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Southwest airlines values case study
Southwest airlines values case study
Southwest airlines values case study
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Southwest Airlines: A Corporate Cultural Assessment
Southwest Airlines (Southwest) is a domestic US airline that provides short haul, high frequency, point-to-point, and low-fare service to and from 60 airports in 59 cities across 31 US states. From humble beginnings in 1971, this airline with only four passengers per flight, and airhostesses wearing hot pants and white go-go boots, has evolved into a leader in the airline industry with unsurpassed employee loyalty. Southwest's unique and relaxed corporate culture has created a highly successful airline business that has shown a profit for 30 consecutive years. This paper will examine corporate culture of Southwest Airlines and its impact on the company's success.
Southwest's Formal Statements
Southwest has a commitment to customer service as evident in their mission statement, "The mission of Southwest Airlines is dedicated to the highest quality of Customer Service delivered with a sense of warmth, friendliness, individual pride, and Company Spirit" (Southwest.com/about, 2005). According to the Department of Transportation, the airline has the best cumulative consumer satisfaction record in the airline industry. Southwest makes meeting the expectation of their customers a priority; realizing travelers have options when selecting an airline. The Southwest philosophy is that they are in the customer service business, which happens to provide airline transportation. Southwest has written a Customer Service Commitment, which is an official Contract of Carriage. The Customer Service Commitment discusses Southwest's pledge "to provide safe, affordable, reliable, timely, courteous, and efficient air transportation and baggage handling service on every flight we operate
" (Southwest.com/about).
Work Environment
The work environment at Southwest is an informal culture with motivated and energized employees. On board, the flight attendants often joke with the passengers, and are allowed to ad-lib their own announcements. They have even been found hiding in luggage compartments to surprise passengers. The airplanes are all Boeing 737s, and Southwest is updating the interior of the planes this year.
The work environment outside of the aircraft
is equally informal and positive as the inside. According to the CEO, Gary Kelly, the goal is fun and informality. The atmosphere is friendly and everyone is on a first name basis. A variety of activities and team building exercises exist to promote teamwork. Meetings are used as a means of communicating corporate goals and motivating employees (Chapman, 2005). At the corporate office in Dallas, one will find it more common to receive a hug than a handshake. The dress code is casual; if someone is seen in a suit that person is likely a visitor.
For example, all employees constantly communicate from baggage handlers to mechanics. Not only does this practice inculcate a sense of community among employees with vastly different skill sets and job requirements, it expedites turnaround time to get more planes from the gate and into the air (http://www.businessinsider.com/southwest-airlines-puts-employees-first-2015-7). Southwest also heartily encourages feedback through multiple channels, and has received many accolades for its recognition awards system, which allows passengers to identify by name specific employees who exemplify the Warrior Spirit. With a focus on the positive, employees can feel connected to the broader community, a clear example of servant
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...
“Our people are our single greatest strength and most enduring long-term competitive advantage,” reports CEO Gary Kelly on the Southwest Airline website (https://www.southwest.com/html/about-southwest). The company works hard to hire great individuals and then rewards and supports them to make satisfied, productive employees (Ross & Beath, 2007). In fact, Southwest Airlines has received repeated recognition as a great place to work (“Southwest Corporate Fact Sheet,” n.d.). As a result, Southwest Airlines is able to provide a low-cost, fun-cultured experience with excellent customer service (Ross & Beath, 2007). This has allowed the company to build its final strength in this evaluation: a strong brand
Even though Southwest offers no-frills, there is still a high degree of customer satisfaction that continuously builds customer loyalty for the company. As mentioned, Southwest offers low prices on their airplane tickets. Also, Southwest is renowned in the airline industry for its short turnaround time on arrivals and departures. And since people's biggest concern nowadays is money and time, having low price airline tickets to cater their traveling needs in a shorter period of time will surely satisfy them. Moreover, aside from the low prices offered, what attracts to customers is Southwest’s way in dealing with them. The employees of the airline treat their customers well and really listen to their needs.
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 marketing approach of Southwest Airlines is built upon their strong business model. They have successfully managed to target two specific market segments of the airline industry while remaining profitable. Their strategy is simple, to offer frequent non-stop flights with the lowest costs which appeal to both the business and budget travelers. By segmenting their target audience to specific demographics and ticket pricing, passengers know exactly what they are getting for the price they pay.
Southwest has done what others in its industry seem to struggle to do, which is to make flying fun. This has been the cornerstone for how the Southwest operates, thinks, and plans. Many of the policies, procedures, and practices Southwest has used are aimed directly at providing patrons with a unique, fun, and enjoyable experience. This value and the effort Southwest has made to place customers at the forefront of its plans and strategy, has paid off as the company is one of the most popular and well-respected in the transportation industry.
Southwest Airlines is one of the most successful airlines in the United States. There has never been layoffs or strikes in the history of the company, although there were several times when layoffs could have been justified, including the months following the September 11, 2001 terrorist attacks. However, Southwest's Mission statement says “Above all, Employees will be provided the same concern, respect, and caring attitude within the organization that they are expected to share externally with every Southwest Customer.” (Southwest, 1988). The Airline has always believed that their corporate culture is one of the keys to their success. The culture recognizes that employees have emotional intelligence and that their attitudes and morale are key to the teamwork and creative environment.
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.
Most will agree that culture is an important (if not critical) aspect of an organization's success. Culture is an attractor of talent (employees), as well as customers. This article will explore management's role in building and affecting organizational culture. Culture at Southwest Airlines Herb Kelleher, the co-founder and retired CEO of Southwest Airlines was the chief architect of the organization's culture.
Although many companies are in business to make a profit, Southwest claims that their primary goal is not profit maximization. However, they have been consistently profitable by making air travel affordable to those who previously could not afford it (Freiberg, 1996).Southwest says the customer comes second, showing their devotion to employees. By taking care of their employees, the company encourages employees to take care of the customers. Employees are...
Southwest has comprehensive strategy and they work with harmony. They are low cost airlines which make the customer feel like royalty. Southwest have a winning strategy is proven by their profit year after year even thought they had economy crisis. Since 1973 Southwest reported a profit each year even when they lost billions of dollars from the year 1980 to 2009 because of the low operating cost strategy, low fares and customer service. Since the start of Southwest they have stay faithful of keeping low cost across the industry. Their value in corporate culture reflected through their prices and customer service.
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).
In the United States, many of the major airlines have tried to copy the success from Southwest Airlines trying to incorporate its ideas into their own airline. However, they have all failed. Surely, the airline can copy Southwest Airlines model by no frills service, operating at secondary airports and using a single aircraft type. But what made the airlines failed to achieve Southwest Airlines success was that it was not able to copy the intangibles according to Linda Rutherford spokesperson of Southwest Airlines. “You can’t copy the corporate culture; you can’t copy the people. You can’t just flip a switch and say, ‘We’re going to be more like Southwest.’ (Elliot, 2002) The culture established within the airline is unique to its own. Airlines can use examples
It all started in 1971, when Rolling King and Herb Kelleher decided to challenge the existing rut of charging high prices for air travels. They considered the railways and roadways their competitors and decided to offer cheaper travel for smaller routes. The company was incorporated in 1967, apart from initial entry troubles, Southwest has been the only US airline to have earned profits since 1973. The eccentric company’s outlandish way of conducting themselves has been the sole reason for Southwest Airlines to succeed in a highly competitive and packed industry.