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Abstract:
The case "Southwest Airlines' Organizational
Culture" gives an account of the development of
the organizational culture of Southwest Airlines.
The case starts with the background of Southwest
and its development over the years. The case
explains the unique culture of Southwest, and how
it has helped Southwest to face challenges. The
case also describes how Southwest responded to
the situation arising out of the September 11
terrorist attacks which dealt a severe blow to the
airline industry. Southwest's response to the crisis
was shaped by its organizational culture, which
laid emphasis on taking care of employees and
building relationships. The influence of the
leadership of Southwest on its culture is also
explained.
Issues:
» Role played by leadership in shaping an organization's culture
Contents:
Page No.
Testing Times
1
Background Note
2
Shaping Southwest's Organizational Culture
3
Operational Philosophy
3
Leadership
4
Building Relationships
6
Thriving Under Pressure
7
Replicating the Southwest Model
8
Exhibits
10
Key Words:
Southwest Airlines, Organizational Culture, culture, September 11, terrorist attacks, airline industry, crisis, taking
care, employees, building relationships
Testing Times
After the September 11, 2001 terrorist attacks,
Southwest Airlines (Southwest) and the entire
airline industry in the US faced devastating losses.

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Major airlines rushed to the US Congress for
relief in the form of federal assistance. The
industry was allocated $15 billion; a part of the
relief came as outright grants to cover the losses
of operating revenue following the shut down of
the industry by federal order, while the rest was in
the form of loan guarantees.
However, this assistance was not enough to pull
the industry out of its heavy losses. It continued
to lose billions of dollars every day because of the
slow rate of passenger return.
To reduce their losses, the airline industry in the US cut the number of flights by 20% and laid off 16% of their
workforces in the weeks following the attacks. However, one airline that responded differently to the crisis was
Southwest. The airline had its own unique approach to the crisis. Southwest avoided layoffs altogether and stuck to
its mission of caring for its employees.
It was felt that avoiding layoffs in the face of a
dramatic decline in demand would jeopardize
Southwest's short-term prospects. The company
was losing millions of dollars per day in the
weeks following the terrorist attacks. However,
Southwest was willing to suffer some damage
even to its stock prices, to protect the jobs of its
people.
Southwest's no-layoff response to September 11
was a reminder to its employees of the
organization's tradition of caring for its people.
When asked to comment on this, an official
explained, "Its part of our culture. We've always
said we'll do whatever we can to take care of our
people. So that's what we've tried to do."
1
Southwest has been profitable every year for 31
years since it started its operations in 1971.
During this period most airlines have struggled to
achieve three or four years of consecutive
profitability. In 2002, the total market value of
Southwest was $9 billion, larger than that of all
the other major airlines in the US put together
(Refer Exhibit I). The airline achieved high levels
of employee satisfaction and was included in the
Fortune magazine's list of the "100 Best
Companies to Work for in America" for three
years in a row. Many analysts feel that the
remarkable performance of Southwest is because

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Abstract: The case "Southwest Airlines' Organizational Culture" gives an account of the development of the organizational culture of Southwest Airlines. The case starts with the background of Southwest and its development over the years. The case explains the unique culture of Southwest, and how it has helped Southwest to face challenges. The case also describes how Southwest responded to the situation arising out of the September 11 terrorist attacks which dealt a severe blow to the airline industry. Southwest's response to the crisis was shaped by its organizational culture, which laid emphasis on taking care of employees and building relationships. The influence of the leadership of Southwest on its culture is also explained. Issues: » Role played by leadership in shaping an organization's culture Contents:   Page No. Testing Times 1 Background Note 2 Shaping Southwest's Organizational Culture 3 Operational Philosophy 3 Leadership 4 Building Relationships 6 Thriving Under Pressure 7 Replicating the Southwest Model 8 Exhibits 10 Key Words: Southwest Airlines, Organizational Culture, culture, September 11, terrorist attacks, airline industry, crisis, taking care, employees, building relationships Testing Times After the September 11, 2001 terrorist attacks, Southwest Airlines (Southwest) and the entire airline industry in the US faced devastating losses. Major airlines rushed to the US Congress for relief in the form of federal assistance. The industry was allocated $1 ...
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