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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"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."

- Herbert D. Kelleher, Co-Founder and Chairman, Southwest Airlines.

Testing Times

After the September 11, 2001 terrorist attacks, Southwest Airlines (Southwest) and the entire airline industry in the US faced devastating losses. Major airlines rushed to the US Congress for relief in the form of federal assistance. The industry was allocated $15 billion; a part of the relief came as outright grants to cover the losses of operating revenue following the shut down of the industry by federal order, while the rest was in the form of loan guarantees.

However, this assistance was not enough to pull the industry out of its heavy losses.  It continued to lose billions of dollars every day because of the slow rate of passenger return.

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

To reduce their losses, the airline industry in the US cut the number of flights by 20% and laid off 16% of their workforces in the weeks following the attacks. However, one airline that responded differently to the crisis was Southwest. The airline had its own unique approach to the crisis. Southwest avoided layoffs altogether and stuck to its mission of caring for its employees.

It was felt that avoiding layoffs in the face of a dramatic decline in demand would jeopardize Southwest's short-term prospects. The company was losing millions of dollars per day in the weeks following the terrorist attacks. However, Southwest was willing to suffer some damage even to its stock prices, to protect the jobs of its people.

Southwest's no-layoff response to September 11 was a reminder to its employees of the organization's tradition of caring for its people. When asked to comment on this, an official explained, "Its part of our culture. We've always said we'll do whatever we can to take care of our people. So that's what we've tried to do."1

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1] Jody Hoffer Gittell, The Southwest Airlines Way, McGraw-Hill, 2003.

 

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