Southwest Airlines Case Study the Southwest Airlines case and Southwest's organizational purpose and mission video located in Module 1: Lecture Materials & Resources. This case discusses employee

S Employ ee Relations Nearly 90 percent of Southwest’s workforce is organized into nine uni\ ons. Four—the pilots and three small technician unions—are independent \ organizations. The flight attendants and ramp workers are represented by the Transportation\ Workers Unions (TWU), the customer service and the reservation agents are repr\ esented by the International Association of Machinists (IAM), and the mechanics and c\ leaners are represented by the Teamsters (IBT). The company has enjoyed highly cooperative and peaceful labor relations since its founding. Its founders were not oppo\ sed to unions and essentially invited them into the organization. However, management has\ also worked hard to ensure that the unions maintain the same objectives as the compa\ ny, avoiding highly adversarial relations. There are no formal union-management structures or processes for consult\ ation and representation beyond negotiations and grievance procedures. Howeve\ r, management keeps the union representatives informed of new developments. One example is when the company decided to implem ent a flexible benefit plan; it met with union leaders and indicated the plan would be an add-on to the existing \ contractual provisions and therefore did not require negotiations. Union leaders al\ so initiate dialogue, as they did when raising questions over how the company was implementing the Family and Medical Leave Act. Several union leaders questioned the \ procedures, and briefings were held to clarify how the company was complying with th\ e Act. Other issues around which informal consultations have occurred include workers\ ’ compensation administration policies. The primary channel for employee input is the company’s open-door pol\ icy, in which employees with questions are encouraged to write to Herb Kelleher \ with their concerns, suggestions, or questions. These letters forwarded on a daily\ basis to appropriate managers to prepare a response. All letters receive a respo\ nse—in fact, sometimes middle managers are concerned with being bypassed by these inq\ uiries or 1 This case is contained in, “Rebuilding the Social Contract at W ork: Lessons from Leading Cases,” Thomas A. Kochan, Institute for W ork and Employ ment Research, MIT Sloan School of Management, T ask Force W orking Paper #W P09, May 1, 1999. T he l onger article, including bibliographic references and footnotes omitted from this versi on of the case, can be found in the CasePlace.org References section. 1 complaints. However, this avenue is widely used, because management doe\ s follow up on them. “It’s part of the culture,” said one manager. Top managers also visit four or five stations each year to meet with emp\ loyees. With no pre-arranged agenda, these meetings serve as another opportunity\ for management to learn about employee concerns and for employees to bring problems to management’s attention. These visits also introduce new managers to \ the airline’s cultural norms. Southwest also maintains a “culture committee,” comprised of 127 m\ embers from different parts of the company. Each year , the Executive Vice President meets with groups of employees to elicit issues and pr oblems of greatest concern. From these meetings, priority issues are identified, and small teams are formed to work on them. Examples include: problems of employee burnout among individuals in a job for a long period of time; a “New City” committee that goes to each new city \ Southwest serves to educate new employees about the values of the company; and the “Back \ to Basics” team, which sponsored an essay contest to describe what makes Southwest \ work. The team chose a series of essays that were integrated into a book with an a\ ccompanying video that is now given to every new empl oyee. These committees are all staffed by volunteers working on their own time. In short, the values of the company and its practices are implemented by developing the culture of empowerment and family values, not through any formal representative forums or structures. Summary and Implications Southwest has used its human resources as assets for achieving and susta\ ining a competitive advantage. Moreover, it has co mmunicated this intention to its internal workforce, to its customers who expect a highly motivated and friendly w\ orkforce and high levels of service, and to an external investment community that con\ tinues to value the company highly, as indicated by its favorable price/earnings ratios.\ Southwest accomplishes this success largely through the leadership and culture est\ ablished by Kelleher and the managers he has hired and promoted. It also does so wi\ th unions that embrace the company’s culture and have not pursued demands for a role in the management or governance process or join tly-run programs at the workplace. 2