Southwest S Case Study Management Control System

Because they understand that long-term profitability comes from capitalizing on employees’ wisdom and capability, Southwest sees massive layoffs as merely “quick fixes” that often fail in the long run (see “Layoffs That Fail”).Because of the company’s commitment to its workforce, Southwest employees perform at heroic levels on a daily basis and volunteer to make huge personal sacrifices on behalf of the company in hard times.

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The attitude and spirit toward others complete the needs the company has of that employee.

As leaders, if we allow lack of teamwork or low productivity, we are being unfair to the rest of the team.” Time and again, Southwest employees have more than held up their end of this new employee-employer contract.

Seeing the leader as servant, however, puts the emphasis on very different qualities.

Servant-leadership is not about a personal quest for power, prestige, or material rewards.

During the Gulf War, when fuel prices rose so much that the company lost money every time an airplane took off, Kelleher promised to do everything in his power not to address the challenge by laying people off.

He, top leaders, and many employees took voluntary pay cuts to keep the company profitable.Through the deep mutual trust and sense of ownership that characterize their cultures, Southwest and other companies that embrace servant-leadership have achieved remarkable results that put them at the head of their industries.These achievements don’t happen by accident or through guesswork — they are the result of leaders who commit to serving their employees and, in turn, providing their customers with the best products and service in the marketplace.Says Miller, “This last year has been Southwest’s biggest trial.But preparation for 9-11 didn’t start the day the terrorists struck.Rather than controlling others, servant-leaders work to build a solid foundation of shared goals by awakening and engaging employee knowledge, building strong interdependence within and beyond the organization’s boundaries, meeting and exceeding the needs of numerous stakeholders, making wise collective decisions, and leveraging the power of paradox.Company managers profoundly understand the negative impact that layoffs can have on employee morale, trust, productivity, corporate memory, and, eventually, bottom-line results.It regularly ranks in the top 10 of the “100 Best Companies to Work for in America.” In a company that is 85 percent unionized, Southwest has been able to develop high loyalty among its people because it instilled the “soft stuff into its organizational processes from its inception.Chairman Herb Kelleher’s motto for both Southwest employees and the airline as a whole is “Manage in good times to prepare for bad times.” To succeed in today’s marketplace, the company cross-trains employees and increases their skill base so that individuals at all levels can take personal responsibility for keeping the company marketable, maintaining high-trust relationships, and identifying effective options for dealing with transitions.Southwest Airlines—which has practiced servant-leadership for 33 years — is one company that has managed to thrive in the face of adversity.In 2001, the company was the only major airline to make a profit.