Week_5_Disscussion_1_Southwest_and_Novo - CASE 14 Novo...

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CASE 14: During the last decade, it seemed no matter where we looked we found evidence of the erosion of business ethics and the basic concepts of right and wrong. Respected corporations and individuals who spent years building their reputations of integrity seemingly lost theirs overnight —perhaps forever. But some companies hold themselves to a higher set of standards and recognize that their business practices have lasting and worldwide effects. Let’s look at one example from the United States—Southwest Airlines, and another—Novo Nordisk from “across the pond.” Southwest Airlines has grown from a regional Texan carrier into one of the most profitable and beloved airlines in American history. Its success springs from its core values, developed by Herb Kelleher, cofounder and former CEO, and embraced daily by the company’s 35,000 employees: humor, altruism, and “LUV” (the company’s NYSE stock ticker symbol). 1 At Southwest Airlines they believe that low costs are crucial; change is inevitable; innovation is necessary; and leadership is essential—particularly during troubling economic times. “Our competitors take drastic/short sighted measures to compete with us on the price level … They make draconian reductions in their employees’ salaries, wages, benefits, and pensions. In doing so, they ultimately sacrifice their most important assets—their employees and their employees’ goodwill.” 2 Southwest applies this philosophy in an organizational culture that respects employees and their ideas. As executive vice president, Colleen Barrett started a “culture committee” made up of employees from different functional areas and levels. The committee meets quarterly to brainstorm ideas for maintaining Southwest’s corporate spirit and image. All managers, officers, and directors are expected to “get out in the field,” meeting and talking with employees to understand their jobs. Employees are encouraged to use their creativity and sense of humor to make their jobs—and the customers’ experiences—more enjoyable. Gate agents are given books of games to play with passengers waiting for delayed flights. Flight agents might imitate Elvis or Mr. Rogers when making announcements. 3 To encourage employees to treat one another as well as they treat their customers, departments examine linkages within Southwest to see what their “internal customers” need. The provisioning department, for example, whose responsibility is to provide the snacks and drinks for each flight, selects a flight attendant as “customer of the month.” The provisioning department’s own board
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This note was uploaded on 10/17/2011 for the course PM586ON B taught by Professor W during the Fall '10 term at Keller Graduate School of Management.

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Week_5_Disscussion_1_Southwest_and_Novo - CASE 14 Novo...

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