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
For example, giants of the industry merged to make super-giants. Southwest Airlines decided to merge with another airline called AirTran. They formed one huge airline that became the fourth-largest airline in the United States. This allowed Southwest Airlines to pull in even more people than they had been doing separately. This was also a positive impact because if people were fans of the AirTran Airlines, it is a possibility that they will stick with their preferences and continue to buy tickets for their flights. This benefited Southwest Airlines greatly. Another example of specific tactics that Southwest Airlines implemented included the number of people that were on airplanes within the last year compared to that of 2001. In 2010, there were 720.4 million people who were on airplanes. In 2000, 719.1 million people were on airplanes, which was slightly lower than people who fly even after September 11th. After the attacks on America, airlines actually were seeing more people flying than they were in 2001. So, these special tactics that Southwest Airlines implemented increased their sales in tickets (Goldschein 2011). However, there are several influential factors that affected these
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 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.
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,
Since its first grand opening in 1971, Southwest Airlines has shown steady growth, and now carries more passengers than any other low-cost carrier in the world (Wharton, 2010). To expand the business operations, Southwest Airlines took over AirTran in 2010 as a strategy to gain more market share for the Southeast region and international flights. However, the acquisition of AirTran brought upcoming challenges both internally and externally for Southwest Airlines. In this case analysis, the objectives are to focus on the change process post the merger with AirTran, and to evaluate alternatives to address the impacts of the merger. II.
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 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.
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.
More than 37 years ago, Rollin King and Herb Kelleher got together and decided to start a different kind of airline. They began with one simple notion: If you get your passengers to their destinations when they want to get there, on time, at the lowest possible fares, and make darn sure they have a good time doing it, people will fly your airline. And you know what? They were right. What began as a small Texas airline has grown to become one of the largest airlines in America. Today, Southwest Airlines flies over 104 million passengers a year to 64 great cities all across the country, and we do it more than 3,400 times a day.
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
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
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.
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
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.
Gittell, J. H. (2003). The Southwest Airlines Way: Using the Power of Relationships to Achieve High Performance. New York: McGraw-Hill.