The root of any renowned and huge organization lies in the ethics, values and the functioning of its social responsibilities. In the 21st century, the modern era business culture includes in depth concern to corporate or work culture of a company. There are many organizations existing today that is focusing more on this particular concept along with quality management system and advancing techniques.
One of the well-reputed organizations admired from afar is the Southwest Airlines of the United States. In this case, study, an engaging elaboration of ethical and social responsibilities of Southwest Airlines shall be discussed.
The requirement for ethics and norms is huge in a company in today’s world. The increasing population in the world in influencing every existing mechanism in the planet including the work cultures of places. The internal traits beliefs and behaviors, business activities performed in a company and their typical way of functioning, holds up the concept of ethics, values and social responsibilities.
An overview of the organizational framework and management system
The entire management structure of Southwest Airlines is methodical and well organized. The company comprises of several layers to its management system. As stated by Carroll & Buchholtz (2014), the senior executive level crew is known to be highly experienced as well as cooperative to the level of employees below. Though there are never ending problems arising day by day, the responsibilities are maintained in effective manner with the help of appropriate leadership qualities by the board of directors.
The hierarchy also has a skillful functioning team that is Aviation security department, Air navigational department, Air transport sector and the flight operations. The firm possesses a neutral party that is the legal department of Southwest airlines, which acts as a constant leading medium in order to enhance organizational harmonization by taking significant and neutral decisions for the other members.
In the opinion of Freeman & Moutchnik (2013), one of the strongest qualities and reason behind immense growth and expansion is the organization’s cost management and customer friendly attitude. The company also holds a remarkable reputation for employer employee relationship. For these specific criteria, the senior management department is highly responsible. It is one of the rarest organizations that offer free and special services to its passengers inviting and attracting more every day. In contrary, though the company has been excelling in the mentioned field, the rapid expansion has also brought about several issues against the success story and the ethics and norms carried out in the organization plays a significant part in it.
Figure 1: Strategy Map for Southwest Airlines
The investors’ relation in the company has been dealing with conflicts to maintain a proper balance in business activities such as, meeting consumer expectations, stabilizing financial activities carried out in the company and balancing the criteria and regulations of internal financial requirements and a standard business class ticket fares. The company is also facing strong competition focusing on these areas lately.
As per Kolk (2016), the southwest Airlines has been on the verdict of implementing new ideas and bringing forward cost friendly strategies by arranging business meetings of the higher authority though the issues arising in the recent years has highly impacted the compliance, ethics and values of the company resulting in the formation of heavy atmosphere in work culture.
The social responsibilities and work culture of Southwest Asia and how can it be ranked in the market today
The cultural social responsibility aspect in an organization is being given a new perspective today. It has ended up being one of the core influencers to the other branches and its functions.
The airlines company as a whole experienced a great work culture over the years. The other competitions have been quite aware of the fact. The mission of this firm is to prioritize its employees and customers. The work environment has been made friendly and warm in order to establish stability among workers. The company expects its employees to be dedicated with well-maintained integrity at workplace.
Though Southwest airlines is known to consider its employees significant, similarly the employees are well trained and incorporated with standards habits and ethics of putting the guests and passengers demands first when it comes to the focus area of cultural and social responsibility (CSR). As per Haski-Leventhal et al. (2015), these particular groups of responsibilities include aspects of human rights, business principles, corporate and social ethics, privacy of consumers and employees, work re quality and diversity, efficient environmental factor supports and more. In the opinion of Panwar et al. (2017), the company puts effort to increase satisfaction in work culture continuously.
Figure 2: Passengers growth of Southwest Airlines
The detection of findings and brief demonstration of the appearing CSR issues of the organization
According to Panwar et al. (2017), along with the smooth and constant flow of business management and cultural ethics, a great company like Southwest Airlines has been experiencing issues, which are eventually influencing the ethics, values and social responsibilities of the organization. There has been arising controversial discussions about such conflicts, which are quite time consuming for the company to resolve.
Increasing air ticket price due to increase in fuel price largely affecting the customer mindset
The recent controversial statements about the occurrence of the fuel price dispute. In observation, the company has been undergoing huge loss due to sudden increase in the fuel price, Since Southwest airlines was marked as one of the top companies for a low cost travel and customer friendly services at a lower cost compared to other organizations and its competitors, it has to go through plenty of hindrances in particular.
Balancing by impressing its customers and employees as well as maintaining profitable revenue of the company has been a tough challenge for the senior management team and the directors, ("Corporate Social Responsibility: How it Impacts Business in 2016 | Mondo", 2017).
The fuel price and the cost of the air tickets are directly proportional to each other. The rise in the cost of one factors lead to an impact on the mindsets and thought process of people.
Though a useful strategy has been taken by the organization to put up with the loss, such as fuel hedging, it has still not diminished the challenges completely. Hedging of fuel is a well-known process considered by airlines business companies in order to cope up with the high price services and to increase productivity more than loss.
As per Chan & Park (2015), the hedging of the contracts is aiding the method of cost reduction to some extent but it is claimed as per the reports that the main current expenditures of the airlines company are the cost of labor and the cost of fuel. Both of these factors are standing as an obstacle to overcome customer dissatisfaction.
Increase in employee deduction and firing degrading employee value and ethics on a large scale
The core value of the SouthWest has always depicted considering and supporting employees. In contrary to the mentioned fact, is lately marked that the company has been firing a good number of employees, ("5 Ways to Improve your Corporate Social Responsibility – KARI", 2017).
Figure 3: A yearly statistic explaining organizational culture
Similar to the expectations of company from employees, the employees states to have expectations and promising careers from the company as well. An organization is mainly comprised of its employees. Adjusting the final turn over cost and finding a sudden replacement for the fired employees also affected the company additionally increasing training cost of the employees leading to degradation of quality of service.
Internal monitoring issues and delay in flight and services that is destroying the long built reputation of the organization
According to Jamali, et al. (2017), in the past decade, the company has not faced such huge influences, regarding managing service and safety. Due to the negative impacts in other aspects such as increasing of fuel price, firing of employees and more has created an indirect impact on the services and its quality.
If noticed carefully, the structure of management all of the above criteria in a nutshell. The aspects are all interlinked and there are high possibilities the consequential influences can overlap. For example, the replacement of old assets and resources and the involvement of a new hire shall not bring the same quality of service.
The company was strong competition to other renowned aviation organizations and underwent issues like, delay of flight, lack of safety measurements, disputes among passengers while travelling. Southwest, also became the victim of large amount of fines to legal authorities by losing its valuable customers.
As per Hoejmose et al. (2013), the company also took quite an amount of time to fix the glitches, which dissatisfied the beliefs and mindset of customers. In evidence, they had to face problems beyond worthiness at some situations stating that Southwest being a respectable and prestigious organization has put away from the promises to its customers.
An analytical overview of the social responsibility issues discussed
The Southwest airlines are a well-reputed company with finite limitations. Appropriate scanning and scrutinization of the past reports and statistics were required, in this particular case study. As mentioned before, the increase in fuel price has raised the price of the airline tickets overnight. The ratio stands to price of the fuel is to the price of the tickets is one of the causes of huge recent risk factors of the company profile.
Negative work culture affecting the entire management chain
The financial activities and transactions of business were at high risk for a couple of months due to customer friendly service of Southwest airlines. Compared to the other organizations like the American airlines and united airlines, the Southwest focused more on providing warm and welcoming services than cost cutting for the business.
It was of massive help for airline companies including the southwest airlines, when the cost of oil went down. As per Hesselbarth & Schaltegger (2014), the lowering in the market of fuel increased revenue or final profit for Southwest along with productivity in good customer service.
On the other hand, the risk of losing its people, employees and customers increased due to faults in the process of management leading to firing of above almost five hundred employees in a very short period, leaving a negative impact on the hearts of its ex-employees.
In the field of business, these kind of sudden decision-making and imbalance can end up in degrading business levels. All of these criteria cover the issues and affairs of human rights, labor practices, environmental issues, and consumer issues.
Figure 4: A graphical presentation of the Fuel cost of Southwest
Consequential influences of the negative impacts
The chances are that the process of business can be affected in many ways due to which severe consequences can arise.
The decrease in the engagement of employees and customers can be very harmful for the further growth of the company and lead to loss in business. If the employees are kept away from the working procedure of the system, they are exposed to instability and curiousness. A cross flowing structure of team management can keep such issues aside in order to focus on services and quality of services more. In the opinion of Heras‐Saizarbitoria & Boiral (2013), the fulfillment of the goal is only possible if the there is strong communication, cooperation and harmony in the internal working space.
Moreover, southwest have many advantages of being broad and expanded organizations such as, high profile networking, customer preferences, appraisals from afar, positive media attention, sponsorships and advertisements. At the same time, it was observed that the organization had immense focus on external growth. The company launched new facilities for both their customers and employees, new arrangement of seats. Journey comfortable services and more but the internal work culture has been degrading due to negligence in business management along with it.
The long term goals in business are also affected drastically due to these factors and the consequences can be huge. According to Jeston & Nelis (2014), a company’s long-term vision, goals and objective highly depend on the principles of CSR today. For an assuring long-term future of the company sustaining and retaining its useful resources play a huge role. The other consequences that can affect are cost deductions and loss of innovation from resources.
Comparison of methodologies to other organizations
The practice of transparency in an organization is highly required. It is one of the core methods acquired by companies like the Emirates and Turkish airlines. The Emirates is a well-established company with a strong base and formation. It has been giving difficult competition to quite a number of organizations for the past few years including the Southwest.
The surveys and reports says, the key reason being the trust and transparency maintained in the company. The methodology involves training and educating the employees about the ethics and norms of the company in order to inform them about how the company relies on its employees about earning respect and prestige from all around the world.
As per Tao et al.(2014), environmental well being and promotion of charitable funds and donations have aided them to make their position on the top most rank today. Even though the companies are successful, a constant and endless effort for making better environmental impacts is another important method that can be acquired by Southwest.
Recommendations for continuing the improvement plan
The trade of Airlines involves a number of purchasing of expensive business products related to customer welfare, improvement of comfort plans and more. In this case study, the decision making of purchasing products has been acting as a part of the trigger. Though the objective is to facilitate the customers, indirectly the company is losing out on most of its or its profits with an imbalance in customer service and sudden fall in business with more maintenance cost.
In Order to save cost, there are lacking in safety and security along with disputes in customer satisfaction and employee wages. These slightest of factors can influence the company’s ethical and moral values highly.
The strategy of playing a significant role in participation in community affairs can also help overcoming these issues in a faster way. Several organizations participate in competitions, seminars and local events. Performing such activities can give a better exposure to the well being organization. One of the most important benefits is that the employees shall get a new perspective, enthusiastic and encouragement to put more effort and cooperate with the seniors.
In addition, strategies like, producing a global report or survey on the CSR status every year can increase the productivity of the company.
Career benefits in business management from the leanings of CSR
The above-mentioned findings, analysis and strategies are fresh ideas evolving today’s management criteria. In order to run a trade or business in the modern world, the detection of the right problems at the right time is highly necessary.
The particular study is helpful in excelling business management skills balancing the financial aspects as well as the social and cultural responsibilities. Moreover, it shall also help in detecting the problems in advance by understanding the significance of CSR in the organization by polishing communication skills to execute the productivity.
As gathered from the particular case study, there are several reasons that any organization including the CSR should embrace the existence of CSR in today’s world. Above all, the focus should be shifted on maintenance of the social responsibility in an organization and emphasizing on how the strategies are implemented rather than launching new strategies and ideas constantly. There are several new tactics applied by the organizations today to diminish issues and introduce the importance of CSR, such as fund raising, accountability, volunteering, sustainability and more. As the involvement of, forced labor, bribing and corruption is increasing day by day, a significant attention to CSR should be paid rather than continuing the casual form of approach.
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