Team Members : Krystal Brown, Jasmine Cooley, Aretas Coleman, Jeremy Lewis, Terry Kerr

overview Organization History and Life Cycle External Environment Mission, Goals, and Strategies Organizational Culture and Management Interorganizational Relationships

History 1967: Air Southwest Co. is incorporated; later in 1971 the company name was changed to Southwest Airlines Co. Rollin King and Herb Kelleher founded Southwest Airlines with one simple goal: To serve Dallas, Houston, and San Antonio with point-to-point flights. “As company legend goes, the very first route map was drawn on a cocktail napkin during a meeting between Rollin King and Herb Kelleher.”

History Herb Kelleher, Attorney at Law (Co-founder) 1967: Files application with TAC to serve DAL, IAH, & SAT. Rival companies Braniff and Texas International serve the same areas; hence, they fought through the legal system to keep Air Southwest grounded. Herb offers to represent Air Southwest’s appeal to the Texas Supreme Court. He charged no fees and paid any costs out of pocket. 1970: Texas Supreme Court overturns lowers court ruling and clears Air Southwest for “take-off.”

history Lamar Muse: Joins Air Southwest in 1971 as President. Sells promissory notes to raise $1.25M in funds for aircraft and startup costs Makes agreement with Boeing to purchase three Boeing 737s (with Boeing holding 90% of the financing) Hires “The Over the Hill Gang” (Dick Elliot, Jack Vidal, Donald Ogden, Bill Franklin) Made initial public offering of stock (raising $6.5M in funds) June 18, 1970: The “Love Airline” is born; starting service to DAL, IAH, & SAT.

history 1975: LUV made ticker symbol on American Stock Exchange 1976: Southwest Airlines expands service to 5 new cities in one year. 1978: Southwest Airlines purchases Midway Airline as a wholly owned subsidiary and enters the Northeast U.S. market 1978: Muse resigns as President; Herb is asked to step in as Interim President, CEO, & COB. 1981: Herb Kelleher assumes the permanent position of President and CEO

HISTORY Herb Kelleher served Southwest Airlines from 1967-2007 Profitable for 37 years Largest U.S. based airline (by passengers) 547 Aircraft (Boeing 737) 3400 Flights A Day One of first airlines to have a website First airline to offer automated ticket services “Southwest Effect”- term coined by the Department of Transportation

Life cycle

Low Moderate Uncertainty High-Moderate Uncertainty External Environment Simple + Stable Low Uncertainty Complex + Stable Low Moderate Uncertainty Small number of external elements, and elements are similar. Elements remain the same or change slowly. Large number of external elements, and elements are dissimilar. Uncertainty Simple + Unstable High-Moderate Uncertainty Complex + Unstable High Uncertainty Small number of external elements, and elements are similar. Elements change frequently and unpredictably. Large number of external elements, and elements are dissimilar.

External Environment Complex + Unstable High Uncertainty Air- Traffic Controller shortage Competition Fuel Prices Air traffic disasters Decline in customer demands Economic downfall Complex + Unstable High Uncertainty Large number of external elements, and elements are dissimilar. Elements change frequently and unpredictably.

External SWOT Analysis External Environment External SWOT Analysis Opportunities Threats Falling interest rates New technologies increasing efficient Limited substitute products High entry barriers Bargaining power with Boeing Declining fuel prices Receptive business traveler Underserved markets Uncertainty in fuel prices Increased airport security Weather Strong power of buyers Substitute products in short-haul markets Intense competition New Northwest/Delta merger (increased competition) Labor union demands

External Environment Porter’s 5 Forces Threat of New Entrants (L) Capital Intense Government Regulations Excess to distribution channels Economies to scale Power of Buyers (H) Switching cost Differentiation of products Information available

External Environment Porter’s 5 Forces Cont. Power of Suppliers(H) Switching costs Substitutes Difference between Products Threat of Substitutes(M) Rental Car Services Rail Bus Ship

External Enviornment Porter’s 5 Forces Cont. Rivalry of Existing Firms (H) Mergers Competition

Mission The mission of Southwest Airlines is dedication to the highest quality of customer service delivered with a sense of warmth, friendliness, individual pride , and Company spirit. To Employees: We are committed to provide our Employees a stable work environment with equal opportunity for learning and personal growth. Creativity and innovation are encouraged for improving the effectiveness of Southwest Airlines. Above all, Employees will be provided the same concern, respect, and caring attitude within the organization that they are expected to share externally with every Southwest Customer

Goals Low cost leadership High customer service

Strategies Low cost Leadership

Strategies Defender strategy Chart on pg 73 http://www.nytimes.com/2010/11/21/business/21south.html http://www.bloomberg.com/news/2010-09-27/southwest-airlines-agrees-to-buy-airtran-for-1-4-billion-in-cash-shares.html Strategies Defender strategy

strategies Internal process approach

Culture

Culture

Culture

Management

Management

Interorganizational Relationships

Population Ecology Resource Dependence Population Ecology Organization Type Dissimilar Similar Resource Dependence Population Ecology Collaboration Network Institutionalism Organization Relationships Competitive Cooperative

Population Ecology

Interorganizational Relationships

Interorganizatl Re