Social Capital

INTRODUCTION

Few executives would doubt the importance of employee

attitudes and performance to organizational success, or the

influence of company philosophy, policy, and practices on

attitudes and performance. Particularly impressive are organizations

that year after year achieve outstanding results and

competitive success as a consequence of their employeerelated

philosophies, policies, and practices. This article will

focus on three of these — Lincoln Electric, Southwest Airlines,

and SAS Institute. The purpose here is to delineate and clarify

these aspects of their operations, as the three have been and

should be models for others. Lincoln Electric, for example, is

a model for domestic manufacturers competing with firms in

China and Southeast Asia.

While the three operate in very different industries and

demonstrate different approaches in managing employees,

they share similarities. At the highest organizational levels in

each, there is a deep respect for, appreciation of, and

commitment to the individuals who have joined the organization.

Workforce policies and practices emanate from this

essential foundation.

Another important similarity is that top management in

the three, historically and today, believe that if you take care

of employees, in the long run the needs of shareholders will

be satisfied. As you will see, this does not mean being blind to

external realities or at all ‘‘soft;'' far from it. At least two of

these organizations (Lincoln Electric and Southwest Airlines)

exist in hyper-competitive markets. Every year they must

battle for revenues, earnings, and market share, while supporting

the employees whose work permits the achievement

of company targets in these areas. A third similarity is that

leaders in each of the three, over a long period of time, have

worked