South-West Airlines – a critique of its business strategy and approach to HRM

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South-West Airlines- A Critique of its Business Strategy and Approach to HRM
The position of a firm in a sector is assessed by the level of its profitability against a particular industry standard. A Long-term sustainable competitive edge is what determines whether a company retains above average profitability or not. The two standard competitive advantages, according to Porter, are differentiation and low cost. According to Porter, these competitive advantages coupled with a firm’s intended activity scope “lead to three generic strategies for attaining above average industry performance” (Porter 19). These are differentiation, focus, and cost leadership. SW Airlines skillfully uses Porter’s cost leadership theory to ensure that it charges the lowest possible prices (Porter 23). To achieve this, it cuts on things like meals, interline transfer of baggage, and seat assignment. In differentiation, a company seeks uniqueness in an industry by innovative strategies along certain areas that the clients value. SW Airlines employs this theory by investing heavily in the training of its human resource and coming up with unique concepts like the rapid gate turnaround. These help them attract and retain loyal and happy clients.
Henry Mintzberg, a management guru, argues that the people that get the strategy right are much fewer than those that get it wrong. According to him, those who get it right like Southwest Airlines employ the 5 Ps; plan, ploy, pattern, position, perspective (Mintzberg 12).

In essence, what he means is that, before one strategies, he has to brainstorm options, and then come up with an innovative plan to disrupt or influence competitors. After that, the ploy often develops into some organizational pattern which gives the company some unique position in the market. Once the strategy becomes a pattern and the firm positions or presents itself to the consumers as a believer of that, it then becomes their culture and their way of looking at things (Mintzberg 23). From the case study, Southwest Airlines had a plan of providing low-cost flights and maintaining a highly satisfied staff whose input at every level was highly appreciated. It then became a norm and something that sold them to the clients. Consequently, they adopted an egalitarian culture with a focus on low-cost services and highly qualified personnel.
Whittington’s argument about whether the strategy is an emergent phenomenon or a planned phenomenon does not seem to overlap in the Southwest airline case study. The airline clearly plans its strategy with a reasonable picture of what the future results might look like. Amongst the four perspectives (classical, processual, systemic, and evolutionary perspectives) that he uses to argue his case, only the classical theory seems to make sense while analyzing the SW case. This point of view assumes that the management almost has total control over all resource allocation, and as a result, can control a firm’s internal organization to suit the company’s objectives better (Johnson, Kevan, and Richard 27). This assumption is valid for SW since the management were in charge of hiring the staff or purchasing any other resources needed, as well as leading the process of making a decision on how the resources ought to be used. Although the airline respects all its staff and welcomes their ideas, the cue to contribute ideas often has to come from the management.
Some of the things that give the airline a competitive edge over its rivals are the quality of staff it recruits and the quick turnaround gate that allows for more departures than is practically possible with the other airlines. The decision to hire highly competent staff and train them to the highest possible professional level is an idea that came from an interactive process led by the SW management. This fact lends some credence to Whittington’s classical perspective on HRM. Once the company started doing this and noticed that the results were good, it became a pattern which they slowly ingrained into their culture. This series of events also lends Mintzberg’s 5 Ps towards strategy. The SW case study, therefore, shows one just how interwoven the various management theories can get even in one organization or department.
Works Cited
Johnson, Gerry, Kevan Scholes, and Richard Whittington. Exploring corporate strategy: Text and cases. Pearson Education, 2008.
Porter, Michael. “Porter’s generic strategies.” Retrieved June 14 (2007): 2009.
Mintzberg, Henry. “The strategy concept I: Five Ps for strategy.” California management review 30.1 (1987): 11-24.