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Corporate Culture/Leadership Actions For Strategy Implementation

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Assignment # 5

Corporate Culture/Leadership Actions for Strategy Implementation

Jacqueline R. Jones

Dr. GIGI Smith

BUS - 599

September 4, 2010

Strayer University

Discuss the corporate culture at Southwest Airlines and how it leverages its culture to achieve a competitive advantage.

Southwest Airlines has become the largest domestic airline in the United States. It has created a new form of transportation, more in competition with the automobile than any other airlines. Southwest Air was founded in 1966 by a group of Texas investors, Rollin King, M. Lamar Muse, and Herbert D. Keller, pooled $560,000 to form the Air Southwest Company. Incorporated in 1967, the company was envisioned as a commuter airline serving cities within Texas: Dallas, Huston, and San Antonio http://www.fundinguniverse.com/company-histories/southwest-airlines-co-company-hist

The culture at Southwest is the development, improvement, and refinement of the originality, individual, identity, and personality of a given people. Happy employees = happy customers keep Southwest flying. Southwest one of a kind culture includes fun events that motivate and make it worthwhile to work hard for the company. Southwest Airlines has always been devoted to each and every community that they serve. Their employees, customers, and neighbors make Southwest family the luving place that it is http://www.southwest.com/html/about-southwest/careers/culture.html

The corporate culture at Southwest Airlines include, core value, management style, and compensation. Southwest Airlines had two core value that permeated the work environment Luv and fun. Luv was the company's signature symbol and recruiting theme that grew into Southwest code word for treating individuals, fellow employees and customers the same. Both customer and employees were treated with respect and dignity. Luv would soon be incorporated within the company as a reminder of the compassion that was expected toward employees and customers. Fun was incorporated into the company's core value as a form of behavior that employees exhibited while performing their jobs. Southwest believed that the company's growth was primarily a function of the rate at which it could hire and train people to fit its culture, to mirror the Southwest spirit and to consistently display the traits that comprised the Southwest way.

The management team at Southwest Airlines was given roles to ensure that its employees were proud of the company that they worked for. Manager were expected to spend at least one-third of their time among there workers, observing and ensuring that demands were met, and managers listen to employees concerns and suggestions. Manager and the company executives were approachable, enforced an open- door policy, and actively listen to employees concerns. At Southwest, managers strived to create an environment where people were able to by-pass the lean structures so that they did not have to have meetings to get things done.

Compensation was very important to employees and employees were expected to be compensated for their performance. Southwest Airlines pay scale was known to be above their industry average wages and their benefits packages were very good. The organization offered profit-sharing plans for senior employees, along with stock option programs, they also provided a 401-k plan were employees could save ant this plan covered nearly all of its employees. Southwest competitive health package made staying healthy affordable. They offered medical, vision, dental, life insurance, and other benefits such as long-term disability insurance, dependent care pending accounts, healthcare spending account, adoption assistance reimbursement benefits, child and elder care resources and referral programs, mental health chemical dependency employee assistance program, family and medical leave, employee rights and responsibilities. Southwest boost that they are an equal opportunity employer http://www.southwest.com/html/about-southwest/careers/benefits.html

The corporate culture at Southwest encourages staff members and employees to enjoy the place for which they work for. When individuals are secure with their workplace they tend to be more productive and involved within the company. Having a great workforce is the key success to leveraging; this is what Southwest has incorporated among its employees. You have to treat your employees like your customers, when you treat them right then they will treat your outside customer's right. By Southwest doing so, this has been a very powerful competitive advantage/weapon for them. With Southwest exhibiting this behavior they have compelled competitive advantages over other airlines.

Evaluate the company's financial performance by calculating and interpreting the profitability ratios (operating profit margin, net profit margin, return on total assets, and return on stockholders equity.

Southwest Airlines continues to operate profitably, the company made $474.3 million dollars with a growing net income of $ 4.7 billion in revenues. It has recorded over 27 consecutive years of operating at a profit. Southwest debt of $871 million has been the lowest against all U.S. carriers and also has the highest Standard and Poor's credit rating in the industry with a rating of A. Assets are increasing as they reach % 5.65 billion as opposed to a year ago of $ 4.71 billion.

Their income expenses have come from a negative $21 million to a positive $ 7 million in a year's time. Overall the company is making very smart moves as it enjoy growing profits as net income rose to 9% to go alone with an increase of 13% in total revenues.

Describe the characteristics of company's culture and how it affects company performance.

The characteristics of Southwest Airlines can be seen as trustworthy, and loyal. The trustworthiness at Southwest Airlines stems from the fact that they have an open door policy, which encourages employees to bring any issues or concerns to their supervisors, or managers at anytime. By allowing employees to feel open or comfortable in discussing issues or concerns to upper management creates a sense of trust within the organization. Southwest employees feel as if they are not only associates to the organization but that they are an asset. Southwest Airlines no lay-off policy shows that the company is loyal to its employees. Southwest has never lain off any employees since the company began its operations.

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