HR Executive Summary
The largest low-cost airline in the world and a well-known American airline is Southwest Airlines. The corporation currently employs 60,000 people (Harvey & Turnbull, 2020). With 103 domestic destinations and ten international ones, the firm primarily serves the domestic airline market (Harvey & Turnbull, 2020). The link between organizational human resource strategies, goals, and objectives is strategic human resource management. The primary goals of HRM strategies are to create a fit with corporate culture, guarantee the growth or improvement of business performance, and advance competitive advantage through more adaptable innovation.
HR Strategies
Southwest Airlines is frequently cited as an example of how an innovative strategy, firm culture, and a solid management-employee relationship may result in business success. Low costs, good labor relations, simplicity, and quick expansion were the company’s cornerstones (Harvey & Turnbull, 2020). Even though workplace conflict appears to be inherent to the airline sector, Southwest consistently stood up for its employees, who were unwaveringly dedicated to the business’s success (Ren, 2020). Nevertheless, as the company has developed and aged, the initial plan appears to be in jeopardy. The competitive struggle singled out the segment of cheap air transportation, where the organization continued its activities.
Lastly, carriers like JetBlue and Virgin America fight for Southwest’s core middle-class clients. Although Southwest faces various technological and competitive obstacles, its labor expenses take center stage, and Southwest is not growing as quickly (Gupta, 2020). Therefore, the business cannot hire as many new hires at the lowest pay levels. Most of the company’s employees are unionized, which is currently leading to a policy shift towards a wage freeze and sick leave issues (Stewart & Brown, 2019). The airline has also discussed the prospect of outsourcing several positions and wants to hire more part-timers.
Every business eventually faces the difficulties faced by Southwest Airlines. Even if business success can last for a while, the effects of competition finally start to show. It is also challenging to retain the same strong culture when the leadership changes, as Gary Kelly took over as CEO after Herb Kelleher retired in 2004 (Stewart & Brown, 2019). This significantly impacts how employees must be managed to maintain success in the face of shifting competition. Despite these difficulties, Southwest continues to do well. In 2016, the airline’s profits reached a record $2.24 billion (Cote, 2018). The airline will also keep growing globally, opening up additional income expansion opportunities.
Current Strategies and Issues
Southwest Airlines values its employees, which makes it simple for the HR department to find and educate new hires. This serves as the organization’s fundamental HR strategy. The HR department only picks candidates with a solid academic record and a positive attitude toward the workplace culture. Operating on a budget is the company’s other strategy. These two tactics positively affect the team of consumers they serve, the employees, and the organization. These may all be seen from the conversation that follows. Employee-driven strategies are used by Southwest Airlines. Employees are introduced to the company culture during the hiring process. Both merit and attitude are taken into account while rating the workers. Customers of Southwest Airlines are pleased with the company because they obtain excellent services from treating personnel well. Low-cost strategies make up the second strategy. Despite the pandemic concerns, the corporation has an excellent track record of operating at a minimal cost.
Main Strategy
The general strategy of Southwest Airlines Co. is cost leadership, which builds a competitive advantage based on low costs and, consequently, low prices. In this broad strategy, the company’s strategic goal is to minimize operational expenses, maximize profit margins, maintain cheap pricing, and provide airline services to the mass market to combat competition (Gupta, 2020). These operations have a wide scope in internal business processes and, according to the mission and vision, are necessary to achieve a presence in the global market. Costs are a key factor in an airline’s success in terms of competition and leadership.
HRM Implications and Strategies
The low-cost airline Southwest Airlines and its service offerings illustrate the broad cost leadership strategy. It lies in the focus of marketing on the availability of air tickets with a high level of service, which can only be achieved by competent management and optimization of operating costs (Gupta, 2020). The corporation positions itself as a fierce rival in commercial aviation based on its comprehensive business strategy, which includes pricing and the warmth and friendliness of its customer service (Evans, 2019).
Southwest Airlines’ expansion is independent of market expansion. Achieving the goals of the strategies lies in the plane of horizontal expansion through the quantitative superiority of the client base. Southwest, though, is still concentrating on its modest global activities in the US and a few other nations. As a result, the market development-focused growth strategy has little impact on the expansion of the airline industry. Diversification plays a minor role in the development of Southwest Airlines Co.’s operations. This aggressive strategy aims to expand the corporation through new ventures like service companies focused on the aviation industry. To achieve a competitive advantage in business diversification, Southwest focuses on expanding inside its current markets rather than using its generic system that offers the lowest costs. As a result, diversification is a modest but effective growth strategy for the aviation sector. As a result, changes in the entire structure are inevitable with such expansions to new markets, on which the competitive success of the company will depend.
References
Cote, R. (2018). Leadership Analysis: Southwest Airlines-Herb Kelleher, CEO. Journal of Leadership, Accountability & Ethics, 15(1). Web.
Evans, L. (2019). Southwest Airlines generic strategy, intensive growth strategies & competitive advantage. Panmore Institute. Web.
Gupta, S. K. (2020). Southwest Airlines SWOT Analysis (2020) | Business Strategy Hub. Business Strategy Hub. Web.
Harvey, G., & Turnbull, P. (2020). Human resource management and industrial relations. In Air Transport Management (pp. 327–340). Routledge.
Ren, J. (2020). Fare impacts of Southwest Airlines: A comparison of nonstop and connecting flights. Journal of Air Transport Management, 84. Web.
Stewart, G. L., & Brown, K. G. (2019). Human resource management. John Wiley & Sons.