Business Background and StrategyGeneral StrategySouthwest Airline(SWA) has differentiated its strategy compared to other major airline companies such as Continental, American and etc. They have abandoned the system so-called “Hub & Spoke”, and focused on the “point-to-point” system, and tried to keep average flight time to 65 minutes. The strength of point-to-point system is that customers can reach destination without via other cities, in other words direct-flight. According to the article, “In 1993, 80% of their customers fly non-stop to their final destination.” In addition, they could avoid delays due to connecting flights. This time-saving led to higher equipment utilization, which helped SWA to have safe flight.Advantages of Southwest AirlineLow FareSouthwest Airline has cut the price dramatically. There are several reasons how they could have low air fare and maintain it.First of all, company only flies with fuel-efficient 737s. This helped SWA to save cost and allowed them to hn the function of monitoring and have nullified manuals and instead placed experienced experts on the front line.Leadership at SouthwestSWA has more managers than other corporations. It is because to make managers work together with the colleagues rather than setting the goal and allocating the tasks that workers needed to do. In order to work together, they needed to have as many interactions as they can with the in-service employees, so that manager can actually feel the difficulties that employees are having. SWA could reinforce their thrust power between managers and workers.Teamwork No. 1SWA does not person only with professional skills. What they are really looking for is the person with good personality such as good social relationship, kindness, teamwork and etc. SWA only hired and trained those who met the criteria of good attitude rather than professionalism. SWA also adopted “peer recruiting”, which helped SWA to find better human capital easier and with more reliable sourcesider labor union as opposition of the firm. However, SWA is different. SWA considers labor union as their mutual partners. They form horizontal and personal relationship with them and build trust among two. Where there needs something to be negotiated, both sides collect enough information about the topic so that they can have smooth negotiation. Also, because SWA does not hire much temporary or contract employees, it gives confidence to the regular employees.RewardSalary and IncentivesSWA focuses more on team-based incentives rather than individual-based. This triggers individuals in the department to work hard together to achieve the company goal. The method of compensation is stock options. Stock options are highly related with the performance of the firm. Therefore, in order to maximize their incentives, workers are required to put all the efforts that they posses. Also, SWA tries to reduce the salary gap between managers and full-time workers. The CEO of Southwest ranked at the finstrumentality. All the managers and employees contain high motivation to make the company best - the expectancy. With three perfect components working smoothly, Southwest airline had enormous amount of motivation within not only the company but also the workers as well.Note similarities/differences when compared to other companies we discussIn the article, there are two examples of differences between Southwest Airline and Continental and United. Both Continental and United recognized their internal problem and lack of competitiveness related to SWA, and tries to imitate what SWA has done. However, both failed.Continental Airline changed its strategy under the command of Bob Ferguson. What they did was they tried to copy the customer service and cost saving of SWA. However, they failed. The main reason why was because of difference in culture. Continental suddenly requested their flight attendants to be kind and be humorous toward their customers so that they can attract their travelting” system. The problem of “peer recruiting” is that some might think as unbiased. It is because the ones who are linked with the SWA employees will have higher chance of getting a job. If a SWA employee lies about strengths that his/her friend have which meet the SWA criteria, then there will be what Koreans call “parachute”. This unfair draft might bring complaints from outside of the company which will strike them.Thirdly, Southwest might not act quickly to the changes. One fatal weakness that humans possess is the “law of resilience” or “path dependency”. What humans do is that they want to keep the way it is if the result is satisfactory. Moreover, the proportion between “keeping their own way” and “internal strength” are positive. In other words as internal harmony is more tenacious, they tend to stay with what they are dealing with right now. And as we know, Southwest Airline is very strongly connected internally, and the employees show great content for having their job at SW 1 -
Southwest Airline - HR Diamond, Strategy, Alignment
평가A+최고예요
