Producing sustainable competitive advantage Essay examples

8708 Words Apr 11th, 2014 35 Pages
஽ Academy of Management Executive, 2005, Vol. 19, No. 4

Reprinted from 1995, Vol. 9, No. 1

........................................................................................................................................................................

Producing sustainable competitive advantage through the effective management of people*
Jeffrey Pfeffer
Executive Overview

Achieving competitive success through people involves fundamentally altering how we think about the workforce and the employment relationship. It means achieving success by working with people, not by replacing them or limiting the scope of their activities. It entails seeing the workforce as a source of strategic advantage, not just as a cost
…show more content…
In 1978, competitors sought to bar flights from
Love Field to anywhere outside Texas. The compromise Southwest wrangled permitted it to fly from Love to the four states contiguous to Texas.6
Its competitive strategy of short-haul, point-topoint flights to close-in airports (it now flies into
Chicago’s Midway and Houston’s Hobby airports) was more a product of its need to adapt to what it was being permitted to do than a conscious, planned move—although, in retrospect, the strategy has succeeded brilliantly. Nor has Southwest succeeded because it has had more access

November

to lower-cost capital—indeed, it is one of the least leveraged airlines in the United States. Southwest’s planes, Boeing 737s, are obviously available to all its competitors. It isn’t a member of any of the big computerized reservation systems; it uses no unique process technology and sells essentially a commodity product—low-cost, low-frills airline service at prices its competitors have difficulty matching. Much of its cost advantage comes from its very productive, very motivated, and by the way, unionized workforce. Compared to the U.S. airline industry, according to 1991 statistics, Southwest has fewer employees per aircraft (79 versus 131), flies more passengers per employee (2,318 versus 848), and has more available seat miles per employee
(1,891,082 versus 1,339,995).7 It turns around some
80% of its flights in 15

Related Documents