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SOUTHWEST CEO

Order Description

Watch the video (about 4 ½ minutes)

http://www.mhhe.com/business/management/videos/DestinationCEO/SouthwestCEO_QT.html

2. Read the summary

Summary

Southwest Airlines CEO Gary Kelly is a 6’3″ Texan who wears jeans and cowboy boots and considers himself “just someone who works in the office.” When he flies, he always chooses to sit in the noisiest, most cramped last row of the airplane. Kelly makes sure he remembers employees’ names and takes time to talk with customers. Kelly came through the ranks with a rich finance background serving as a former accountant with Arthur Young and Co. and then as CFO (chief financial officer) of SWA.

Kelly never had aspirations to become a CEO, but since assuming the position he has helped Southwest maintain its enviable position as the only airline earning profits every year since its founding in 1972. Kelly is credited with locking up fuel hedging contracts, resulting in paying less for jet fuel than competitor airlines.

Southwest continues to focus on its founding principles: Keep costs down through fast turn-around time at the gate, fly all the same planes (737s) so that parts are maintenance costs are reduced, and treat customers like queens and kings. Oh yes, and one other principle: Treat employees even better than the customers.

Southwest (NYSE: LUV) remains committed to its strategy to grow, but will be adding fewer planes and tightening flight schedules in several cities as a result of the slowing American economy. Kelly may be facing his greatest challenges to date as he leads the airline at a time when fuel hedges no longer provide cost protection from high jet fuel costs and employee labor disputes have started to appear.

Assignment Development

Based on the video and summary, please answer these two questions:

1.Do you think Kelly’s traits and skills make him an effective leader? Why or Why not?

2.What do you think are the benefits of treating employees even better than the customers?

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