Westjet Case Culture free essay sample

Culture is imperative in any business. It separates the good companies from the great ones. As WestJet continues its goal of becoming a low fare international airline, it will face numerous obstacles. The problem addressed here deals with the people aspect. How can WestJet maintain its current people culture as the company expands? How can WestJet instill the culture into its new people? And how will WestJet meet the cultural differences in other markets? Answering these questions is essential to the future success of WestJet. Analysis In order for us to address how to reach WestJets long term goal of becoming the largest low fare airline in the world while maintaining its culture, we must understand where we are today. We have developed a S. W. O. T. analysis centered around WestJet’s culture. Strengths The culture is very democratic and people feel safe in the organization. The CEO has taken special care to give primary importance to the interests of the employees and puts their interest foremost. We will write a custom essay sample on Westjet Case Culture or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page The employees enjoy complete freedom as well they have full authority which helps them act in interest of the company and customers. WestJet applies a bottom up approach, the employees are part of the decisions and policy changes. WestJet’s profit sharing plan allocates bonuses based on profit margins to most of the employees. This profit sharing plan has a ceiling of 20 per cent of net income and cheques are handed out twice a year. The profit sharing program combined with the share purchase plan gives the people of WestJet an ownership stake in the corporation. This further reinforces WestJetter to act in the interest of the company as the employees are aware that company growth will in turn result into their own growth. The people are innovative and always thinking of ways and means to reduce the costs which would mean an increase in profitability. There is also a strong sense of belonging. The employees believe in working in teams and are excellent team players. WestJet’s working process creates a very relaxed, fun, youthful environment in which creativity and innovation are rewarded. The climate of positivity, trust, and honesty exists that make WestJet an employer of choice. Weaknesses The people of WestJet are closely knit. They are the corporation’s key strength. They have been instrumental in the organization’s success and its expansion. As WestJet expands, the employees may find less time to nurture the culture into the new hires and may find that the culture becomes diluted. They may also find it difficult to go beyond their existing roles and provide those value additions and innovations to the company. This may also mean an increased cost to the corporation and it would lose its business advantage which makes it competitive in the business environment. The reduced profitability of the company may also translate into reduced interest of the employees and reduced commitment. Opportunities The airline industry has undergone significant changes over the decades and years. The freedom to enter and exit any market and to offer any services has altered the way airlines operate. No doubt, there will be many opportunities WestJet could have in order to be competitive and successful in the near future as they move forward. For instance, there might be lots of opportunities for growth and to achieve and maintain corporate competitive advantage like more integrated air route networks, alliances, mergers, expansion of national and international markets etc. However, they need to keep in mind that the soul of the organization is their unique culture and the profitability is not always the top priority for long term success. WestJet has been built on a guest loyalty, WestJetter satisfaction, and public reputation based on the WestJet sprit. Having about 50,000 applications coming in to WestJet every year, obviously, money is not the most important reason why people want to work for WestJet. It is because of the friendly, caring and sharing working environment that WestJet has fostered that make people want to work for WestJet. Motivated and engaged people are the most important resource West Jet has which maintains the WestJet culture. The climate in WestJet is very strong and unbreakable. The culture is the huge advantage which could attract people of all ages and backgrounds because everyone wants to be a part of something as great as WestJet. We feel that WestJet can leverage the cultural framework it has build so hard to build as you grow in other markets. Threats In today’s globalization era, it has become imperative for companies to expand outside their home market in order to survive. Organizations face severe challenges while expanding their operations outside their home territories. The volatile airline industry is no exception. Entry barriers are obstacles that prevent new companies from breaking into an industry, and of course could prevent WestJet from expanding to other national markets or international markets. We have focused on five main threats which you need to be aware in your growth strategy. WestJet must be aware of potential changes to government regulations that could increase costs and reduce profit margins. Government regulations such as changes to labour laws, environmental laws, airline regulations, etc are all things that could have profound effect on WestJets culture. Competition is another significant threat, as WestJet grows and costs increase it opens the door for additional competition. Competition is the airline industry is critical for the millions of people who depend on air travel in their business and family life. One of the main national competitors would be Air Canada which has well-established alliance with some foreign companies and it will be a challenge for WestJet to get into the international market. Competition could potential affect the culture my reducing profit margins. Economy is an outside factor that is out of the direct control of the company and people, however; it could threaten the WestJet culture if there is a global economic downturn. For example, the increasing price of fuel due to the economic change is the greatest cost for airlines and in a way could affect people’s leisure, optional travel, as well as business travel and of course it would potentially affect the West Jet culture. Demographic Uncertainty as WestJet expands into other markets. In term of demographics, we should keep in mind that different people equals different markets based on the different needs of customers. No business can be all things for all people. Instead, WestJet must reach specific customers’ needs and familiar and satisfy their particular needs within these new markets. Also, they need to identify those customers and try to understand as precisely as possible what they want and consider all of the reasons why these new guest might fly with WestJet. WestJet also has to be agile with respect to culture in the new markets. This does not mean the basics of WestJets culture have to change completely but WestJet may have to be adaptive. Unions have become major forces influencing wages and working conditions. WestJet (not a unionized company) has done a wonderful job of motivating, encouraging, and connecting with their people. They have built a great reputation and satisfaction among employees and guests fostered by a unique culture and sprit based on their beliefs and values. Unionization would change the working climate and potentially change the peoples’ motivation system, which would damage the West Jet culture because of the loss of empowerment. Solution WestJet‘s culture and people are a pillar to it future success. We recognize the importance of developing a plan that addresses elements that WestJet can apply to three specific areas. First, maintaining the culture with the current people base, second, developing the culture into the new people and third, meet the cultural differences as WestJet moves into different markets. WestJet must maintain and build on the current culture with its current people base. The WestJet Strategic Plan is a systematic and elaborate plan of how WestJet plans to accomplish its goal. For the WestJet people to take ownership of the strategic plan, we are suggesting that WestJet involve employees at various levels in the development of that plan. Often we hear that employees feel excluded from the planning process. With WestJets current culture and employee ownership, we feel that including employees from all levels of the organization in strategic planning would be a great fit. This option will generate increased profits and improve employee satisfaction at no additional cost. By involving employees from various levels it provides indirect job shadowing with senior management and gives employees a new perception of management leadership skills. Trust is important to WestJetters, and by having all levels at the strategic planning table, it will bring a sense of cohesiveness and transparency for the entire organization. The process for including all WestJetters in the strategic planning process would include having a package of information developed with such information as market growth trends, current market share and profit projections, competitor information, the current WestJet vision, mission, values and goals. This information could then be shared by WestJet managers to their respective groups. Then after a defined time frame, each group will come back together and generate a list of key issues, opportunities, and priorities as seen through each groups’ prospective. Each group would designate one employee to represent their group at the strategic management table, allowing the entire group to feel engaged giving a direct link between the employees group and the management team. Once the strategic planning session is complete, the group representative would report back to the group about the plan and the process it achieved. The process would compliment the current culture by fostering empowerment and trust. WestJet has done a phenomenal job of communicating the culture to the current staff and the public. However, these communication channels have to be enriched in order to maintain the open and honest atmosphere that has developed. As a company grows, the loss of communication channels will be detrimental. As employee communications suffer we see employee disengagement, increased turnover, absenteeism, loss of focus, innovation suffers and potential customer dissatisfaction. WestJet can ensure that employee’s communication does not suffer by â€Å"walking the walk†. If executive management makes a conscious effort to visit and talk with different employees each month, it has a greater chance of keeping communication lines open. Bottom up communication really starts at the top. Top management has to give the lower level employees an open door. To keep the door open, supportive communication is needed. Management needs to be honest, specific, take ownership, and listen to what the employees have to say. Currently WestJet has wonderful motivation programs in place that give the employees a sense of ownership and accountability. The employee share program, the stock option program, and the new LEAD program are all valuable motivators. In order to sustain this culture of positivity, WestJet could implement motivation programs that are centered on extraordinary acts of cultural display. This could include an employee going out of their way to help a sick guest or a senior employee taking time to mentor a junior employee. The reward could be as simple as a small donation to a charity of the employee’s choice or a gift certificate. Employee involvement and communication gives the current employees empowerment in sustaining WestJet’s competitive advantage of being a profitable low fare airline. As officials have indicated, WestJet has a significant growth plan. Consider that along with growth comes new employees it is essential that the WestJet culture is transferred to the new employee base. New Westjetters need to feel the same sense of ownership, accountability, and openness that the veteran employee feels. We recommend that a mentorship program is developed to link a new employee with veteran employee. The learning objectives of the mentorship program would allow learning opportunities for both the new employee and the mentoring employees, build relationships and display WestJets culture. The mentorship program would be an ongoing one year program that would see the new employee spending a week with the mentor at the onset of their job and then follow-up with meetings and interactions throughout the year, followed by an evaluation by both the mentor and apprentice. As WestJet grows, we anticipate the employee base is going to triple over the next ten years. As mentioned earlier, communication to all employees is extremely important. Keep in mind that as the generations change, so will the communication mediums. WestJet will need to incorporate the use of other mediums in order to communicate; such as Facebook, Twitter, blogs, and wikis. We would recommend that WestJet surveys all employees, especially new employees on a regular basis to understand what communication medium they prefer. We recognize that various methods will be needed but it is essential that WestJet does not jeopardize communication channels by not utilizing the preferred mediums. As mentioned previously, as the age demographics change at WestJet, so will the needs. Flexible time off, environmental programs, child care programs, and healthy lifestyle programs are all things that your new people base may value as motivators. The motivators must meet the needs of this new employee base or retention will be an issue. Employees are not loyal when their personal needs are not met. Not only do new employees need to be coached but so does the organization in order to know its people base. We would suggest that WestJet develop a communication tool such as a survey to address personal needs and values of employees. From this information, WestJet will be better able to develop motivation programs that meet both extrinsic and intrinsic needs. WestJet is looking to rapidly expand in the near future and maintaining the WestJet culture is going to be a challenge. Changing markets accompanied by changing workforce and customer dynamics (as new market areas are entered, the potential customer and hiring pools alter as well) leaves numerous factors to be taken into account. First, consider that different people in different markets have different needs. This requires being adaptive and receptive to change. One cannot expect the culture in a new area (i. e. other North American and International Markets) to be a ‘perfect fit’ based on the past success in other areas; for example Calgary and Hamilton. Consider the differences that already exist between the two established Canadian Hub Centre’s: East versus West – Calgary and Hamilton. While both are in Canada, each represents two distinctly different cultures. The common characteristic in all places is the low airfare. This ties these two different markets but can these core competencies be successfully duplicated in other markets outside of Canada? Within Canada, WestJet has done an excellent job of creating this image of being an economical, high energy and fun organization but consider the costs of recreating this corporate culture in new markets. It is not the same from Calgary to Hamilton as it would be from Calgary/Hamilton to Beijing. The logistics are much more costly; just consider equipment maintenance and fuel costs alone. Consider the logistics of transporting and implementing culture, you are now in a different country with different market expectations, regulations and demands. This is not to say that it can’t be done but the question becomes whether it can be done without WestJet being flexible on their application of its corporate culture and cultural structure in different markets. Flexible in this case refers to WestJet expanding its sensitive line (willingness to process new information) when it comes to the usage and importance of maintaining its cultural values throughout the expansion process. Different markets will require different means of collaborating, mitigating and implementing the unique WestJet branded culture. Ill fate awaits those who use assumptions, groupthink and are homophily. WestJet cannot afford to presume that new markets will be automatic. To maintain and continue growth through the use of expanding the current culture (as Bell claims is the major goal) will require a major investment in research and development teams that can determine the viability of a market. For instance: will this market support the culture? Is there a market at all? More specifically, is there a sustainable and profitable potential market? Profitable in this case goes beyond monetary value; it also refers to the cultural profitability: what will happen to our culture in this new, unfamiliar market? WestJet has to expand from the inside-out. Granted that the existing corporate culture has a vibrant, positive, empowering, engaging, and dynamic; there is an additional area in which WestJet has to improve its cultural strategy. While the major concern revolves around how WestJet culture can be maintained and recreated in new markets, there is little consideration given to how vast and diverse the outside world really is.