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

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

3. 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.”

4. 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.”

5. 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.

6. 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

7. 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

8. Life cycle

9. 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.

10. 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.

11. 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

12. 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

13. 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

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

15. 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

16. Goals
Low cost leadership
High customer service

17. Strategies
Low cost Leadership

18. Strategies Defender strategy Chart on pg 73
Strategies
Defender strategy

19. strategies
Internal process approach

22. Culture

23. Culture

24. Culture

27. Management

28. Management

29. Interorganizational Relationships

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

31. Population Ecology

32. Interorganizational Relationships

33. Interorganizatl Re