Case Study on "Southwest Airline"

Case Study 4 pages (1319 words) Sources: 0

[EXCERPT] . . . .

SW Airline Case Study

There are several Human Resources systems at place within Southwest Airlines that allow the company to maintain competitive advantage over its rivals. These systems work efficiently primarily thanks to the unique corporate culture nurtured by SW's founder Herb Kelleher and his supporters. SW promotes values such as teamwork, dedication, cost-consciousness, hard work, respect, optimism, humor, care, and workforce dynamics. The management put in place numerous motivational programs that are continuously revised and improved. HR systems at SW are employee- and union-friendly, whereas many of its rivals have been trying to minimize or completely eliminate unions. The systems also encourage productivity, allowing, for instance, the pilots to fly longer hours and also cut costs overall. The system that allows comparative advantage at SW starts with its leadership. Kelleher treats the employees as if they are his equals and friends, staying up with mechanics until early morning or joining parties with them. Kelleher has turned this attitude into company culture, making sure that others in leadership positions follow suit. The positive, family-like attitude is emphasized everywhere at SW. For instance, the Human Resources has been renamed "The People Department." Just like some managers are adopting the term "coaching" instead of "managing" (because the latter is associated with control), at SW employees are not called "resources" (thus classifying them alongside non-human resources) but "people." The HR theory today emphasizes that people are more comfortable and exhibit greater motivation when they feel that they are not being controlled or treated as "things." This is certainly an advantage since SW's many rivals treat employees in authoritarian fashion. SW also put a recruitment system that allows additional advantage. Those recruited to SW join the company because they believe in SW spirit and principles rather than for money alone. Some employees gave up offers with higher wages from rival airline companies and took jobs at SW. Those who do not believe in SW principles are not recruited even if the have top quality qualifications such a pilot whose application was rejected for being rude to a receptionist.

2. SW, in my opinion, sets a positive example for a number of reasons. It is a company that is both employee- and customer-oriented and at the same time is commercially successful. Although a relative late-comer to the industry, SW today is the largest commercial airline company in the U.S. SW is built upon the most effective and efficient HR principles. For example, SW's organizational development is fully consistent with Edgar Huse's suggestion that an organization should be "competent by increasing both its effectiveness and its efficiently, with heavy emphasis on reducing the conflict, actual or potential, between organizational requirements and human wants and/or needs" (PP "Organizational Development"). And SW is not only union-friendly, but also set up a "catastrophe fund" funded by voluntary donations to help employees who may be in urgent need and the budget to finance parties and celebrations. These policies are all in place to avoid any conflict with human needs and wants, encouraging instead the employees to feel themselves at home in a family. In treating its employees, SW meets the human workforce needs identified by Maslow, successfully use McGregor's theory Y and eliminate his theory X, and maintain Herzberg's extrinsic and intrinsic factors positively. SW also provides exemplary customer service, encouraging its employees to help the customers voluntarily. And while SW offers excellent services to both employees and customers, the company still manages to offer reduced fare, simplified fare, and additional services (such as Wi-Fi on board which they began to introduce in 2010 and plan to finish by 2012). The fact that SW sets a positive example can be seen by the way the company influenced the HR systems in the industry. Also, the fact that Continental and United tried to challenge SW by copying its strategies is the testament to SW's exemplary success.

3. Different parts of SW's HR systems work fairly smoothly, avoiding significant conflicts with… READ MORE

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