...chapter, we explored several alternatives to layoffs as a means of reducing a labor surplus. Compare and contrast the list we generated with what was done at Southwest in the wake of the 9/11 attacks. How did the response at Southwest differ from other airlines? This case shows how a company, Southwest Airlines, was able to go against the normal cost-cutting measures of a layoff and not downsize employees even during an extremely difficult period in the Fall of 2001. Southwest Airlines has a strong focus on its employees and a no-layoff policy which is “one of the core values that underlie its human resource strategy” (p. 218-9). Downsizing of any kind would have undermined this strategy, so it was clearly not an option for the company. This was not the case with the other airlines. The case outlines “draconian cuts in both schedules and service” made by Southwest’s competitors even before the 9/11 attacks. After the attacks, over 100,000 employees were downsized by the other airlines (p. 217). Southwest’s alternative to layoffs was to cut costs through other ways. The company was able to rely heavily on its employees who were very productive and flexible (p. 218). High productivity equates to a cost savings for the company because it keeps the labor costs low. Some of this cost savings was passed on to consumers who were also looking to reduce their own costs during the economic crisis. Because of the commitment to its no layoff policy, the company was also able to leverage...
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...Southwest Airlines has adopted a cost leadership strategy. Southwest chooses to operate by the most efficient way by concentrating on short-haul segments rather than hub-and-spoke system. Southwest Airlines has created its own niche by providing short-distance flights connected less populated airports that have often been ignored by the large carriers. They use the same fleet of aircraft that helps them in limiting the number and variety of technicians and the training expense that would be required of a fleet consisting of various different kinds of aircrafts. It also doesn’t provide full services such as food, designated seats etc. to keep their cost down. It also invests heavily in fuel futures by locking in fuel prices in advance that has helped them in saving millions in dollars even after the fuel prices have been increasing. It believes that it should satisfy its employees first and then they would satisfy its customers. It believes that it should trust and stand on its employee’s side. All the employees of Southwest Airlines work as a big family, and everyone in the crew share the responsibility of cleaning up the aircraft, and enabling their planes to have the take-off again after a spending very short period of time after the ground duty. The company has a strong, fun-loving, employee-oriented culture. The company's mission statement focuses on these aspects of the business. The result is a loyal employee base that is willing to work hard to achieve the company's...
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...Employment Downsizing and Society Student name Student University Abstract The purpose of this research paper is to present the implications of the downsizing to the former employees and the social environment around this individual. The author presents the theoretical implementations of the downsizing and provides the implications to the laid of employee, his/ her family, and the employee who kept his/ her work. Later, the author discusses about ethical questions related to the downsizing. Keywords: downsizing, social impact, business ethics Studying Business Ethics and examining real life situation an individual starts to see the world from a different angle. The one starts to see the other side of a dilemma and begins to realize that sometimes decision made might affect both his/ her life and the environment around them. Most of the times, the decision is like a scale of wrong and right. Therefore, understanding the consequences – both negative and positive – is an essential part of decision making process where personal benefit or strong relationship might contradict individual’s worldview or belief. In my paper, I will discuss the problem of making decision of the top managers to pursue economic benefits when restructuring the organizations and potential ramifications, such as impact of employment downsizing on employees, communities, and families of the employees. To start with, employment “downsizing refers to a company's decision...
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...Introduction:- Southwest Airlines is the largest airline measured by number of passengers carried each year within the United States. It is also known as a ‘discount airline’ compared with its large rivals in the industry. Rollin King and Herb Kelleher founded Southwest Airlines on June 18, 1971. Its first flights were from Love Field in Dallas to Houston and San Antonio, short hops with no-frills service and a simple fare structure. The airline began with one simple strategy: “If you get your passengers to their destinations when they want to get there, on time, at the lowest possible fares, and make darn sure they have a good time doing it, people will fly your airline.” This approach has been the key to Southwest’s success. Currently, Southwest serves about 60 cities (in 31 states) with 71 million total passengers carried (in 2004) and with a total operating revenue of $6.5 billion. Southwest is traded publicly under the symbol “LUV” on NYSE. The Case:- South West airline who is known for low cost airline was facing completion from other airlines and also called for imitators like Kiwi and Reno Air as well as major airlines like United and Continental. Rhoades an MBA had joined SouthWest airline to transform the so-called people department, because they think that there advantage lies with kind of employees they have. Since its instigation, Southwest has maintained the same strategy by concentrating on flying to airports that are underutilized close in to metropolitan...
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...Southwest Strategically Robert E. Woodward Embry Riddle Aeronautical University Abstract The following document will discuss and analyze how Southwest Airlines has become an industry leader in the air carrier business. How has Southwest Airlines adapted after the attacks on the Twin Towers of New York and the Pentagon on September 11, 2001. Where is the company headed in the future? Recommendations after a SWOT analysis will be made on how Southwest could remain one of the dominant leaders in the airline business. Southwest Airlines Corporate Stategy I. INTRODUCTION A. Executive Summary 1. Summary statement of the problem: Where did Southwest Airlines begin and how do they stay competitive in the air carrier industry since the attacks on America the morning of September 11, 2001. 2. Summary statement of the recommended solution: Southwest can stay competitive by reshaping its rewards program and trying to increase its customer loyalty. B. The Situation Southwest Airlines began business in 1971 offering flights between Houston, Dallas and San Antonio Texas. Now Southwest Airlines operates in more than 35 states. It offers shorter flights than other air carriers; that average less than 1.7 hours. Most of Southwest’s flights are non-stop. Southwest Airlines customer focused attitude helps them to become the leader in US flights, according to the bureau of transportation statistics (docstoc). On September 11, 2001, terrorist attacks shut down...
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...STRATEGY MBL 915P Southwest Airlines in 2008: Culture, Values and Operating Practices Repeater Assignment 2 By : Refiloe Mokebe (72542683) 9/6/2011 Table of Contents Introduction 3 Question 1 – What is impressive about South West? 3 Question 2 – Benchmarking against the best practices 4 Question 3 – Key drivers for low cost / no frills strategy 6 Question 4 - What are the key elements of Southwest’s culture? 9 Question 5 - What grade would you give Southwest management? 13 Question 6 - What problems or weaknesses do you see at Southwest Airlines? 15 Question 7 - What recommendations would you make to Gary Kelly? 16 List of References 17 Introduction The objective of this assignment is to apply analytical methods on how Southwest Airlines strategy is executed. Various Strategic models will be used in analyzing how Southwest Airlines is applying and executing their strategy. In late 1966, Rollin King, a San Antonio entrepreneur who owned a small commuter air service, marched into Herb Kelleher’s law office with a plan to start a low cost/ low-fare airline that would shuttle passengers between San Antonio, Dallas and Houston. Southwest Airlines was founded as Air Southwest Company in 1967, it incorporated as Southwest Airlines in Texas and began customer service in 1971. The airline was founded on King’s simple business concept “attract passengers by flying convenient schedules, getting them to their destination on time with good experience...
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...case: United Airlines Time Context: 2003 Summary United Airlines is the world’s largest air carrier and the second largest in the U.S. United is owned and controlled by its parent company UAL Corporation. United has hubs in San Francisco, Chicago, Denver, Los Angeles, and Washington D.C. and also has key international gateways in Tokyo, London, Frankfurt, Miami, and Toronto. During 1995, United was experiencing profit and cash flow problems at that point and in order to achieve an operating cost reduction of $ 4.8 billion, specifically in salaries, Gerald Greenwald, CEO and chairman of the UAL, created an agreement with the pilots, machinists, and non-union salaried employees to accept the wage cuts provided they were given 55% ownership of the airline and each group was awarded one seat on the board of directors. United Airlines experienced a turbulent journey while traveling in its goal to be the top in airline industry. It was December of 2012, when Glen Tilton, CEO and Chairman of UAL, himself drove to Chicago’s O’Hare International Airport to personally assured UAL flyers that notwithstanding the previous day’s filing of bankruptcy, United will be flying its usual routes and guaranteed the employees that their jobs are secured, for the time being. The company’s financial problems are speculatively and frequently viewed as a result of the 9/11 hijack attack. The terrorists’ attacks of September 11, 2001, draw a major blow to the airline industry; especially...
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...Economic Analysis of Southwest Airlines Facilitator: James Young MGT: 513 Managerial Economics October 14,2012 Economic Analysis of Southwest Airlines History of Southwest Airlines History and Key Defining Moments Southwest Airlines was founded in 1966 when a group of Texas investors pooled together 560,000 to form the Air Southwest Company, incorporated in 1967 the company was envisioned as a commuter airline serving the cities of Texas, Dallas, Houston and San Antonio. Although the Texas Aeronautics Commission (TAC), the body responsible for overseeing aviation within the state granted the company permission to fly the routes requested in February 1968, three competing airlines filed suits to prevent the airlines form getting off the ground. An attorney, who stake in the company was a mere 20,000, took the case all the way to the U.S. Supreme court and in December 1970 this court ruled in the favor of Air Southwest. Early in 1971, Air Southwest changed its name to Southwest Airlines, the fledgling airline began operations on June 18, 1971 under the stewardship of President M. Lamar Muse, the airline offered six daily roundtrip flights between Dallas and San Antonio, and twelve daily roundtrip flights between Dallas and Houston. The start of service in June 1971 was accomplished with three 737-200 aircrafts that had been obtained from Boeing on favorable terms, and a fourth aircraft was obtained in September of 1971. The rest of 1971 and 1972 saw operating...
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...years, air travel has grown by approximately seven percent per year. However, the airline industry suffered its largest downturn between 2008 and 2009, due to the economic downturn. Airlines carried 767,627,651 passengers in 2009, down from 809,447,811 passengers in 2008. Airlines have been forced to accommodate the economic recession by cutting flights, rescheduling existing routes, and looking for new revenue streams. As the economic recession revives itself, the demand for flights has begun to increase with 787,182,312 passengers flying in 2010; a significant upturn from the previous couple of years. Business travel has grown as companies increase their international presence in terms of their investments, supply and production chains and their customers. The rapid growth of global trade markets in goods and services and international investment have all contributed to growth in business travel. The domestic travel industry in the United States is typically a low cost, low fare environment. Most of the major airlines have undergone cost restructuring. Some airlines have sought the protection of Chapter 11 bankruptcy to restructure and reduce costs and then emerged as strong low-cost competitors. The majority have entered into cross-border alliances to improve profitability through synergy benefits. In order to meet the requirements of their increasingly discerning customers, some airlines have invested heavily in the quality of service that they offer, both on the ground...
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...g Downsizing: Layoffs/Closings [pic] | | | | |Top of Form | |[pic][pic][pic] | |Bottom of Form | | | | | |Introduction | |Leadership Examples | | | |Business Importance | |Sample Policies | | ...
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...management. Research, experience, and common sense all increasingly point to a direct relationship between a company's financial success and its commitment to management practices that treat people as assets. Yet trends in management practice are actually moving away from these very principles. Why is common sense so remarkably uncommon when it comes to managing people? Why do organizations habitually overlook readily available opportunities to boost their financial performance? Drawing on extensive empirical research, an irrefutable business case can be made that the culture and capabilities of an organization, derived from the way it manages its people, are the real and enduring sources of competitive advantage. Managers today must begin to take seriously the often heard, yet frequently ignored, adage that "people are our most important asset" [ABSTRACT FROM AUTHOR] DOI: 10.5465/AME.1999.1899547. (AN: 1899547) Base de données: Business Source Complete Putting people first for organizational success[a] Executive Overview There's a disturbing disconnect in organizational management. Research, experience, and common sense all increasingly point to a direct relationship between a company's financial success and its commitment to management practices that treat people as assets. Yet trends in management practice are actually moving away from these very principles. Why is common sense so remarkably uncommon when it comes to managing people? Why do organizations habitually overlook...
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...Jet Blue Airways JetBlue Airways took to the skies in 2000 under a novel concept: bringing humanity back to air travel. Based at New York's Kennedy International Airport, JetBlue, a non-union airline, distinguished itself from other low-fare carriers such as Southwest Airlines by offering seat-back entertainment systems with live television, comfortable seats and blue corn chips. During the last six years, when traditional airlines were piling up more than $40 billion in losses, JetBlue grew to $1.7 billion in annual revenue and became increasingly popular with travelers. But now that fuel prices have pushed up expenses for all airlines, and older carriers have sharply cut their own labor costs, the advantage JetBlue enjoyed as a start-up is greatly reduced. JetBlue — too new to have built up excessive costs that can now be trimmed, is trying mightily to raise fares in a bid to restore profits after surging fuel prices caused it to lose $42.4 million during the fourth quarter of 2009. The trends in the U.S. airline industry and how these trends might impact a company’s strategy The airline industry is susceptible to upturns and downturns with the trends in the economy. A growing economy and booming business mean greater demand for air travel, and a slow-down in the economy means reduced demand, consequent unutilized capacity and intensified competition. The availability of venture capital and other capital sources have an impact on the number of new entrants...
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...Exploring Corporate Strategy CLASSIC CASE STUDIES Chaos in the skies – the airline industry pre- and post-9/11 Gary J. Stockport The case provides an opportunity to analyse the Airline Industry both pre- and post-9/11. It shows how one major event in the business environment can reshape many aspects in both the macro and competitive environment of an industry. In turn this requires a reshaping of strategies for most of the individual companies in the industry in order to cope with this new environment. It also provides an opportunity for students to recommend how airlines might better plan for, as well as react to, disruptive events such as 9/11 happening in the future. ● ● ● This is a true story from the many stories of 11 September 2001. It was a typically routine early morning flight home. United flight 890 had left Narita Japan several hours earlier, and the sun would be coming up any minute. Captain Jim Hosking was looking forward to getting home to see his wife in LA. Suddenly a message from the cockpit teleprinter came in from the US Federal Aviation Authority (FAA). Such messages were routine, advising of bad weather or maintenance requirements. However, this message was different and it read: UA890 NRTLAX – –MESSAGE FROM CHIDD– THERE HAS BEEN A TERRORIST ATTACK AGAINST UAL AND AAL AIRCRAFT. WE ARE AT HIGH ALERT. WE ARE ADVDa THERE MAY BE ADDTLb HIGHJACKINGS IN PROGRESS. SHUT DOWN ALL ACCESS TO FLIGHT DECK. UNABLE TO ELABORATE FURTHER. a b ADVD – Advised...
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...Attempt Only Four NO. 1 MARKETING SPOTLIGHT- NIKE Nike hit the ground running in 1962. Originally known as Blue Ribbon Sports, the company focused on providing high-quality running shoes designed especially for athletes by athletes. Founder Philip Knight believer that high-tech shoes for runners could be manufactured at competitive prices if imported from abroad. The company’s commitment to designing innovative footwear for serious athletes helped it build a cult following among American consumers. By 1980, Nike had become the number-one athletic shoe company in the United States. From the start, Nike’s marketing campaigns featured winning athletes as spokespeople. The company signed on its first spokesperson, runner Steve Prefontaine, in 1973. Prefontaine’s irreverent attitude matched Nike’s spirit. Marketing campaigns featuring winning athletes made sense. Nike saw a `pyramid of influence’’ – it saw that product and brand choices are influenced by the preferences and behavior of a small percentage of top athletes. Using professional athletes in its advertising campaigns was both efficient and effective for Nike. In 1985, Nike signed up then-rookie guard Michael Jordan as a spokesperson. Jordan was still an up-and-comer, but he personified superior performance. Nike’s bet paid off: The Air Jordan line of basketball shoes flew off the shelves, with revenues of over $100 million in the first year alone. Jordan also helped build the psychological image of the Nike brand. Phil...
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...Professor Edward Desmarais BUS 470 Business Policy and Strategy Spring 2004 SOUTHWEST AIRLINES CASE ANALYSIS Presented by: The Stategizers Lawrence Bluemmel, Irene Johnson, Dennis Mackey, Dorothea Morgan, Elaine Pereira, Jeff Piecuch, Heather Pontifex, Nicole Soucy TABLE OF CONTENTS I. Executive Summary 3 A. Mission 3 B. Vision 3 C. Objectives 3 D. SWOT Summary 6 E. Recommendations 7 II. Current Situation 8 A. Current Performance 8 B. Strategic Posture 9 III. Corporate Governance 25 A. Board of Directors 25 B. Top Management 25 IV. External Factors 27 V. Internal Factors 118 VI. Action Plan 178 Appendix A. Stakeholders Worksheet 206 Appendix B. Answers to Panel’s Questions 212 I. EXECUTIVE SUMMARY A. Mission To provide a low-cost/low-price/no-frills, reliable, friendly service with “more value for less money” mode of transportation for consumers traveling short distances for business and/or leisure. B. Vision ...
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