Southwest Airline is a success story in the aviation industry of United States of America. The company has displayed a strategy of cost leadership strategy with great success. Leadership of the company has been charismatic since the foundation of Southwest. The management style of the company is friendly…
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Southwest Airlines is a well known name in the American aviation industry. It is the largest domestic carrier in United States operating more than 3000 flights a day. The company is a huge success story due to its record continuous profits, even in years when other airlines were suffering. The company was founded in 1971 and since 1973 to 2003 the company never recorded an annual loss. This strong financial record has forced management gurus to study the company in detail in order to understand the factors behind its success. Southwest Airlines only flies within United States and even then the company has done extremely well over the past three and a half decades. The friendly organizational culture of the company may be one of the reasons behind this tremendous success. In this report Southwest Airlines will be discussed in great details and a thorough SWOT analysis will be conducted. Organizational behavior and leadership within the company will be discussed alongside with human resource management issues. Details of organizational culture and structure will also be included in the report. In the end future directions of the company will be analyzed and discussion will be made on how it will try to launch its operations globally. Recommendations will also be made at the end. Background Southwest Airline has always used a strategy that is not widely practiced in the aviation industry. The company uses cost leadership approach in its business operations. Since its inception the company has targeted shorter routes and has tried to fly more flights between cities. Due to this approach Southwest Airline has been successful in gaining a significant market share in the country. The company has been successful in lowering costs to an amazingly low level and by doing this it has knocked out its competitors (Bunz & Maes, 1998). With very low fare it is a first choice of cost conscious frequent travelers. The company uses a variety of techniques to lower its costs down and maintains profitability by utilizing its resources in an efficient manner. An example would be the plane of Southwest Airlines where there is no first class seating available. All the seats are labeled economy class because it allows more seats in the plane. This is one example of how lower costs is achieved by South West Airlines. Southwest Airline has also achieved success because of its inspirational leadership. The CEO of the company for a long time was Herb Kelleher. His charismatic leadership is one of the major reasons why the company did well for a long time (Gibson & Blackwell, 1999). The business strategy of the company has been of lowering costs and increasing efficiency, and charismatic leadership blends well with such a strategy. The organizational culture of the company is also commendable. Southwest Airline has a very friendly culture and employees are encouraged to take initiatives. Employees are also treated in a good manner and this is what motivates them to work hard. Workers of the company are a major reason why company has always been successful even in tough economic times. Employees are given power to take decisions and this is why they are able to come up with innovative ideas and this helps the company at the grass root level. The company only flies short routes with United States and it
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“Organisational Behaviour and Human Resource Management Southwest Research Paper”, n.d. https://studentshare.org/marketing/1390729-organisational-behaviour-and-human-resource-management-southwest-airlines.
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