Corporate value
Southwest airline has its own corporate culture that clearly shows the positive features of the company. The main success of the company is mainly based on its ability to use its corporate culture in value development. The company in the past years has expressed a low turnover rate and increased productivity which show that the airline has successfully managed to create an important value to its employees. This culture helps in development of Team Corporation and good communication among all employees. The top management and executive do nurture and support collaboration culture. The airline industry has succeeded in developing a positive working environment that can be enjoyed by all employees. This leads to the provision of
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Expansion by co-operative strategy: Merger and Acquisition
Southwest airline’s acquires Airtrans
On September 27th 2010, Southwest Airlines announced its intention to acquire its rival AirTran Airways. Southwest Airline’s 1.4 billion dollar expansion created the most expansive network of any low-fare carrier in the United States. However, employees from AirTran decided to unionize prior to the completion of this merger, in order to protect their interests. After all parties agreed to the transaction, approval by Southwest Airlines’ shareholders on March 23rd, 2011, followed. At this time, the only obstacle was approval by the United States Department of Justice (DOJ), which was completed on April 27th, 2011.The DOJ approval completed the acquisition of AirTran by Southwest Airlines. The completion of this merger allowed for Southwest Airlines to further increase its presence in the domestic market. At the same time, the merger between these two airlines allowed for Southwest to enter the busiest passenger airport in the world, Atlanta’s Hartsfield-Jackson International. Entering this airport meant that Southwest was now able to go head to head with Delta Airlines in its home turf (Jones, 2010). When two different companies merge into one, there are several
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But Southwest began 2015 with a celebration: completing the integration of AirTran Airways after the latter’s final service flight in late Dec-2014. The merger integration was a lengthy four year process, reflective of Southwest’s historically slow approach to such huge
Southwest airlines is one of the most widely respected companies among those profiled by Firms of Endearment. They are recognized for having one of the best corporate cultures, which is emphatically encouraged from the top down. Southwest’s model clearly exemplifies the concept of servant leadership, and we will elaborate on how this creates a firm of endearment.
As the project management triangle states, “do you want something done good, cheap, or fast?. Pick two!” That had been the constraints applied to many businesses until the launch of Southwest airlines in the mid 1960’s. Southwest managed to break free of the management triangle and offer safe (good), low cost (cheap), and timely (fast) air service in Texas and eventually across the United States. From the beginning, the company’s staff and management shared these goals, and developed a foundation on which to build the business. Visionary leaders Rollin King, Herb Kelleher, Colleen Barrett and other early leaders at Southwest, proved that there is no more competitive advantage than a dedicated, loyal work force. Her Kelleher’s transformational leadership style was just what the new airline needed to be successful, and motivate the staff of SWA to do what no other airline had done before: offer cheap, short distance, no frills air service, and make a profit doing it.
Southwest Airlines employees are its biggest strength. Their hiring process strictly ensures that only the best candidates are hired. Training is necessary to sharpen the skills of these employees. Its low cost approach is also a major strength as it attracts more clients. Staff members need to be trained to improve efficiency so that the company can remain profitable even after charg such low prices. Finally, Southwest Airline only purchases Boeing airplanes to keep the repair costs at minimum. This is also a significant strength (Gittell,
This is the historic background of an American Airline company called the Southwest Airlines Co. based in Dallas which still exists and operates with great success between 57 cities in 26 states of the US, by over 300 airplanes , providing primarily short-haul, high frequency, point to point, low fare service . Through this essay we will see an analysis of the company’s advantages and disadvantages through a SWOT Analysis. We will try to localize the problems of the company at the time and in the case of a future expansion, and we will try to give a number of alternative solutions and chose one of them. The Southwest Airlines is a company that has done its first movements in the airline world in 1971 after many efforts for its opening through legal battles with competitors that did not believe that there was any particular reason why the another airline company should exist among all the others already existing. The different things that the new airline company provided were many and very interesting. The idea started from two friends Rolling King, and investment advisor, and Herb Kelleher, his lawyer, who met in order to discuss the idea of Rolling King for a low-fare, no- frills airline to fly between three major cities in Texas. The outcome of this discussion was in reality the decision of the two men to go for something that they believed would work, even though they were not positive about that. After all the legal battles between the two men and the airline companies of Texas at the time who believed it was not necessary for another airline company to enter the market, battles that prevented the operation of the company for three whole years, Southwest Airlines Co. had become a reality. Other legal battles followed in the future that justified the Southwest Airlines but left the company broke, while during the first year of its operations made losses and the earnings for the next half a year were balancing with costs. Gladly the recovery came soon and by 1978 Southwest Airlines was one of the most profitable in the country. Later on, Southwest Airlines Co. managed to provide airline transportation in eight more cities in Texas and dominated the Texas market, with low prices and frequent departures. Today the Southwest Airlines Co. is a very big domestic airline company, the fourth in the US. We will now have a small analysis of the company’s environme...
Despite its growing domestic network, the company didn’t offer international flights until July 2014, and even then, it only offered limited destinations (“Southwest Corporate Fact Sheet,” n.d.). Furthermore, the company’s reliance on a single aircraft is cause for concern. Southwest Airlines was also weak with technology utilization initially but has since turned this into an asset, as described later. Finally, the company has a limitation with providing customer perks due to its low-cost operations (Ross & Beath,
Southwest Airlines: A Case Analysis. ORGANIZATIONAL ANALYSIS It is evident that the greatest strength Southwest Airlines has is its financial stability. As known in the US airline industry, Southwest is one of those airlines who are consistently earning profits despite the problems the industry is facing. With such stability, the corporation is able to make decisions and adjust policies, which other heavily burdened airlines may not be able to imitate.
Since 1987, when the Department of Transportation began tracking Customer Satisfaction statistics, Southwest has consistently led the entire airline industry with the lowest ratio of complaints per passengers boarded. Many airlines have tried to copy Southwest’s business model, and the Culture of Southwest is admired and emulated by corporations and organizations in all walks of life. Always the innovator, Southwest pioneered Senior Fares, a same-day air freight delivery service, and Ticketless Travel. Southwest led the way with the first airline web page—southwest.com, DING, the first-ever direct link to Customer’s computer desktops that delivers live updates on the hottest deals, and the first airline corporate blog, Nuts About Southwest. Our Share the Spirit community programs make Southwest the hometown airline of every city we serve.
The culture of an organization can simply be defined by its core values, traditions, and beliefs. For over 45 years Southwest Airlines has been successful. Its success has been attributed to a value system that tasks managers with the responsibility
For Southwest Airlines, values are not just about what the company believes, it’s about how it sets the culture. Newly hired employees are tested in the company’s three core values and in reward Southwest Airlines provides a recognition program for all employees who are complimented by customers. These values are mentioned in newsletters, staff meetings by the CEO and at special events. Southwest’s values are what sets their culture. For this reason, Southwest Airlines continues to successfully strive utilizing the time tested values that are set forth for all their employees.
This cell-like structure was heavily influenced by the philosophy of Graham Turner, the founder and CEO of Flight Centre (Dunford et al, 2002). His ideas of rewarding initiative, empowering employees and fostering the spirit of a large tribe throughout the company were developed into the organizational culture. Flight Centre’s culture was formed first and it is comprised of their values, such as their people, their customer, the brightness of future, taking responsibility and egalitarianism and unity (Flight Centre, 2017). Its culture influenced the creation of their unique structure. They had to consider major factors, such as whether the organization would be mechanistic or organic, whether it would stress differentiation or integration, and how its strategy would affect its structure. The culture dictated that the structure would be organic because it promotes cooperation and flexibility. Similarly, the structure is differentiated because the culture values smaller teams. Lastly, Flight Centre had to determine the link between its strategy and its structure. The strategy is the organization’s plans to achieve its goals, which is facilitated by both the culture and structure. Although an organization’s culture influences its structure, together the culture and structure help provide the necessary framework for the organization to achieve its
Southwest Airlines strategy of focusing on short haul passenger and providing rates as low as one third of their competitors, they have seen tremendous growth in the last decade. Market share for top city pairs on Southwest's schedule has reached 80% to 85%. Maintaining the largest fleet of 737's in the world and utilizing point-to-point versus the hub-and-spoke method of connection philosophy allowed Southwest to provide their service to more people at a lower cost. By putting the employee first, Southwest has found the key to success in the airline business. A happy worker is a more productive one as well as a better service provider. Southwest will continue to reserve their growth in the future by entering select markets only after careful market research.
Gittell, J. H. (2003). The Southwest Airlines Way: Using the Power of Relationships to Achieve High Performance. New York: McGraw-Hill.
Company had a culture on not giving up through all the adversities the company faced. Strengthening of employees that is when they are motivates employees and is important part of the company. Finally cost awareness is when reduce price in every progression in the business. Southwest airlines are a strong culture company because of how they make the employees feel as part of family. This makes the employees to work hard for the success and that success they see the company as expert and personal
I. Introduction Southwest Airlines has come from an underdog to being one of the best airlines in the industry. This reputation translates from its strategic management of resources. The Co-founder and former CEO, Herb Kelleher, established a unique corporate culture that leads to high customer satisfaction, employees’ morale, and is one of the most profitable airlines in the industry (Jackson et al., 2012). Corporate culture concentrates on empowering the workforce. It shows through Southwest Airlines core values that “happy employees lead to happy customers, which create happy shareholders” (Jackson et al., 2012).
This concept was challenged by Southwest Airlines by marketing itself as a cost leader. Their entire growth curve in the industry has been attributed to its cost effective strategies which has made it more efficient and successful than traditional airlines.