Southwest Airlines’ Success through Organization Culture
This paper, "Southwest Airlines’ Success through Organization Culture" gives an account of the development of the organizational culture of Southwest Airlines. The paper starts with the background of Southwest and its development over the years. The paper explains the unique culture of Southwest, and how it has helped Southwest Airlines to face challenges. The paper also describes how Southwest Airlines responded to the situation arising out of the September 11 terrorist attacks which dealt a severe blow to the airline industry. Southwest Airlines’ response to the crisis was shaped by its organizational culture, which laid emphasis on taking care of employees and building relationships. The influence of the leadership of Southwest on its culture is also explained.
More than 40 years ago, Rollin King and Herbert Kelleher got together and decided to start a different kind of airline. They began with one simple notion: If you get your passengers to their destinations when they want to get there, on time, at the lowest possible fares, and make sure they have a good time doing it, people will fly your airline. The success of Southwest Airlines has proved that they were right. Southwest Airlines was originally incorporated to serve three cities in Texas, San Antonio, Dallas, and Houston as Air Southwest on March 15, 1967. These cities were growing rapidly and were also too far apart for travelers to commute conveniently by rail or road. With other carriers pricing their tickets unaffordable, high for most Texans, Southwest sensed an attractive business opportunity. Some of the incumbent airlines of the time, United Airways and Continental Airlines to name a couple, initiated legal action, and thus began a three-year legal battle to keep Air Southwest on the ground. Air Southwest eventually prevailed in the Texas Supreme Court, which ultimately upheld Air Southwest’s right to fly in Texas. The decision became final on December 7, 1970, when the U.S. Supreme Court declined to review the case without comment. In early 1971, Air Southwest changed its name to Southwest Airlines (Southwest), and the first flight was on June 18, 1971. Its first flights were from Love Field in Dallas to Houston and San Antonio, short flights with no-frills service and a simple fare structure, features that became the basis for Southwest’s popularity and rapid growth in the coming years. Southwest’s huge success in being the only major US airline to earn a profit throughout the early 1990’s where other major airlines were struggling to stay in the sky, having one of the most successful airline stocks, and being the only airline in ever win the airline industry’s triple crown-measures of customer satisfaction is predominately due to creating a strong and solid organizational structure that values their employees by motivational approaches (Hallowell, 1996). Herbert Kelleher once said “Culture is the glue that holds our organization together. It encompasses beliefs, expectations, norms, rituals, communication patterns, symbols, heroes, and reward structures. Culture is not about magic formulas and secret plans; it is a combination of a thousand things." Southwest organizational culture utilizes seven people centered practices that enable an organization to be successful: job security, careful hiring, power to the people through decentralization and self-managed teams, generous pay for performance, lots of training, less emphasis on status, and trust building (Kinicki & Kreitner, 2009).
Southwest created a competitive advantage by creating value for its employees, which increases their motivation. Second, Southwest converts some of that value to customer and firm value by designing operating processes, and encouraging behavioral norms that enable employees both to reduce cost and to improve service. Third, Southwest captures...