An inside look at how Koch Industries does business. Washington Post. Tags: business strategy culture organizational culture southwest airlines. Total Length: words 4 double-spaced pages Total Sources: 3 Page 1 of 4. Introduction There are many different pathways to success for companies, and as a result successful organizations can have distinctly different cultures. This paper will examine a couple of different companies — Southwest Airlines and Koch Industries, to examine their different cultures, and how those cultural differences have emerged, and support the overall business objectives of those two organizations.
Culture of Southwest Airlines The Southwest Airlines culture is one of the more celebrated organizational cultures in business. The company is based around " A warrior spirit, a servant's heart and a fun-loving attitude. These values are even reflected on the company website.
For example, this month the Star of the Month is a pilot, and the quote in the feature story is "his love of serving others helped him fit with in the culture from the start" Southwest. The value of this culture to Southwest is simple. Aa a B2C company, it serves consumers, and thus needs to appeal to the needs of consumers in the course of its business. Herb, as everybody called him in Southwest Airlines has given this company a unique culture, where the employees sing and dance with the customers and they give friendship and love more than just customer service. This style has worked for more than 40 years, the airline is love by their customer, who do not really care that there is no first class or preferred seating.
They just want the good service and to be transported from point to point safe, on time and with a better price. Even their stock name reflects love. Southwest was the first airline to negotiate these prices with the oil companies.
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Southwest Airlines has its own school for flight attendants and training for employees, there is no other University that can train them with the special Southwest Airline Culture. Other airlines have the training schools too, what happen is that the culture is different. Other airlines like United trained the flight attendants for First Class and Business class, besides economy, their training takes longer and their uniforms are more expensive.
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Southwest uniforms are less expensive and they only have one class, economy. Their flight attendants are also trained to clean the plane on turn around. This has saved Southwest salaries on each city for cleaning. Only on cities that the planes stay overnight they have a special cleaning crew that gives the plane a complete service.
Role Of The Culture Committee At Southwest
Southwest has all his mechanics highly trained for only one kind of aircraft and the maintenance inventory of their pieces for maintenance in their planes are all the same and this means that they do not need millions of dollars in equipment and train mechanics for each different type of aircraft. It was here when all the eyes of the analyst look at Southwest as the marvelous company that has been doing the right thing all the time, and that was prepared with enough cash, for any eventuality.
Southwest Airlines is name in every management book as example of how to conduct an airline and what strategy they have to hold their employees and have very low turn around. Strategy which gives their passengers what they want, and also the strategy has made Southwest a profitable airline since For Southwest Airlines the employees come first and customer second.
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By having employees satisfied with their job, and treated like family, they will be able to give the best customer service with warmth, friendliness and keep all customer satisfied too. The airline has pursued low fares to make affordable travel to a majority of middle class customers. By charging low fares, and no charging extra fees on baggage, and changing tickets, the customers know exactly what they are paying without paying any extra charges.
Southwest serves 72 airports in 37 states and transports Million passengers annually.
With their 20 minutes turn over on each point, the airline has on the air their planes most of the time. This capacity utilization makes their cost down and has a competitive advantage over other airlines whose turnaround times were more than 30 minutes. Their bargaining power with suppliers like fuel prices paying in advance and saving millions of dollars over other airlines.
Their labor efficiency and pay scales. By training their employees to perform the best and guarantee them good pay and becoming more important than customers, Southwest has economized in having fewer employees per aircraft than other airlines. Employees have in average the same salary as other airlines, employees get profit sharing plan, however they work more. In economies el scale, Southwest Airlines operates only jets Boing with planes, Boeing with and Boing with 25 planes. Having the same kind of planes they operated with very low cost. Widespread Reach: As of the end of , the company serviced 72 cities in 37 states, stretching across the entire United States, and their AirTran acquisition now extends their reach into international skies, mostly over Mexico and the Caribbean islands.
Southwest announce 15 more nonstop services from Dallas Love field Airport. Online systems and software, Southwest Airlines invested in next-generation technology and software to improve its ticketless system and its back-office accounting, payroll and human resource information. Previously they have invested in its management information systems to speed data flows and upgrade its customer capabilities.
Southwest Airlines Culture and Management Thesis
In implemented new software to generate optimal crew schedules it help improve on-time performance and reduce employees in the schedule department. Southwest operating cost had been lowers than other airlines. Thompson, A. Successful differentiation from other airlines is their employees culture, which is transmitted to the customers, employees give a warmth customer service, normally calling the passengers by their first name, singing and hugging and kissing. No other airline does this. November 13, By giving the same product at a better price than other more expensive airlines, Southwest Airlines has been able to have a larger share of the market.
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Southwest has a reputable brand with excellent record of safety, this is a major advantage. Additionally, average passenger revenue per available seat mile rose 1. Ing, S. July 24, Weaknesses Operating Expenses: The average cost per gallon of fuel from to grew Depending on only one company as supplier for their planes can be a problem if the supplier fails or stop their production.
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Although Boeing is a robust company, changes can affect Southwest Airlines. The economy, even though Southwest is a low cost airline, until the economy continues low, people cannot fly unless is business or emergency. Achieving sustainable competitive advantage for Southwest is becoming harder as operating costs are going up and the company has a low net profit margin. Guenette, R. November 13, Opportunities The industry attractiveness is a strength and an opportunity for Southwest Airlines, the only major airline that do not charge for baggage, many customer look into this as they are also attracted for the price the service, safety and excellent rate on time performance.
As a complementary strategy function, Southwest Airlines acquisition of Air Tran gives them the option to fly international for the first time.