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.