Essay on Corporate Culture Southwest Airlines

1290 Words Dec 21st, 2010 6 Pages
Discuss the corporate culture at Southwest Airlines and how it leverages its culture to achieve a competitive advantage.

The corporate culture at Southwest Airlines can be defined within three areas including, core value, management style, and compensation. Southwest Airlines organization structure incorporated several areas but I was impressed with these three the most.
Southwest Airlines had two core values, which emphasized on LUV and fun. Not only was LUV the company’s signature symbol or recruiting theme, but eventually this core value grew into Southwest’s core word for treating individuals, including customers and employees. Both customer and employees were expected to be treated with respect and dignity. This would soon be
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When individuals are secure within their workplace they tend to be more productive and involved within their organization. Having a great team is the key success to leveraging, which is exactly what Southwest Airlines has incorporated amongst their employees. By exhibiting this behavior it has compelled competitive advantages amongst other airline organizations.

Evaluate the company’s financial performance by calculating and interpreting the profitability ratios. (operating profit margin, net profit margin, return on total assets, return on stockholders equity)

Southwest Airlines continues to operate profitably as it made $474.3 million in a growing net income on $4.7 billion in 1999 revenues. It has a record of over 27 consecutive years of operating at a profit. Its debt of $871 million has been the lowest against all U.S. carriers and also has the highest Standard and Poor's credit rating in the industry with a rating of A. Assets are increasing as they reached $5.65 billion from $4.71 a year ago. Their debt and equity are both rising as they have issued common stock with retained earnings of $505 million. Their income expenses have come from negative $21 million to positive $7 million over a year time. Overall, the company is making very smart and strategic moves as it is enjoying growing profits as net income rose 9% to go along with an increase of 13% in total revenue.

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