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Westjet Case Essay

1686 words - 7 pages

Consultant Report
I. Introduction
WestJet began as a Canadian low-cost carrier which has been growing rapidly and has experienced domestic and non-domestic expansion. Its unique corporate culture of engagement and invested interest is based on creativity, innovation, care, productivity and fun which has been its sustainable competitive advantage in the market.
II. Issues
WestJet is experiencing some underlying issues and problems which threaten the success of future growth. First of all, there is a lack of knowledge and experience necessary to further develop their cultural-business complex to assure the sustainability of the corporate culture in their growth. As well no discernable ...view middle of the document...

However, if this system does not have the foundations and flexibility to support the growth, it will be very difficult to assure a sustainable corporate culture.
WestJet’s system has worked since the foundation of the company; however, they need to know if the system is flexible enough to make adjustments based on the market situation. If they want to grow, they need to hire people who fit with their culture, and to develop employees inside of WestJet who embody the culture to fill the new positions derived from growth. According to Chatman and Cha (2003), it is more convenient to hire people who fit in their culture than to hire people who fit in the job. People can acquire knowledge develop new skills; however, it is difficult to fit them in a specific corporate culture (pp. 26) . If they do not train and motivate employees to follow the procedures and the values which characterize West Jet culture, they will lose their competitive advantage.
An example of the issue of growth and sustaining corporate culture is the outsourcing of positions in foreign countries. WestJet’s outsourcing dilutes the corporate culture it depends on. WestJet has externalized these positions because they do not provide a competitive advantage however as WestJet grows more foreign positions will be required. The growth of outsourcing will become an issue as the two competing factors collide: efficient cost-effective operations versus sustaining corporate culture. They need to consider whether to engage these people in the company or to simply internalize these positions or to find some middle ground between the two.
Another example of the issues facing WestJet is the pilot negotiations. The pilots’ disagreement with the contract offered threatened the future operations and the growth of WestJet. A major element WestJet’s success is that their pilots are non-unionized, and have cross-functional jobs. According to Pfeffer (2005), cross-utilization and cross-training is one of the thirteen practices to produce sustainable competitive advantages. Cross-utilization and cross-training motivate employees to improve their skills (pp. 97, 100-101). These features have let WestJet gain market share and have lower costs. If pilots do not maintain their engagement with the underlying corporate culture and agree with the contract in terms of the compensation plan, they can go on strike or even unionize. At this point WestJet would have to increase the fare costs, and Air Canada could become a potential competitor. The pilots are in this moment linchpin positions in the organization. WestJet sees the compensation plan as the unique motive for retention. Money is not the only reason why employees leave their jobs. Feelings, satisfactions, connections and links make people stay at their jobs (Mitchel, 2010, pp. 102) .WestJet does not have a strategic retention policy other than bonuses and the program to promote employee investment in WestJet stocks.
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