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Organizational culture of a company defines its guiding principles, business behavior, laying the foundation for employee relations, both internally and externally. Organizational culture positions the company on the market. It reflects the essence of the organization. In addition, it correlates to its motto. Each company has its own pattern of business behavior, therefore, the organizational culture is very individual. It pertains to its field of expertise. Southwest Airlines and Koch Industries Companies represent service and product providing organizations. Therefore, the organizational culture significantly differs. Such culture of Koch Industries and Southwest Airlines is a significant obstacle that needs to be addressed, while merging both firms.
Organizational Culture of Southwest Airlines
Originated back in 1967, Southwest Airlines have become a global leader in low fare flights. Operating capacity of Southwest Airlines is around 100 million passengers per year. The customer loyalty is one of the most distinguishing features. It differs the company from many of its rivals. The excellent customer service contributes much to the organization’s success; and it is reflected in loyal and returning customers each year.
Southeast Airlines Company is detail-oriented towards their customers as they provide excellent customer service exceeding expectations for the latter one. The organization has excelled on the market because of its strong and reliable team. As for December 2014, the company employed 43,000 people. Each of employees reflects its values. The latter ones represent four core strengths: warrior spirit, servant's heart, fun-loving attitude (Luving is the way that company spells the word), and work in the southwestern way. The first set describes employees’ traits that are essential for a successful cooperation for everybody, i.e. the company itself, an employee, and a customer. The second concept shows its expectations towards employees while at work. The third set displays expectations from work in Southwest Airlines. The last principle is the strongest one. It is addressed to customers, as they can expect nothing but safety and reliability, friendly customer service and low cost travels. This one is an outcome of successful cooperation of the organization and its employees.
From January 2013, the company has changed the rules of the market game. The innovations now have to deal with a people-oriented approach (Gallo, 2014). It has become more than paying for hours spent during a working shift in Southwest Airlines Company. The organization has decided to inspire people that work for them with the things they personally believe in. It is a strong and powerful motivating tool. The company's vision since 2013 and onwards has stated as follows, “Our vision is to become the world's most loved, most flown, and most profitable airline” (Southwest airlines, 2015). The new approach shows that priorities have been set to develop human capacity by investing in its own staff and by a proper motivation. In addition, it helps to achieve the corporation’s ambitions in receiving the profit. Thus, it indirectly leads to being outcome-oriented.
Southwest Airlines cannot be viewed as an aggressive player among service providers. Its approach is rather assertive. It reflects the motto, which is convincing and attracts people. It clearly represents a high quality service the organization provides. Those ones who have experienced journeys with Southwest Airlines can relate the motto to reality. Therefore, it all adds up for assertiveness on the market by the firm.
Organizational Culture of Koch Industries
Koch Industries, Inc. is the second largest privately owned company in the United States. The operational capacities of the corporation embrace a number of core industries such as petrol, refining, distribution, chemical, including technologies and equipment, finance, investment, trading, etc. According to the data retrieved from an official website, Koch Industries employs more than 100,000 people around the world (Koch Industries, Inc., 2015).
The Company’s culture relies on market-based management. The main principle of the latter one is staff encouragement to be initiative, participatory, and devoted to what they do. It envisages a long-term success in business and prosperous societies. The company has its own guiding principles being tied to market-based management strategies. The leading concepts of Koch industries include as, “integrity, compliance, value creation, principled entrepreneurship, customer focus, knowledge, change, humility, respect and fulfillment” (Koch Industries, Inc., 2015).
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The guiding principles of the organization clearly show that it is detail-oriented. The employees should strive for integrity and the own courage. Compliance is also an important factor in a detail-oriented approach. The company seeks to achieve 100% compliance in every single activity and process with local laws and regulations.
The leading concepts do not encourage people to be team players. The employees should dedicate themselves to their own field of expertise. In other words, a mechanism works properly if everyone does what is supposed to do.
Innovation lies on the milestones of classical principles. Such ones differ from a company to a company and are being interpreted in their own specific way. The organization was founded in the 1940s. Thus, the core values were created back then along with the organizational culture.
Outcome-oriented principles are clearly outlined in a value creation and respect. As mentioned above, the company does not encourage people to be team players as one of the key factors for success. Furthermore, it encourages teamwork for an outcome rather than for a personal benefit.
Koch industries Inc. emphasizes the importance of devotion and engagement with what people do for the corporation. Besides integrity powered by courage, its employees should possess thirst for knowledge that will lead for profit. Ties and relations should be set to meet profits and defend the firm’s interests.
Comparison of Southwest Airlines and Koch Industries Organizational Cultures
The most distinguishing features between Southwest Airlines and Koch Industries Inc. are the spheres of operation. The first company works in aviation; in particular, it is related to service providers. The latter one consists of a number of different companies in diverse fields of interest. It means that it provides products. Both companies have their own markets and the targeted audience. The market they work for determines and affects their organizational culture. As mentioned before, Southwest Airlines has reached its niche due to excellent customer service. It is a key to success for service providers. In comparison to Koch Industries, it was established later, thus, the degree of flexibility is higher for this firm. The company can change and adjust its business ambitions to market demand. Koch Industries was founded in the 1940s. It has paved its way through major challenges. The end of the World War II demanded business to be reliable. Therefore, reputation was of main priority. Concerning product providers, such thing as reputation plays an important role. Companies would rather sign a contract with the reliable firm with an impressive history of influence on the market than with a friendly business. To sum up, the two organizations, i.e. Southwest Airlines and Koch Industries, in their organizational cultures can be described as innovative and classical accordingly.
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Thus, if Koch Industries bought Southwest Airlines, both would have to deal with reorganizational difficulties. However, each of them is a leader in its own sphere. Their leading market roles have been achieved by their own identity. It would be vitally important to save and maintain Southwest Airlines’ market position and reputation without significant losses. The merge should be as smooth as possible. If it would be impossible, a new manager will have to face integration of one organizational culture type into the other one. Both companies are interested in profit. Thus, they have to invest in human resources. For Koch Industries Company, the area of expertise is of main priority while for Southwest Airlines the personal traits are more important. Therefore, it is a contrast of individual and team playing strategies. These ones will lead to major differences. Another challenge could be connected with positioning itself on the market. Southwest Airlines Company works hard for its reputation as opposed to Koch Industries Corporation. Here, reputation works for itself. The changes for the organization would be inevitable. Nonetheless, they could be minimized. In this case, both of organizations should reach their win-win option with a mutual benefit from merging.
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Both Koch Industries and Southwest Airlines Companies have different operational spheres that outline the organizational cultures of both organizations. Organizational culture establishes behavior internally and externally. Thus, while merge of two corporations it will be important to take into account a factor of organizational culture and adjust it according to new goals. However, such one should maintain the core values of each firm. The reason is that these one have contributed to the existing success and market share of each company.