The Secret to the Success of Southwest Airlines

Southwest Airlines has been prospering in the airline industry since 1971 (Wharton, 2008). Despite rising fuel costs and the sluggish economy, Southwest has been able to stay profitable with their genius business model since 1973. Coming a long way from its humble beginnings, Southwest has grown to 34,000 employees that fly to sixty four different cities using more than five hundred different planes (CBS News, 2007).

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Southwest vs. Competitors For Southwest, the secret to success lies within the employees and their genius business model. These advantages allow them to compete with their three main competitors: Delta Airlines, American Airlines, and Jet Blue Airways (Hoover’s Inc.

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Unlike their competitors who place the most value on the customer, Southwest places the importance on the employee. As far as Southwest Airlines is concerned, if you treat the employee with pro-active customer service then the employees will reciprocate that service to customers. Once happy customers are created, they become repeat customers, which create happy shareholders (Wharton, 2008). To Southwest, this business model is the sure formula to infinite success.

Since opening their doors in 1971, Southwest has never had a layoff, nor has it ever cut salaries. In fact, “it’s one of the best-paid, most highly-unionized airlines in the industry” (CBS News, 2007). As CEO Gary Kelly says the difference is, “People working together, people lovin’ each other, people respecting each other” (CBS News, 2007).

Their genius business model and employee appreciation is not the only thing keeping Southwest above the rest, however. Southwest Airlines also has an unbeatable turnaround time of just an average twenty three minutes (CBS News, 2007). The caring attitudes of the flight attendants and pilots has also allowed Southwest to omit reserved seating. This allows for a more social, friendly environment that gives customers yet another reason to choose Southwest Airlines over any other competitor. Organizational Control in Southwest Southwest Airlines is a company of great magnitude so it is essential that organizational control is established all throughout the enterprise. The first method of organizational control that Southwest uses is a functional organizational structure. This allows the top levels of management to make all of the important decisions and stay in control (Liu, 2012). The second method Southwest implement is a sense of community (Wharton, 2008).

Colleen Barrett, President of Southwest Airlines, is known for always telling of Southwest’s reputation for being a loving family type of environment; this allows freedom to the employees. If the employees feel well respected and taken care of, they are more likely to respect authority and obey guidelines within the company. The third method of organizational control Southwest Airline’s demonstrates is exceptional employee training (Wharton, 2008). Employee training is an old, yet effective form of organizational control. Employees are eased into the training experience and leave knowing they can complete their duties to the expectations of the company. This method takes the pressure off of both employees and management. Once training is done, management is positive that employees know their duties and will perform them well without managers hovering. Organizing and Controlling It may not be apparent to everyone, but organizing and controlling do tend to go hand-in hand even if they are not the same thing.

Organizing is the process of establishing good uses for all resources within a management system (Dutton). In short, management must organize a company to be sure that all resources are used in a way that generates some sort of good for the company. Control is exerted to allow management to compare performance of employees throughout the company (Dutton). Without control, there is no organization. If management does not have absolute control over their employees then organization is pretty much as impossible; the entire company will consist of disorder and chaos. Once a corporation has control over the company, organization of resources and employees can follow; this makes running any form of business a lot simpler. Employee Performance Monitoring Southwest Airlines uses a variety of methods to monitor the performance of their employees. Some of the methods are quirky, and some are a bit more traditional.

To see just how unique their monitoring process is, I conducted a brief interview with three individuals in regards to how their workplace managers monitor their employee performance. My first participant is a 20 year old male who works as a designer at an international gas company. When asked how he was monitored by his employer he responded with, “We have an employee performance management system where I have to create goals aligned with the company and my departments overall goals. I also have to include how I want to grow as an employee. Then I do a one-on-one review of goals and performance with my boss twice a year.” He was happy to do the interview. It seemed as though he had a liberal workplace. As long as he got his work done on time and it was done well, his boss is pleased.

My second participant was an 18-year old female who works at a local gas station. When she was asked how her bosses monitored her performance she replied, “Both of my managers are always on top of our performance. They work the same hard work that we do so if they’re not on us, they have to pick up the slack and they do not enjoy that. At the end of every shift the manager gives an informal evaluation. Basically she tells us if we did great that day or if we need to improve on something.” She was off-put when I asked her to conduct the interview. It seemed to me that she did not frequently talk about work with most of her friends. My third participant was a twenty two year old male who works as a cook at a local restaurant. When asked of how his boss monitored his performance he laughed and replied, “They (owner and managers) are literally on us all day.

If he (owner) is not on the line working with us, he is sitting in his office watching us from the cameras. It’s really uncomfortable. We have time cards too that are watched closely. They look for any excuse to dock your pay.” The interview seemed comfortable for him. He honestly appeared kind of happy to be able to vent about the situation. It seems to me that employees enjoy it when their managers are more hands-off and expect them to be self-reliant. This series of interviews allowed me to see how a friendlier, quirky environment can relieve stress from employees and overall create a better business. Employees want trust from their managers and appreciate a bit of independence.

References

1. CBS News (2007, August 30). Something Special About Southwest Airlines – CBS News.Retrieved February 8, 2014, from http://www.cbsnews.com/news/something-special-aboutsouthwest-airlines/
2. Dutton, K. R. (n.d.). Management Issues: ‘The Basics: Organizing, Controlling and Influencing’.Retrieved February 8, 2014, from http://www.emsvillage.com/articles/article.cfm?id=797
3. Hoover’s Inc. (n.d.). Southwest Airlines Co. Names of Competition. Retrieved February 8, 2014,from www.hoovers.com/company
   information/cs/competition. Southwest_Airlines_Co.0e6ec4453563eb4d.html
4. Knowledge AtWharton (2008, July 9). Southwest Airlines’ Colleen Barrett on ‘ServantLeadership’ [Video file). Retrieved from http://www.youtube.com/watch?v=6TgR95vnMOC
5. Liu , I. (2012, May 7). Organizational Structure Analysis for Southwest Airlines Co. | I-Hui’sBlog [Web log post). Retrieved from
   http://www.danielihliu.com/blog/2012/05/07/organizational structure-analysis-forsouthwest-airlines-co/