Ethics In Southwest Airlines An Term Paper

Length: 18 pages Sources: 1+ Subject: Transportation Type: Term Paper Paper: #17405736 Related Topics: Delta Airlines, Southwest Airlines, Deregulation, Accounting Ethics
Excerpt from Term Paper :

(Southwest Airlines Corporation)

The employees are always put first at Southwest Airlines, and according to the CEO Herb Kelleher, who was responsible for founding the company Southwest Airlines, the philosophy that employees come first is deeply embedded in the psyche of the company, and if the employees of the company are happy and contented and fully satisfied with their work, then they will most definitely take better care of the customers of the company, and this is exactly what happens at Southwest Airlines. When the customers are happy at the treatment that they receive at Southwest Airlines, they, quite naturally keep coming back for more, and this in turn makes the shareholders extremely happy and satisfied. The employees at Southwest Airlines are some of the best and most highly paid employees of any airline, and in general, all the walls of the company are always filled with several pictures of the employees of the concern.

The business ethics and the corporate culture of Southwest Airlines dictate that the employees of the company are hardworking, highly energetic, full of fun and energy, and extremely creative, at all times. The company has a Training Center named 'University of People', and the employees are trained according to company specifications and needs here. In-flight contests and recognition of personal initiative among the employees are some of the trademarks of the training that employees undergo at the University. The CEO Kelleher also stated that the company wanted its employees to "do things well, with laughter and grace." (Southwest Airlines Corporation)

Howard Putnam, the Former CEO of Southwest Airlines, has been one individual who has led the airlines through times of trouble and turbulence. He was the person, in fact, who was able to lead the company when it was but a fledgling carrier, and it carried the company through deregulation and was also responsible for developing a 'vision' that helped to guide the Southwest Airlines into the top position that it is in today. He had certain important tips for companies that want to do well and perform better in order to be able to generate more profits. One is that the management must be aware of the leadership that would be needed in running the business, and the second is that the management must be able to create and build up the very culture that support the visions of the company, as well as the business, in the best possible manner. (Program resources, Professional Speakers: Howard Putnam)

As far as customer service is concerned, according to Howard Putnam, the best possible method is to start with the basics of bottom line improvement, wherein hour people would be placed ahead of others, and then others. The culture of the company must be taken into account first, before picking out the team of personnel, and this means that the team would be able to match the numerous expectations and outlooks of the company in such a way that customer expectations would be exceeded. Change being an integral part of the success of a company, it must be brought about gradually, especially in times of turbulence. Howard Putnam states that it is at these specific times that the management of the company must be able to focus better, and also to resize, and to simplify, and to organize the company better for the purpose of inculcating flexibility. This is how a company would be transformed in times of turbulence, and this is exactly what the former CEO of Southwest...


(Program resources, Professional Speakers: Howard Putnam)

III. How Southwest Airlines handle the various crises?

It is indeed a fact that the airline industry today is facing losses, and more and more companies are declaring bankruptcy and closing down. A few examples are U.S. Airways, which is seeking the elimination of more than 2,000 mechanics, cleaners, other ground personnel, and stock clerks. Out of the 848 cleaners, 798 would lose their precious jobs, and the remaining personnel would have to accept to cut their pays by 15%. The number of mechanics too would have to be cut from 3,000 to 1,800, and would have to put up with an 8% pay cut, and in the same way, stock clerks would be cut from 400 to 268, and the reduction in their pay would be about 15%. All these measures, stated the U.S. Airways, the United States of America's second largest carrier, would save the airlines about $268 million a year, and when the company filed for bankruptcy in the year 2004, the second time in as many years, it was also the third time that the workers of the Airways had taken concessions. (U.S. bankruptcy judge terminates contract of U.S. Airways workers)

While their flight attendants had already given up more than a full third of their pay, retirement and various other concession plans for the workers were also cancelled, thus saving the airlines $1 billion over the next few years. Other companies too are in the same situation, and there are significant losses to these companies. However, one notable exception is that of Southwest Airlines, which will supposedly show a profit in the next year, despite the massive losses; in spite of Bush's claims of economic recovery, and also the highest ever fuel costs in recent years, and the increasing numbers of low cost carriers. This year too, the situation will be similar with heavy losses being suffered by the airline industry because of rising fuel costs, and also heavy losses in jobs, and the resulting payoffs, because of which more than tens of thousands of people would be left without jobs. Most airlines would also be forced to sell out their long-term fuel contracts in order to raise more money to survive. (U.S. bankruptcy judge terminates contract of U.S. Airways workers)

The so-called 'Southwest's Chick's Dozen', according to which a list was created enlisting the various companies that could be 'bought', Southwest Airlines was a good contender up until the end, at which time it lost out to 'Medtronic'. According to the list, flying in Southwest Airlines is an enlightening experience, and one individual states that when she was flying in Southwest Airlines, the air was full of fun and laughter, and the flight attendants would say things like, "for those of you who are from the Dark Ages, and do not know how to fix the seat belts, here goes," and also things like, "Look out for an emergency outlet, because if there is an emergency, we will be the first ones out of here," and so on. That is the type of fun that passengers and the crew on board Southwest Airlines generally have, and perhaps this is why this airline is preferred over the others. (Unscrambling Southwest Airlines)

The Southwest Airlines has successfully weathered many different crises through the years, and has remained as one of the top companies in the United States of America, today. In the year 2005, for example, the Southwest Airlines, which was once known as the scrappy underdog in the airline industry, managed to carry more domestic passengers in its flights than any other airline in America. This particular company, not like all its numerous competitors, has been in fact profitable without fail for a number of years, consistently. In other words, it has managed to face oil crises, recessions, and weather crises, and the latest Terrorist attack that occurred in September 11, 2001, all of which have affected other airlines in a drastic manner. In recent years, Southwest Airlines has become even more aggressive in its growth, and this is why the company entered the Philadelphia market in the year 2004, and made plans to enter the Pittsburgh market in 2005. (Southwest Airlines, 2005)

It must be remembered that it was in the year 1978 that the U.S. Commercial Airline industry became permanently affected when the then president Carte signed the Airline Deregulation Act. Before this deregulation, the Civil Aeronautics Board would regulate airline route entry and exit, and mergers, acquisitions, and also passenger fares, and return rates, and so on. Now with the deregulation, the airlines were not allowed to operate on the assumption that there were only two types of market segments, that is, those who could afford to fly, and those who couldn't. With deregulation, the prices decreased dramatically, and now numerous new firms were able to enter the market, and the financial impact of this phenomenon on commercial airlines was devastating. In addition, there was a severe fuel crisis in the year 1979, and when the air traffic controllers went on a strike in 1981, it only added fuel to the fire, and when the recession happened during the 1980's,…

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Retrieved at Accessed 29 August, 2005
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Financial Executive: Corporate Values Stimulus for the Bottom Line" Retrieved at 31 August, 2005
Herb Kelleher, Executive Chairman of Southwest Airlines talks about Building Leaders and how their Innovative People-culture has lifted the Airline to Success" Retrieved at Accessed 31 August, 2005
Hundred Best Corporate Citizens for 2004" Retrieved at Accessed 29 August, 2005
Karin, Chick. (4 June, 2001) "Unscrambling Southwest Airlines" Retrieved at Accessed 30 August, 2005
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