Introduction
Organization behavior (OB) is the study of the way individuals and groups of people act within a particular organization or organizations. It can also be defined as the study of the behavior of individuals and groups in organizations, it has an impact on how this people and groups think, respond, act and feel towards work and the organization. It also entails how an organization responds to the environments (Laurie J. Mullins. 2007). It comprises of the study of organizations from various view points, levels of analysis and methods. According to Glen (2008), “Organizational behavior entails paying attention to the interpersonal relationships, productivity, attitudes, commitment, loyalty, job satisfaction, and also the organization’s role in nurturing industrial relations”.
“OB is a product of organizational culture and management structure” (Robbins & Judge, 2009). Understanding of organization behavior is important not only to the management and leadership teams but also to the employees as it helps them to know how their individual actions contribute to the big picture of the company (Mats Alvesson, 2002). Though its not only for the management it is mostly important to the managers and those who are responsible for supervising the activities that one or more employees are engaged in (View cart, 2009).
There are various organizational concepts that help in the running of an organization and helping in meeting the organization’s goals. This concepts are practiced by the management, range from, planning, organizing, motivation of employees leading and so many others. All these are just examples of the concepts of organizational behavior in practice (Glen, 2008).
In our case we shall look at planning, organizing and leading in conjunction with motivation of workers towards achievement of organization’s goals. Planning in an organization will involve establishing the strategies of the organizations and then deciding how best to use and allocate the resources in order to achieve the goals of the organization (Laurie J. Mullins 2007). In organizing, managers do establish structures of relationships that dictates how the members of the organization will work towards the achievement of the organization goals. Leading as well will involve managers encouraging workers to do a good job and also they should coordinate groups and individuals so as to make sure that everyone is working to the achievement of the organization goals (View cart, 2009).
Air travel is the fastest and quickest and also hassle free mode of transport. It enables one to cover a distance in a couple of hours hat would otherwise take days if one was to use train or automobile. For an enhanced productivity and performance of an airline company, the company has to incorporate 4 general aspects namely: proper use of its finances, good control and management of its people, initiating better advertisement strategies to attracting customers and good control of its fleet (Edgar H. Schein. 2004).
- When in pursuit of attracting customers there are two distinct factors which are considered in finding out the level of attraction to be achieved or achieved. which are; the type of attraction of the company’s services and the kind of effectiveness achieved as well as the promotional initiatives undertaken by the airline company. in this case we use the relative price of tickets as the most significant factor for attractiveness, this is because a relatively lower price would generally attract most travelers (Richard, McCabe. 2006).
- Good control of its fleet: The load factor in average is on how well the average individual airplane is used, also in the proportion of the number of seats that the airplane is filling per departure (Richard, McCabe. 2006).
- As far as good control and management of company’s employees and stakeholders is concerned, the control is determined by; the company’s capacity per employee, which is a determination of how well the workers are able to relate and work together (McNamara, 2008). The motivation and morale of workers is also another determinant of how well the workers can provide their output to the customers. Morale can be measured through using the cases of the lost bags per 1,000 passengers, and complaints per 100, 000 passengers that are derived from the air travel consumer report (McNamara, 2008). This are therefore used as indicators of how committed the employees in the airlines are in serving the customers. Also using labor-management relations, which may include strikes or threatened strikes, are a good show of how well the employees in the airline are treated (Richard, McCabe. 2006).
- Managing finances: In managing finances, the unit revenue and the unit costs are used. The two have to harmonize in order to get good revenue. In addition a company need to fund for growth as this will enhance its long term success (Richard, McCabe. 2006). There are various airlines in the world and as well there are major airlines that are well known in the world for their good performance and employees treatment. According Business Week (2009), “the leading airlines in the United States of America include; Continental Airlines, American Airlines, Delta Airlines, United airlines and United States airways”. In our discussion we shall compare and contrast two major airlines by looking at their success and failures, and also looking a t their organization behavior as a contributing factor to either their success or failure. The major airlines that we shall look at are the Southwest Airlines and the American Airlines
Southwest Airlines (WN)
Southwest Airlines company is one of the largest airlines in the United States being he 6th largest in terms of revenue and the largest in the word by the number of passengers that is carried per year as of 2007. Southwest is has experienced a decline in its customer base due to the consequence of terrorist attacks and the economic down turn. Southwest airlines has products for domestic flights that are also quit affordable. This company low cost structure enables the company to be able to offer low prices to its customers. Through the utilization of single type crafts and also putting into place efficient flight time schedule structure coupled with the increase in oil prices and productive workers the company is able to sustain a good performance. For instance in the year two thousand and eight, southwest airlines consumed an average of about two point four dollars per gallon of petroleum as compared its American airlines counterpart which used an avererage of $3.03 per gallon to purchase fuel.
Because of providing its customers with low fare services, the company has beemn able to maintain a consecutive productivity and profits for thirty five years. Again because of its low operating costs it became the second most profitable airline in the united states in the year 2007. It has been a model of success in the United States airline. It ranks much ahead of its competitors. The year 2008, Southwest Airlines did mark 36 years of profitability (Business Week, 2009). According to Business Week (2009), “the low fares had helped Southwest Airlines in growing by more than sixty six percent since the year 2003, thus raising its fleet by one forty nine aircraft during that period. To add on to this Southwest Airline’s yearly passengers have raised by more than thirty six percent between the year two thousands and three and two thousands and eight, as the company had its fleet and destinations expanded”.
Success
For a long time Southwest Airlines has had limited success in attracting business customers. Its single-cabin service has made it difficult for them to attract business executives who are seeking business- class seats. Also its limited route map has contributed highly in that, it makes it difficult for a company to use southwest for all the travel needs that it requires and thus making most companies to chose a single favored carrier. This had really endangered the company a lot given that business travelers are attractive to airlines as they are less price sensitive as compared to the leisure travelers. Also the demand for business travelers is much less cyclical than that of the leisure travelers an example is the fact tat an economic downturn can make the leisure travelers to cancel their vacation to a place whereas the business travelers can not or other its impact is much less to the business travelers. After noting how much they are losing in the business travelers they decided in the year 2007, to implement its business select offering, that allows business passengers to be among the first people to board the aircraft.
This acts as an incentive to the business travelers as they do not have to wait in long lines before boarding. Within this the south west airlines believed it would boost their revenue by about $100 million in 2008. This is a good show of how planning in the company’s organization has been well implemented as well as organization in order to increase its revenue. Southwest as compared to its competitors has been able to undercut competitor’s prices and still remaining to be profitable. It has made it to have the lowest ex-fuel operating costs as compared with any other U.S. airline. According to Jost (2008), “South West Airline organizational structure has so much positively influenced its success as productivity and morale of workers are much better than most of its competitors and that is what allows them to keep their costs in a much low level”.
This is largely due to the fact that it has good operating strategies in that there are faster turn- around times between flights, fewer total employees per aircraft and more flying time per pilot. There is also diversification of employees and minimized nepotism in the organization which makes the company to be truly a formal organization (Barbara Taylor, 1993). This allows the airline to undercut competitor’s prices and still remain to be profitable. The southwest’s point to point service enables direct and non stop routing which reduces connections, delays and total trip time. Thus this results in convenient and timed flights to its markets. The hedging of oil is another thing that leads to the success of southwest airlines kin that it leads to costs savings this has also allowed the company to increase its profitability. As compared to other airlines it’s the only that hedges a lot of fuel which has ensured the lowest prices on jet fuel.
American Airline
American Airlines (AA) it is one of the major airline of the United States. According to Sky base (2009), “American Airline is known to be the world’s largest airline in passenger miles transport and also passenger fleet size”. The company is the world’s largest carrier and it gives itself the pursuit of raising its performance which aims at increasing its output by lowering the fraudulent tickets production (Globe Aviation Security Corporation, 2009).Therefore the company having realized the magnitude of fraudulent ticket production it had to efficiently and quickly audit its warehouse of data (Sybase, 2009). Thus after which they developed a warehouse that is able to detect fraudulent ticket processing, able to track sales ticket and thus ensuring that proper revenue is flowing into the company.
Success factors are very important to any organization whether big or small, for profit or for non profit, domestic or foreign (Laurie J. Mullins. 2007). This factors often act as analytical tools that are used in examining the character of the industry in which the business is competing. Competition is a very vital factor for the growth and quality assurance of an industry because the competitors have to always improve on the type of service or commodity they offer (Laurie J. Mullins. 2007). Even though it’s the largest airline in the world American airline has experienced a very stiff competition from the southwest airlines which has always managed to keep a long record of success (Frost, P. 1995).
Comparative Performance
The figure below is a comparison of the performance of the southwest airline and the American airline in the year 2004 & 2005:
From the figure above its clearly seen that the organization structure of southwest airlines is well managed and as such proving its lead as compared to the American airlines. Though Southwest Airline is leading in planning, in terms of reduced fare, fuel, employee morale- the employees here are well treated thus able to treat their customers well and thus avoiding cases of theft and bag lost in the airline, this is leading to higher employee productivity which shows that the concept of motivation is well catered, and thus have a great attractiveness for customers. Its faults are its low unit revenue and low load factor (Richard S. 1960).
Conclusion
American airlines as well, its organizational behavior has well looked on the reload factor, though it highly needs to improve on employee’s morale to reduce complaints and bags lost of passengers, planning should also be improved in order to increase the equity growth of the company and also the craft utilization. Thus in general the American airlines which is far much behind the southwest airlines needs to address the major challenges that leading to its poor performance as shown in the diagram, for it to survive in the coming years (Richard, McCabe. 2006).
References
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