South West Airlines is a perfect example of blending strategy and organization culture. For a high degree of success it is not only necessary that the organization culture be strong but also that it be closely related to business strategy and strategically relevant. It is thus necessary that we view the South West airlines from 2 perspectives i.e. strategy and then organization culture.
Strategy, HRM and Organization Culture
Strategy is of 3 types
• Corporate Strategy – Which business to operate?
• Business Strategy – How to compete, how to attract?
• Functional Strategy – HR, Marketing….
Further as per Michael Porter, an organization considers 3 generic strategies that are based on cost leadership, differentiation and focus group. HR is a functional strategy which is used to leverage the generic strategies. FedEx is a fine example of using HRM as a functional strategy to differentiate itself from its competitors. However, there is a fine difference in imposing strategy and adopting strategy. Organization culture can be utilized to implement functional strategy. However, culture needs to be strategically relevant and be closely related to business strategy.
South west Airlines - Strategy, HRM and Organization Culture
• Low fare Strategy
• Expanding in Horizons where other airlines are cutting down service. No direct confrontation with Market leader in the initial stages.
• Concentrate on flying to airports that are underutilized and close to metropolitan areas
• Flying fuel efficient and only one type – Save maintenance costs
• Identifying a system efficient than hub and spoke model and increasing turnaround times. Point to point strategy better that hub and spoke model.
• Seeing the broader picture - Competing with Surface transportation than airlines
• Simplification – Only two type fare i.e. regular and off peak fare, same price within a geographical area
• Core business – Cost effective fares... [continues]
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