Case Study: Southwest Airlines



Case Study: Southwest Airlines

Southwest Airlines' Leadership

In July of 2004, Southwest's new CEO James Parker relinquished the CEO role to Gary C. Kelly, former Chief Financial Officer of Southwest. Kelly, as a leader of the Southwest family focuses on providing low cost efficient customer services and focuses on managing the people of organization (Mueller, 2009). Effective communication between the staff members is an important aspect of the leadership at Southwest. As a leader, Kelly always prefers to listen and respond to the staff members, rather than just passing orders. Undoubtedly, this leadership style promises the improvement in productivity of the staff members, as they feel a part of organization.

To make it different from the traditional organizations, Southwest offers the highest possible packages for its employees, but not for the executives (Mueller, 2009). This is mainly due to the financial crises which the company has been facing over the period of past few years. The leadership agreed on the fact that appraisals of employees should not affect due to the financial difficulties, however the executives can sacrifice their benefits in order to promote the positive organizational culture. This is a practical proof of Kelly's belief that “Good leaders care for their employees first”. The company highly relies on the fact that keeping employees happy is the key to keep customers happy and satisfied.

Southwest always provides its employees a chance of expressing their feelings without any hesitation. This strategy has revealed that some of the employees have been very unhappy with the organization, as they have been going through changes in their schedules and compensation due to the shrinking business travel market. Expressing their views helps the leader as well as the employees to adjust to the new realities easily. Kelly always tries to fit well with the culture and team, while not losing the sense of own personality.

Southwest's Competitive Advantage

The four major strategies have helped the Southwest Airlines in achieving the competitive advantage. These strategies include being employee driven, low cost, future focused and differentiated. It was the first airline which introduced "low-cost, no-frills" strategy. The airline is highly differentiated as it has never served meals, never offers advanced seat reservation services and only flies Boeing airplanes. This strategy of Southwest has provided them with competitive advantage particularly during the period when the airline industry has been facing economical challenges after 9/11 attacks. Since the company ...