Southwest Airlines - Key Points for

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Iqra University Gulshan Campus
M. Phil: Strategic HRM
Presentation Topic: Southwest Airlines: A Case Study Linking Employee Needs Satisfaction and Organizational Capabilities to Competitive Advantage written by Roger Hallowell
Reference: Human Resource Management, 1996, Vol. 35(4), p. 513-534
Presented by: M. Shahnawaz Adil
Dated: Tuesday, March 01, 2011
Course Facilitator: Mr. Ahsan Durrani

Abstract (as written by Roger Hallowell):
This article analyzes the sources of Southwest Airlines’ competitive advantage using an integrative approach, employing economic analysis tools to illustrate the roles of commitment and organizational capabilities in delivering competitive advantage at Southwest. A framework is presented illustrating that much of the value Southwest generates is: (1) created through employee needs satisfaction; (2) converted to customer and shareholder value via organizational capabilities; and (3) captured by the firm as a result of its cost advantage and superior service.
This three-part framework may be applicable to other labor-dependent service organizations.

Southwest’s Major Courses of Actions (Southwest Airlines, here-in-after called, ‘SWA’) 1. SWA developed its industry niche and (contrary to many airlines) stuck to it. 2. The concept was to offer frequent, no-frills, low-fare service in short-haul markets using a point-to-point system rather than a hub-and-spoke system: i. That meant about 10 daily flights between two cities, with no in-flight meals (SWA served only drinks and snacks), ii. And a single class of open seating. 3. SWA was not listed on a computer reservation system so travelers or travel agents had to call SWA’s own ticket agents to get on a flight. 4. SWA had a frequent flier program that was based on number of trips, not mileage. 5. The Company had one of the best overall customer service records and had been given very high ratings on the overall customer

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