Case #23 Southwest In 2008: Cultures, Values, and Operating Practices

1. Discuss the corporate culture at Southwest Airlines and how it leverages its culture to achieve a competitive advantage. Southwest airlines began in 1966 by Herb Kelleher. His vision was to run a low cost customer friendly airline. Originally, his customer base was to be business class men in the Texas area. Even today, the vision and culture remains the same: Low price and excellent customer service. Since 1966, Mr. Kelleher has been able to keep the culture the same while adapting to changes in the airline industry. Unlike other carriers, all decisions seem to be based on a cost, which sometimes removes extravagant benefits that other airlines offer. For example, all Southwest airline planes are the same, which cuts down on maintenance costs. Next, Southwest does not charge a baggage-handling fee like all other airlines. Furthermore, Southwest does not offer a first class section on their planes. In addition, Southwest tends to fly into smaller markets, which reduce taxes and runway fees. Finally and most importantly, you can only purchase tickets directly from Southwest Airlines. Ultimately, this reduces costs because it removes the middleman. By cutting out the middleman, Southwest controls customer service 100%. As part of Southwest Airlines commitment to customer service, they recruit cheery and enthusiastic employees to deal directly with their customers.