This document provides recommendations for Southwest Airlines CEO Gary Kelley after the acquisition of AirTran. It recommends: [1] Choosing a strategy that executes Southwest's goals and objectives while integrating AirTran; [2] Implementing best operational practices from both airlines to maintain low costs and satisfaction; and [3] Integrating the AirTran culture into Southwest's culture over 3-5 years through visible actions and feedback processes. Execution steps are outlined for each recommendation to ensure their successful implementation.

1. 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.

2. 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?

3. Recommendation 1
Building 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.

4. 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.

5. 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

6. 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

7. 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

8. 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

9. Figure 12.2 Steps to Take in Changing a
Problem Culture (p. 406)
Compare and contrast the core competency of both companies
Step 1 Compare and contrast effective strategies and key success factors
for both companies
Keep employee morale high
Step 2 Provide excellent customer service
Be the industry leader of low-fares
Employee feedback through blog (Nuts about Southwest) and
Step 3 annual surveys
Step 4 Substantive: Attend Southwest’s University for People
Symbolic: Hold ceremonial events (annual awards banquets)

10. Culture of Southwest
Warrior 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

11. Culture of AirTran
Our 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