Southwest Airlines was founded in 1971 in Dallas, Texas. It has a strong organizational culture focused on values like family, equality, dedication, and fun. The CEO, Herb Kelleher, fostered an informal, transactional leadership style where he treated employees like family. Southwest utilizes selective recruiting and training to socialize new employees into the culture. It has been successful in capturing value through high customer satisfaction driven by happy employees and a competitive low-cost business model that has been difficult for competitors to copy.

1. SOUTHWEST AIRLINES
Group 7: Curti Leda; Javadinia Azari Morteza; Maatz Bettina‐Sophie;
Sandrone Claudia; Vestrucci Margherita; Bandini Arianna; Cominelli Marta

2. Agenda
I. Brief summary of the case
II. Discussion of theoretical concepts
a) Culture
b) Leadership and values
c) Recruiting, training, workforce
III. Questions & Answers
Q1. The organizational culture and the cultural values
Q2. The creation of value for employees
Q3. Capturing value in the marketplace
Q4. Generalizability of the model
I. Brief Summary of
the case
II.
Discussion of
theoretical
concepts
III. Questions
& Answers

3. I. Brief summary of the case
I. Brief Summary of
the case
II.
Discussion of
theoretical
concepts
III. Questions
& Answers
This is an example text
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with your own textSouthwest Airline was founded in 18 June1971 – In Dallas Texas.
Southwest
“ The people who work here don’t think of Southwest as a business.
They think of it as a crusade.”
Herb Kelleher, CEO at SWA, one of the 10 less paid CEO in Dallas
Southwest refers to it self as the “LOVE” (LUV) airline

4. II. Discussion of theoretical concepts
I. Brief Summary of
the case
II.
Discussion of
theoretical
concepts
III. Questions
& Answers
a) Culture
b) Leadership and values
c) Recruiting, training, workforce

5. a) What is Organizational Culture ?
“A pattern of shared basic assumptions invented, discovered,
or developed by a given group as it learns to cope with its
problems of external adaptation and internal integration"
that have worked well enough to be considered valid and
therefore, to be taught to new members as the correct way to
perceive, think and feel in relation to those problems”
Edgar Schein
I. Brief Summary of
the case
II.
Discussion of
theoretical
concepts
III. Questions
& Answers

6. Organizational
Culture
Organizational
Identity
• Customer
Service
• Togetherness
• Shared Values
Social System
Stability
• Non confirms
stucture
• Internal Loyality
Sence – Making Device
• Equality / Coherence
• Transparecy
• Emphasize Teamwork
Collective
Commitment
• We Vs I
• 2Cs
I. Brief Summary of
the case
II.
Discussion of
theoretical
concepts
III. Questions
& Answers

7. Typology of organizational value
Meritocractic
Endorsed Discouraged
Values Values
Performance Authority
rewards
Teamwork
Participation
Commitment
Affiliation
Equal or
Decentralised Power
Equitable
I. Brief Summary of
the case
II.
Discussion of
theoretical
concepts
III. Questions
& Answers

8. Southwest Strategy
Revolutionary strategy
Low costs – Low fares
Frequent flight
Short – Haul trips
No frills
On-time performance
Southwest's culture, which underlines employees as the
airline's "first customers" and passengers as the second, it means
employees are considered as an internal customers.
I. Brief Summary of
the case
II.
Discussion of
theoretical
concepts
III. Questions
& Answers

9. How SWA treats his employees
High context culture • Social trust, agreement by general trust
Particularism • Pilots & Flight attendants may earn less per
hour but more flexibility to work more hours
(payment by trip)
• No incentives  avoidance to create envy among
employees
• Most people take a salary cut to join Southwest !
Collectivism • Use of “we”
• 481 couples working for SWA: if they are talking
about family they really mean it
Specific • More public space, directness, openness, but not
separation between work and private life
Meritocratic • No nepotism policy; Contract paid on basis of
Seniority
• Below market wages offered to clericals &
management positions
I. Brief Summary of
the case
II.
Discussion of
theoretical
concepts
III. Questions
& Answers

10. b) Leadership and values
The Leader – Herb Kelleher
Characteristics
• Friendly CEO
• He treats employees as internal customers
• He is part of the crew
• He believes in individuality expression
• He wants employees feel part of the SWA
I. Brief Summary of
the case
II.
Discussion of
theoretical
concepts
III. Questions
& Answers

11. «The difference between Southwest and other carriers is the effort Herbert
gets out of the people who work for him »
TRANSACTIONAL LEADER
• Constantly interaction with
employees
• Relaxed management style
• Use contingent rewards to
motivate employees
• He puts himself on the same
level of other employees
I. Brief Summary of
the case
II.
Discussion of
theoretical
concepts
III. Questions
& Answers

12. “Work is important …
don’t spoil it with
seriousness”
(H. Kelleher)
“There is an unwritten
rule that, if you don’t
want to stay all night
drinking and talking,
then you stay the hell
away from Herb”
(a friend of H. Kelleher)
“You don’t have to
surrender your
individuality to work
for Southwest Airlines”
(H. Kelleher)

13. How to foster motivation
• Parties and celebrations contest
• Culture Committee
• Reward System
Employee
productivity
Motivation
OpportunityAbility
I. Brief Summary of
the case
II.
Discussion of
theoretical
concepts
III. Questions
& Answers

14. The cut-cost policy
Take a look at some data…
I. Brief Summary of
the case
II.
Discussion of
theoretical
concepts
III. Questions
& Answers
Costs per Available Seat-Mile (1993) Southwest Airlines (cent) United Airlines (cent)
Wages & Benefits 2,4 3,5
Fuel & oil 1,1 1,1
Aircraft ownership 0,7 0,8
Aircraft maintenance 0,6 0,3
Commissions on ticket sales 0,5 1
Advertising 0,2 0,2
Food & beverage 0 0,5
Other 1,7 3,1
Total 7,2 10,5

15. c) Recruiting, training and workforce
“You are your culture and your culture is you.”
Southwest
Airlines
Promotion of
informal
teamwork &
help out your
colleagues
Trainings in
order to foster
teamwork
within the
company
We-Feeling
(big family
without
obvious envy)
Integrating
customers into
relevant
processes
I. Brief Summary of
the case
II.
Discussion of
theoretical
concepts
III. Questions
& Answers

16. Organizational Socialisation
Theory (3 phases of
socialisation)
In practice at SWA
Anticipatory Socialisation Long application process +
selective recruiting policy
Encounter All new hired employees get a
training to be prepared for their
new jobs
Change and acquisition Trainings in general as
important form of 2-way
communication & special
trainings (e.g. “The Climb” and
“The Front-Line Forum”)
Process of learning values, norms & required behavior to be allowed
to be part of the organization
I. Brief Summary of
the case
II.
Discussion of
theoretical
concepts
III. Questions
& Answers

17. III. Questions & Answers
Q1. The organizational culture and the cultural values
Q2. The creation of value for employees
Q3. Capturing value in the marketplace
Q4. Generalizability of the model
I. Brief Summary of
the case
II.
Discussion of
theoretical
concepts
III. Questions
& Answers

18. Q1. What are the organizational culture and the key cultural
values at Southwest Airline?
Key Values
Family
Equality
Dedication
Fun
Customer Services
“ Team Spirit. “
“ We’re all one “ rather than “ We’re us and you
are you”
“ Sense of pride, Warmth, Friendliness
“ I love to come each day (…) “ Let’s us have
fun”
“ How many airline do you know that send
birthday and valentine's day card (…) to
customers. “
I. Brief Summary of
the case
II.
Discussion of
theoretical
concepts
III. Questions
& Answers

19. Q2. How does SWA create value for employees?
“leadership implies influencing employees to voluntarily pursue
organizational goals”
Collectivism
use of “WE” Decentralized Parties and Culture
power contest committee
• Performance
rewards
• Teamwork
• Participation
• Commitment
• Affiliation
I. Brief Summary of
the case
II.
Discussion of
theoretical
concepts
III. Questions
& Answers

20. Q3. How does SWA capture value in the market place?
Two important components
A) CUSTOMER SATISFACTION B) COMPETITIVE ADVANTAGE
Reaching customer satisfaction  gaining a relevant position in
the marketplace.
How is it possible?
Thanks to the huge differentiation of SWA in the market, considering
competitors.
There are continual efforts to preserve the values that brought SWA to its
current position
[Triple Crown won 24 times]
I. Brief Summary of
the case
II.
Discussion of
theoretical
concepts
III. Questions
& Answers

21. A) CUSTOMER SATISFACTION
• Simple strategy: Happy staff will be followed by customer
satisfaction and then profits
• Customers are integrated into internal processes :
- Interviews for flight attendants
- Feeling of being relevant and important
• Effective advertising campaign “make Love, not war”
(Lovefield Airport)
What does SWA offer to customers?
I. Brief Summary of
the case
II.
Discussion of
theoretical
concepts
III. Questions
& Answers

22. B) COMPETITIVE ADVANTAGE
“Southwest program is the greatest value because it gives
you free travel faster, for much less money, without
giving up great service” (Kelleher)
The industry of airline characterized by notoriously poor
labor relations and authoritarian management.
SWA is different:
 Trust
 Non-adversarial relations
 Open sharing of information
 High productivity
COMPETITIVE
ADVANTAGE
I. Brief Summary of
the case
II.
Discussion of
theoretical
concepts
III. Questions
& Answers

23. Q4. Is Southwest Air’s model generalizable?
I. Brief Summary of
the case
II.
Discussion of
theoretical
concepts
III. Questions
& Answers
LEADERSHIP VALUES
RECRUITING
& TRAINING
LOW COST
STRATEGY
copied
Southwest
Airlines budget
airline business
model.

24. Thank you for your attention crew … !