BA 460 Upper Iowa University Southwest Management Strategy Discussion 2 Discussion Responses In 2016, Southwest Airlines was the world’s second largest a

BA 460 Upper Iowa University Southwest Management Strategy Discussion 2 Discussion Responses

In 2016, Southwest Airlines was the world’s second largest airline in terms of total passengers boarded (144.6 million in 2015), trailing only Delta Airlines, which boarded just over 180 million passengers in 2015 (counting those on flights operated by Delta’s regional and international joint venture partners). However, based on the most recent data available from the U.S. Department of Transportation, the number of originating domestic passengers boarding Southwest flights exceeded those of Delta and its other two biggest rivals—American Airlines and United Airlines (see Exhibit 1). Southwest also had the enviable distinction of being the only major air carrier in the world that had been profitable for 43 consecutive years (1973-2015). In 2015, Southwest was named to Fortune’s list of the World’s Most Admired Companies for the 22nd consecutive year, coming in at number 7.

This case sets forth Southwest’s strategy, then describes in some detail all the various policies, practices and operating approaches that management has employed to implement and execute the strategy. Southwest’s values and culture are also covered in some depth.

What are the key elements of Southwest’s culture? Is Southwest a strong culture company? Why or why not?
What problems do you forsee in sustaining the culture that was created by the company’s long-time leader, Herb Kelleher

DQ1

Southwest Airlines see themselves as a culture that can do anything that they set their minds to. Herb Kelleher transformed Southwest into a major airline and did it loudly and proud. It was not uncommon for Kelleher to be out in the workforce with the employees either working or just checking in with them to see if there was anything that they needed that he was not supplying them with; he was very personable with his staff and treated them like family. A benefit for Kelly is that Kelleher believes in him and what he can do for the airline as well as the industry. As stated in the previous question, Kelly wants to be the best airline out there for his employees and customers, and do it affordably.

Part of Kelleher’s strategy was that he insisted that the management teams always be looking ahead for the “what-if’s”, have contingency plans and be ready to put those plans into action if it was suddenly needed, have a strong balance sheet, keep minimal debt, and be profitable (Thompson et al, 2018). For Kelly to avoid any problems, he is going to have to keep the company running the way that it always has; low-cost, high attitudes, and fair treatment of all staff and customers. The airline was built on a foundation of trust and family, now would not be a good time to change that and chance losing the core of the company: the employees.

DQ2

Southwest Airlines has a well established cultue. The company has four key elements that have created their strong successful culture. First Southwest focused on hiring quality employees and continues to treat them like family. Next the care for their customers is sincere and personal, they are treated like guests in their home. All while keeping fares and operating costs low, being safe, efficient, and operating at excellence. Finally, they stay prepared for difficult times with a well maintained balance sheet, revenue surplus, and fuel hedging.

Similar to Herb Kelleher, Gary Kelly is family of Southwest Airlines. He has the same values and goals, and doesn’t want to change the mission of the company. His biggest challenges will be in the ever changing economy and airline mergers. He will have to focus on further cost savings with fuel rates and airlines getting larger. Mr. Kelly will need to work with other managers to find creative ways to compete with creating revenue against the massive airline fleets who can provide more trips per day with larger planes and further destinations.