West Jest vs Air Canada Essay

1203 Words Oct 19th, 2011 5 Pages
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
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A labor force in its most basic form, through profit maximizing practices, must be minimized, due to the cost associated with it, in order to drive up profit. And it is because of this outlook that WestJet has managed to outperform their competition, for example Air Canada. This theory is in sync with the findings of Jeffery Pfeffer in his 1995 paper “Producing sustainable competitive advantage through the effective management of people.”

As described above, the organizational culture, the foundation of WestJet’s success, is heavily weighted on its people. Where as the competition, sees the workforce as a cost and aims to minimize it, WestJet looks at their work force as an asset and an investment. Conventional airlines run their business as any other company. They look out for the shareholder’s best interest and do not pay the slightest attention to their workforce. In WestJet’s culture, the workforce consists of the shareholders due to profit-sharing and co-operative environment. By nature capital managed firms will have a hard time converting to labor managed firm. They will have to change a lot of rules and regulations that governs their everyday operations. They will face a large number of opposition by their shareholders. According to Fernandez Guadano (2009) even if they do manage to adopt similar practices as labor managed firms, they will never be able to achieve the same rate of employee ownership and profit-sharing as their counterparts,

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