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Southwest Airlines Individual Case Write-Up

In: Business and Management

Submitted By aaonthego
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Business Strategy

Southwest Airlines uses a low cost, short haul/high frequency/fast-turnover strategy focused on underutilized airports in the proximity of major metropolitan cities to compete in the consumer air transportation industry. The differentiator and key to the company´s success with this strategy is the unrelenting focus on human capital and employee culture in delivering exceptional customer service. Southwest is unique in that it does not offer a very minimalist and simple air transportation service (1 type of plane, no meals, etc.) to its customers, with no frills, choosing to delight the customer instead by leveraging the results of the culture it cultivates amongst employees.

Alignment

Roles: Southwest Airlines has a relatively flat organization structure with minimum barriers between the various parts of the organization. Both pilots and flight attendance work in tandem to support the company key competitive edge of minimum down/ground time or 15 minute turnaround. The rest of the Southwest organization is considered to be the customer of the “people department” (HR), whose role is defined as enabling the rest of the organization to deliver maximum performance while preserving the company culture.

Rewards: Southwest employs a simple tenure-based rewards structure for most employees. However, for pilots and flight attendants, the company has implemented a pay structure that rewards productivity and fast turnaround, two factors which are key to the company´s success. By paying flight attendants and pilots by the trip, these employees are motivated to fulfill one of the company´s best competitive edges. The company also rewards loyalty to the company – promoting a develop from within culture, by rewarding senior employees with higher pay than newer employees, as well as profit sharing benefits after the first year of employment. The...

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