Date of Submission:
Organizational culture tends to be one of the most critical element in ensuring success and sustainable growth of a company in the global market. Virgin America is one such airline service in US that emphasizes on the inculcation of values and characteristics pertaining to the culture that is existing in an organization. The seven primary characteristics of culture has been identified and evaluated for the Virgin America Airlines. The relationship of the organizational culture with the structure that is adopted in the Virgin America has also been obtained. At the same time, it also affects the performance of the organization through developing customer service and customer satisfaction accordingly. Along with that, the four types of culture provided by Charles Handy has also been discussed. It has been obtained that the organizational culture in Virgin America is such that it places people before the profit and this makes them a leading organization in terms of development of positive culture in their structure.
Table of Contents
1. Abstract 2
2. Introduction 4
3. Literature review 5
4. Primary characteristics of culture 6
4.1. Focusing on the details: 7
4.2. Result orientation: 7
4.3. Innovation and risk taking: 7
4.4. People orientation: 8
4.5. Aggressiveness: 8
4.6. Stability: 8
4.7. Team orientation: 9
5. Relationship of organizational culture with structure and performance of this organization. 9
6. Evaluating seven primary characteristics of organizational culture for Virgin America 12
7. Handy’s four types of organizational cultures 14
8. Conclusion: 15
9. References 16
Organizational culture can be termed as the system that includes the values, shared assumption, beliefs and working patterns that is adopted by the people working in an organization. The main function of the organizational culture is to affect the people that are working in the organization and help in improving their performance through consistent motivation.
The organizational culture tends to be at its best in case of Virgin America Inc., that is a US based Airline Company. It was founded on 7th August when it first flight took off the airport of California. The main hub of Virgin America is at San Francisco International Airport. The culture that is adopted in the Virgin America is very friendly for both the customers as well as the employees. They always believe that people come first and then comes the profit. With the help of such organizational culture that motivates the employees to improve their performance has resulted in an increase in its annual net income from $74.2 million in 2013 to $84.4 million in 2014. It involves developing a fourfold increase in the profitability of the company (VIRGIN AMERICA.COM, 2015). It has been acquired by the Alaska Air Group on 4th April 2016 owing to the low range of profitability that it generated despite of an extensive customer base across the US.
With an effective organizational culture and innovative strategies for the customers and employees, Virgin America has been successful in wining hearts of large number of travelers that have used its service (Gallo, 2013). There are many elements to be considered while developing the culture in an organization like Virgin America and it has been discussed in the section below:
Since its inception, Virgin America has been striving hard to develop cost effective air travel experience for the customers across the globe. It has been successful in their efforts and has one of the most cost effective and quality efficient fare structure among the topmost airline companies. It has to develop an economic structure so as to ensure that the processes are carried out in a productive manner and that the service and quality of air travel that is provided by the airlines is not adversely affected. It refers to the development of the cost incurring factors like the fleet to be maintained, the maintenance of human resources and personnel in its organization. It refers to the handling of the operations in such a way. Economic structure that is to be in an organization involves deriving the various costs that are incorporated in its functioning and then identifying the elements where cost cutting can be done without any major effect on its appearance and performance (Dauber, et al., 2012). These factors have been very well studied and developed by Virgin America and they have come up with an optimum solution for the organizational culture in the company.
Providing an extensive customer service is also one of the most important element where the Virgin America has been a leader in the market in terms of the cost effectiveness travel structure and customer friendly experience that it provides throughout its service. It places people before the profit and this strategy has emerged to be the characteristic that has helped them in developing a successful customer base that are satisfied with its service. They have been providing an exclusive experience to the customers in terms of the service quality and costing provided to them by the airlines. It has developed various critical factors that include hiring for attitude which refers to the behavior of the employees at the time of hiring. It believes in empowering the employees for doing the right things and creating a culture of service across the different departments present in the organization (Gallo, 2013).
The products and services that are adapted in the company include providing a tinge of glamour to the customers where they believe in providing interesting and exciting offers to the customers through its ambience and the quality of air travel. For this purpose, they have also incorporated purple light bathed passenger section in their flights that will have purple lights on during the time of take-off. This has helped them in creating a niche for itself in the US Airline industry and they have earned a reputation of being cost effective and interesting at the same time. It has low profitability scenario in order to maintain the low fare for the customers and the extensive service and ambience that it provides to the customers. Hence, it is very important to inculcate few values and develop elements pertaining to the organizational culture that has been adopted in the company (Richtel, 2013).
These are the various elements that help in deriving the background of Virgin America, the effect of the products and services that are developed by it and its reputation in the US Airline industry.
Primary characteristics of culture
The organizational culture that is observed in Virgin America is based on the development of extensive customer service across the different functions that are carried throughout its structure. It has to be observed that there are seven primary characteristics that should be derived by an organization for developing an effective organizational culture in it. The characteristics of culture refers to the elements that should be incorporated in an organization through its culture and practices that are developed and followed in it. The functioning of the organization should be carried out on the basis of the seven primary characteristics of culture that are widely accepted (Kulkarni, 2011). These characteristics are:
Focusing on the details:
It is very important for the airline to focus on each and every details that are related to providing an extensive service to the customers. It includes development of services across the organization in such a way that it takes care of each and every minute characteristic that is obtained in the organization.
For an organization, the main purpose of carrying any operation or function is to generate positive outcomes and earn profits through it. Thus, it should be at the core of any measure or strategy that is developed by the Virgin America in its structure. It involves developing a thorough analysis of the factors that have been contributing to the development of positive results that leads to achieving growth in the organization.
Innovation and risk taking:
The term innovation has become very significant and popular in the last few years. It has gained significant importance owing to the increasing demands of the customers and an urge in them to get some unique service and product each time they purchase or use. For obtaining higher profitability through innovation, there are many risks that are to be taken. However, there is a direct proportionality between risks and returns. Hence, higher the risks, greater will be the returns.
It is one of the core element in the organization. It involves the management to be focusing on the people that are working in the organization through effective organizational culture and structure in the organization. Virgin America has been carrying this variable in tis functioning since a long period. They are very much focused on providing extensive traveling experience and at the same time ensure that the employees are healthy and happy while doing their jobs. This tends to be the people orientation strategy of the organizational culture.
In each and every organization, there is a certain level of predefined aggression that is promoted in the organization. In the Virgin America, they are aggressive in terms of providing exclusive service and travelling experience to the customers. It has to be obtained in advance to establish the standards that are to be followed in the organization.
It is a very crucial element and task to ensure stability in the functioning of the organization. It involves carrying innovation and changes in terms of the ways and measures that can be improved, but the principles, code of ethics and the mission as well vision of the organization should be stable and there should be continuous efforts made to ensure the stability of the business.
The success of an organization is solely based on the efficiency of the team. It is the overall performance of the team that results in the growth and success of the organization. Hence, Virgin America strives hard to obtain highly motivated and synergetic teams for the fulfilment of their tasks and achieving excellence through it.
Relationship of organizational culture with structure and performance of this organization.
There is an exquisite relationship between the organizational culture that is adopted in an organization and the performance that is observed across the organization. The culture that is prevailing in organization promotes certain vibes and energies among the employees. It helps in determining the level of satisfaction that is inculcated among the employees (Lim, 1995). In an organization like Virgin America, the culture that is adopted in the organization plays a significant role as it includes developing cost effective structure and extensive service to the customers at the same time. It is very crucial to develop an effective organizational culture across its functioning by Virgin America (Dauber, et al., 2012).
The employees are very much affected by the type of culture that is existing in the organization. The development of culture refers to the existing practices that are followed and deriving improvements through innovations in it. It also includes development of new strategies related to the functioning of various operations and the structure followed by the employees in the organization. Thus, it can be stated that the organizational culture helps in developing an ideal structure and structure leads to the increasing performance among the employees in an organization. It serves to be one of the most important element in ensuring that the company would be profitable and whether it would be accepted in the market.
The relationship between the organizational culture and the structure as well as performance that is obtained through an organization has been shown in the figure below:
(Dauber, et al., 2012)
There are four main elements that are identified in developing the relationship between the organizational culture and performance of an organization and they are:
It refers to the basic assumptions in terms of values and beliefs that are to be made while developing a specific product or service in the organization. It involves formulating various strategies for the benefit of the company. The organizational culture that has been developed in Virgin America has been developed with the aim of ensuring high end satisfaction to the customers in terms of service, quality of air travel and cost effectiveness in the fares.
It refers to the development of values and customized goals for the organization where the main function is to develop an effective set of policies and procedures that should be followed to ensure success and growth in an organization.
As shown in the above figure, it refers to the development of a framework that would be formulating various strategies that would be useful for an organization. At the same time, it involves developing a set of operations that are to be followed in an organization. It tends to develop the basis for the development of organizational culture and obtain the outcome that is set by the company for itself in the market. Virgin America has been developing a flexible structure in terms of its functioning in order to inculcate innovation and creativity across its structure.
It tends to be the last element of the organizational culture, but it helps in obtaining the required level of growth and success in the market for an organization.
Evaluating seven primary characteristics of organizational culture for Virgin America
Primary characteristics Rating Evidence
Focusing on the details: High The extensive level of customer service and detailed features that it provides to its customers while travelling through Virgin America (Gallo, 2013).
Result orientation: Low It does not focus on obtaining extensive profits and this is not good for the growth of the business (Richtel, 2013).
Innovation and risk taking: High It takes high amount of risks in terms of investments made in technology, customer service and other features to be provided to the customers. Hence, they focus on consistent innovation across its service (Gallo, 2013).
People orientation: High It highly focusses on the wellbeing and experience that it provides to the people through its service (Gallo, 2013).
Aggressiveness: Low There is a low level of aggressiveness that is obtained in the organization through fulfilment of the profit related operations across its structure. (Richtel, 2013).
Stability: Low There is hardly any stability in terms of the finance and revenues generated from the business carried out by Virgin America (Richtel, 2013).
Team orientation: High It is very extensively developed in Virgin America to ensure that high quality of service has been provided to the customers through high levels of employee involvement and satisfaction that they have in their jobs (Gallo, 2013).
The revenue generated by the company has been shown in the table that has been otbaiend from its annual report of 2013-2014.
(VIRGIN AMERICA.COM, 2015).
Handy’s four types of organizational cultures
There are different types of organizational cultures that are observed among different organizations in the market. Charles Handy, was one of the most acclaimed philosopher and expert in organizational culture. He has developed four types of organizational culture that may be existing in any company across the globe and they are:
It refers to that culture where the power remains in the hands of few people and they have an extensive control over the functioning and operations of the organization. It is very rigid and there is no flexibility where the employees cannot interact with each other and with the seniors regarding any point.
Task culture refers to the development of various tasks and activities for carrying the operations across the organization, it is very much =task oriented and hence, it does not have permanent options for the employees. Virgin America has certain tasks that are outsourced and hence, it can be stated that it displays task culture in few of its operations which includes execution of various operations in the form of tasks.
In this type of culture, an individual, that is, the employee has got higher powers and responsibilities and he puts himself ahead of the organization. It is not good for long term basis and sustainable growth and success of the organization.
Role culture refers to the development of responsibility and self-screening values among the employees through providing them with the tasks that they have specialized in. it involves identifying the nature and talent of the employees and then allocating the same among them would help in providing them with a liberty to provide their best in whichever dimension of the organization that they want. This is the culture that has been adapted by the Virgin America where they provide specialized features to their customers through acquiring of specialization among its employees that are involved in providing these services.
Thus, it can be observed that Virgin America believes in providing extensive customer service across its functioning and it does not give prior importance to the gaining of profits across its system. Hence, it needs to redevelop its strategies to ensure sustainability of the company in the Airline industry.
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Lim, B., 1995. Examining the organizational culture and organizational performance link.. Leadership & Organization Development Journal, 16(5), pp. 16-21..
Richtel, M., 2013. At Virgin America, a Fine Line Between Pizazz and Profit. [Online]
Available at: http://www.nytimes.com/2013/09/08/business/at-virgin-america-a-fine-line-between-pizazz-and-profit.html?_r=0
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VIRGIN AMERICA.COM, 2015. VIRGIN AMERICA REPORTS FOURTH QUARTER AND FULL YEAR 2014 EARNINGS. [Online]
Available at: https://www.virginamerica.com/cms/about-our-airline/press/2015/virgin-america-reports-fourth-quarter-and-full-year-2014-earnings
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