, 2011). Employees, therefore, shapetheir financial destiny by improving the proceeds to thecompany.Decision-making in Koch industries is left to the topmanagement and the key owners of the company. Southwest airline, onthe other hand, allows for delegated decision-making processes.
KochIndustries’ organizational culture encourages unscrupulousbehaviors and teaches workers the “Koch Method,” of stealing andcheating as long as it meets company interests (Whatley, 2013). Thecompany has a history of illicit and unscrupulous conduct. It,therefore, demonstratesthe extensiveness of the Koch method andthe extent the company is prepared to do away with ethics and publicsafety. Culture clashes would certainly be inevitable when the twocompanies seek a merger. Nonetheless, as a means of reducing theclashes, an orientation ought to be done to the employees to makethem aware of the change of guard and the apparent change in businessstyle. The change further ought not to be abrupt but rather should bea progressive exercise. Koch industries should not seek to entrenchtheir extreme capitalistic concepts on the airline but rather shouldseek only to improve their profit margins with a few changes.
Bird,A. (Mar. 13, 2011). Southwest: Corporate culture combines work, play.The Post and Courier.
Hitt,M. A., Ireland, R. D., &Hoskisson, R. E. (2007). Strategicmanagement: Competitiveness and globalization[concepts and classes]. Mason, Ohio: Thomson South-Western.
Klein,D. (2011). Creating cultures that lead to success: Lincoln Electric,Southwest Airlines, and SAS Institute. OrganizationalDynamics 41(1).
Koch,C. G. (2007). The science of success: How market-based managementbuilt the world`s largest private company. Hoboken, N.J: Wiley.
Whatley,H. (2013). Principles and dimensions of market-based management.IndependentJournal of Management & Production.