Southwest Airlines Is One of the Most

Southwest Airlines is one of the most successful low-cost airlines in the world. The company's focus on constant innovation, excellent labor relations, and sound financial management have ensured its success at a time when many companies have suffered from the economic downturn. In this way Southwest Airlines has created an example of business success for many. The company's success is also due to the consistency among its organization practices, which even imitating companies have found difficult to truly replicate. Indeed, the company has used its tangible, intangible, and other resources to ensure its security in the world.

Southwest's response to 9-11 has shown its attitude and commitment to the industry. It has set itself apart from its competitors by avoiding layoffs in an industry where most major airlines cut their workforces by 16%. Southwest, in turn, maintained its labor force and expanded the availability of its product to the flying public. In this way, the company maintained its reputation as a caring employer and service provider, maintaining a high level of importance in terms of both its internal and external human relations. This attitude was difficult to replicate in the face of the 9-11 crisis and the company's reputation received a major boost where others faltered (New York Times, 2011).

Southwest Airlines also has an impressive range of physical resources to maintain its reputation as low-cost service provider. During 2011, the company's fleet amounted to 698 Boeing 737-717 aircraft. During 2011, the company's aim was also to introduce the 737-800 craft into its fleet.

Additional costs were cut down by incorporating technology in its service process. Indeed, the company was the first of its kind to introduce ticketless travel. The company website is responsible for 46% of revenue for Southwest and receives the largest amount of clicks among websites of its kind.

The company has a significant amount of financial resources, which is the result of the company's sound cash management policies. In the financial year 2011, for example, the total cash generated was $985,000,000, which amounted to an operating income of $262,000,00. The company's credit value level is also "very good."

To achieve this, Southwest's business policy is to operate the same type of aircraft at a high frequency between smaller airports (New York Times, 2011). This, along with its "no-frills" policy, has allowed the company to reach more customers with lower prices. This has allowed the company to show 23 consecutive years of profit, resulting in its currently strong financial position. This also affects its ability to maintain its service and employment levels during difficult economic times. The company also has a very low equity-to-debt ratio. This enables it to invest and borrow as needed, while there is also a high return on their investments because of its financial position and reputation. These excellent financial resources are supplemented by the company's human resources, which are maintained by a focus on creating a sound business culture and good employee relationships.

In the year 1971, Southwest airlines increased its employee numbers from 195 to about 45, 000. These employees include 19,000 flight personnel, 3,000 maintenance personnel, and 20,000 personnel members to work on the ground, in customer and fleet service. In addition, 2,000 personnel members at the time were involved in management, accounting, marketing, and clerical work.

The company's leadership is also focused upon maintaining good human relationships in terms of both employees and customers. The drive is to "Lead with Credibility and Caring" (New York Times, 2011). In order to do this, the company has been not only upfront with its message, but also consistent. In its employee relationships, the company has demonstrated a sense of caring that is beyond others in the industry or in large business conglomerations. Specifically, this attitude is promoted by more supervisors per frontline employee than any other company of its kind in the country. The work of these supervisors amounts not only to supervision, but also to coaching and listening. Supervisors have managerial authority, but also perform the same work as frontline workers. In terms of employee relationships, they function to coach and advise frontline workers (Gittell, 2005).

Another important component of the company's employee relationships is to hire people with what they have determined "the right attitude." Employee satisfaction is maintained by offering the opportunity to advance towards higher levels of responsibility and employment.

The company's conflict management policy is another important component of human resources. "Come to Jesus" meetings are, for example, set up to provide a way for conflicting employees to openly and honestly discuss the source of conflict in order to achieve reconciliation by means of a mediator (Gittell, 2005).

Southwest also maintains good relations with their employees by encouraging them to be themselves during their work hours, and also by recognizing major life and family events such as birthdays and weddings.

Southwest shows the same commitment towards building relationships with external parties such as its suppliers. It places emphasis on building partnerships not only with customers and employees, but also with other professionals in the industry, such as airport personnel, air traffic controllers, and airplane manufacturers. This is another element that sets the company apart from its peers in the industry (Gittell, 2005).

The company also has a number of excellent intangible resources, all set up in such a way to increase its competitive edge in the industry. One such resource is the company's distribution. In 2011, the company had operations in about 73 American cities. Its growth plan is conservative, adding only a few cities per year. This affects the ability of managers to make sound decisions in terms of other resources, such as personnel and finances. Lower growth rates, in other words, ensure better control of reputation-enhancing actions and policies (New York Times, 2011).