SOUTH WEST AIRLINE CASE ANALYSIS

South West Airline Case Analysis

South West Airline Case Analysis

Answer of Question No.1

Southwest Airlines expends a lot of energy in maintaining its workplace culture. Southwest is the only major airline in the U.S. that has been profitable in each of the last five years. It also has a good reputation as an employer. Herb Kelleher, Southwest's CEO, indicated how Southwest maintained its culture:

"Well, first of all, it starts with hiring. We are zealous about hiring. We are looking for a particular type of person, regardless of which job category it is. We are looking for attitudes that are positive and for people who can lend themselves to causes. We want folks who have a good sense of humor and people who are interested in performing as a team and take joy in team results instead of individual accomplishments.

"If you start with the type of person you want to hire, presumably you can build a work force that is prepared for the culture you desire... "Another important thing is to spend a lot of time with your people and to communicate with them in a variety of ways. And a large part of it is demeanor. Sometimes we tend to lose sight of the fact that demeanor - the way you appear and the way you act - is a form of communication. We want our people to feel fulfilled and to be happy, and we want our management to radiate the demeanor that we are proud of our people, we are interested in them as individuals and we are interested in them outside the work force, including the good and bad things that happen to them as individuals."

Southwest Airlines is vigilant about maintaining its' culture. The behavior rules and boundaries are relatively clear and communicated often. However, this is not typical. I believe most organizations operate with a diversity of cultures. This is especially true considering the increasing worldwide mobility of people and cultures and values. There is some debate over whether companies should design their personnel policies and reward systems around cultural values. Currently companies tend not to, because of the concern about stereotyping certain cultures. A popular trend is for companies to "reengineer" themselves, which involves an attempt to change their culture, usually to a team orientation. The importance of corporate culture is growing as the result of several recent developments. Companies are encouraging employees to be more responsible and act and think like owners. In exchange for more flexible work schedules, employees are expected to always be "on-call." With the demise of more traditional communities, companies are filling employees' need to belong to a community. At the same time companies are encouraging teamwork and the formation of teams.

Answer of Question No.2

First we will look at SWA's ROI and ROE compared to the rest of the industry. Two thousand and one and 2002 were difficult years for the airline industry. Most airlines showed negative ROIs and ROEs, however SWA posted an average ROI of ...