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Southwest Airlines
Sandra GuzmanLisa IkkandaLaura Lopez
Gerame WongDr. Chandler - MGMT 449
Summer 2012, Tuesday, Wednesday, Thursday 8:00 a.m.
Case Analysis
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?
Recommendation 1
• 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 take3–5 years.
Building an Organization Capable of Good Strategy Execution
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.
Recommendation 1
Recommendation 2
• 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
Managing Internal Operations
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
Recommendation 2
Recommendation 3
• 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
Corporate Culture and Leadership
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
Recommendation 3
Figure 12.2 Steps to Take in Changing a Problem Culture (p. 406)
Step 1
Step 3
Step 2
Step 4
Compare and contrast the core competency of both companiesCompare and contrast effective strategies and key success factors for both companies
Substantive: Attend Southwest’s University for PeopleSymbolic: Hold ceremonial events (annual awards banquets)
Employee feedback through blog (Nuts about Southwest) and annual surveys
Keep employee morale highProvide excellent customer serviceBe the industry leader of low-fares
Culture of Southwest
Warrior Spirit
• Work Hard• Desire to be the
best• Be courageous• Display urgency• Persevere• Innovate
Fun-LUVing Attitude
• Have FUN• Don’t take yourself
too seriously• Maintain
perspective• Celebrate successes• Enjoy your work• Be a passionate
Teamplayer
A Servant’s Heart
• Follow The Golden Rule• Adhere to the Principles• Treat others with
respect• Put others first• Be egalitarian• Demonstrate proactive• Customer Service• Embrace the SWA
Family
Culture of AirTran
Our Guiding Principles• Safety• Courtesy• Pride• Teamwork• Innovation• Cleanliness• Anticipation• Results
Our Values• A total commitment to safety• Compliance with regulatory
standards• Technical excellence and
continuous learning• Honesty, trust and integrity• Respectful responsibility for
resolving issues• Acting with purpose and urgency• Hard work• Fun• Profit
Conclusion
• The success of the acquisition will be based on how they implement our recommendations.– Building an organization capable of strategy execution.– Managing internal operations.– Integrate into one corporate culture and leadership style.