Study On Southwest Airlines Management Essay

Study On southwestward Airlines Management EssayThe past few decades the airline industry has experienced major setbacks. They went through governmental deregulations in the 1980s where many an(prenominal) of the airlines had to file for bankruptcy or close down because they were not making a dough. The ones who survived these series of crises out of deeply in debt, strapped by union regulations, and facing an industry that was highly competitive.Then when the World Trade Center was hit by terrorist late in 2001 these airline companies faced a country that was leery of air travel and as a result these companies often had to fly their planes with empty seats. On top of that these airlines had to incur additional cost due to the rising cost of fuel. The airlines that had survived these earlier disasters finally succumbed to the economic pressures that they were facing. Again, they were forced to either file bankruptcy or merge into other companies.During all of these trials and trib ulations when many of these organizations were failing, one carrier grew and prospered throughout this entire period -this airline is southwestern Airlines. (Buller, 2006).Company Description south-west Airlines was founded in the 1960s and since its beginning southwest has invariably been the underdog, fighting for its survival. It was approved to fly on February 20, 1968 from the Texas Aeronautics Commission. But it had many legal and political battles to fight over the next few years in order to continue doing business. Braniff, Trans Texas, and Continental fought to keep southwestward Airlines out of the market. Eventually southwesterly had to go to the Texas Supreme homage and then to the United States Supreme Court in order to get the approval to continue to enmesh. herbaceous plant Kelleher, who was a law student graduate from New York University and withal south-wests CEO, led the fight approximately of the way and it was through his efforts that Southwest came out of their early legal battles, victorious.From these early battles to the major airline that is now days, Southwests growth can be divided up into three different phases. The first, named Proud Texan phase, took place from 1971 to 1978. It was during this period that Southwest expanded its services within the state of Texas. Since it did not cross state lines the political party was not subjected to many of the federal regulations that other airlines had to face, thus saving the troupe time and money.The second phase is called the Interstate Expansion and it took place from 1978 to 1986. It was during this phase that Southwest Airlines started flying into other states. By the end of the Interstate Expansion Southwest was flying into 14 different airports. Southwest opened into these markets subsequently the deregulation which al slumped them to ope tell on interstate bases without being overburden by the government.The third phase is the National Achievement phase which took pace from 1987 to 1997. During this phase Southwest gained much of its success and notoriety. It was during this phase where Southwest airlines had most(prenominal) of its growth.By looking at the past we can discover fundamental insights about the companys culture and philosophy. In Southwests case after looking at its different stages of growth we can see that the company is c arful about how fast it expands. Many airlines have expanded to fast, lost control, and deviation under. Southwest decided to take a more conservative approach, go-slow, a philosophy which comes from Herb Kelleher. The company has a policy that even if a urban center offers money to the company they can not enter that market. Rather, the only way Southwest will enter a market is if conditions are favorable to the company, including, further not limited to weather and economic conditions.The way Southwest handles their growth brings up two important points about the company. The first is that the company doe s not involve the growth of their organization to get out of hand. They have watched other companies in the past and have learned from their mistakes This in force(p) growth strategy is evidenced by the fact that the top 100 most profitable markets for airlines account for 75 percent of Southwests profits. The second is that Southwest airline is an ethical company. They refuse to take bribes from cities and communities that indigence their business. Both of these points come from Southwest cultures and can be traced to back to Herb Kelleher and management techniques.The CEOHerb Kelleher is a man who must be looked at in order to understand Southwest Airlines. It was Kellehers vision that made Southwest Airlines what it is today and much of the companys fun oriented culture comes directly from him. He took the company from scratch and built it into a major airline company. Kelleher is friendly, participative, deeply involved, and caring approach is revered throughout the organizat ion. He can be described as being both a charismatic and a transformational leader. For Kellehers aura inspires the honest deal of Southwest Airlines and to transcend their own self-interest. (Robbins, 2007).Herb Kelleher has been described time and time over again as having charisma. Even though it is hard to put a definition on charisma, Kelleher does fit into Robert Houses four characteristics of a charismatic leader. First, Kelleher has a vision and he articulates that vision of high quality node service in the mission statement at Southwest airline. Second, he takes personal risks in order to come upon that vision. He showed that he was willing to take personal risk and incur high costs when he was fighting the legal battles at the inception of Southwest Airlines. Third, he is sensitive to his followers needs. Herb Kelleher seems to really care about his employees and their well being. This permeates throughout the whole organization and most of his employees understand hi s level of empathy for them. Finally, he displays unconventional behavior. This can be seen by looking at Southwest airlines, it seems to do everything unconventional but it has the success to back it up.Herb Kelleher can also be described as a transformational leader. By listening to the stories from Southwest employees a person will soon learn that the culture at Southwest is truly different and that this difference is credited to Herb Kelleher. One of the stories that resonates throughout the company is how one of the Southwest agents babysat a passengers dog for two weeks so that the customer could take a flight on which pets were not allowed. (Buller, 2006). It is this kind of service that can be seen throughout the whole organization. Southwests employees often ask themselves if this is something Herb Kelleher would do?Mission and ObjectivesSouthwest Airlines mission focuses on their employees and customer service. Southwests mission is dedication to the highest quality of Cus tomer Service delivered with a sense of warmth, friendliness, individual pride, and Company Spirit. (Buller, 2006). Since Southwest is a no frills airline they gain and keep customers by offering exceptional customer service which is provided through the employees, the cornerstone of the company.Southwest Airline proclaims that We are a company of people, not planes. That is what distinguishes us from other companies.(Buller, 2006). Other companies may have nicer airplanes but they only provide sound service to first phase ticket holders. Southwest treats all of their customers as if they were all riding first class. Having a mission statement focused on customer service makes Southwests affinity to its customers unique. This is what allows Southwest Airline to dominate the discount airline market.The objective at Southwest are simple to provide basic servicesin an efficient effective manner. Southwests flights are safe, low-price transportation with great customer service. South west offers some of the industries lowest fares and have one of the industries highest safety ratings. Another main objective of Southwest is to provide arrivals and departures that are consistent and on time. This has been a large problem for many airlines. But because Southwests average turn around time of 15 to 20 minutes helps ensure on-time flights. As long as Southwest continues to achieve its objectives, they will continue to excel in the airline industry.Southwest StrategiesThe strategy serving of Southwests business begins with its workforce which is carefully selected and trained to reflect the image of the company. It starts with a careful hiring process. Applicants to Southwest are put through a laborious choice process because the company is focused on obtaining people with the right attitudes for their company. This is because the belief at Southwest is that they can thatched roof skills but they can not teach attitude. Some of the attributes the company is looking for in employees include positive attitude, positive self image, internal locus of control and highly conscientious.Once the right people are selected for the jobs, the training begins. Kelleher pushes the importance of maintaining a cohesive culture and training is an excellent way of assuring that this is achieved. A major way that employees learn to amaze to the culture of Southwest is through Southwest University which is a training facility where employees learn what it means to be part of the Southwest family.In addition to strenuous hiring and training processes Southwest Airlines invests heavily in treating its employees well. In an industry notorious for labor disputes and bad union relations Southwest Airlines is a rare exception. The volume of their employees, 85 percent, are non-unionized. When the company does have to deal with unions the negotiations are generally friendly. Much of this success comes from a practice of profit sharing with its employees. In this case, profit sharing can be beneficial because it encourages employees to be personally vested in the company and it allows for room for salary negotiations. Southwest also offers excellent medical and dental benefits which are very important in the era of rising health costs. Good salaries, health care programs and profit sharing are tools the company uses to persist in the valuable employees it worked so hard to obtain.All of the benefits of working for Southwest directly feed into its corporate culture, which is one of Southwests key strategies. Part of the reason Southwest is so successful is because they strive to make it fun to fly with them. To accomplish this the company created an atmosphere that is fun to work in. This means diminishing the influence of bureaucratic restrictions so the employees feel like the management is working with them, to bring excellent customer service. Southwest creates their desired culture by using a flat structure, teams, good labor relations and profit sharing to modify employee behavior to be that of a free flowing team versus a bureaucratic dictatorship.Another important way that Southwest works to reinforce its corporate culture is through company mailings. LUV Lines is the company news letter and it contains detailed information about the surgical process of Southwest as well as other competitors. This is a good tool for flattening the organizational structure because well informed employees are more likely to make the correct decisions. The newsletters helps make sure the employees know where their company stands in relation to the competition which encourages the feeling of ownership that is necessary to create involved employees. Southwest also has an entire book devoted to creating, positively outrageous service. This is crucial because one of the main goals of a cooperative culture is to bring about an purlieu in which its customers are properly cared for.StructureLargely due to the fact that the planes must ope rate safely and efficiently, Southwest Airlines structure is like most airlines, imposing and centralized. But where Southwest differs is on their loose tight design.(Buller, 2006). They give their employee informal job descriptions concerning customer service. While there is very high standardization regarding operations, it is low with respect to customer service.(Buller, 2006). Southwest empowers its employees to do what is necessary to please their customers. So Southwest follows both the mechanistic model and organic model. On its upper levels, such as the corporate office and the flight crew, the mechanistic model is used. On the companies lower level where safety and time is not as high of a priority, the organic model is used. This gives the employees leeway to try new things on the customer service level while maintaining safety.Human Resource ManagementSouthwests human pick departments mission statement is recognizing that our people are the competitive utility, we del iver the resources and services to prepare our people to be winners, to support the growth and profitability of the company, while preserving the value and special culture of Southwest Airlines. (Buller, 2006). Structurally, Southwest places more focus on their human resource department, The People Department than do its competitors. This is a major advantage for Southwest Airlines. Since Southwest Airlines has a reputation for being a great place to work, many people apply to work there. This allows Southwest airlines to be discriminating in its hiring process and to look for the best fit for both the employees and the company. Southwest rejects about 100,000 applicants a year while maintaining a lower turnover rate than their competition. Having this low turnover rate show that Southwest airline does a good job in their selections and their employees that they do hire have a good fit for their organization.Culture and ControlSouthwests culture is its most unique attribute. The co mpany focuses on a team-oriented culture and is not distracted by work rules and regulations that most competitors are consumed by. Southwest foregoes the functional structure of its competitors in favor of a more positive equalitarian culture to create a positive equally based culture. This approach contributes significantly to Southwest having the lowest employee turnover rate in the industry and the highest level of consumer satisfaction.ConclusionAs was noted above Southwest Airlines has had success while their competitors have gone under. A majority of this success can be credited to Herb Kelleher and the culture that he has created. However, Herb Kelleher is acquire close to retiring and he has no clear successor to take his place. It will be interesting to watch and see who Southwest picks as Herb Kellehers successor. This will be an important crossroads in Southwests future as a new CEO can change Southwests whole culture and the manner that the company is going. Only tim e will tell if the unique culture and organization that Kelleher has created will survive this uncertain future.