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In depth analysis of Southwest Airlines as of 2013 and how social media and PR affected empoyee relations and performance, and it's impact on their market value.
In depth analysis of Southwest Airlines as of 2013 and how social media and PR affected empoyee relations and performance, and it's impact on their market value.
In depth analysis of Southwest Airlines as of 2013 and how social media and PR affected empoyee relations and performance, and it's impact on their market value.
Introduction Southwest Airlines is America's largest low-fare carrier, serving more Customers domestically than any other airline. They operate a fleet of 694 Boeing jets on over 3,000 daily flights (Fact Sheet). They recently acquired AirTran Airways in an expansion move that will make them an international carrier with service to Canada and Latin America. With this acquisition they face the challenges of combining corporate cultures and adding over 8,000 new faces to their 33,000-plus existing employees (Chatzkel). This change is coming at a time when airline-employee relations have been heavily strained. Last summers labor disagreements were largely publicized as affecting customers of American Airlines and United. However, ground workers at Southwest Airlines were involved in the service disruptions, even though Southwest is known for its excellent service, operations and relatively harmonious labor relations (Karp). Earlier, in 2011, Southwest made major social media buzz when their rapping flight attendant video went viral. Southwest is renowned for encouraging their employees in expressing their personalities through their job (A. Miller). Airline attendants are famously asked to display large amounts of emotional labor in their stressful position of dealing with irate passengers, long itineraries and extensive layovers, and as a result of this they are often the focus of much scrutiny in the study of organizational communications. Many times the other employees are overlooked by scholars of communication because the emotional toll of other positions in the airline industry do not have the same apparent set of stressors and factors that negatively affect the employee experience, but are equally Mrozinski and Naadjie 2 important to the well-being and happiness of pilots, ground crew workers and customer service associates. The Case Incorporated on March 15, 1967 and headquartered in Dallas, Texas, Southwest Airlines has been spreading the love in the air for 46 years. Their first flight departed on June 18, 1971 and they initially provided service between three Texas cities: Houston, Dallas and San Antonio. Offering a unique combination of low fares with no annoying fees, friendly Customer Service delivered by outstanding People, safe and reliable operations, and an extraordinary corporate Culture that extends into the communities, Southwest they quickly became Americas number- one low fare carrier of passengers, first reaching the billion-dollar revenue mark in 1989 and topping the passenger departure rankings in May 2003, and today they employ nearly 43,000 men and women that serve 91 destinations in 41 states, the District of Columbia, Puerto Rico and 6 near-international countries (Southwest). The chairman of the board of directors, president and chief operating officer is Gary Kelley who believes leadership is effectively supporting your team of employees, of which approximately 82 per cent are unionized (Biography, Fact Sheet). Southwests support of their employees reached the national limelight when a video of their rapping flight attendant, employee David Holmes, went viral on social media, even garnering him an appearance on the Tonight Show with Jay Leno and a mention on Oprah Winfreys talk show (A. Miller). Holmes is not the first of Southwest flight attendants that take their own flair and bring it to the boring flight safety speech they have to give before takeoff on every flight. This is an example of how the corporate culture that Southwest has constructed gives some employees the opportunity for creative expression, allowing for satisfaction of higher-level needs according to Maslows hierarchy of needs. Mrozinski and Naadjie 3 Southwest Airlines, known for its excellent service, operations and relatively harmonious labor relations, had an incident last year when employees in their ground crew handed out informational leaflets to passengers at Chicago Midway Airport. The leaflets were describing some of Southwests plans to outsource some of their jobs to temporary workers. Labor issues are ongoing in the airline industry and conflict between airline management and unions are quite typical and can cause headaches for management and sometimes passengers too. As airline passengers fly back and fourth from vacations, they might be surprised to know their pilot may not have had a substantial pay raise in nearly a decade, and flight attendants might be seething beneath friendly smiles (Karp). When these strikes come into play passengers are faced with flying in grumpy skies because the numerous conflicts between airline and unions. However, not every position at Southwest necessarily encourages this kind of expression or allows for those needs to be met. Last summer saw industry-wide labor negotiations and issues, from which Southwest was not excluded. The majority of press coverage was devoted to United and American airlines pilots who used excessive sick days and caused unnecessary delays as a sign of resistance to inflict damage on these airlines sales and customer satisfaction. At Southwest, the resistance was largely confined to ground crew workers and baggage handlers, who distributed leaflets to passengers informing them of labor negotiations that would result in reduced job security for workers on the ground. Finally, in the ever-changing airlne industry, we discuss the airlines expansion via their acquisition of AirTran Airways that began a few years ago and is in the process of being finalized. This merger will make Southwest an international airline and will add, as mentioned, over 8,000 employees to their workforce in all positions, from pilots and grounds crew to customer service and flight attendants. This acquisition, in order to run smoothly, demands that Mrozinski and Naadjie 4 higher management uses appropriate methods of communication to explain the merger to employees at both airlines. Analysis Communication Strength: Encouraging creativity and expression amongst employees Southwest has a long history of leveraging their flight attendants as a marketing tool that dates back to the 70s. Sex sells seats was the internal marketing strategy; attendants clad in the orange hot pants and tall, lacy boots that were part of the corporate attire would distribute Love potion and passion punch to fliers until 1981, when a lawsuit challenging their hiring practices was ruled against Southwest, citing discriminatory hiring practices that excluded males from inclusion (Burning Taper Blog). Thirty years later, Southwest still uses their employees as a marketing asset, albeit with much more taste. David Holmes, the rapping flight attendant, is perhaps the most visible example of this in the public eye. Other flight attendants have done their own renditions of singing flight songs, including Renee Allens country-western attendant song featured on their YouTube channel NutsAboutSouthwest (Allens video has over half a million views, and Holmes two videos have a combined 300,000-plus views, while other versions on the various YouTube channels now total nearly a million views). Holmes was recently featured at the companys shareholder meeting in 2009 to provide the General Accepted Accounting Principles and introduce CEO Gary Kelly, naturally, in the form of a rap. Schein describes the culture of an organization as a group phenomenon that exists on many levels and is often fragmented; they serve the human needs for stability, consistency and meaning and thus the push of many cultural forms toward patterning and integration (K. Miller 90). Artifacts define the most visible level of culture. In this case, the artifacts of Southwest include their uniforms, design of their aircrafts and written communications that permeate the Mrozinski and Naadjie 5 media (dominantly advertising and press releases). The second level of Scheins model is the espoused values that employees share. We looked at Gary Kellys biography, in which he quotes leadership is effectively supporting your team of employees and he ensures the values of support are company-wide. They support the creativity and expression of their employees as shown by the popularity of the David Holmes video on multiple channels of social media. Miller is keen to point out that organizations do not have values, but individuals do, and that scholars believe that the values of the organizational founder or current leader play a critical role in shaping the organizations culture (91). Finally, level three of Scheins model is defined by the basic or core assumptions about the world and how it works. This may include Southwests belief that happy passengers are repeat customers and is reflected in the lengths they go to ensure customer satisfaction through all stages of the flight. This has been reflected in the pastwith their uniforms and drink specialsto current advertising campaigns and public relations efforts: Bags Fly Free, using Twitter to answer customer service inquiries, NutsAboutSouthwest blog and YouTube channels, etc. David Holmes rise to fame is an example of social media campaigning that Southwest should expand upon to make other employees feel included in the corporate culture they have been carefully crafting for over 40 years. People are familiar with the image of the fun flight attendants since the inception of Southwest Airlines. Increasing employee presence on social media and advertising beyond that of flight attendants will spread that image. However, this may not be the best solution, due to the fact that oftentimes organizational culture is not consistent across subculture boundaries, as argued by Louis (K. Miller, 87). As in-air crew is shuffled from location to location, ground crew stays at one airport and executives are stationed in Dallas, subcultures are more likely to emerge around networks of personal contacts or demographic Mrozinski and Naadjie 6 similarity (K. Miller, 87). Southwest needs to be sensitive to these organizational differences while allowing employees personalities to shine in their own unique ways by recognizing and honoring the individuality every employee possesses. Let us now look at how the complexity of these organizational subcultures leads to problems in the workplace. Before we begin, it is worth mentioning that David Holmes was a grounds crew attendant before enrolling in flight attendant school, when he conceived the idea for the aircraft safety rap (CNN). Communication Issue: Ambiguity and resistance within ground crews Transport Union Workers Local 555 handles the baggage and other ground operations for Southwest Airlines. The ground crews in airports, especially Chicago Midway, were facing a degree of job insecurity due to Southwests willingness to hire temporary workers and outsource their positions, and they handed out leaflets to passengers informing them of such. According to K. Miller in her conceptualization of burnout and workplace stressors, this uncertainty is a key contributor to stress, which leads to lowered levels of job satisfaction and commitment as they become disenchanted with a stressful organization or occupation (208). Across the airline industry, many employees have been facing burnout and their lowered commitment to a companys espoused values lead up to the many issues passengers had with flying in 2012. Airline pilots at United and American had record numbers of cancellations and delays, the amount of pilots on sick leave was unusually high, and overall there were lowered levels of customer satisfaction as a result of these delays. The burnout and ambiguity caused by organizational change in the industry has curtailed many of these companies success. Frost, Moore, Louis, Lundberg and Martin, 1991: It is impossible to characterize an organization as having a single culture Organizations are characterized by a multitude of subcultures that may co-exist in harmony, conflict, or indifference to each other (K. Miller, Mrozinski and Naadjie 7 87). Never before have the subcultures that exist in the airline industry been so apparent than the recent instances of resistance between employees and higher management. The conflict between organizational goals and the desires of ground employees at Southwest has certainly contributed to the levels of resistance in the workplace. Resistance is seen in the forms of collective and organized processes such as unionization, boycotts, and large-scale movements (K. Miller, 109). Another form of resistance comes in more subdued ways, such as pilots who abuse sick leave, a combative customer service agent, and flight crews that make unnecessary delays. These manifestations of resistance have a deleterious affect on airlines that have to compete with one another for an ever-eluding piece of their market share. Power in a culture is a defining, ubiquitous feature of organizational life (K. Miller, 102). It is clear that the ground workers have organized in a union to maximize the power they have in bargaining and other labor issues befitting their group. Because flight attendants are usually associated with emotional labor, there are fewer chances for ground crew to receive support or attention as being a job with those kinds of demands. All humans are emotionally influenced creatures. Indeed, most research considers frontline service works in organizations that sanction (and pay for) emotion in the service of customers (K. Miller, 200). We propose using a similar technique to the Hawthorne study to replicate the unintended outcomes of the study. Researchers described a phenomenon whereby mere attention to individuals causes change in behavior (K. Miller, 39). Today, channels of media exist where Southwest can provide cultural touchstones for employees affected by organizational change, such as their Facebook pages, YouTube channels and blogs that function as a platform for ethnographical research themselves. This research will delve into the individuality of Southwest employees and may even provide a chance for future David Holmes Mrozinski and Naadjie 8 visibility in the national eye. It will also promote satisfaction of higher-level emotional needs in workers occupying positions with traditionally lower-level satisfaction and a perceived increase in job security, ultimately reducing inconveniences to the customer and airline alike. Interestingly enough, David Holmes was a ramp agent before taking flight attendant training, when he developed the idea for the airline safety rap (CBS). Communication Issue: AirTran merger, dealing with organizational change In an acquisition or integration there are several factors that have to be worked. Facing the challenge of adding 8,000 new employees to its current 33,000 employees, Southwest has to incorporate the two cultures of Southwest and AirTran and find a way to bring them all together. According to the AirTran fact sheet, seniority integration will be governed by their contract and by Federal law, which requires seniority to be integrated in a fair and equitable manner. First of all, the acquisition needs to be approved by the AirTran board of directors and by the Justice Department. This pending approval, it can take up to 9 months or more before the deal is legally closed. After this comes the process of integration which is yet to be determined by the amount of time which varies widely throughout the industry that takes to integrate books, fleet, employees, routes and so on. In the end, AirTran and Southwest will be operating under a single carrier certificate. From then on, everything will be considered Southwest Airlines (TWU555). In addition, Southwest also has to deal with always difficult issues such as union/non- union and wages differential issues, all of which have to be take place and be resolved while it keeps its planes flying. Southwest also has to deal with a shift in target audience, moving from a business model base that is keyed on fast turnarounds at smaller regional airports and using a single model aircraft. Southwest Airlines acquisition of AirTran Airways could evidently be seen as Southwest progressing beyond its strategy of organic growth by going as far as it could to go Mrozinski and Naadjie 9 with the strategic model that the airline first sketched out in 1970 and needed to consider changes that would allow them to move to the next stage of development (Chatzkel). This acquisition with AirTran airways was a major shrift in strategy and as a result would allow their customers to stay on Southwest aircrafts to travel on Southwest to major airports across the US. Then again, this also meant that Southwest would not have to compare more broadly and directly with legacy carriers in the US as well as the Caribbean or even anywhere and everywhere for that matter since it will then become a significantly fully national and international carrier. For organizations to achieve success it has to undergo change. Organizations that tend to remain static ad stuck in particular ways of doing things and modes of thinking will not survive long (K. Miller, 180). There are several models of organizational change, in situations that there is planned change oftentimes organizations tend to face problems in the environment, with internal contingencies that suggest the current ways of doing things are not effective or in this case where there is a merger. Whatever be the case implementing planned change is not a simple and straight forward process for instance the senior managers who initiate the change might have a different idea as compared to the employees who in fact are implementing the change. Given the complicated nature of communication within each of these groups and sometimes-limited interaction between senior management and employees even a well-developed, well-planned change can have unanticipated outcomes. Firstly, due to the comprehensiveness of any mergers and acquisition, change must be planned in order to exclude as many surprises as possible while facilitating a smooth transition for the organization and its members. Secondly, due to the presence of anxiety and uncertainty among members, planning of change will facilitate a more comfortable environment for members, as they know that they can trust management and that they will be honest with them. Mrozinski and Naadjie 10 In short, for a successful merger all change should be carefully planned, managed and communicated to all of the organization's members (K. Miller, 220). Also for theoretical information regarding organizational conflicts, rich communication seems to be the number one suggestion for a successful outcome. Management needs to encourage a positive mindset towards this new situation in order for the acquisition to go smoothly, and the best way to promote this atmosphere is for management to display positive behavior, enthusiasm and drive. Southwest would have to consider certain capabilities that will help them achieve unprecedented gains from this acquisition. Since the company is undergoing change, Southwest needs to be able to respond to the changing dynamics of its target audience and come up with new ways or possibilities to serve them better. Secondly, Southwest needs to be able to build on its current capabilities so as to nurture the right culture, implement the right leadership principles, building trust, forging robust processes and incentivize the engagement of the workers in the company this could be done by integrating organizational building capabilities. Southwest needs to draw on and enhance its tradition of recognizing talent and quickly select people making sure they are placed at the right level of challenge neither underestimated nor overestimating their abilities. Conclusion Change is a part of every organization and how it is handled often determines the long- term success of a company. This comes about in many forms, inspired by resistance or spurred by growth. A company that treats its employees well, like Southwest tends to do, will be able to provide the best customer service in an industry and will keep happy customers coming back again and again. This is how Southwests business model has largely served to benefit them, making them the biggest domestic airline around today. Their growth has led them to the point of Mrozinski and Naadjie 11 great expansion. The methods they use to communicate this expansion throughout the coporation will determine their future success. Minimizing tensions and the effect resistance has on their punctuality and service will go a long way in ensuring their continued growth and success.
Mrozinski and Naadjie 12 Bibliography Burning Taper Blog, The. Sex sells seats, Southwest used to say. http://burningtaper.blogspot.com/2007/09/sex-sells-seats.html 8 September 2007. Accessed 24 March 2013.
Chatzkel, Jay. Southwests acquistion of AirTran: An opportunity for quantum leap outcomes. Beyond the Deal Blog. http://beyondthedeal.net/blog/2010/11/09/southwests-acquisition- of-Airtran-an-opportunity-for-quantum-leap-outcomes/. 9 November 2010. Accessed 20 March 2013
CBS Television. Rapping flight attendant. Video. http://www.youtube.com/watch?v=rhMOnr0GxU8. 13 April 2009. Accessed 20 March 2013.
Karp, Gregory. Stressed out skies: Labor issues rampant at major airlines. Chicago Tribune. http://articles.chicagotribune.com/2012-07-15/business/ct-biz-0715-bf-fly-grumpy-skies- 20120714_1_professional-flight-attendants-leslie-mayo-bill-swelbar. 15 July 2012. Accessed 20 March 2013.
Miller, Amanda. Social media success: Southwest Airlines rapping flight attendant. Miller Brooks Blog. http://blog.millerbrooks.com/social-media-success-southwest- airlines%E2%80%99-rapping-flight-attendant/. 29 September 2011. Accessed 20 March 2013.
Transport Workers Union Local 555. AirTran acquisition fact sheet. TWU555.org. http://twu555.org/LinkClick.aspx?fileticket=S1UjmrPMj4o%3d&tabid=423. Accessed 25 March 2013.