CREATING CULTURES THAT LEAD TO SUCCESS: LINCOLN ELECTRIC, SOUTHWEST AIRLINES, AND SAS INSTITUTE Q & A
Few executives would doubt the importance of employee attitudes and performance to organizational success, or the influence of company philosophy, policy, and practices on attitudes and performance. Particularly impressive are organizations that year after year achieve outstanding results and competitive success as a consequence of their employee-related philosophies, policies, and practices. This article will focus on three of these — Lincoln Electric, Southwest Airlines, and SAS Institute. The purpose here is to delineate and clarify these aspects of their operations, as the three have been and should be models for others. Lincoln Electric, for example, is a model for domestic manufacturers competing with firms in China and Southeast Asia.
While the three operate in very different industries and demonstrate different approaches in managing employees, they share similarities. At the highest organizational levels in each, there is a deep respect for, appreciation of and commitment to the individuals who have joined the organization. Workforce policies and practices emanate from this essential foundation.
Another important similarity is that top management in the three, historically and today, believes that if you take care of employees, in the long run, the needs of shareholders will be satisfied. As you will see, this does not mean being blind to external realities or at all ‘‘soft;’’ far from it. At least two of these organizations (Lincoln Electric and Southwest Airlines) exist in hyper-competitive markets. Every year they must battle for revenues, earnings, and market share while supporting the employees whose work permits the achievement of company targets in these areas. A third similarity is that leaders in each of the three, over a long period of time, have worked very hard to avoid the standard practice of laying off workers when business activity declines. These organizations have not lain off a full-time employee either since their founding or for more than sixty years.
One purpose of this article is to profile organizations who have been able to endure difficult economic times — including the present one — without resorting to significant furloughs and layoffs. There are considerable personal, social, and economic costs associated with layoffs, and it is important to understand how some organizations are able to avoid them.
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