Images of organization

Sample 1

Southwest initiated its first flights in 1971 with round trip low-fare flights between three cities, Dallas, San Antonio, and Houston (Thompson and Gamble, 2010). Today however, Southwest serves seventy-eight cities, all of them domestic, most of them medium sized, from Akron, Ohio to West Palm Beach, Florida (Popular, n.d.). Along the way, Southwest engaged in a variety of efforts to enhance its visibility and to mobilize more passengers. <o:p></o:p>

Two of those efforts, although entirely acceptable in the era, would likely raise some politically correct eyebrows in these hyper sensitive times. First, according to Thompson and Gamble (2010), they had their “flight hostesses dress in colorful hot pants and white knee-high boots with high heels” (p. C-278). These skimpily dressed young ladies likely drew a large crowd of businessmen to Southwest. Southwest also served free alcoholic beverages during daytime flights and in 1973, offered complimentary bottles of premium liquors with the purchase of a ticket for a brief period (Thompson and Gamble, 2010). <o:p></o:p>

Some more conventional marketing efforts included catchy advertising campaigns, 10-minute turn-around times by having their ground crews multi-task, the creation of the two-tier on-peak/off-peak pricing structure and the reduction of travel time to and from the large cities by maintaining their locations in the older downtown airports (Thompson and Gamble, 2010). <o:p></o:p>

These days, “Southwest, which flies more domestic passengers than any other U.S. airline, is going international” (Jones, 2012). Jones (2012) reports that after buying AirTran, Southwest, has picked up its routes to Mexico and the Caribbean. This is a shift in strategy for Southwest, which has focused on reliable low-priced service within the United States, is poised to expand into these areas with footholds in Texas and in Atlanta. <o:p></o:p>

Legal and Regulatory Hurdles<o:p></o:p>

Starting in the 70s, through today, Southwest has been embroiled in a continuing series of legal proceedings and regulatory hurdles, overcoming most of them. Its current legal issues include a complaint filed against AirTran (now owned by Southwest) for a violation of the Sherman Act in which it is alleged that AirTran conspired with Delta to monopolize air travel in imposing a $15.00 –per-bag fee for the first item of checked baggage, amongst other issues. Additionally, Southwest is continuously subjected to a variety of proceedings and claims arising from the ordinary course of business, including IRS examination (Southwest, 2012). <o:p></o:p>

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SWOT Analysis<o:p></o:p>

Strengths: Southwest Airlines has great relations with its unions. Their low-cost and efficient method of operations lends itself to lower fares. Southwest’s people management practices and the corporate culture keep their employees happy which, in turn, keeps the customers happy. With rare exception, Southwest maintains “one of the safest operations in the world” (Thompson and Gamble, 2010, p. C-306).<o:p></o:p>

Weaknesses: Most southwest employees belong to a union. When there is a union, there is always the possibility of strikes or lockouts, which can be disruptive and costly. Southwest does not offer the frills that many other airlines offer such as lounges, movies, etc. Southwest offers only one class of seating, cattle call. You cannot book a flight on outlets such as Expedia or Orbit, you must use their website.<o:p></o:p>

Opportunities: Continued expansion into the international market. Southwest can achieve this through acquisitions, such as the recent AirTran acquisition which brought them to Mexico and the Caribbean. Southwest can move beyond its self-imposed limitation of using only the 747 and use more recent plane technology, such as the Dreamliner.<o:p></o:p>

Threats: Increases in fuel prices will either threaten fare prices or reduce the number of customers. Southwest, like all airlines, is faced with the ever-growing number of government regulations which can increase fares. The saturation of the industry with competition hurts profitability.<o:p></o:p>

Action plan and set of recommendations <o:p></o:p>

Continue to expand internationally<o:p></o:p>

Thompson, Peteraf, Gamble, and Strickland (2012) list a number of reasons for international expansion, including access to new customers, lower costs through economies of scale, to exploit core competencies, to gain access to capabilities in foreign markets, and to spread risks across a wider market base. As the U.S. domestic market is increasingly saturated with low-cost providers, by expanding internationally, Southwest will find customers abroad and retain its position as a leader in the industry. <o:p></o:p>

Maintain a corporate culture that fosters loyalty and commitment<o:p></o:p>

Thompson and Gamble (2010) note that the culture at Southwest Airlines “fostered high labor productivity and contributed to Southwest’s having low labor costs in comparison to the labor costs of at its principal domestic rivals” (p. C-305). Corporate culture exerts profound influences on employees. It stands to reason then, that a good corporate culture will exert positive influences on employees, which can lead to corporate success. Corporate culture can help leaders with stability and control, competitiveness and productivity, flexibility, cohesion, and innovation. Greenberg (2010) in discussing culture states, “relative to other companies in their fields, those with strongest corporate cultures tend to have the best financial performance” (p. 348). <o:p></o:p>

Sustain a state of good labor relations<o:p></o:p>

Thompson and Gamble (2010) note Southwest is “one of the most highly unionized U.S. airlines” (p. C-301). An ever-present killer of a good corporate culture is the employee union(s). Morgan (1998) notes “foremost among all organizational countercultures are those fostered by trade unions” opining that “unions are in effect countercultures in the sense that their existence stems from the fact that the interests of the employee and employer may not be synonymous” (p. 131). By encouraging union members and negotiators to research their pressing issues and to conduct employee surveys before each contract negotiation” (Thompson and Gamble, 2010, p. C-302) as well as non-restrictive work rules and broad job classifications, Southwest will continue to foster a culture of loyalty and commitment.<o:p></o:p>

Strategy<o:p></o:p>

The recent acquisition of AirTran, the All-New Rapid Rewards frequent flyer program, and a plan to modify its reservation system to include international destinations and provide enhanced customer service all serve as a defense against high fuel prices and the bad economy. Replacing older Boeing 737 planes with the larger and more fuel-efficient Boeing 737-800 and plans to use the new fuel-efficient model Boeing 737 Max for expansion to locations of greater distance, will enhance profitability. In partnership with the Mexican carrier Volaris, Southwest provides service that allows passengers to book international flights by connecting with Volaris through most Southwest-served cities. Volaris flies to Mexico City, Guadalajara, and Aguascalientes (Anonymous, 2013). <o:p></o:p>

I give Southwest a B+ for its strategy. I would have gone higher except having flown on Southwest, I often feel the cattle-call aspect of their methods and get the impression that I’m on an urban bus ride while in flight. <o:p></o:p>

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References<o:p></o:p>

Anonymous. (2013, January 2). Apple, inc. [Snapshot]. In Hoovers. Retrieved January 6, 2013, from LexisNexis Academic website: http://www.lexisnexis.com.ezproxy1.apus.edu/hottopics/lnacademic/?<o:p></o:p>

Greenberg, J. (2010). Managing behavior in organizations. (5th ed.). Prentice Hall: Upper Saddle River, NJ<o:p></o:p>

Jones, C. (2012, May 23). Domestic giant southwest sticks nose into international air. USA Today. Retrieved from http://travel.usatoday.com/flights/story/2012-05-23/Domestic-giant-Southwest-sticks-nose-into-international-air/55174412/1<o:p></o:p>

Morgan, G. (1998). Images of organization. (The Executive Edition). Berret-Koehler Publishers, Inc: San Francisco, CA<o:p></o:p>

Popular routes and destinations. (n.d.). In Southwest.com. Retrieved January 11, 2013, from http://www.southwest.com/html/air/routes/index.html?int=GFOOTER-DIFFERENCE-ROUTES<o:p></o:p>

Southwest Airlines CO [Form 10-Q (Quarterly Report)]. (2012, October 26). In Edgar Online. Retrieved January 11, 2013, from http://www.southwest.com/<o:p></o:p>

Thompson, A. & Gamble, J. (2010). Southwest airlines in 2010: Culture, values, and operating practices. In A. Thompson, M. Peteraf, J. Gamble, & A. Strickland (Eds), Crafting & executing strategy: The quest for competitive advantage: Concepts and cases (pp. C276-C309). New York, NY: McGraw Hill<o:p></o:p>

Thompson, A., Peteraf, M., Gamble, J., & Strickland, A. (2012). Crafting & executing strategy: The quest for competitive advantage: Concepts and cases (18th ed.). New York, NY: McGra