The most impressive thing I find about Southwest Airlines ( SWA ) is the history of the company. I truly look up to how Herb Kelleher fought to make SWA, even when everything and everyone was against him, and how his warrior spirit has shaped the organizationA?s civilization and public presentation.
Besides it is really impressive to me how the company can be profitable with a low cost scheme. It is good known that air hoses companies do non do any addition even with high ticket monetary values so it is truly astonishing to me how SWA is successful in this point.
Finally I am truly impressed with its human resources direction and the spirit of the company. I found truly interesting that a client driven concern dedicated to gross revenues has one of its nucleus rules saying “ Employees come foremost and clients come 2nd ” . I think it is a truly smart idea to believe that happy employees will maintain clients happy.
What class would you give Southwest direction for the occupation it has done in crafting the company ‘s scheme? What is it that you like or dislike about the scheme? Does Southwest hold a winning scheme?
In my sentiment, direction did a great occupation crafting the scheme of the company. At the beginning, Herb Kelleher saw a market chance with the flight trigon and fought hard to prolong the company. With his public presentation and behaviour indirectly he was puting the pillars of Southwest. Since the beginning Herb established the mission and vision of Southwest and aims indicating out the way to follow.
Besides Herb hired really gifted executives and directors with much experience in the sector.
The lone thing that I do non wish about the SWA scheme is that I think is limited on growing. The planes purchased, the airdromes working at and some in-flight services such as non offering repasts limit the possibility of spread outing internationally.
Harmonizing to the book Essentials of Strategic Management ( Chapter 1 ) to cognize if a company winning scheme, 3 inquiries can be used:
Does the scheme fit the company ‘s state of affairs?
Has the scheme yielded a sustainable competitory advantage?
Has the scheme produced good fiscal public presentation?
In my sentiment, SWA has first-class public presentation in each of the inquiries.
The scheme fit competitory conditions in the industry ( external ) and has of import resources and capablenesss. Besides the cost decreases carried out by the company confers a competitory advantage over rivals and the fiscal public presentation is first-class.
What are the cardinal policies, processs, runing patterns, and nucleus values underlying Southwest ‘s attempts to implement and put to death its low-cost/no frills scheme?
They key policies that I find on Southwest are:
Using merely one type of aeroplane: as it is explained in the instance, utilizing merely Boeing 737 allowed them to minimise to minimise the size of trim parts stock lists, simplify the preparation of care and fix forces, better the proficiency and velocity with which care modus operandis could be done, and simplify the undertaking of scheduling planes for peculiar flights[ 1 ].
Introduction of ticketless travel: this component helped SWA to cut down cost related to go agents and emanation of paper tickets[ 2 ].
Deemphasizing of engorged airdromes, assisting them to bring forth “ better-than-average on-time ” public presentation and cut down fuel cost[ 3 ].
Execution of point-to-point programming of flights, which is more cost-effective than the hub-and-spoke systems implemented by rival air hoses[ 4 ].
Use of fuel hedge and derivate contracts to antagonize lifting monetary values for rough oil and jet fuel.
Authorization of employees and TQM attack, lending to fast job resolution and efficiency.
The slogan “ employees are foremost, clients 2nd ” has generated a strong company civilization actuating employees to make their occupations in the best manner, achieve ends and aims more expeditiously and therefore, making a direct part to the companyA?s profitableness.
What are the cardinal elements of Southwest ‘s civilization? Is Southwest a strong civilization company? Why or why non? What jobs do you anticipate that Gary Kelly has in prolonging the civilization now that Herb Kelleher, the company ‘s religious leader, has departed?
The civilization of Southwest Airlines chiefly involves giving importance and accent on the overall public assistance of its employees, holding its operative rule of “ employees come foremost and clients come 2nd ” . Particularly, the cardinal elements of SWA civilization are:
Fun atmosphere and work environment: promoted through entertaining behaviours in executing their occupations, an on-going buffooneries and gags, and frequent company-sponsored parties and jubilations.
High compensation and legion inducements.
“ Can make ” attitude: this enables the employees of the company execute their occupations efficaciously, work out jobs expeditiously, overcome hardships and observe the company ‘s success.
Company ‘s civilization of non giving up: developed through all the hardships the company had to confront
Cost-consciousness: seeking to cut down costs in every measure of the concern.
Authorization of employees: this motivates employees and makes them experience as an of import portion of the company.
In my sentiment it is clear that that Southwest Airlines is a strong civilization company.A All elements pointed earlier make employees of SWA feel as portion of a large household instead than simply employees of accompany who does non care about them. This experiencing do the employees to work hard for the success of the company and they see the companyA?s success as professional and personal accomplishments.
Sing the jobs that I can anticipate with Gary Kelly ‘s publicity, and harmonizing to the information given in the instance, I can non anticipate existent jobs on prolonging the civilization. Gary has been in the company for adequate clip to cognize which 1s are the nucleus values of SWA and the cardinal elements of its success. Possibly the lone job I foresee is that Kelleher was really of import for the organisation and it will take a piece to Gary to derive that place but the way that he will walk will be the same as the one walked by his predecessor. This is sustained with the picture watched in category. In the picture Gary Kelly was presented as a “ down to earth ” foreman who knows most of his employees, and still follows the thoughts established by Kelleher like “ handling the clients as Queenss and male monarchs and employees better ” .
What class would you give Southwest direction for the occupation it has done in implementing and put to deathing the company ‘s scheme? Which of Southwest ‘s scheme executing attacks and operating patterns do you believe have been most important in accounting for the success that Southwest has enjoyed in put to deathing its scheme? Are at that place any policies, processs, and runing attacks at Southwest that you disapprove of or that are non working good?
Harmonizing to the book Essentials of Strategic Management ( chapter 10 ) a successful scheme must hold 8 constituents:
In my sentiment, SWA is successful in most of the eight points:
SWA is chiefly characterized on enrolling the best and bights people they can happen and so retain them with first-class compensation bundles, chances for rapid promotion and professional growing, and disputing and interesting assignments[ 5 ].
The success of SWA was to undertake those activities that were critical in its low-priced scheme. The company merely operates one type of aircraft, was the first company to present ticketless travel or point-to-point programming of flights. These are merely few illustrations on how research and selling sections put their full attempt on happening ways to cut down cost in every measure of the service offered.
Besides the TQM attack is really good implement due to the authorization of employees at all degrees: “ authorising people to take determinations will do a positive difference every twenty-four hours ”[ 6 ]and the betterment of entire client service and satisfaction by engaging forces who enjoyed interacting with clients and developing selling tools as frequent-flyer plan and rapid wages based on trips flown instead than milage.
SWA has a truly strong corporate civilization fostered by its executive direction degree. In SWA directors are expected to pass at least one-third of their clip out of the office, walking around the installations under their supervising, detecting firsthand what is traveling on, listening to employees, and being antiphonal to their concerns. Besides company executives are really accessible and in 1990 formed a Culture Committee. All this things besides help to prosecute the end of client satisfaction.
SWA besides believed in preparation and publicities. Approximately 80-90 % of SWA supervisory places were filled internally. Besides the wages are above the industry norm. It introduced a net income sharing program for senior employees and stock option plans. All this contributes significantly on binding wagess to the accomplishment of public presentation aims.
For all this grounds I think that SWA direction deserves an Angstrom for the occupation done in put to deathing the companyA?s scheme.
The attacks and runing patterns most important in accounting for the success that Southwest has enjoyed in put to deathing its scheme has been their cost containment, enrolling procedure and organizationA?s civilization.
Sing the policies, processs, and runing attacks that are non working good I can see that there is a failing sing the support systems. Many instance analysis of the company point out that Southwest must be required to modify and upgrade a important part of its internal package to vouch that its computing machine systems will work decently.
What weaknesses or jobs do you see at Southwest Airlines?
The failing I see in SWA is related to one point of its scheme. The current scheme of merely winging to “ 2nd line ” airdromes represents a job of limited growing and there are still large metropoliss in the USA without SWA services. And this is contradictory with the thoughts of Gary C. Kelly. As it is explained in the instance, during his term of office as a CEO, Kelly has worked with other top-level Southwest executives to sharpen and fine-tunes SWAA?s scheme in a figure of countries and continued spread outing the operations ( adding both more flights and originating service to new airdromes ) . The current scheme has a “ infinite ” bound that will keep company ‘s desires of enlargement.
What recommendations would you do to Gary Kelly?
The first recommendation I will do to Gary Kelly is to seek to maintain traveling with the company as it is, feeding company ‘s civilization and good environment. Besides try to maintain their low-priced scheme even through bad times.
The 2nd suggestion I would do to Gary Kelly will be to overhaul its fleet ( I have read that it is a bit old ) , purchase bigger planes and spread out the flights to other chief metropoliss in the U.S and spread out their concern to other states near to the U.S such as Mexico or Canada.