2. Background Estb. In 1967 by Rollin King and John Parker Herbert D. Kelleher joined them later as the legal advisor Best service at lowest fare for short haul frequent flier and point to point travelers Started operation on June 18, 1971 in Golden Triangle of Texas Slowly and steadily expanded to other small towns connections
3. Leadership CEO Kelleher practices Value based leadership at Southwest The values are communicated via awards, contests and newsletters Adoption of “Management by fooling around” principle Risk taking and failures are appreciated Having fun on the job is encouraged
8. Avoiding Laying off strategy was rightbecause Focused low –cost leadership which will provide competitive advantage. Employees organization commitment will reach to peak, there will be very less attrition rate. Employees will accept low pays if needed without any unrest. Avoiding increase in long run cost as existing employees have great deal of task identity so removing them now and then hiring new one would increase cost.
9. Contd.. If they remove people , southwest will have to undergo entire organization restructuring , their mission, vision etc has to be changed. In tough times such massive shake ups might lead to disastrous consequences. Innovation needs to snap back once the economy recovers.
10. How Southwest has benefited himself from this policy? Higher productivity Will attract talent pool in expansion phase. Will recover very fast as all the resources are available and only the demand has decreased because of insecurity among flyers.
