The case study of the two companies represents the principles and practice of management. In the two cases, we can define management by its approach to employees and say that Management is the art of getting things done through people. This means that managers achieve organizational goals by arranging for others the necessary tasks to be performed to achieve the goals of the organization. These goals are achieved when the companies have strong organization features that make them different, features that distinguish them from other companies and make them market leaders. The features that make these companies successful and that make them stand the test of difficult times such as inflation and terrorism threat include but not limited to the following,
1) Employee friendly culture. 2) Their organization structure. 3) Corporate culture. 4) Job security. 5) Profit making.
Southwest airline has a motto that puts its employees in front of its plane which states that “we are a company of people, not planes” the company has encouraged its employees to identify themselves with each other within the company and to work together to deliver customer focused services and to have fun in their work. The result of this is the company has maintained existing customers and got new customers. It is also a leading employer and very many people want to work for the company since it has an excellent reputation of treating its employees. (Child, 2005, ch.16, pp 396) according to, J. Child “Southwest has been recognized as atop employer among Fortune’s list of America’s Most Admired Companies since the program began in 1993”. On the other hand, Semco has a policy of employee participation in all its activities. In Semco, work is delegated to employees where they decide how to do their work, they set their own goals and targets, and they set their own budgets and production goals and these means that their salary is tied to their performance. The result of this feature is that there is increased production and greater responsibility on the part of the employee. Employee involvement makes them feel part of the company especially when they are involved in the process of decision making and when work is delegated to them.
The companies have another feature which makes them admired. They offer job security to its employees. Therefore, the company does not suffer from employee turnover. The job security involves offering job on permanent and pensionable basis, offering some jobs on a contract basis, offering bonuses for work well done, offering leaves, medical allowances and other allowances which are all centered to the employee. The companies also had a very flexible working plan during the financial crisis whereby instead of laying off employees it had to rotate their functions and some of the members were willing to take a pay cut in order to raise the productivity. The advantage that these companies have is that even in the wake of crisis such as terrorism and inflation, there were no redundancies, layoffs, dismissal or downsizing. They assured their employees of their security. This helps the company achieve better performance in that the company has reduced costs in recruiting new employees; they have maintained their skilled workforces which is conversant with the operations of the company.
The other feature that draws a line between these two companies and the rest is their organization structure which makes them stand out from the rest of the companies. They have very flexible hierarchical structures that are short. For example, Southwest airlines cut across any distinction between hierarchy and job. The airline has a principle of treating all its employees with respect regardless of the title since all jobs and people are much or less the same. For example, the pilot will help the attendants clean the aircraft, check passengers and load bags if the situation calls for it. Semco has greatly shortened its organization structure. Initially the company had twelve layers in its structure but now it has reduced to six Counselors. The Company follows a laissez faire form of management where all employees from the C.E.O will perform his duties independently. Job titles do not hold significant meaning since all employees are treated as being equal. The companies have also reduced bureaucracies in their management and this has led to a speedy decision making process. They have a decentralized organization system which enables its employees to make decisions at the lower level of the organization structure without having to wait for decisions from top managers. (Child, 2005, ch.16, pp 396), according to the C.E.O of Southwest airline he summed up his companies philosophy according to his mother’s advice where he said that, “she talked a lot about how you should treat people with respect. She said that a lot about how you should treat people with respect. She said that positions and titles signify absolutely nothing…she taught me that every person is worth as much as the any other person and any other job”.
The other feature is the corporate culture which refers to the understandings that members of a community share in common. These shared understandings consist of norms, values, attitudes and beliefs. The organization culture is usually determined from the things, doings, feelings and sayings held in common by organizational members. For example in Semco Company all employees including the C.E.O receive their own guests, send their own correspondence and make their own tea. The values held by top management are also a form of corporate culture. Top management through their orientation and values set the tone that prevails in the organization. For example management that is antagonistic to competitors creates this atmosphere for its employees just like the competition experienced in Southwest airline where the company withstood competition from other companies. Also the history of the organization forms part of the corporate culture. The way things have always been done in the organization determines to a great extent the things held in common by its members. For example the character of the founder of a company is maintained in the company through out the years.