Corporate Culture Southwest Airlines Essay Example

levels for its employees along with appealing benefits packages.

Southwest Airlines offers advantages such as profit-sharing schemes, stock options, and 401(k) savings plans to its long-term employees, which are advantageous for most of their staff. The company's work environment fosters a feeling of fulfillment and inclusiveness among its workers. Employees often perform better and participate more when they perceive their workplace as safe and welcoming. The strong team that Southwest Airlines has built within its workforce greatly aids in their prosperous expansion.

The behavior has ignited a competitive edge over other aviation companies. Evaluate the company's financial health by identifying and scrutinizing profitability indicators like operating profit margin, net profit margin, return on total assets, and return on equity. Southwest Airlines operates a profitable enterprise, generating a net income rise of $474.3 million from its 1999 revenues of $4.7 billion. The company prides itself on maintaining a steady track record of lucrative operations for over 27 years. Despite holding an $871 million debt, the organization demonstrates greater fiscal responsibility than any other American airline.

Standard and Poor's report reveals that S. carriers have the highest credit rating in the industry, proudly holding an A rating. Over a single year, their assets demonstrated consistent growth, soaring from $4.71 billion to a remarkable $5.65 billion. Significant increases were also seen in their debt and equity due to common stock issuance combined with retained earnings amounting to $505 million. They successfully turned around their income expenses from -$21 million the previous year to +$7 million currently, showcasing strong financial management strategies. Looking at it on a larger scale, their business approach seems effective as it

has led to increased profits; there was a 9% rise in net income while total revenue experienced a 13% growth.

Discuss the characteristics of a corporation's culture and its impact on business efficiency. For example, consider the traits of Southwest Airlines like trustworthiness and loyalty that provide significant insights. Their clear open-door strategy promotes an atmosphere of trust by encouraging staff to express their concerns and difficulties to higher-ups without any fear. This method nurtures a robust bond between management and employees, consequently enhancing trust throughout the company.

Southwest employees view themselves as vital participants in the company, not merely colleagues. Their commitment to a no-layoff policy mirrors Southwest Airlines' dedication to its workforce. From its founding, the airline has never dismissed any of its personnel. This strategy of no layoffs is seen as a crucial part of the firm's human resources management approach with an aim to sustain and encourage its corporate culture" (Thompson, A. A., Strickland, A. J., & Gamble, J. E., 2010).

Southwest has managed to cultivate a positive relationship with their employees and unions by refraining from layoffs within their structures, unlike other airline companies that have needed to resort to employee layoffs due to a fall in industry revenue. Such attributes are crucial in influencing the company's output, as an employee's performance heavily relies on the rapport they maintain within their employing organization. By demonstrating reliability and loyalty to their staff, Southwest secures equivalent devotion in return from their personnel towards the organization.

In light of the essential choices in this scenario, it is advised that the management takes measures to uphold or enhance the organizational

culture, or instigate required alterations, in accordance with the presented conditions. It is beneficial for Southwest to broaden their business reach within the U.S. as well as across international borders. By extending their services to nations such as Mexico, the company could significantly increase their profit margins. This is due to their unbeatable low prices and impressive turnover rates that would render them more competitive in relation to other markets.

In the business world, recognizing customer needs is paramount, a concept that Southwest Airlines comprehends well. However, their strong emphasis on employee satisfaction may not suffice to attract clients. Therefore, they ought to contemplate introducing additional strategies for winning over customers. It is recommended for Southwest Airlines to persist in its cost leadership approach for maintaining competitive prices and expanding market presence. The continuous pursuit of their market development strategy primarily aimed at local consumers should likewise be maintained.

In the U.S, there's an abundance of unexplored markets yearning for Southwest's operations. Contemplating upon the strategic resolutions within the scenario, three key leadership actions need to be outlined for the execution of these decisions. The reason these actions hold importance is due to their critical role in executing the strategic decision. For Southwest Airlines to successfully enforce these decisions, multiple elements should be taken into account. This includes maintaining open lines of communication with Southwest Airlines employees to discuss thoughts and proposals. Gathering feedback from team members and fostering a culture that encourages dialogue isn't the aim for this organization's implementation.

Southwest Airlines persistently nurtures a sense of teamwork, urging its staff to play a substantial role in its success. Both managers

and personnel are encouraged to contribute to the streamlined operation of the Airline. It's important for Southwest to uphold its mission statement. The willingness of the employees to take part as outlined in the case, proves the clarity of the airline's mission: to function as a low-cost, consistent and dependable short haul airline service. Southwest should persist in nurturing this distinctive culture.

Southwest's vibrant culture and commitment to its workforce have yielded both concrete and abstract advantages, bolstering its competitive edge. It is crucial that the airline continues to adopt and champion up-to-date technologies like their widely accepted ticket-less travel and computer-based reservations. The embrace of advanced technology also extends to their commitment towards acquiring new aircraft, ensuring a youthful, secure fleet of long-range jets. These technological advancements will enable Southwest to control costs, penetrate more markets, and uphold its reputation for safety and dependability.