Human Resources Management at Southwest Airlines - Case Study Example

HRM at Southwest Airlines Student’s Name: Instructor’s Name: Course Code: Date of Submission: Company Background: Southwest Airlines Southwest Airlines is a company which was established in the year 1967 but acquired its names in the year 1971. It is capital headquarter is in Dallas, Texas US. The company is known for its low cost of tickets. By the year 2012, the company had more than 46,000 employees and it is known to operate more than 3,400 flights daily (Southwest Airlines 2012). The company has acquired many other airlines for instance in the year 2011, Southwest Airlines acquired Air Tran Airways and the company was issued with a single certificate for operating hence became one Airline. Although the company of Southwest Airlines has been doing well in the flight industry, it has faced many challenges in its Human resource management. In some cases it has encountered legal issues to an extent of paying fines. In this regard therefore, in this paper I will discuss how Southwest Airline has gained competitive advantage itself, major issues involved in the human resource management, the sustainability of HE in the long run and the shortcomings of the Southwest model. How southwest created competitive advantage itself Southwest Airline has applied various strategies which have enabled the company to gain competitive advantage in the highly competitive industry. The first strategy that the company is applying to gain competitive advantage is the operation of one aircraft for along time (Arthur 2001). Southwest Airlines has operated Boeing 737s although in the year 1970s and 1980s it operated Boeing 727s. By the year 2012, Southwest Airline was the largest known operator of Boeing 737. The reason behind this strategy of operating a sole aircraft is that it reduces the maintenance costs and operating costs. For instance, the costs of maintaining the planes will be low because the skills which are required for maintenance purposes can be served by regular individuals unlike when the company has to hire different skills to maintain the planes (Southwest Airlines 2012). With the reduced operating and operation costs, the company is able to offer quality services and be able to attract and maintain many customers. For example the ticket prices will be low because of the reduced costs of operations hence the company has been able to attract many customers than other companies thus Southwest Airlines has gained competitive advantage in the industry. Another strategy which has been applied by Southwest Airline to create competitive is the change of airports to the Southern airports which are less congested. Through the change of these airports to less congested airports of the South, the company has been able to offer quality services to the customers by ensuring that there is no delay in scheduled flights. This is because there is high demand for aircrafts at Dallas therefore if not scheduled well there will be some delays which will inconvenience the customers. Therefore this strategy of relocating to less populated airports, the company has been able to gain the competitive advantage because of its known quality of services. Southwest Airline does not experience any disruptions because of the congestion at airports and thus many customers prefer Southwest Airlines hence there is competitive advantage has it serves many customers than other Airlines. On the other hand, Southwest Airline has applied the leadership skills to gain competitive advantage. The leadership of the company due to their creativity and innovation, they came up with a company website where the company details can be accessed (Evans 2003). In the year 1995, Southwest Airline became the first Airline to have a website where the passengers and other customers could access the information like the scheduling and a map of the routes as well as the company information. This was a great step by the leadership because it enabled the company to make communication easy with the customers. Instead of travelling to the company’s offices, the customers could now access some of the services online and this reduces the service time. Through this online service, the company was able to attract and maintain many customers than the competitors who had not developed the company website and because the customers wanted to be served faster hence preferred Southwest Airlines. The company website gave the company uniqueness from other Airline companies and therefore the company was able to create competitive advantage (Ticoll 2004). On the other, through good leadership, Southwest Airlines has been able to create competitive advantage by creating good reputation as a result of their capability of creative thinking. The leaders of the company have been able to possibly and adequately focus on the risks that might cause severe damages to the company (Fitz 1998). The leadership upon anticipating that the price of fuels will keep on fluctuating, they came up a hedging policy which is the contract used to reduce the risks associated with fuel prices. With hedging, the company was and has been able to maintain the prices of the tickets whereas other companies keep on adjusting their prices because of the fluctuating fuel prices. In this regard, the company has gained competitive advantage by being known to have ticket prices and also which are relatively affordable when compared to other airlines. As an effort of reducing the cost of operating the company, Southwest Airline’s leadership came up with an idea of introducing Ecopower water pressure washing –system to be used in the cleaning of engines of the aircrafts when they have been packed (Grote 2002). This was introduced in the year 2008 and the Ecopower system is known to improve the efficiency of using fuel when they are regularly used to clean the power engines. This is one of the strategies that are applied by the company to reduce the fuel costs which in turn helps to maintain the cost of tickets. Therefore through this strategy, the company has managed to lower the overall cost of running the company hence maintained the lower ticket prices leading to competitive advantage because other airlines seem to be more expensive than Southwest Airlines and that there services are reliable- there are no delays or disruptions in the scheduled time. Human Resource Management at Southwest strategy and its Sustainability The management of Southwest is people oriented and that is where they gain their competitive advantage from because it is hard to emulate people management unlike other aspects like pricing structure. The management style at Southwest Airline is that people first than anything else. The management of the company emphasized on the importance of providing favorable conditions for the people before anything else for instance the pricing structure (Heneman 2000). People management has enabled the company to gain competitive advantage as the employees are encouraged to improve the services they offer to customers with the aim of ensuring the customers are satisfied with the services they get at the company. The people of Southwest Airlines are motivated because they are given opportunity to make some situational decisions on behalf of their company which can enable it to grow and gain competitive advantage. Furthermore through this strategy of people oriented human resource management style, the employees work together in teamwork spirit towards achieving a task (Holden 2003). This makes the human resource skills of Southwest be productive. For instance the turnaround time for the workforce is 15 minutes compared to industry turnaround standards of 35 minutes. This clearly indicates that human resource strategy of Southwest can be sustainable at long run. One of the cultures of human resource skills of Southwest Airlines is teamwork culture. The employees are encouraged to socialize positively and make interactions which can enable the company to grow economically. Furthermore, the human resource strategy of the company can be sustained in the long run as it can be seen from the productivity and dedication of the aircraft employees. The employees are smaller in number but they can offer standards services to the customers. The people oriented strategy is also sustainable at the long run because the employees are motivated by the leadership of the organization (Kearns 2001). The CEO of the company practices relaxed and participative style of leadership in the management of the company. This style of leadership encourages creativity and innovation and a sense of belonging encouraging the workforce to work even harder to improve the productivity of the organization. The CEO encourages the employees to work hard to ensure that the company remains competitive in the market. This is a clear indication that the employees will develop new skills which will sustain the company even in the long run. For instance the workforce will improve the utilization of resources of the company which will ensure the company sustains itself. Finally, the leadership style encourages compassion and common sense. This style of leadership encourages the workforce to break the rules only if they can create something good out of it to benefit the company(Lucas 2003). The employees have the opportunity to exercise some powers in situations which can improve the competitiveness of the company. This strategy can enable the company to sustain itself at the long run because the employees will always be motivated leading to high creativity, effective teamwork and positive attitude towards the company thus the company will be able to attract and maintain the competitive skills in the organization. Shortcomings of South-West Model People oriented style of leadership has its own shortcomings despite having many benefits. The first shortcoming is that decision making maybe overwhelming (McConnell 2003). This is especially when the decision making is left to employees who are not well managed or guided. When the workforce is not well managed and guided, there are some employees who can make decisions which benefit themselves and not the whole organizations. These decisions made could influence the performance of the organization negatively. For instance, the organizations can lower its performance in terms of services given to customers, there will be high employee absenteeism and lack of customer satisfaction which will lead to low profitability of the organization. Another shortcoming of the people oriented style leadership or non-controlled is that it requires highly skilled employees. With non-controlled in any organization, there has to be high levels of skilled human labor in order to make viable decisions (O'Reilly & Michael 2004). For instance if the head of departments are left to make decisions on behalf of their departments, they must be qualified in order to make quality decisions on behalf of the organization. It might be costly to hire the qualified staff or employees who can be able to make decisions on their own for the benefit of the Southwest Airlines. Failing to make quality decisions and applying common sense appropriately, the company may suffer losses because of the decisions made by some of the employees. Therefore, Southwest Airlines should ensure there are qualified employees who will make decisions which will benefit the whole company through gaining competitive advantage. In addition, non-controlled model of management may lead to poor communication between the employees and the management and between the management and the employees. This is because there will be no clear chain of command and each employee is left to make timely decisions to accomplish the tasks (Miles & Charles 2003). The workforce can make their own decisions without consulting the management and therefore will be poor communication between the employees and their superior. This breaks down the communication channels leading to communication breakdown which can finally lead to misunderstanding among the stakeholders of Southwest Airlines. Through the Southwest model of non-controlled style of leadership, there maybe conflicts among different members of the work teams. This is especially when there are team members working on the same issue but have different opinions (McConnell 2003). Each member of the group may think his or her opinion is superior to those of the other group members. If the group member makes the decision and the group fails to achieve the goals set, the blame will rest on that particular member leading to disputes. Also on the same note, members of the same group may make independent decisions but if one member fails in his or her decision, the other members of the group will blame that group member that his or her decision was the reason why they did not achieve the objectives set. This leads to conflicts among the teams in the company hence the performance of the company will be low. Human resource problem solving techniques The first technique that can be applied to solve human resource conflicts at Southwest Airlines is the delegation of authority. When there is delegation of authority, the workforce could feel more committed to achieve their tasks effectively (Falcone 1999). The employees will get some opportunities to make decisions on behalf of the organization without always consulting the managers. This will reduce possibility of many conflicts among –the workforce. Another technique is the delegation of problems. When the other employees are involved in solving the problems, they will feel part of the organization thus they can work with the experience they have which can help to reduce conflicts among the employees (Hoffman 2001). Also the management will collect opinions from the employees on the best way to solve the problems. Another technique is to ensure good communication among the employees. Through good communication, all the stakeholders will understand the objectives of the company hence could try to work always towards achieving the goals (Hansen & Nitin 2004). There should be clear channels of communication for instance from top management to head of departments then to supervisors and finally to employees to ensure each employee gets the information. Conclusion Southwest Airlines has managed to gain competitive advantage despite high competition from other Airlines. Some of the strategies the company has applied to create competitive advantage include reducing the operational costs by operating only one type of aircraft for along time, ensuring no delays as the flights are scheduled, applying good leadership skills to motivate the employees, good reputation and reducing the cost of operations leading to low cost of tickets. The human resource model applied by Southwest Airline is sustainable at the long run because it motivates employees, promotes employee development and enables the company to reduce the cost of operations. On the other hand the techniques that can be applied by the company to solve the human resource conflicts or problems include good communication, delegation of authority and delegation of problems to the staff members to solve the problems. References Arthur, Diane. The Employee Recruitment and Retention Handbook. New York: AMACOM, 2001. Print. Evans, Christina. Managing for Knowledge: HR’s Strategic Role. Boston: Butterworth-Heinemann, 2003. Print. Falcone, Paul, 101 Sample Write-Ups for Documenting Employee Performance Problems. New York: AMACOM, 1999. Print. Fitz-Eng, Jack. A New Vision for Human Resources: Defining the Human Resources Function by Its Results, Menlo Park. CA: Crisp Management, 1998. Print. Grote, Dick. The Performance Appraisal Question & Answer Book. New York: AMACOM, 2002. Print. Hansen, Morten. & Nitin, Nohria. “How to Build Collaborative Advantage.” MIT Sloan Management Review 46.1 (2004) 22–31. Heneman, Robert. Business-Driven Compensation Policies. New York: AMA- COM, 2000. Print. Hoffman, Edward. Psychological Testing at Work. New York: McGraw-Hill, 2001. Print. Holden, Philip. HR and Its Implications for Corporate Strategy. London: Spiro Press, 2003. Print. Kearns, Paul. The Bottom Line HR Function. London: Spiro Press, 2001. Print. Lucas, Robert. Creative Training Idea Book. New York: AMACOM, 2003. McConnell, John. How to Identify Your Organization’s Training Needs. New York: AMACOM, 2003. Print. Miles, Raymond. & Charles, Snow. Organizational Strategy, Structure, and Process. New York: McGraw-Hill, 2003. Print. O'Reilly, Charles & Michael, Tushman. “The Ambidextrous Organization.” Harvard Business Review 82.4 (2004), 74–82. Southwest Airlines. Southwest Airlines. 2011, http://www.southwest.com/, accessed 3rd August 2013. Ticoll, David, “Get Self-Organized.” Harvard Business Review, Vol. 82, No. 9, pp. 18–20, 2004. http://www.southwest.com/ http://en.wikipedia.org/wiki/Southwest_Airlines Read More