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There are many examples of this throughout the company's history, all pointing to the fact that employees who have a strong sense of ownership and wiliness to sacrifice for the greater good. Southwest's ability to translate cultural values into financial performance while embracing, even attacking change, in their industry is what fuels their profitability. Through the worst recession in 40 years, Southwest has been able to generate positive Return on Investment (ROI), Return on Assets (ROA), and Return on Equity (ROE).
Sustaining and Strengthening the Culture Given Strategic Decisions Made
The case study shows that while Southwest excels with their culture from a purely customer service standpoint, their leadership and management of maintenance, repair, overhaul and support has been a weakness that in 2007 became a liability. Southwest had failed to create a culture of transparency and accountability to the point of whistle-blowing in its maintenance organizations. As a result Southwest was forced to cancel 4% of its flights in the 2008 timeframe when media issues surfaced. No doubt Southwest mechanics and maintenance crews were aware of the cracks appearing in their jets and of the violations, some 30 months old. Due to the cozy relationship between Southwest's maintenance and repair organization on the one hand and the FAA on the other, lapses began to...
Southwest needed to define more accountability and ownership for maintenance services as well, and had to change their culture in this area quickly. Making this cultural change required more ownership of the maintenance process, not just the customer experience, which had been the case in the company to this point. Auditing maintenance procedures for accuracy, providing expanded training and more effective escalation of faults with planes to the FAA senior management teams, and creating more transparency of communication between the FAA and Southwest were all needed. Southwest excels at owning the customer; it needed to change its culture to own the Maintenance process as well.
Appendix a:
Table 1: Southwest Airlines Financial Ratio Analysis: 2000-2009
References
Freiberg, K. And Freiberg, J. (1996), Nuts: Southwest Airlines' Crazy Recipe for Business and Personal Success, Broadway Books, New York, NY.
Ginger Hardage (2006). PROFILE: COMMUNICATING the SOUTHWEST WAY. Strategic Communication Management, 10(3), 4.
Thomas a. Kochan (2006). Taking the High Road. MIT Sloan Management Review, 47(4), 16-19.
Dawna L. Rhoades (2006). Growth, customer service and profitability Southwest style. Managing Service Quality, 16(5), 538-547.
As the value proposition that the company was based on, the attractiveness of flying when it is equal to or less than the cost of gasoline for the comparable trip has helped to create a unique niche for this airline. Their reliance on regional airports within 500 miles of each other has also contributed to the unique value proposition being realized for millions of customers a year. Southwest Airlines Internal
Southwest Airlines: The corporate culture of the LUV airline Southwest Airlines is known for a unique corporate culture that is particularly distinctive, in contrast to its competitors. Southwest Airlines has "a raucous corporate culture that is the exception in the grim airline industry" (Bailey 2008). From the Airline's inception, its founder and chairman, Herbert D. Kelleher ensured that there was "a startling amount of office hugging and kissing in lieu of
Southwest Airlines: We Love Bags Determine how Southwest Airlines' corporate culture differs from other airlines. Southwest Airlines was founded on the premise that an airline needs to put its customers and their needs at the center of all operations, and further create a customer experience that is highly differentiated, memorable and sought-after by passengers. Southwest has surpassed even its own initial expectations in these areas. The culture of Southwest galvanizes the employees,
The secondary gross margin measure, Gross Margin after Depreciation, shows the costs of having a rapidly growing infrastructure to support new routes and the purchase of additional planes over the five-year period. The reduction Gross Margin after Depreciation would be flat or slightly down during a strong economic period as well. This measure of gross margin indicates that the capital investments that are often amortized over seven years as
Southwest Airlines Internal Analysis of the Southwest Airlines RBV Framework Southwest Airlines (NYSE:LUV) has a market cap as of September 12, 2011 of $6.3B, the most profitable and valuable American-based airlines there is today. This is a direct result of the company's ability to consistently take a resource-based view (RBV) of its inherent strengths and develop and execute successful strategies on them over time. The RBV of the airline industry illustrates how
culture in an organization using Southwest Airlines as a model. It uses Geert Hofstede Four Dimension of Culture to analyze the company and provides an over view of how the company's policies enable it to secure a top position in the industry. It uses 5 sources in MLA Format. Globalization has changed the way people do business today. Factors like strategies, resources or capacity to produce has become secondary to