West Jest vs Air Canada
How serious is the threat from conventional airlines that want to imitate the westjet culture? What does it take to imitate organizational culture? Can Air Canada compete against westjet’s employee productivity and its relationship with its employees?
Ever since its establishment in 1996, WestJet has aimed to operate as a low-cost carrier while employing non-unionized members in a unique organizational culture. In its simplest form this unique organizational culture can be labeled as a labor managed firm. In a labor managed firm employees are owners, and they are affected by the company’s performance through profit sharing. Then it should not be surprising that in labor managed firms, the employees can voice their opinions and actually contribute ideas and theories in regards to how to best run the company, or the airline in this case. An interesting example for WestJet: the employees have formed a group, dubbed the ‘WestJesters’, they do various things to improve the customer’s (referred to as ‘guests’ in WestJet language) experience such as developing little jokes that flight attendants tell. WestJesters is one of the several committees of flight attendants that meet regularly to discuss everything from customer service to language and culture.
According to Kruse et al. (2009, Chapter 5) shared capitalism (profit-sharing) positively affects workplace performance. And it has also been discussed that shared capitalism leads to lower turnover and greater loyalty to the firm. It also leads to increased willingness to work hard, especially when combined with high-performance policies, which include incentives.
WestJet has produced an organizational culture that sustains the competitive advantages they have derived from their employee involvement and empowerment. And they managed to do this by fundamentally altering how they think about their workforce; employees are referred to as ‘people’ in WestJet language. They see their people as an advantage, a source
Ever since its establishment in 1996, WestJet has aimed to operate as a low-cost carrier while employing non-unionized members in a unique organizational culture. In its simplest form this unique organizational culture can be labeled as a labor managed firm. In a labor managed firm employees are owners, and they are affected by the company’s performance through profit sharing. Then it should not be surprising that in labor managed firms, the employees can voice their opinions and actually contribute ideas and theories in regards to how to best run the company, or the airline in this case. An interesting example for WestJet: the employees have formed a group, dubbed the ‘WestJesters’, they do various things to improve the customer’s (referred to as ‘guests’ in WestJet language) experience such as developing little jokes that flight attendants tell. WestJesters is one of the several committees of flight attendants that meet regularly to discuss everything from customer service to language and culture.
According to Kruse et al. (2009, Chapter 5) shared capitalism (profit-sharing) positively affects workplace performance. And it has also been discussed that shared capitalism leads to lower turnover and greater loyalty to the firm. It also leads to increased willingness to work hard, especially when combined with high-performance policies, which include incentives.
WestJet has produced an organizational culture that sustains the competitive advantages they have derived from their employee involvement and empowerment. And they managed to do this by fundamentally altering how they think about their workforce; employees are referred to as ‘people’ in WestJet language. They see their people as an advantage, a source
References: Barney,J.B, 1986, Organizational Culture: Can it be a source of Sustained Competitive Advantage? Academy of Management Review, 11, 656-665 Giles, Lee, 2009, WestJet or Air Canada? Red Deer Advocate. April. 10. Fernandez Guadano, Josefina, 2009, Analysis of the economic differences between capitalist and labor-owned enterprises, International Journal of Social Economics 36(5-6), 679-91. Kruse, Douglas; Richard Freeman, and Joseph Blasi. 2009, Shared Capitalism at Work: Employee Ownership, Profit and Gain Sharing, and Broad-Based Stock Options. Chapter 5: Creating a Bigger Pie? The Effects of Employee Ownership, Profit Sharing, and Stock Options on Workplace Performance. Version 2009. Jang, Brent, 2011, Air Canada in Black, workers get shares. The Globe and Mail. Feb. 10. Pfeffer, Jeffery, 2005, Producing sustainable competitive advantage through the effective management of people. Academy of Management Executives, 19(4), 95-106.