Organizational Design and Strategy in a Global Environment Essay
A southwest airline is an aviation firm which was established in 1871 Texas by Rollin King and Herb Kelleher. Before the airlines were launched, the two entrepreneurs faced legal proceedings which frustrated their plans in terms of finances. This is because as the company’s original capital was spent on meeting legal settlements while on the other hand, the Supreme Court had took time in legalizing Southwest airlines to carry out its service.
Even after three years of litigation, Southwest still had no airplanes because of the inadequate capital. Lack of an elaborate management team to come up with the effective plan also limited the organizational planning and control capacity on the operation of the young Southwest airlines company. Lack of employees was also a major hindering factor (Case studies). Other than lack of capital, Southwest airlines also faced rivalry among competing firms like the California airlines which had become popular in the region
When Southwest’s were ready to pick up their business, Civil Aeronautics Board failed to exercise its jurisdiction in cushioning the young firm from competition from foreign firms in Texas. Southwest experienced economic challenges for one and half year of its initial operation since no profits were made. Kelleher wanted to access to the Midway gates by ensuring that the midway airlines remained opened and this assured Southwest’s ability to expand in Chicago and the Midwest and in Florida, a market he had coveted for more than a decade.
Southwest aimed at gaining the biggest market share by concentrating in price-sensitive and time service to customers. Through resilience, Southwest airlines managed to penetrate to other major markets in California and the Southwestern United States. By 2008, it had managed to offer over 3,000 flights daily and the demand was still rising (Gittel, 2005). It is now the leading state airline in Texas.