Southwest Still Flies High

8 August 2016

A case study on Southwest Airlines management process. Submitted To Group – K Roll Name Q: Name at least two things that Southwest is doing efficiently. Name at least two things that Southwest is doing effectively. In what ways do efficiency and effectiveness support each other at Southwest? In what ways do they contradict each other? Answer: Efficiency at Southwest Airlines: Efficiency or being efficient in business terms means using an organization’s resources (Human, Finance, Physical and Informational) wisely and in a cost effective way.

Efficiency is using managerial skills to minimize losses and reduce expenditure while maximizing the organization’s profits. From this perspective Southwest Airlines has shown efficiency in a couple of factors. This are- Point-to-point schedule Standard aircrafts Carefully chosen routes Carrier operation Point-to-point schedule: Southwest did not adopt the hub-and-spoke system preferring a short-haul, point-to-point schedule instead. Carrier operation: The carrier operates out of smaller, less expensive airports in many major markets. Effectiveness in Southwest Airlines:

Effectiveness in business terms means making the right decisions and successfully implementing them. Southwest Airlines have shown effectiveness in the following parts- Successful low-cost carrier Use of human resources Successful low-cost carrier: Southwest Airlines is one of the biggest low cost carriers in the world. It uses less capital than any other carriers in United States and maintains their low-cost idea intact. Analyst’s estimates that major carriers would need to reduce expenses by 18. 6 billion to match up its low cost performance.

Most other of its competitors can not effectively manage their carriers to counter against Southwest’s strategies. So, it has successfully achieved most of its goals and is a step ahead in the competition. Use of human resources: Although Southwest is highly unionized; it has never experienced a labor strike. That means Southwest use human resource effectively. Successful organizations are both efficient and effective. The Business of Ethics highlights the impact businesses can have when they balance efficiency and effectiveness with social awareness about their role in protecting the natural environment.

Efficient actions which are effective: 1. As mentioned, Southwest is a low-cost carrier. The company uses its resources strategically. The company flies only one type of jet (which is standard), prefers a short-haul point-to-point schedule and tries to cut down their expenditure as much as possible. So, the company directs its resources efficiently and fulfilled the organizations goals as a low cost carrier. 2. Southwest focuses greatly on their customers. Customer satisfaction is a top priority at Southwest. It maintains personalized services and customer loyalty.

This helps them attain more customer and increase popularity and profits. 3. Southwest’s human resource planning despite being unionized proved to be efficient. They negotiate every union contract personally, never experienced labor strike and seldom have conflicts. This proves they made the right decisions in employee management and has successfully implement them thus making the planning and determining courses of action part of management effective. Actions which were ineffective: 1. According to the passage, Southwest’s stock price is down and there are only a few profits to be shared just now.

So, there might some dilemma in the organization. Dilemmas usually indicate that the managing isn’t very effective. 2. It’s been said that Southwest has a no-frills model. Though this is a way to keep the workers assiduous it might have a negative effect on employees sometimes. This concludes the suppositions of efficiency and effectiveness in Southwest’s business actions. Q: Based on the information in the case, describe the managerial skills that Colleeen Barrett and Jim Parker use in their jobs at Southwest. Answer: Colleen Barrett:

She first joined as a secretary in the organization. Later she was appointed to human resource manager and eventually became president and chief operating officer. She and Jim Parker have done an exemplary job of carrying the on the carriers tradition of success. Jim Parker: Jim Parker was the company’s corporate counselor. In 2001 when founder and CEO Herb Kelleher retired from his position he assumed the role of CEO and vice president of the board of directors. He and Colleen Barrett have done an exemplary job of carrying the on the carriers tradition of success.

The basic managerial skills are- Skill Name Definition Technical skills Understanding the specific kind of work being done in an organization. Interpersonal skills The ability to communicate with, understand and motivate both individuals and groups. Conceptual skills The manager’s ability to think in the abstract. Diagnostic skills The ability to visualize the most appropriate response to a situation. Communication skills Abilities both to effectively convey ideas and information to other and to effectively receive ideas and information from others. Decision-Making skills

The manager’s ability to correctly define problems and opportunities and to then select an appropriate course of action. Time-Management skills The manager’s ability to prioritize work, to work efficiently, and to delegate appropriately. By studying these basic skills we find the skills that Jim Parker and Colleen Barrett use in their jobs as top managers. Which are- Decision-Making skills: Jim Parker and Colleen Barrett made use of their decision making skills by recognizing certain flaws in the way their predecessors handled certain aspects of the business.

E. g. their decision to implement a short-haul, point-to-point schedule instead of hub-and-spoke system schedule as well as operating out of a smaller less expensive airport. The decision that proved to be most efficient was their decision to limit their operation to just one type of Jet which went a long way to cutting costs in three major areas: purchasing, maintenance, and training. Conceptual skills: Both CEO and COO are shown to have the mental capacity to understand the overall work and grasp the concepts of the work of the organization.

Colleen Barrett sum up the carrier’s culture by saying “We aren’t in the ‘airline business’; we are in the ‘Customer service business’ and we just happen to fly airplanes. ” Diagnostic skills: Jim, Colleen made use of their exemplary diagnostic skills by flying only one type of (standard) Jet and reducing its expenses in every area from purchasing to maintenance to training. This has given them long term systematic advantages over other carriers. Communication skills: CEO Jim Parker, COO Colleen Barrett and rest of the Southwest team have shown excellent communication skills.

Although Southwest is highly unionized, it has never experienced a labor strike. The firm’s management sits down personally to negotiate every union contract. Employees have some benefits such as extensive training, a no-layoffs policy and generous profit sharing and stock ownership. These can depicted as the managerial skills which Jim Parker and Colleen Barrett has shown in their roles of being top level managers. Q: Neither Colleen Barrett nor Jim Parker has a formal education in management. Explain then how they can be effective managers.

Would formal education help them to be better mangers? Why or why not? Answer: It has been explained that Southwest CEO Jim Parker and COO Colleen Barrett don’t have any formal education in management. Jim Parker was the firm’s lawyer and Colleen Barrett was the human resource manger. But despite not having any formal education in management they both are effective managers. Firstly, Jim Parker and Colleen Barrett have been in the company for a long time and are aware of the procedures regulations.

They have a vivid idea of how to do run the company from all the experiences they had working there. Experience is an important factor in the fields of management. The managers should have an outline of how the company runs and should be managed. For example, Colleen Barrett’s knowledge on human resource makes her capable of handling employees proficiently. Secondly, the ideas they have taken over the years has help the company to achieve a lot of organizational goals. They have shown exceptional competence in their managerial duties.

They have shown to think in abstract and visualize the most appropriate response. It is always essential for managers to think of the best possible way to handle duties and Jim Parker and Colleen Barrett have successfully done that. So, it could be said they are effective mangers. Of course, they still lack formal management education. And they might actually be more proficient managers if they had formal management education. Extensive knowledge on management gives one the basic managerial skills to handle dilemmas efficiently.

It can help understand the managerial roles better and the science and art of management. But as Southwest’s top level managers they have performed extraordinarily and have done an exemplary job of carrying on the carrier’s tradition of success. From this we can perceive that Jim Parker and Colleen Barrett are proficient managers of Southwest even without having formal education in management. Though having extensive knowledge on management might broaden their planning more, they are more than capable of doing their duties as top level managers at Southwest without it.

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