Southwest Airline Analysis

Southwest Airline Analysis

The goal of this paper is to explain the prominent success of Southwest Airline in the United States through a single case study analysis making use of the McKinsey’s 7-S framework. Developed in the early 1980s at the McKinsey & Company consulting firm by Tom Peters and Robert Waterman, this framework looks at 7 internal factors (Structure, Strategy, Systems, Style, Staff, Skills, Super-ordinate goals) which, according to its authors, need to be aligned for an organization to be successful. In this paper, we will analyse each of its internal elements through the case study “Southwest Airlines in 2008, Culture, Values, and Operating Practices”.

Structure:

The organizational structure of Southwest Airlines is known for being functional. There are only four layers of management between a frontline supervisor and the C.E.0. This structure aims at serving more efficiently their values which are considered the core of their organization: action, reliability, quality, informal communication and feedback.
At Southwest, job specialization is not as deep as in any other airlines and it is not uncommon to see pilots help cleaning the plane in order to reduce the turnaround time, a thing which barely happens elsewhere. According to Arthur A. Thompson and John E. Gamble, this proximity and flexibility between employees and top management favours considerably employee-led initiatives: “Rather than buy 800 computers for a new reservations center in Albuquerque, company employees determined that they could buy the parts and assemble the computers themselves for half the price of new ones, saving the company $1 million.”

Strategy:

Southwest Airline is following a cost leadership strategy. To keep its prices as low as possible, it implemented several practices in the past:

* An intensive use of its fleet (departure of planes every 15 minute, turnaround time of 25 minutes in 2002 versus 40 to 60 minutes for other major airlines)

References: - Thompson A. and Gamble J. (2009), Crafting and Executing Strategy: The quest for Competitive Advantage, 17th edition, Boston: McGraw-Hill/Irwin, pp. C-401-C-431. - Campbell Quick, J. (1992) « Crafting an Organizational Structure: Herb’s Hand at Southwest Airlines, » Organizational Dynamics 21, no. 2, Autumn, p. 51. - Paik Sunoo, B. (1995), « How Fun Flies at Southwest Airlines», Personnel Journal 74, no. 6, June, p. 70. [ 6 ]. As quoted in Thompson A. and Gamble J. (2009), Crafting and Executing Strategy: The quest for Competitive Advantage, 17th edition, Boston : McGraw-Hill/Irwin, p. C-404. [ 7 ]. As quoted in Freiberg K. and J. (1998), NUTS! Southwest Airlines’ Crazy Recipe for Business and Personal Success. New York: Broadway Books, p. 15. [ 8 ]. As quoted in Thompson A. and Gamble J. (2009), Crafting and Executing Strategy: The quest for Competitive Advantage, 17th edition, Boston: McGraw-Hill/Irwin, p. C-406. [ 9 ]. Fairbank, K. and Kirkpatrick, J. (2001), "A Tough Guy who Understood 'spirit '”, The Dallas Morning News, 20 March. [ 10 ]. As quoted in Brooker, K. (2001), "Herb. Kelleher: The chairman of the board looks back”, Fortune, pp. 62-76. [ 11 ]. As quoted in Freiberg K. and J. (1996), NUTS! Southwest Airlines’ Crazy Recipe for Business and Personal Success, New York: Broadway Books, p. 15. [ 12 ]. As quoted in Thompson A. and Gamble J. (2009), Crafting and Executing Strategy: The quest for Competitive Advantage, 17th edition, Boston: McGraw-Hill/Irwin, p. C-419. [ 13 ]. As quoted in Paik Sunoo, B. (1995), "How Fun Flies at Soutwest Airlines”, Personnel Journal 74, no. 6, June, p. 70. [ 14 ]. Thompson A. and Gamble J. (2009), Crafting and Executing Strategy: The quest for Competitive Advantage, 17th edition, Boston: McGraw-Hill/Irwin, p. C-424. [ 17 ]. Brooker, K. (2001), “Herb. Kelleher: The chairman of the board looks back”, Fortune, p. 72. [ 18 ]. Southwest advertisement, “Work in a Place where Elvis Has Been Spotted ”, and Paik Sunoo, B. (1995),  “ How Fun Flies at Soutwest Airlines”, Personnel Journal 74, no. 6, June, p. 70. [ 19 ]. As quoted in Campbell Quick, J. (1992), “Crafting an Organizational Structure : Herb’s Hand at Southwest Airlines”, Organizational Dynamics 21, no.2, Autumn, p.51.