Strategic fit is an inherent factor in the successful implementation of an organization’s strategy. Strategic fit is dependent on the organization’s components, which consist of the organization designs, culture, employees, resources and processes. Southwest Airline has been able to achieve a strategic fit thus the successful implementation of its low-cost strategy. However, the airline should ensure it adheres to the airline industry laws and regulations in maintenance of aircraft to avoid legal costs, which is detrimental to its low-cost strategy.
Management’s ability to achieve a strategic fit between the organization strategies, organization components and mission, is critical to successful strategy implementation. Southwest Airlines Co. is one of the largest carriers in the United States of America. The airline has its headquarters in Dallas Texas. Southwest Airlines has a low-cost strategy which emphasis on highly skilled employees and ability to maintain low ground cost by minimizing aircraft turnaround cost.
This paper provides a detailed discussion on Southwest Airlines’ culture, structure, human capital and systems; and how they affect the implementation of the airline’s low-cost strategy. In addition, it explores the strategic fit between the organization’s mission, strategy and corporations components.
Structure, culture, Systems and Employees
An organization structure can make or break an organization. In the advent of technology, organizations are operating in the highly dynamic business environment. To adapt to the changing environmental factors thus gaining competitive advantage an organization needs to have a flexible organization structure that has the capacity to accommodate change. Southwest Airlines has adopted an organization structure that encourages innovation among its employees when carrying out operations thus it is highly decentralized. Southwest Airlines management fosters team coordination and open lines of communication between employees and management. Management offers support for employees so that they can deliver greater aircraft’s and increase productivity by ensuring flight delays and customer complaints are minimal.
According to Burton (2006), an organization system refers to the processes and procedures that an organization uses when planning, implementing strategies and measuring performance. Southwest Airlines is famous for the proactive style of management that focuses on risk management in the organization. The company takes the initiative to hedge against fluctuating fuel prices in the market. Ability to maintain low cost in the airline industry is a critical success factor. Fuel prices form the bulk of cost incurred by airline companies thus ability to plan to mitigate effects of fluctuating fuel prices is critical for success.
An organization’s human capital determines its ability to obtain a competitive position in the industry. According to Alvesson (2002), human resource skills abilities and attitudes determine the organization’s ability to implement its strategies. Management of the Southwest Airlines expects all employees to be proactive, maintain perspective on their responsibilities and embrace the southwest airline family. Ability to be a team player is valued, and the organization maintains open lines of communication throughout the organization that has enabled management to support employees in the implementation of the organization’s strategy. Southwest Airlines expects employees to maintain a fun attitude and enjoy doing the job. However, ability to offer exceptional customer care and teamwork is imperative as the airline likes to minimize delays and employee complains. The airlines recruits employees with the right skills and then mould them to work at a premium through performance management. Management has invested heavily in their human capital to increase the organizations overall productivity.
Management of an organization should ensure its corporate culture supports its objective, mission and strategies. The corporate culture of an organization exemplifies through the shared values, symbols and norms (Alvesson, 2002). Southwest airlines corporate culture emphasizes togetherness within the organization with the philosophy of “one company, one airline, one family and one love.” The airline encourages employees to maintain balance between work life and family. Southwest airlines contribute to the community through its corporate citizenship initiative.
Implementation of Southwest Airlines’ strategy
Southwest airlines strategy focuses on maintaining low costs thus providing airline passengers with low fares. In addition, the airlines strategy focuses on maintaining exemplary customer care by ensuring flight schedules are prompt, and all employees know the customers needs come first. The airlines strategy is successful due to the organization a design, corporate culture, employees and strategic control systems.
According to Burton (2006), the organization design should support strategy implementation. Organizations design to the structure, process and procedures, and technology that organization employee in meeting its strategic objectives. Southwest has a structure that encourages teamwork, open lines of communications and autonomy on the job. This factors impact profoundly on its employee’s ability to work efficiently and thus increasing the airline’s productivity.
Strategic is the systems that an organization uses to evaluate the success of the organizations chosen strategy. Strategic controls can be either financial or nonfinancial. Southwest Airlines focus on employee satisfaction and profitability of the organization through the ability to maintain low costs. Southwest airlines monitors flight schedules to ensure the observe timeliness and they monitor operational costs to ensure they are minimal.
Human resource is an inherent factor in determining an organization’s success in implementing its strategy. The employees of Southwest Airlines have unions, to address their grievances concerning low salaries. Given Southwest low cost strategy employee’s desires for high pay affects its ability to maintain low cost of operations.
Southwest Airlines organizational culture emphasizes on together, respect for each other and fun attitude and approach towards the job. The culture has played a vital role in keeping the employees of Southwest Airlines towards meeting the organizations strategic objectives.
Southwest Airlines Strategic Fit
According to Garlichs (2011), strategic fit refers to the extent that an organization is using its resources and capabilities to take advantage of opportunities in its external environment. Organization components can be either financial or nonfinancial. Financial components include the organizations finances, location and its technology. On the other hand, an organization nonfinancial resource consists of the culture, human resource, technology and brand. Successful organizations ensure that their mission, objectives and organization components facilitate the implementation of the organization strategy successfully.
Southwest Airline uses a low-carrier strategy that helps it to maintain low cost thus offering airline passenger’s low fares. The strategy is achievable through use highly skilled pilots and efficient staffs that are able to minimize aircraft turn around time thus reducing ground time expenses. In addition, Southwest Airline uses secondary airports this serves to reduce costs because major airports within the same destination charge higher prices. Southwest corporate culture exemplifies the value of good customer care through friendliness, individual pride and friendliness. The airlines mission aligns with the corporate culture that encourages togetherness, respect and teamwork in meeting customer’s needs.
Southwest’s corporate culture encourages employees to be team players and show initiative when at work. This culture has helped the airline attaining its strategic objective because in order to reduce aircraft turn around time employees need to work together. The airplane is able to operate over three thousand flights in one day increasing the airlines productivity.
Human resource is a critical component in when implementing the organization’s strategy (Armstrong, 2000). Training and development of human resource ensures that employees are competent thus increasing their productivity and efficiency. Southwest airline has a facility for training its staff on Love Field. This initiative has helped the organization to implement its strategy by ensuring employees productivity and efficiency. To reduce the turn around cost, the employees of Southwest Airline perform their roles in loading language and inspecting boarding passengers using efficiently and with precision. Southwest airlines have the reputation of being an airline with the lowest number of complaints from passengers. This is attributable to organization ability to give exemplary customer care and reduce flight delays. Location of runways is a critical success factor in the airline industry. Southwest airline headquarters is located in Dallas love field, in Texas. It controls four terminals in the field.
Leadership of a company should ensure that the organization external environment does not pose threats to the survival or success implantation of the organizations strategies (Bohlander & Snell, 2009). Management should understand all the dynamics of the legal environment to avoid expensive lawsuits. It is imperative to follow industry regulation in order to avoid legal costs. Southwest Airlines flouted airline regulations that require airlines to follow federal standards for maintenance and inspection of aircraft because aircraft that do not follow this standard are unsafe. Southwest had to pay over seven million dollars for the misdeed. In order to be successful in implementing its low-cost strategy, Southwest Airlines should follow the industries standards to avoid extra cost, which drives costs up the long run.
Southwest Airlines leadership uses proactive approach to hedge against fluctuating fuel prices. This helps the organization to maintain low-operation cost. Fuel costs form the bulk of operational cost in the airline industry. Ability to maintain low cost is a critical success factor because it enables an airline to offer consumers low prices thus gaining a competitive advantage in the industry.
Processes and procedures used by an organization determine the organization’s success in implementing its corporate strategy. Southwest Airlines use jet engine pressure washing. The technology helps to remove grime and contaminants from engine. Regular use of this technology on aircraft improves fuel efficiency thus reducing cost for the organization.
Southwest Airline was among the first airlines to have a website. Airline passengers use the website to view road maps, company information, flight books and passenger check-in. Most of the airlines revenue is attributable to online bookings. The use of the internet to carry out operations such as check-in and booking reduces the airlines labor cost and minimizes aircraft turn around ground expenses. These factors have contributed to the success of southwest low cost strategy.
Southwest management has been successful in implementing its corporate strategy by achieving a strategic fit with the organizations components. Southwest Airlines uses technology such as jet engine pressure washing which increasing cost efficiency if used regularly. It also uses the internet to make the booking and for passenger check-in reducing labor cost. The airlines corporate culture emphasis on highly skilled employees to reduce turn around ground cost for the airline. However, the organization failure, to adhere to federal standards for maintenance and safety requirements caused the organization to suffer a substantial loss due to the fine incurred. Management of the airlines should ensure the airline adheres to all roles and regulations in the industry to avoid damaging publicity and legal expenses.