More specifically, since Southwest invests heavily in both training and the "attitude" of its employees, the fact that all economically motivated employee separations are voluntary buyouts allows the company to protect that investment.
A happy workforce is more productive, which further helps the company manage its costs. Compared to the industry average, Southwest serves more than twice as many customers per employee and gets by with 8% fewer employees per plane. Moreover, the company's all-hands-on-deck approach allows it to turn its planes substantially faster than the competition, getting these extremely expensive assets back into the air where they can generate revenue.
4. Given the strategic decisions in the case, recommend actions that management should take to sustain/strengthen the culture (or implement a change), based on the situation given.
In the face of recent safety-related setbacks to the company's previously unblemished brand, both employee and public confidence in the maintenance system must be rebuilt. More broadly, since culture is the centerpiece of the company's competitive proposition, the most natural resources available to overcome the situation are likely to be cultural in focus. Simultaneous, risks to the culture must be identified and addressed.
A secondary concern is the possibility that the public will identify Southwest as a "fun" or party-oriented low-cost airline with a willingness to cut corners on safety. Such perceptions must be actively challenged through a campaign that demonstrates that while the carrier avoids wasting money on frills, it still provides substantial value for the price of a ticket.
5. Given the strategic decisions in the case, identify three leadership actions that the company would need to be consider to implement the decisions....
Southwest Airlines Effectiveness of Southwest Leadership Southwest management has defined a clear and simple business purpose. The management has also chosen the right business model that supports the business purpose. The management consistently demonstrates the core values and behaviors derived from the key business purpose (Emerald, 2005). The quality of the airline customer service is synonymous with warmth, friendliness, individual pride, and company spirit. This has kept the staff morale high. The
Southwest Airlines Case Analysis Southwest Airlines is a company that has grown from a small regional carrier in Texas and surrounding states to the largest U.S.-based airline. The primary strategy of the company is to be the low-cost, no frills option for people wanting to travel within the United States. Recently, Southwest acquired another carrier so they will soon begin international flights to the Caribbean and Mexico. This paper discusses the
Southwest's interest coverage is comfortable, at 3.909. Southwest's operating leverage is high, as they are in a low margin business. They had a negative change in EBIT over the period, as did AMR, despite both having higher sales. Southwest's combined leverage is 1.505, much stronger than AMR, which suffered a huge decline in earnings per share despite having higher sales. 10) the weighted-average cost of capital for Southwest is 0.56%.
Southwest Airlines Before 1978, the federal government regulated the U.S. airline industry. Airlines were given profitable routes but were also obligated to serve unprofitable routes in the public's interest. Increases in airline costs were routinely passed along to customers due to the lack of price competition. In 1978, the airline deregulation act enabled airlines to set their own fares and enter or exit routes without government approval (Lam, 2003). The major airlines
Southwest Airlines K Annual SEC Report Review What 3 items of important information does the income statement reveal about the financial performance of the company over the last three years? There are many different items that the income statement reveals about Southwest Airlines. In 2015, the company really had a good year financially. The company's total revenues grew considerably, while at the same time the total operating expenses also dropped significantly which lead
Southwest Airlines Organizational Culture Analysis of Organizational Culture at Southwest Airlines Application of the OCP Framework Developing Organizational Culture at Southwest Airlines Implementation of Organizational Culture Organizational Culture as an Important Determinant of Organization's Success Southwest Airlines is a world renowned air travel company and a low cost leader in airline industry of USA. Formed in 1971 by Rollin King and Herb Kelleher, the company is committed to "providing highest level of customer service with
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