Southwest Airlines

Southwest Airlines

In the airline industry, Southwest Airlines is considered a true innovator. By shaking up the rules of flying and improving upon inefficient industry norms, Southwest has quickly grown by leaps and bounds. From the very start, Southwest Airlines’ goals were to make a profit, achieve job security for every employee, and make flying affordable for more people (Southwest,2007). Southwest has not strayed from these goals. It does not buy huge aircrafts, fly international routes or try to go head to head with the major carriers; and thanks to a great planning, Southwest airlines has become the most successful airline company in the U.S., if not the world.

Southwest’s philosophy of “Service for Smiles and Profits” encourages employees to treat customer service as the most important aspect of their job. It appears that when employees strive for this high level of service, the rest takes care of itself and success is inevitable (Amanor-Boadu, 2007). Southwest Airline's management structure is designed to carefully direct the activities of employees while still maintaining the spirit of "fun" that is the cornerstone of the airlines’ customer service success (Lancaster, 1999). The fundamental concept of management at Southwest is the notion of a "loose-tight" design. Within the context of tight rules of conduct, employees are encouraged to take a wide degree of leeway. For example, the company encourages employees to make their own customer service decisions. Employees are encouraged to try new things, knowing that they will not be punished for innovation as long as they do not violate safety standards, endanger crew or passengers, or keep a plane from taking off or landing on time; this allowed not only to increase the speed of service but it allowed to increase the quality of it too.

Southwest is organized in a typical hierarchical structure, with employees reporting through a line of supervisors to the CEO himself. While most people will not interact with the CEO on a daily basis, technology allows all employees to keep abreast of the CEO’s activities. At Southwest Airlines, only the Executive Vice Presidents, or top managers, actually report directly to the CEO. These individuals are responsible for making strategic decisions about the future of the organization. They make higher-level, general decisions about the directions Southwest will take in the future and the kinds of policies and procedures that should govern employees' conduct. In the early 1990s Colleen C. Barrett, Executive Vice President, set up a Company Culture Committee comprised of people from all over the organization. The committee meets four times a year, and is charged with preserving and enhancing Southwest's company culture. Under Barrett's leadership, these individuals come up with programs designed to foster teamwork and cross-functional cooperation. Rather than focusing only on a specific area of the organization, Barrett's role is to make sure that all of Southwest's people talk to one another on a regular basis. The policies she implements contribute to the airline's success because she looks beyond a particular functional area to see how each component of the organization can and should work together for the overall good of the company. Treating the customer right is a lot easier when employees are treating one another that way. Each operating division at Southwest has identified its internal customer and focused on his needs. Mechanics who service planes target the pilots who fly them, and marketers do the same with reservation agents. Barrett figures that if they can provide the service to one another that they do to the passengers, Southwest is bound to soar (Teitelbaum, 1992).

Like most top managers, Barrett has a primarily decision-making role. This means that she is likely to initiate and oversee new projects, take action to guide the company through times of crisis, and make decisions about allocating resources to various parts of the organization.

Reporting to Colleen Barrett are middle managers, the Vice Presidents in charge of Advertising/Promotions, Governmental Affairs, Marketing and Sales, Human Resources, and Special Marketing. These individuals translate Ms. Barrett's goals and strategies into actual programs to be implemented within their functional area.

In 1999, Southwest transferred 13.7% of its annual budget for salaries to the profit sharing account. Libby Sartain, Vice President in charge of “People” (Human Resources), insure that human resource policies and procedures, including fringe benefit programs such as profit sharing, help support the teamwork orientation goals of the airline. Like most middle managers, Sartain translates the goals of top management into specific programs and policies within her functional area (Wong,