Southwest Airlines' Organizational Culture

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Case Details:

Case Code : HROB021
Case Length : 15 Pages
Period : 1971 - 2001
Pub Date : 2003
Teaching Note : Available
Organization : South west Airlines
Industry : Aviation
Countries : USA

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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Southwest has been profitable every year for 31 years since it started its operations in 1971. During this period most airlines have struggled to achieve three or four years of consecutive profitability. In 2002, the total market value of Southwest was $9 billion, larger than that of all the other major airlines in the US put together (Refer Exhibit I). The airline achieved high levels of employee satisfaction and was included in the Fortune magazine's list of the "100 Best Companies to Work for in America" for three years in a row. Many analysts feel that the remarkable performance of Southwest is because of its ability to build and sustain relationships characterized by shared goals, shared knowledge and mutual respect between employees.

Human Resource and Organization Behavior | Case Study in Management, Operations, Strategies, Human Resource and Organization Behavior, Case Studies

All these characteristics were ingrained in the organizational culture of Southwest.

Background Note

In 1967, Rollin King, a San Antonio entrepreneur who owned a small commuter air service, and his banker, John Parker, initiated the idea of starting an airline company called Air Southwest Co. (later Southwest Airlines Co.)

They wanted to provide the best service with the lowest fares for short-haul, frequent-flying and point-to-point 'non-interlining'2 travelers. Herbert D. Kelleher, (Kelleher), who was the legal advisor to King's air service, later joined them to start the airline company. The trio decided to commence operations in the state of Texas, connecting Houston, Dallas and San Antonio (which formed the 'Golden Triangle' of Texas). 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 unaffordably high for most Texans, Southwest sensed an attractive business opportunity.

Excerpts >>

2] Southwest did not arrange connections with other airlines; passengers transported their own luggage to recheck themselves onto connecting airlines.


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