Case Study on Southwest Airlines

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1. What role has leadership played in the success of Southwest Airlines?

In an era where all the major players in the U.S. airline industry experienced problems, only Southwest Airlines remained profitable throughout that period. This amazing and continued success is attributed to its great leader Herb Kelleher. He has been a very successful leader who knows the employees and marketplace well and can effectively take action for the success of the organization. He applies flexibly to the growth and innovation arena, which has given him, guaranteed success.

Best CEO - Herbert Kelleher is called as one of the best CEOs by Fortune magazine in USA. Under his leadership, South West Airlines became the most consistently profitable, productive and cost efficient carrier in the industry.

Humour & Fun - Humour comes naturally to Kelleher, and he is responsible for bringing it into the workplace at Southwest. He encourages fun because he believes that it stimulates productivity. For e.g. Flight agents might do an imitation of Elvis while making announcements.

Unorthodox leadership - At Southwest Airlines, leadership is not considered to exist in one person, instead it is embedded in all employees. Kelleher has an unorthodox style when compared to CEO's of other major corporations. This style is reflected in his organization's style.

Innovation in leadership - The airline does not assign seats or sell tickets through the reservation systems used by travel agents. Many passengers buy tickets at the gate. The only foods served are snacks. All this has led to reduced operational cost & more profit margins

Simple hierarchy - Since its establishment, Southwest has been leanly staffed with less layers of hierarchy. This simplifies communication and facilitates easy decision making. For e.g. in order to save time and money, flight attendants clean the planes themselves instead of ordering in a cleaning crew.

Culture - Culture defines what the company considers important and what it considers unimportant. Encouraging employees to have fun on the job not only creates an atmosphere conducive to great employee relations, but also helps them develop their potential. It enhances team work. Employee service is the most important ingredient in customer service, for the simple reason that employees who are treated right will in turn treat customer’s right.

2. Explain the role of employee empowerment at Southwest Airlines and how it can act as a substitute for leadership. Southwest’s organizational culture is characterized by good employee-management relations. Southwest employees on all levels think of the company as a family. They feel personally involved, responsible, and motivated. The below few examples state the role of employee empowerment in the company

Open Door Policy - At Southwest, open-door policies and “let’s try” approaches are part of the culture. Employees are encouraged to generate ideas and then try them.

Humour at workplace - Southwest workers often go out of their way to amuse, surprise, or somehow entertain passengers. For example, employees may explain the usual safety Regulations through rap-singing or imitate Elvis while making announcements

Passengers - Southwest maintains very close ties to the customer. Suggestions are taken seriously. Even letters to the company are answered personally, not according to a standardized formula.

Internal Customers - The Company gives immense importance to its internal customers – its employees. Employees treat one and other with great respect & trust. For e.g. employees from other regions sent personal cards & T-Shirts to welcome new recruits. Departments shower one another with free ice cream, pizza, or other goodies as tokens of customer devotion or simple in appreciation of a job well done.

Profit Sharing - Southwest has a profit-sharing plan for all eligible employees unlike many of its competitors, due to which...
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