The airline began service June 18, 1971 with flights to Houston, Dallas, and San Antonio. Since May 2003 (through August 2003 – the latest data available) Southwest has been the number one carrier in terms of domestic boardings. Yearend results for 2003 marked Southwest’s 31st consecutive year of profitability. Southwest became a major airline in 1989 when it exceeded the billion-dollar revenue mark. Southwest is the United States’ only major short haul, low-fare, high frequency, point-to-point carrier. Herbert D.
Kelleher co-founded Southwest airlines in 1967. Herbert D. Kelleher has been Chairman of the Board of the Company since March 29, 1978. Mr. Kelleher became interim President and Chief Executive Officer of the Company in September 1981, and assumed those offices on a permanent basis in February 1982. After being diagnosed and treated with prostrate cancer, Kelleher decided to step down as President and CEO of Southwest in June 2001. Herb Kelleher has been called perhaps the best CEO in America by Fortune magazine.
Under his leadership, Southwest has become the most consistently profitable, productive, and cost-efficient carrier in the industry. It has also earned the “Triple Crown” award for best on-time performance, baggage handling, and customer satisfaction for four years running. erb
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Coercive power is another type of power he possesses whereby he has the power to force compliance by means of psychological, emotional and physical threat. As indicated in the case, the employees are fiercely loyal to him and whenever he asks for any cooperation the employees react promptly. This implies that he possesses referent power whereby the employees react favorably because they are able to identify with him as partners in the fulfillment of their organizational goals. Finally, he has expert power because under his leadership, Southwest continually soars.
He knows when and which decisions to make that keep the Airline above the rest as he continues to expand. Expert power is derived from information or expertise. Some major airlines like United have hub-and-spoke systems connections farther apart; Herb chose to fly frequently between cities not too far apart. An average Southwest flight covers only 700 miles, the average Southwest fare is a mere 86 dollars. The airline flies only one type of aircraft, the 737, which leads to millions more in savings because of flight crew training and plane maintenance expenditures to keep airfares low.
The start-up avoided extras such as meal service and got planes in and out of the gate in twenty minutes or less. “If somebody said to me, Herb, I’d love to be a great coach or a great leader but I don’t have the time to do it. My response to them would be, you don’t have time to do anything else until you accomplish that. ” —————-Herb Kelleher. Kelleher is both a job-centered and employee-centered leader. He pays close attention to Southwest Airline’s mission to make flying fun.
This can be displayed by the way he selects his employees and the training instilled in them to ensure they can perpetuate the Airline’s organizational culture which plays a major role in the success of the organization. As much as he emphasizes performance, he ensures that the employees enjoy their work as well. The way the attendants interact with the passengers and their way of dressing are indications of high degrees of job satisfaction and spirit. Southwest is said to be one of the companies with the lowest turnover rates.
He applies two main leadership theories namely Path-goal theory and Vroom’s Decision Tree approach. He exhibits participative leader behavior when he consults employees regarding cost cutting measures. He draws out suggestions and involves his employees in decision-making processes. He also displays achievement oriented behavior as he sets challenges and expects the employees to perform at high standards, encourages them and shows confidence in them as he expects them to come up with solutions to problems that Southwest Airlines faces.
By assessing the situation and deciding to what degree the employees should be involved in decision-making, Kelleher is applying some form of Vroom’s Decision Tree approach. He presents the problem to the employees, gets their suggestions and then decides. “You need a totally open company where people feel free to talk to one another about anything. You need an environment of trust where people realize that coaching–really is coaching–and not implied criticism. ” Herb Kelleher Kelleher is a transformational leader.
He has gone beyond normal expectations by transmitting a sense of mission and inspiring new ways of thinking. He has transformed Southwest Airlines through the years to what it is today. He has achieved what no other Airline has by keeping Southwest Airlines profitable for over thirty years. By consulting employees regarding important issues concerning the organization, he continually changes their ways of thinking, which greatly contributes to the success of the organization not to mention the high morale, and job satisfaction that comes with it.