Southwest Airlines Case Analysis Sandra Guzman Lisa Ikkanda Laura Lopez Gerame Wong Dr. Chandler - MGMT 449 Summer 2012, Tuesday, Wednesday, Thursday 8:00 a.m.
Problem• What recommendations would we make to Southwest CEO Gary Kelley after the acquisition of AirTran for the Company to remain successful heading into 2011?
Recommendation 1Building an Organization Capable of Good Strategy Execution • Choose a company strategy that best executes the goals and objectives of Southwest Airlines after comparing the strategies of AirTran and Southwest • Rationale: It is crucial to keep only one strategy to avoid decision making dilemma. • Objective: Strategy decision making will take 3–5 years.
Recommendation 1 Execution• Step 1: Put together a talented management team.• Step 2: Allocate sufficient resources.• Step 3: Institute policies and procedures.• Step 4: Strategy needs to relate to Southwest culture.`• Step 5: Strategy needs to support Southwest organizational structure.• Step 6: Exercise strong leadership.• Step 7: Employee decision-making authority.• Step 8: Install information and operating systems.• Step 9: Tie rewards and incentives to the strategy.
Recommendation 2 Managing Internal Operations• Implement the best practice operational activities among AirTran and Southwest that will help Southwest maintain low-cost leadership and high employee and customer satisfaction.• Rationale: Effective operational strategies will improve Southwest Airlines’ core competency• Objective: Execute within 3 years after acquisition
Recommendation 2 Execution• Step 1: Measure effectiveness• Step 2: Select the most effective (Voting Process)• Step 3: Create and improve policies & procedures• Step 4: Implement best practice operational activities• Step 5: Re-evaluate effectiveness
Recommendation 3 Corporate Culture and Leadership• Integrate AirTran Company into the Southwest culture• Rationale: Southwest is a more established airline and is the low-cost leader in the industry• Objective: Focus on teaching AirTran employees about the culture within 3–5years
Recommendation 3 Execution• Step 1: Compare and contrast the core competency for both companies• Step 2: Identify actions and behaviors for the new culture• Step 3: Identify problems and find solutions about Company policies, operations, or management• Step 4: Identify and execute visible and forceful actions
Figure 12.2 Steps to Take in Changing a Problem Culture (p. 406) Compare and contrast the core competency of both companiesStep 1 Compare and contrast effective strategies and key success factors for both companies Keep employee morale highStep 2 Provide excellent customer service Be the industry leader of low-fares Employee feedback through blog (Nuts about Southwest) andStep 3 annual surveysStep 4 Substantive: Attend Southwest’s University for People Symbolic: Hold ceremonial events (annual awards banquets)
Culture of SouthwestWarrior Spirit A Servant’s Heart Fun-LUVing Attitude• Work Hard • Follow The Golden Rule • Have FUN• Desire to be the • Adhere to the Principles • Don’t take yourself best • Treat others with too seriously• Be courageous respect • Maintain• Display urgency • Put others first perspective• Persevere • Be egalitarian • Celebrate successes• Innovate • Demonstrate proactive • Enjoy your work • Customer Service • Be a passionate • Embrace the SWA Teamplayer Family
Culture of AirTranOur Guiding Principles Our Values• Safety • A total commitment to safety• Courtesy • Compliance with regulatory• Pride standards• Teamwork • Technical excellence and• Innovation continuous learning• Cleanliness • Honesty, trust and integrity• Anticipation • Respectful responsibility for resolving issues• Results • Acting with purpose and urgency • Hard work • Fun • Profit