Southwest case analysis Essay -- essays research papers

Southwest has made an organization out of providing low-fare, short haul routes between city pairs. It has concentrated specifically on offering low-fares on all of its flights by maintaining its no frills attitude and high frequency of flights. This has afforded Southwest Airlines with the lowest cost structure in the industry. Southwest has created a niche for itself by flying a network of flights between smaller U.S. cities that average just one hour apart. This has differentiated them from their competition and avoided many clashes with industry giants who concentrate more on coast-to-coast flights. Kelleher, who is the president, chairman and CEO of Southwest Airlines is the companies single biggest asset and driving force. Kelleher runs the company very tightly and makes all the major decisions through a very centralized decision making process. This brings to light two potential problems. Firstly, how can a company such as Southwest airlines maintain such a centralized organi zation in the face of growth. Secondly, how is this company going to survive once Kelleher is no longer running it.   Ã‚  Ã‚  Ã‚  Ã‚  The problem that Southwest Airline is facing, is how are they going to survive in an aggressive industry without Kelleher’s leadership. It is a significant problem as the company is a symbol of Kelleher. However, unlike the company, Kelleher has a limited life-span and therefore the company will likely outlive him. This problem therefore requires some urgency as the succession of Kelleher could be the airlines biggest problem. The consequences of Kelleher leaving could be that the company loses its corporate identity. Employees may not respond well to new management. Customers may perceive that the company will not be run in the same manner and will therefore lose its niche market. This could also apply to stakeholders, who will see the departure of Kelleher as a serious decrease in the value of the company. Competitors may also try to take advantage of the company during this unstable period.   Ã‚  Ã‚  Ã‚  Ã‚  Kelleher is the face of Southwest airlines, even going as far as starring in most of their TV commercials. He also personally maintains an excellent relationship with a virtually all-union workforce. He has single handedly given Southwest the lowest employees turnover rate in the industry. Kelleher’s personal motiva... ...with the reality of the firm.   Ã‚  Ã‚  Ã‚  Ã‚  The implementation of this decision will require a marketing campaign that will be used to phase out Kelleher. The major resistance will be from the employees who will be fearful of new management. This will be addressed by the management team reinforcing the corporate strategies to the employees and reiterating the fact that Southwest airlines will remain the same company and the employees should expect things to stay the same. The ramifications of this plan is that power within Southwest could become to decentralized, therefore changing the core competencies of the firm.   Ã‚  Ã‚  Ã‚  Ã‚  In order for this plan to work it would require: Assembling a team to head the marketing campaign, restructuring of upper management, and decentralize decision making. The objective is to redefine and restructure the upper management in such a way that the loss of Kelleher is manageable. This plans effectiveness will be measured by employee and customer satisfaction throughout the transition. The project will be concluded when the new structure has been phased in and the reaction to Kelleher’s departure is under control.