Leadership and Organisation Behaviour

Instructions

 

Module Title: Leadership and Organisation Behaviour.
Assessment Title: Report.
Word limit: 4500 words.
Assessment Requirements:
You are tasked with producing a report which analyses the success factors of South West Airlines (SWA) and then to make a comparison between SWA and your own chosen organization, taking into account possible cultural differences/considerations.
Your report should make reference to leadership attitudes and values within the two companies. You may discuss specific aspects of organizational behavior in your own organization together with evidence to support your argument. You should also reflect critically on your own leadership propensities and values, considering your own role and responsibilities within an organization.
The Structure

Your paper should contain the following elements:

• An introductory page which includes your name, title and an executive summary.

• An introduction, which explains the overall approach to the subject and the structure of your response.

• • A literature review which provides an overview of the body of knowledge surrounding the areas you have chosen to write about. (In this section you have to talk about some theories like Maslow’s hierarchy of Needs, Scientific management by Frederick Winslow Taylor, Classic Organisational Theory by Henry Fayol and Bureaucracy by Max Weber.
• A discussion, which critically analyses organizational practice within South West Airlines and then compares your own organization as well as your own practice to that of South West. (In this section you have to answer this “What is making the SWA & the company successful?” compare between them through leadership or profit or management style or team working by using the theories).

• Your conclusions should aim to summarize your overall findings relating to the subject, as well as some recommendations for further organizational and personal action. These recommendations could be presented in the form of a table. No new material should be introduced in the conclusion

• A reference list (a separate bibliography is optional).
More details about assignment structure in the table below:
Assignment Structure
1 Introduction 1.1 Say what you want to do (Like this: This report critically compare between SWA and Ford) and talk about the theory which you want to use (I have chosen theory 1 + theory 2) describe, justify, explain this theory.
1.2 SWA overview.
1.3 Ford overview.
2 Literature overview 2.1 Theory.
2.2 Theory.
2.3 the chosen theories for analysing the two company (why).
2.4 Theory (1) that I chose to analyse two company (what is it talk about + why I chose this theory).
2.5 Theory (2) (write the same details in 2.4)
3 Discussion 1. What is making the two companies successful (Leadership style or profit or good leader or team working or management?
2. In this part you have to compare two companies through the theories, which you already chosen.
4 Conclusion and recommendation
5 References

 

Term Paper

 

Leadership and Organization Behaviour

Executive Summary

It is vital for the companies to consider the application of the important theories relevant to the management of the company. In the report, a critical analysis of the South West Airlines and Ford Motor Company would be carried out using the scientific management proposed by Fredrick Taylor and the fourteen principles proposed by the Henry Fayol. The South West Airlines has been in operations since 1971 and is ranked among the best airlines in the USA. On the other hand, Ford Motor Company has ever experienced financial difficulties that resulted in huge losses. The losses resulted from the increased operations costs and reduced market share. Both the South West Airlines and Ford Motor Company have factored the application of the fourteen principles and scientific management in the management. Both the companies has applied the theories in the selection and maintaining a hardworking and motivated workforce. The South West Airlines management is committed to the reduction of the cost through technological developments and increased employee’s knowledge. Similarly, the Ford Motor Company promotes the innovation through effective collaboration and sharing of the knowledge. The profit of the South West Airline is continuously increasing. The Ford Motor Company performance has also improved from 2006, and the company is increasingly making profit. Nevertheless, the performance of the two companies can be enhanced further. The South West Airlines should control the cost involved in hiring and find an alternative way through which the talents of the employees could be nurtured. The Ford Motor Company should ensure the recruitment of highly talented employees and encourage the new employees to learn the culture of the company.

 

Leadership and Organisation Behaviour

1.0 Introduction

1.1 Scope

The organisation culture and the behaviour have a huge impact on the business success in today’s highly competitive world. Scholars have developed different theories applicable to the management of a company. Moreover, the theories describe the best leadership styles necessary to produce positive impact to the organisations. The report critically analyses between the South West Airlines and the Ford using the theory of the scientific management and the classic organisational theory. Fredrick Taylor developed the scientific management. Taylor proposed the four principles vital in enhancing the effective management of a company. Taylor noted that the application of the four principles would increase the effectiveness of the old plan used in the management. Henry Fayol investigated on the application of the fourteen principles to the management of an organisation in the classical organisational theory.

1.2 South West Airlines

South West Airlines began its operations on 18th June 1971. It has provided the Americans with the freedom to fly at an affordable and reasonable price up to today. The company has witnessed outstanding performance and has invested largely in the innovation. For instance, in the 1990s the company became the first to give customers a chance to book for their tickets online. Despite being in a risky industry, the company has maintained a substantial increase in the profit made. In 2012, the company realised a net income of $421 million. The profit of the company has been increasing at an average rate of 26% every year. Notably, under the leadership of the CEO, Herb Kelleher, the company was ranked to be the best-performing airlines in the United States of America. The company’s mission and vision are both directed to the satisfaction of the customers as well as the company’s employees. The company is committed to offering high-quality services to the customers in a friendly mode. Moreover, the company is determined to provide a conducive environment with the possibility to develop their learning and careers (South West Airlines, 2012)

Ford Motor Company

The Ford Motor Company was incorporated in 1906 and concentrates in the manufacture of the vehicles. In the World War 2, the company empowered the side of the Allies through the manufacture of the vehicles and planes. In 1996, the company had planned to streamline its operations worldwide. The company succeeded in introducing the Ford Focus model, but the cost of the operations remained high compared to the other companies in the same industry. In 2006, the company made an operating loss of $12.6 billion. The operating loss remained the highest loss ever recorded in the history of the company. The conditions in the company worsened from the fact that in addition to the increased operations costs, the market share of the company had deteriorated as well.

Alan Mulally took over the management of the company as the CEO in 2006 when the company marked the poorest performance. Alan Mulally highly contributed to the historic turnaround of the Ford Motor Company up to the time it started to make the profits again. From 2009, Alan helped the company to make profit continuously up to the time he retired in 2014. Alan contributed to the transformations of the company’s corporate culture that has contributed to the success of the company to date. Mark Fields is the current CEO of the Ford Motor company. In his statement posted on the company’s website, he has acknowledged the strength of the positive leadership culture in the transformation of the organisations. In 2013, the profit made by the company was $ 7.2 billion after making sales worth $ 146.9 billion.

2.0 Literature review

2.1 Scientific Management – Frederick Winslow Taylor

Fredrick Winslow Taylor and his associates in the scientific management movement were the first to be involved in the effort to understand the scientific nature of the work. They planned for experiments aimed to understand how the work was performed and the impact on the workers productivity. Taylor believed that it was unreasonable to make employers demand the workers to increase the productivity while there were no efforts made to increase the efficiency of the task done. Taylor argued that the main goal of the older method of management was to increase the initiative of the employees.  Nevertheless, the managers found it had to improve the motivation of the employees (Taylor, 2012). Taylor believed that under the plan of the scientific method, the employees could realise the initiative easily. Taylor meant the hard work, willingness and the ingenious of the employees when referring to the word initiative.

At that time, managers left the employees to search for the knowledge, classify the knowledge, and come up with the rules and formulas to help them meet the demands of the task. The motivation of the employees remained the continued employment. The methods that would enable the worker to work easily and effectively at that time never existed. Taylor highly experimented on the best way of completing the task easily and promptly. For instance when working as an engineer he experimented with the designs of the shovels. He came up with a design that enhanced the efficiency of the tasks.  Moreover, he carried out experiments with the bricks until he came up with the best way to lay bricks easily and efficiently. By monitoring the time required for the completion of the task, Taylor noted that he could develop the best method of completing the jobs. Moreover, Taylor noted that there were people who could perform better than others could. Therefore, the managers should make efforts to ensure that such employees are attracted and retained in the organisation. The efficiency is increased when the rights of people are matched with the right jobs.

From the insights Taylor got from the work experiments, he developed the four principles applicable in the scientific management.

1. The managers should study the work using the scientific methods and decide on the bests methods utilised in the performance of the task. The scientific methods should replace the rule of thumb method applied in the management earlier.
2. The workers should be scientifically selected, trained, developed and matched with the right tasks.
3. Ensure the cooperation of the workers to guarantee the completion of the tasks in agreement with the existing principles of science.
4. The work should be divided between the workers and managers. The managers should be involved in the activities of the training and planning to give workers a chance to perform their task diligently.

2.2 Classic management theory-Henry Fayol

Henry Fayol made significant contributions towards the development of the modern management. Daft (2011) explains that the fourteen principles of the management were among the earliest theories developed but remains the one that addressed the needs of the management extensively. Fayol worked as an engineer in the France-based company after which he became to be the director. During his time, the company employed about one-thousand employees. While in the company, he began to consider the fourteen principles that would help in the effective management of the companies. In addition to the fourteen principles, Fayol also developed the five significant functions of the management that includes planning, organizing, leading, controlling, and coordinating.

Fourteen principles of management

1. Division of work

The principle proposed that divisions and the specialization of the labour would ensure the functions of the organisation are carried out effectively. The tasks in the organisation would be divided into the smaller tasks. The divided tasks are allocated to the employees.

2. Authority and responsibility

For effective management, managers need authority to assign responsibilities. Moreover, they need to ensure that employees have carried out the tasks of the organisations professionally and in the right way. Nevertheless, the authority of the managers needs to be protected against abuse.

3. Discipline

The principles require for the development of clearly defined procedures and rules to enhance discipline among the employees.

4. Unity of Command

One direct supervisor should direct the employee’s behaviour towards attaining the goals of the organisation.

5. Unity of Directions

The teams should be working for a clear objective under the lead of a single manager and plan. The goal of the principle is to guarantee proper coordination of the tasks in the organisation.

6. Individuals interests’ subordination

The organisations goals should precede the interest of the individuals. The employees should sacrifice to guarantee the attainment of the organisation objectives. The company should hire the employees who are fully committed to the attainment of the objectives.

7. Remuneration

The company should provide reasonable remuneration to the employees. The employees should not be over or under paid.

8. Centralisation

Both the centralization and decentralisation lead to the ineffectiveness in an organisation. Therefore, the organisation must seek to ensure the balance between the two. The managers guarantee the balance between the decentralisation and centralization through the development of the tactical and the strategic plans.

9. Scalar Chain

The principle recommends the vertical communication in an organisation. The communications system should be developed to enhance the communications from the higher levels to the lower levels. The horizontal communication should be done when the needs arise and after the managers at the senior level have granted the permission.

10. Order

The place of the work is required to be safe and tidy for the employee’s activities. The activities of the organisation should always be done in its place.

11. Equity

The managers in the organisation should gain the commitments of the employees by ensuring the fairness and equity for all the employees. The fairness and justice towards the employees would ensure the employees are devoted to performing their tasks and the well-being of the company.

12. Stability of the tenure

The managers should plan the employee’s welfare in the right way to control the employee’s turnover.

13. Initiative

The managers and other employees hired by the organisation should have the ability to come up with new ideas and implement them in the right way.

14. Esprit de corps

It is vital to enhance the motivation and the spirit of the employees.

2.3 Rationale for the Choice

Reasons for selecting the Classic theory by Fayol

The fourteen principles of the organisation are important to the development and enhancement of the competitive advantage of the business organisations in the world today. The fourteen principles are highly applicable to the organisations today. The airline industry is very risky, and the organisations in the airline business need to practice proper management practices to guarantee the increased profit and the enhanced competitive advantage. There are huge business developments such as globalisation and the technological advancements in both the airline and the motor manufacturing companies. The application of the division of labour and specialisation facilitates the employees to innovate continuously and come up with improved methods of operations in their area of expertise. Airlines Industry Profile: United States (2014, p.27) noted that despite the prospected growth in the market, there is fierce competition in the airline industry. Moreover, the firms in the vehicle manufacturing industries are dealing with either reduced profit or the increased losses due to the decreased market share, increased cost of operation and fierce competition in the industry. Bhattacharya (2014) observed that the companies in the motor manufacturing industry such as Honda, General Motors, Ford and the Toyota had been making losses despite being present in the industry for more than a decade. The innovations, commitment, creativity, are necessary for the South West Airlines and the Ford Motor Company in surviving in the current business environment.

Reasons for selecting scientific management

The complexity of the organisations has increased currently. Therefore, there is a need to use a proved scientific method in the management. The managers should avoid the application of common sense in the management. The business in the airline industry has to come up with new models and strategies to ensure a reduction of the cost. The South West Airlines invested on one model of the aircraft known as Boeing 737. Moreover, the company does not give passengers the seat numbers. The strategy is important in the reduction of the costs as well as the promotion of the efficiency of the operations. According to Eroğlu (2015), the use of one type of the plane enables the engineers of the company to attend the mechanical needs of the company effectively.

The main goal why Taylor developed the four principles was to promote efficiency in the management. The application of the four principles introduced by Taylor would help the South West Airlines to improve their efficiency further. Casadesus-Masanell and Tarziján (2012) noted that the business model is not enough to promote the success of a company. The managers have to continue finding more ways to improve the performance of the companies. Ford Motor Company is making efforts to enhance its performance after the major impact of the increased cost and the reduced market share that left made the company operate at a loss. The company has established a sustainability program determined to ensure provisions of high standard products, adherence to the regulations, and the control of the costs of the production process. In the effort to improve the operations of the Ford Motor Company, the application of the four principles introduced by the Fredrick Taylor is important.

Success factors

The unique management style of the South West Airlines has contributed to the success of the company. Taylor emphasised on the application of the scientific methods in the selection, training and the development of the employees. The South West Airlines ensures the provisions of the employment equitably in agreement with the principle of the equity (Dan & Xinde, 2014). The company went further to make efforts to acquire and hire the best and skilled employees. In 1993, the company interviewed sixteen thousand people out of the ninety-eight thousand applicants who sent their application letters letter for the flight attendants. The company wanted to hire 2700 attendants of the flight. Many companies perceive conducting interviews to a large number of the applicants as an extra cost.

Nevertheless, the managers at the South West Airlines view the activity as an opportunity to select the most talented employees. The company wants to hire the employees desired to create value for the company rather than make money and leave the company. More so, the effort to acquire the efforts needed may be hampered by the starting salaries offered by the company. Therefore, the company must seek talented employees who accept and agree with the company on the fairness of the salary offered (Dan & Xinde, 2014). In addition to the factors mentioned above, the company has highly considered the importance of employees avoiding the conflict of interest as well as the providing a stable tenure to the employees.

The CEO motivations and the positive attitude towards the success also transformed the Ford Motor Company. Alan Mulally was appointed as the CEO of the company in 2006 when the company had made a loss of $12.7 billion. The CEO was tasked to manage the company and make it profitable again. The CEO had to come up with the proper management strategies that would ensure the reduction of the cost of the operations and the increased market share. The company’s losses in 2006 were associated with the increased costs of the operations and the reduced market share.

Ford Motor Company appreciated the principles of the Fredrick Taylor on the use of scientific method in the managements as well as the selection and the training of the employees. A crucial example is the selection of the current CEO before Alan Mulally had left the company. In 2014, Ford named Mark Field as the new COO, who would succeed Alan Mulally. Many people never expected him to be named the COO of the Ford Motor Company. Ford Motor Company was also to change the position of the CEO to COO. The managers wanted the position to have a global perspective since the company was motivated towards the global expansions and growth. Similarly, Healey (2014) explains that the South West Airlines has invested largely towards the scientific management policies.

The managers of the South West Airline are also motivated to invest in the modern fleets. The company managers believe that the company success is highly determined by the investment in the modern technology that meets the needs of the customers adequately. The investment will also highly contribute to the reduction in cost and amount of the carbon (IV) oxide released into the atmosphere. In the current years, the company estimated to realize a profit of $ 700 million before tax (Nanda, 2006). The company also wants to invest largely in the efforts meant to contribute to the reduction of the cost. The managers have also concentrated largely on the use of the Boeing 737. The use of the one of kind of the Airplane has contributed to the success of the efforts to reduce the cost of the operations The Company needs to offer the engineers experience one type of the plane. The effort allows the engineers to gain experience and perform the mechanical activities easily and using less time.

The managers at the Ford Motor Company are committed to attaining the visions of the company through the investment in the technological developments. The Ford Motor Company improves in technology through the integrated employee’s knowledge intended to provide customers with cars of the high value. The Ford was the first to invest in the car entertainment system. The MyFord Touch was the system that helped to give drivers the chance to interact largely with the music applications directed to meet the today’s consumer needs. Millay believed that the visions of the company could not be changed. Nevertheless, responsibilities of the company towards the realizing the vision is required should evolve to satisfy the needs of the customers.

The future objectives of the Ford Motor Company align strategically with the principle provided by Fayol on the needs for the innovation and maintaining the teamwork and the spirit of the workers. In 2011, Hughes-Cromwick explained that the company intended to implement huge technological advancements by 2020. For instance, the company would invest in the technologies intended to help the car to start and stop automatically. The company also intends to make a replacement on the current models of the car intended to use alternative sources of the energy.

At the South West Airlines, the leaders and managers ensure that the goals are very clear, and employees and the senior and junior employees can understate them. The main goals for the South West Airlines are ensuring safety, performing duties promptly and ensuring that the customers are fully satisfied. These goals are communicated to all the employees to ensure that they are aware of the goals and objectives of the company. The manager ensures the coordination of the information. The information is available to all the employees in all the departments of the company. The employees at the company are highly willing to share the knowledge and most employees in the company are aware of the needs of the company. The applications relate to the principle of the unity of directions of the theory provided by Fayol where the employees and the organization have to be certain and working towards the same directions and the objective.

At the Ford Motor Company, the employees who work as teams are committed to attaining the objectives of the company (Caldicott, 2014). They ensure the unity of the direction. The vision and the mission of the company serve as an important tool for the communication. The employees are required to work as a team. Notably, the employees of the Ford Motor Company are required to be committed to the company needs rather than their self-interests. Rather than the enhancing complete system of communication, the company encourages the company employees to work diligently for the needs of the company. The South West Airline has largely directed its efforts towards the unity of the direction while the Ford Motor Company has largely applied the principles that require the employees to concentrate largely on the needs of the company rather than the self-interests. The employees joining the Ford Motor has to adapt to the culture of the company. The employees who are unwilling to adapt to the culture of the company are free to leave the company.

Notably, the senior managers in the South West Airlines have ensured the mutual respect among all the employees in the organization. For that reason, the senior and the junior employees have the capability to interact with one another freely. In other companies, there is a big gap between the employees and when a problem occurs, there is a probability that an employee at the junior level would be blamed. In the South West Airlines, the employees appreciate the roles that every employee has towards making the company operational. The appreciation of the other employees work has enabled the company to attain the crucial objectives. Fredrick Taylor had encouraged the cooperation of the employees and the managers to make certain that they are carrying out their responsibilities according to the principles that have been set in science. The management at the South West Airline has appreciated the significance of the step in the management (Gittell, 2004). Moreover, Fayol has emphasized the importance maintaining discipline among the employees to ensure an effective working environment and the development of the employees.

Similarly, the crucial factor that led to the transformations of the Ford Motor Company is on the positive treatment of the employees. More so, the collaboration between the employees, managers and the CEO helped the company to rise from the losses to a company continuously making a profit (Sapru, 2013). The company’s corporate transformation helped the company to continue with the innovation and the improvement of the competitive strategies. Earlier in the Ford Motor Company, the senior managers always criticized the failures of their juniors. The critic was largely meant for the self-preservation of the managers. Mulally changed the way the motives and the way the meetings were held. In the meetings, all the employees would collaborate with one another and bring about innovations in the company through the frequent sharing of the data and information.

In the South West Company, the managers have maintained very close relationships with their employees. McKinsey (2015) observed that Fredrick Taylor has emphasized the importance of the managers and the employees having a close relationship. In the meetings, the company team, business and the functional leaders are given the opportunity to address the important factors affecting the operations of the business. Some of the important elements given considerations during the meeting include the technology, demography, internal company relationships, innovations, and competition. Within the continuous discussions held in the organizations, the employees understand the goals and the objectives of the organization important in the realization of the objectives of the company. Alan Mulally encouraged the creation of a conducive environment where honest discussions would be possible even when things go wrong in the company.

Conclusion and Recommendation

The world is rapidly changing, and the companies need to develop strategies that would facilitate the companies to survive under the current market conditions. The globalisation process has largely created the opportunities and as well, as threats. Ford Motor Company is an important example of the effect of the globalisations. It almost went out of the market after making a huge loss in 2006. Nevertheless, after Alan Mulally took the leadership of the company, it was evident that the environment remained favourable to the companies with capable and diligent leaders. Until Mark Fields succeeded him, the company was continuously making profit. Moreover, the strategic management of the South West Airlines has facilitated the company to make profit continuously. The increased development of the technology has given the company an opportunity to increase their competitive advantage. The current developments require the companies to increase the efficiency in line with the principles of the Fredrick Taylor. Recommendations

	South West Airlines	Ford Motor Company
1.	Find alternative ways of obtaining talented employees rather than spend huge amount in the recruitments of the employees.	Improve on the methods of communications among the employees
2.	Make investment in other types of airplanes to avoid dependence on a single manufacturing company.	Motivate the employees who are unwilling to learn the culture of the company rather than leave the company.
3.	Due to the risky nature of the Airline business, the company should make efforts to use technological development to facilitate the reduction of the cost of operations.	Improve on the method of recruitment to get the most talented employees who would prevent the company make losses again
4.	In addition to enhancing the    communication, the company should encourage the employees using a better pay and offering opportunities for development	The company should offer equitable remunerations and encourage the employees who are not willing to work as teams to have the willingness to learn

 

 

 

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