course organisational behaviour written assignment case delta united

SCHOOL OF TRADE AND INTERNATIONAL ECONOMICS

M

HA NOI, 4/2024

TABLE OF CONTENTS

organizational culture? 7

3 What will it take for United to overcome its culture that has been built up over such a long

INTRODUCTION:

In the contemporary era of rapid technological advancements, globalization, and evolving workforce dynamics, organizational culture plays a pivotal role in shaping the success and sustainability of businesses It is what distinguishes an organization from others Building a strong organizational culture serves as a powerful driver of success, wherein the managers’ actions and decisions have a profound impact on the collective mindset and morale of employees

This case study delves into how organizational culture affect company's well-being by analyzing the case of Delta Airlines and United Airlines, the two companies having distinctive cultures and the way by which cultures are cultivated within the organization experiencing different effects when facing crisis Thereupon, we can have a more sincere understanding of the value of organizational culture to a company Specific challenges and corresponding solutions will be discussed to assist aspiring managers in preventing avoidable errors when overcoming the company's deep-rooted culture

MAIN CONTENTS

I Company overview

1 Delta Air Lines

Delta Air Lines is one of the major airlines of the United States and a legacy carrier headquartered in Atlanta, Georgia It is the United States’ oldest operating airline and the seventh-oldest operating airline worldwide Delta along with its subsidiaries and regional

affiliates, including Delta Connection, operates over 5,400 flights daily and serves 325 destinations in 52 countries on six continents As of the end of 2022, Delta had 90,000

employees

2 United Airlines

United Airlines is a major American airline headquartered in Chicago, Illinois United operates an extensive domestic and international route network across the United States and all six inhabited continents United was formed by the amalgamation of several airlines in the late 1920s, the oldest of these being Varney Air Lines Since its merger with Continental in 2010, United consistently ranks as one of the world's largest airlines

After the crisis in the case study, United Airlines’ executives have been criticized due to an

unhealthy and poor-performing corporate culture by making vapid promises and setting vague values; prioritizing operational performance over employees; and not respecting or listening to employees

Il Relevant theories 1 Organizational Culture

Organizational culture refers to the shared values, beliefs, assumptions, attitudes, and

behaviors that characterize an organization It represents the unique personality and identity of a company, influencing how employees interact, make decisions, and perceive their work environment Organizational culture plays a critical role in shaping organizational dynamics, driving employee engagement, and ultimately impacting performance and outcomes

2 Strong versus Weak Cultures

It's possible to differentiate between strong and weak cultures." If most employees (responding to surveys) have the same opinions about the organization's mission and values, the culture is strong; if opinions vary widely, the culture is weak

In a strong culture, the organization's core values are both intensely held and widely shared The more members who accept the core values and the greater their commitment, the stronger the culture and the greater its influence on member behavior The reason is that a high degree of shared values and intensity create a climate of high behavioral control Nordstrom employees know in no uncertain terms what is expected of them, for example, and these expectations go a long way toward shaping their behavior

A strong culture should reduce employee turnover because it demonstrates high agreement about what the organization represents Such unanimity of purpose builds cohesiveness, loyalty, and organizational commitment These qualities, in turn, lessen employees! propensity to leave

3 Organizational Climate

Organizational climate refers to the shared perceptions organizational members have about their organization and work environment This aspect of culture is like team spirit at the organizational level When everyone has the same general feelings about what's important or

how well things are working, the effect of these attitudes will be more than the sum of the

individual parts One meta-analysis found that across dozens of different samples, psychological climate was strongly related to individuals’ level of job satisfaction, involvement, commitment, and motivation A positive workplace climate has been linked to higher customer satisfaction and organizational financial performance as well

4 Individual Decision-Making Theory

This theory explains how limited cognitive resources can lead to suboptimal decisions United employees, following pre-programmed solutions due to this limitation, might not have considered the broader impact of their actions People often choose the "good enough" option instead of the optimal one United employees might have seen removing the passenger

as the quickest solution, even if not the best

5 Cultural Leadership Theory

Cultural leadership theory is a framework that emphasizes the role of leaders in shaping and managing organizational culture This theory recognizes that leaders play a critical role in fostering a positive, adaptive, and values-driven culture within their organizations Cultural leadership theory highlights the importance of aligning leadership behaviors, values, and actions with the desired organizational culture Here are some principles and components of cultural leadership theory:

- Vision and Purpose:

Leaders articulate a compelling vision and purpose that aligns with the organization's culture They communicate a clear direction and inspire employees to contribute toward shared goals Effective cultural leaders convey a sense of purpose that resonates with employees and reinforces cultural identity

- Behavioral Consistency:

Cultural leaders exhibit consistent behaviors that reflect and reinforce the desired organizational culture They consistently model cultural norms, such as transparency, collaboration, and innovation, in their interactions with employees and stakeholders Consistency builds trust and credibility, reinforcing cultural values across the organization

- Empowerment and Engagement:

Cultural leaders empower employees to contribute to the organizational culture and participate in shaping shared values They create opportunities for employee engagement, participation, and feedback, fostering a sense of ownership and commitment to the culture Empowered employees are more likely to embrace cultural norms and contribute positively to organizational success

- Communication and Storytelling:

Leaders leverage effective communication and storytelling to reinforce cultural values and narratives They use language, symbols, and narratives to convey the organization's history, values, and aspirations Through compelling storytelling, cultural leaders inspire, motivate, and engage employees in the cultural journey

- Adaptability and Change Management:

Cultural leaders facilitate organizational adaptability and change by fostering a culture of continuous improvement and innovation They promote flexibility, openness to new ideas, and resilience in response to change Cultural leaders encourage learning from failures, embracing new challenges, and adapting to evolving market dynamics while preserving core cultural values

6 Communication Theory

Communication theory in organizations encompasses various principles and models that

explain how communication functions, influences, and is influenced within the context of

organizational settings Effective communication is fundamental to organizational success, as

it facilitates information sharing, decision-making, coordination, conflict resolution, and relationship building

7 Customer-focus Theory

Customer focus theory is a framework that emphasizes the importance of orienting organizational strategies, processes, and behaviors around meeting customer needs and delivering value to customers When integrated with organizational culture, customer focus theory can shape the way businesses prioritize customer satisfaction, engagement, and loyalty Here's how customer focus theory intersects with organizational culture:

- Values and Beliefs:

Customer focus theory influences organizational culture by instilling values and beliefs centered on customer-centricity Organizations that prioritize customer-focus embed principles such as responsiveness, empathy, and service excellence into their cultural fabric This fosters a collective mindset where employees understand and embrace the importance of meeting customer expectations

- Norms and Practices:

Organizational culture reflects customer focus through established norms and practices that promote customer-centric behaviors For example, cultures that encourage active listening, problem-solving, and personalized interactions with customers create a foundation for delivering exceptional service These norms become ingrained in daily practices, influencing employee behavior and decision-making

- Incident: Dr David Dao was forcibly removed from a United flight due to overbooking, resulting in injuries and a public outcry

- United's Culture: Emphasized adherence to strict rules and procedures, with employees expected to follow manuals

- Response: Gate agents followed protocol, using a computer program to identify passengers of "least value" to the airline This led to the controversial and harmful removal of Dr Dao

- Consequences: United faced severe public backlash, stock price decline, calls for CEO resignation, and ongoing negative impact attributed to cultural decisions

2 Delta Air Lines Incident:

- Date: Six months prior to the United incident

- Incident: A computer outage grounded all Delta flights for a day, leading to extensive cancellations affecting passengers and employees

- Delta's Culture: Emphasized empathy, positive emotions, and proactive customer service

- Response: Delta employees demonstrated empathy towards affected passengers, maintaining positive attitudes during the disruption

- Outcome: Despite the crisis, Delta's customer satisfaction scores increased following

the incident, reflecting the positive impact of a customer-centric culture

IV Questions’ answers

1 Why is an organization's culture perhaps the most evident during crisis situations?

An organization's culture can be evident during crisis situations due to the following factors: - Decision making

e Crisis situations create urgency and pressure, forcing employees to make quick decisions An organization's culture shapes how employees approach these decisions

¢ Strong cultures with clear values provide a framework for employees to make informed choices, even under pressure These values might emphasize customer

focus, innovation, or open communication

¢ Weak cultures lacking clear direction can lead to confusion and poor decision- making during a crisis Employees might prioritize following rules blindly or focus on internal needs over customer well-being

- Customer focus

¢ Crisis situations often highlight an organization's priorities A customer-centric culture will lead to actions that prioritize the safety and well-being of customers during a crisis

¢ Cultures that emphasize efficiency or profit might prioritize internal needs over customer satisfaction during disruptions This can damage the organization's reputation in the long run

- Employee Morale

*® Á crIsis can sienificantly Impact employee morale A supportive and trusting culture can help employees feel empowered and engaged in finding solutions during a crisis

¢ Cultures that are secretive or punitive can lead to feelings of isolation and disengagement among employees during a crisis This can hinder effective crisis

Weak cultures lack clear direction Their "follow the manual" culture led to a rigid response (passenger removal) despite the negative consequences

Customer focus

Employee actions, like showing empathy towards stranded passengers, reflect a culture that values customer relationships This highlights how prioritizing customer needs can foster goodwill even during disruptions

The decision to remove a paying customer prioritized internal needs (seating employees) over customer satisfaction This indicates the negative effects of a culture that doesn't prioritize customer experience

Employee Morale

Stories suggest positive employee morale during the outage, potentially due to their empowered approach and the supportive company culture This illustrates how a culture that trusts employees can contribute to better crisis

management The incident likely damaged employee morale due to the negative public perception and lack of support for their decisions This emphasizes the connection between a healthy culture and employee well-being during crises

To sum up, in the case of United Airlines, the company's culture of efficiency and following rules led to a poor decision to forcibly remove a passenger from an oversold flight This decision resulted in a public relations nightmare for the company, as well as a decline in

customer satisfaction

In contrast, Delta Airlines’ culture of customer focus and employee empowerment appears to have helped the company weather a crisis caused by a computer outage Delta employees

were able to empathize with customers and maintain a positive attitude during the crisis, which helped to minimize the negative impact on the company

2 What causes companies like Delta and United to become so different in regard to organizational culture?

Based on this case, several factors likely contribute to the differences in organizational culture between Delta and United:

- Customer Focus vs Internal Efficiency:

® United: Their focus on "follow the manuals" suggests prioritizing internal processes over customer needs (e.g., Dr Dao incident) This approach can damage customer relationships and require significant resources to repair (e.¢., PR disasters)

e Delta: Their handling of the computer outage highlights prioritizing solutions

for customers even in challenging situations This customer-centric approach can foster loyalty and potentially reduce future costs associated with customer dissatisfaction

- Leadership Philosophy:

® United: CEO Munoz's response ("system failure") implies a focus on enforcing existing protocols, potentially reflecting a less flexible leadership style

e Delta: CEO Bastian crediting the culture for navigating the outage suggests leadership that prioritizes values like empathy and customer service, fostering a more adaptable approach

Overall, the contrasting cases of Delta and United highlight how an organization's culture, shaped by leadership, employee empowerment, and focus (customer vs internal), significantly impacts how companies handle crises and interact with customers

3 What will it take for United to overcome its culture that has been built up over such a long period of time?

Organizational culture includes the established norms, values, and behaviors that characterize

an organization or team It is fundamental to the company's identity and shapes its emotional foundation This culture not only influences decision-making within the group but also often

determines the individuals welcomed into it It can be described as a fusion of shared beliefs,

attitudes, traditions, and informal practices that give significance to the collective experience of any society or group as they adapt their lifestyles to fulfill shared needs Simply defining attributes and establishing structures and processes is insufficient because it's impossible to

foresee every potential client scenario and provide staff with specific guidance for each one Instead, employees require clear and directive qualities to assist them in effectively navigating unexpected or challenging situations

Unclear values, such as "mindful," lack the clarity needed for representatives to make optimal

decisions in real-time situations In contrast, when United's leaders embraced and upheld

principles like "listen carefully and behave deferentially," they increased the chances of providing appropriate treatment to clients Providing representatives with the necessary tools and adequately preparing them for their roles, such as through training programs like Core4, 1s ineffective unless supported by plans and processes that enable and prepare representatives to make the nght decisions While it's important for employees to develop empathy and strong relationship-building skills, their choices should not be restricted by rigid policies that only work for specific client care irrespective of the circumstances Representatives should be trusted and empowered to use their discretion accordingly

Adjusting the experiences of both employees and clients is essential Entrepreneurs should recruit employees in a way that mirrors how they envision these workers interacting with clients If supervisors only focus on procedures without taking the time to grasp their employees' preferences, employees might rigidly follow protocols, ignoring the true desires of clients When employees feel less valued than aircraft performance, they may prioritize punctuality and professional duties over client well-being Conversely, if leaders actively listen to, appreciate, and exhibit trust in representatives, employees are more inclined to listen to, value, and trust clients

Recommendation:

1 Becoming more independent from regulations

It's widely observed that United Airlines has diligently adhered to its policy, requiring employees to act and decide strictly within the bounds of laws and regulations While this strategy maintains order, it can occasionally lead to confusion and significant consequences, particularly when employees are insufficiently informed about regulations and policies, resulting in astonishing actions that contribute to notorious scandals

United Airlines must improve communication with its employees regarding company policies and values The airline should strive to make its employees feel comfortable and encourage flexible adherence to regulations This entails basing actions on individual incidents rather than rigid policies and ensuring that actions align with the specific situation The company should empower its employees to innovate and devise solutions that best resolve problems While policies are crucial for maintaining order, problem-solving and customer-centric outcomes should always be prioritized Delta Airlines has excelled in this regard, achieving positive results compared to the situation at United Airlines

2 Employee empowerment and decision-making

A robust, positive, and healthy organizational culture could enable employees to make informed and relevant decisions If employees had clear flexibility to make humane and