What this means is that their primary goal within the company IS to add value in their offered services toward their customers, focusing on delivering both low cost and high quality. This is combined with a focus on the employees within the organization. CEO Herb Keller exemplifies this through stating that the philosophy of the company is to take good care of employees first which in result will lead to the employees taking care of the companies customers.
We argue that the companies’ competitive advantage ices primarily in its cost-UCM strategy. Southwest has chosen to differentiate themselves to the domestic market which means that they reduced the geographical scope of their flashlights to only offer domestic flights. This in combination with a decentralized organization has given the company the chance to specialize in a particular area while also allowing them to cut costs, ergo a cost-UCM strategy.
Another competitive advantage is gained through a loose based control strategy. We argue that Southwest works towards empowering their employees, basically giving them more responsibility and authority to manage their jobs and respective departments. An example of this is the unique hiring process they enforce, where the respective vocations interview and hire their peers. To quote the book “I hire good people and I leave them alone to do their jobs”. A quote that closely resembles CEO Herd Sleeker’s philosophy.
This can also be argued as a competitive advantage for the corporation since the high level of organizational decentralization empowers the workers and supports the organizational culture. This is an example of informal structure, which Southwest exercise. Informal structure is built very much on trust. In combination with a decentralized organization that employs loose based control strategy, as is the case with Southwest, trust is crucial. Even with the high level of trust within Southwest, there are still a set of rules to which the employees must adhere.
