Southwest Airlines

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Introduction

Case studies
Learning excellence:
Southwest Airlines’
approach
Ulla K. Bunz and
Jeanne D. Maes

The authors
Ulla K. Bunz and Jeanne D. Maes are based at the
University of South Alabama, Mobile, AL, USA.
Abstract
In an era in which adapting to change means survival, it is
important to study what successful organizations have
done. While the airline industry in the USA has not made
thriving financial headlines, one small company has been
able to satisfy its customers completely and achieve a
place among the Fortune 500 in a relatively short period of
time. In three steps, this article examines what Southwest
Airlines has done to reach this level of achievement and
maintain its excellent employee and customer relations.
First, the company is defined as “excellent” according to the criteria established by Peters and Waterman. Second,
management-employee relations, organizational training
and strong leadership are identified as the sources of
employee motivation. Third, loss of strong leadership and
organizational structure are discussed as possible future
problems influencing motivation and service. The article
closes by pointing to Southwest Airline’s concept of service as the true source of motivation and excellence.

Managing Service Quality
Volume 8 · Number 3 · 1998 · pp. 163-169
© MCB University Press · ISSN 0960-4529

With the airline industry in the USA hardly
making financial records, how has it been
possible for a small company such as Southwest Airlines to completely satisfy their customers since 1971? (Bovier, 1993). What lessons has the management of Southwest
Airlines learned in such a relatively short time
period? How have these lessons enabled the
company to capture such a portion of the
market? (Bovier, 1993; George and Jones,
1996)
Southwest Airlines began its service in
1971. Since then the killer-whale painted
planes have become familiar to their customers and to corporate America. Besides being profitable, expanding constantly and
defending its high place on the Fortune 500
list, Southwest has a very special trait: attitude
(Bovier, 1993). The Southwest perspective
stems from CEO Herb Kelleher and Southwest’s employee motivation. The purpose of this article is to discover
the sources of success of Southwest Airlines as
a company with high employee motivation.
Three factors will be addressed:
(1) Southwest as an “excellent” company;
(2) the source of employee motivation in this
“excellent” company; and
(3) whether lessons learned can adequately
address potential future problems for
Southwest.

Southwest – the “excellent” company
In Peters and Waterman’s In Search of
Excellence (1982), the authors summarize the
results of their study of “excellent” companies. Forty-three US companies, taken from the Fortune 500 list “had to be of above-average growth and financial return over a 20-year period, plus have a reputation in their business sector for continuous innovation in response to changing markets” (Pugh and

Hickson, 1997, p. 99). The authors then
applied the McKinsey 7-s framework to the
selected companies. The 7-s framework
describes the seven variables “that any intelligent approach to organizing had to encompass” (Peters and Waterman, 1982, pp. 9-10): structure, strategy, systems, style skills, shared
values, and staff. Peters and Waterman
expanded this list of excellence to include
eight attributes:

163

Learning excellence: Southwest Airlines’ approach

(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)

Managing Service Quality

Ulla K. Bunz and Jeanne D. Maes

Volume 8 · Number 3 · 1998 · 163–169

a bias for action;
close to the customer;
autonomy and entrepreneurship;
productivity through people;
hands-on, value-driven;
stick to the knitting;
simple form, lean staff; and
simultaneous loose-tight properties.

Since in 1982 Southwest Airlines had only
been operating for 11 years, it was not included in Peters and...
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