LITERATURE BASED CASE STUDY
Amanda Janssen 1
Literature Based Case Study
Amanda Janssen
Saint Mary's University of Minnesota
Schools of Graduate & Professional Programs
OL-645 – Organization Change and Development
K. David Hirschey and Dr. John Merladet
November 24, 2013
LITERATURE BASED CASE STUDY
Amanda Janssen 2
Literature Based Case Study
Introduction
Change is challenging in any organization and when two large organizations merge into
one, it can expose gaps in strategy and alter the entire culture of an organization. Southwest
Airlines is one of the major airline companies in the United States with a rich culture that values
employee opinions and provides customers with a low-cost, fun travel experience. To keep pace
with the larger airlines, Southwest began taking steps to acquire AirTran Airlines to expand their
service around the country. Airline merger history is rocky and flawed and unfortunately, this
organizational change has not been without its challenges. This analysis will explain the
background and culture of Southwest, the change process that occurred with the merge, and the
outcomes. It will then propose some solutions that would have eased the transition for employees
and customers. Three years after this dramatic change, it would seem that Southwest has finally
gotten its bearings but it begs the question of whether using the proposed changes in this analysis
would have made the process quicker and smoother.
Organization Background
Southwest Airlines has been around for nearly fifty years, helping millions of passengers
reach their destinations safely. Rollin King and Herb Kelleher founded the organization with a
goal to provide low-cost flights delivered with exemplary customer service (“About Southwest,”
2013). It quickly became one of the most utilized airline carriers in the country.
The mission statement of Southwest Airlines clearly defines its purpose and goals as an
organization. Simply put, “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” (“About Southwest,” 2013). One of the key values of the organization is the
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importance of employees. Southwest understands that if employees do not feel recognized within
the organization, they will not be able to provide top-notch customer services to customers
(Gilley, McMillan & Gilley, 2009).
Southwest is as successful as it is not only due to the dedicated employee staff; the
leadership team is continually innovating and adapting to remain a low-cost but effective way of
traveling for customers. When other airlines started charging for checked luggage, Southwest
launched an ad campaign, vowing to keep baggage free. When most airlines take about an hour
to unload passengers and baggage and load the new plane for departure, Southwest launched an
initiative to turn their planes over in ten minutes with tremendous success (Schlesinger, 2011).
These strategies and commitment to excellent service are reasons why Southwest sees continued
positive reviews and continued success in the market.
Identified Change and Outcome
Identified Issue Driving the Need
The airline industry is continually changing and individual airline carriers are adapting
their strategies and their modes of operation on a frequent basis. For the most part, Southwest
stays true to its values and mission to provide low-cost, fun travel experience to its customers
and to always support and encourage their employees. A continual battle for Southwest is being
able to uphold their values while remaining competitive in a market that sees increased gas rates
and new innovative ideas daily. There have been major mergers and tremendous changes to other
airlines and it can be hard for any company to keep up in this type of environment. To stay
relevant, Southwest saw an opportunity to form a merger with AirTran Airways, an airline that is
similar to Southwest in certain aspects but does not share all the same cultural values or
processes. Leadership at Southwest saw this as an opportunity to expand its ability to fly
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customers to more locations and compete against larger airlines like Delta or United (Boehmer,
2010).
The Change Process
After a lengthy process that involved a case being presented to the federal government,
Southwest was given permission to acquire AirTran in 2011. The goal of Southwest’s leadership
team at this time is not to combine the two carriers but rather have them compliment and support
one another, ultimately aiming to fully merge in 2014 (“Abut the acquisition,” 2013). While they
remain separate entities, customers are able to book their flights through southwest.com and
could potentially have connecting flights that utilize both companies depending on the
destination.
In the three years since talks on the merger occurred, numerous kinks remain in the
change process, leaving staff and customers frustrated and confused on how to effectively travel
utilizing one or both of the airlines. Challenges include outdated technology used by Southwest,
chaos surrounding the frequent flier programs, and price differences between the carriers
(McCartney, 2013). Southwest is known for free luggage, no business class, and no assigned
seats. AirTran’s business class’ future is uncertain at this time as well as some of the amenities
that they currently offer. Connecting flights have been a nightmare for customers due to the
simple fact that flights can be booked online with connecting flights using both airlines but ticket
counters and gates remain separated (McCartney, 2013). On the plus side, travelers have more
destination options than ever before and are slowly seeing integration between the two.
Outcome
Unfortunately, airline mergers and acquisitions rarely go as planned and have negative
outcomes for customers (Compart, 2010). Nearly three years since starting the process and two
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years since gaining approval from the U.S. Justice Department, Southwest and AirTran continue
to work on ways to improve functionality and customer experience. Despite the challenges,
Southwest is adamant they are on target with changes and urge customers to continue to be
patient (McCartney, 2013). As mentioned, Southwest intends to fully integrate the two by the
end of 2014 (“About the acquisition,” 2013). They have merged ticket counters at a few airports
and are aiming to tackle the big airports this year (Mutzabaugh, 2013).
One aspect of the organization that has remained intact is the culture. Southwest’s
leadership team has worked to retain the elements of fun that have been integral to their success.
Employees value organizations who have leadership teams that work to “motivate, reward, and
build teams” (Gilley, McMillan, & Gilley, 2009, p. 43). It is evident in the communications put
forth by Southwest that they have no intention of taking away the positive aspects of their culture
and intend to continue to focus on putting their employee’s needs first. Understandably, in the
midst of changes, it can be hard for employees to feel support but if Southwest is true to their
word, their job will remain a place where fun and innovation is valued.
Analysis of Change
For being such a massive change and a merge of two separate entities, Southwest has
done a decent job of managing the change to their organization. There is little analysis available
that discusses the employee reaction to the change but there is certainly information available to
demonstrate customer’s frustrations (Mutzabaugh, 2013). Unfortunately, the slow process of
change, while necessary when merging two large, distinctly unique organizations, leaves a gap
that often involves anger and confusion. Southwest has taken longer than most deem necessary
during this change process with little to show for it up to this point (Mutzabaugh, 2013). Their
website urges customers to be patient as “the bulk of our integration efforts to date have been
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behind the scenes” (“About the acquisition,” 2013). It would seem that through their
communication, they intend on some major changes in the coming year. Many are left to wonder
what the final result will be and if there will ever be a complete integration of the two airlines.
One of the major concerns that accompanied the merger was the lack of cohesion
between Southwest and AirTran Airlines. Southwest had created such an elaborate, effective
system of operation and there was significant disruption when the merger occurred. While the
leadership team was prepared to deal with an elaborate change, it seems there were some gaps in
their planning strategy. Challenges of connecting flights, frequent fliers, and customer service
discrepancies really put a bad spin on this merge. Gilley, McMillan, and Gilley (2009) explain
that transformational, or “radical shifts” can be positive only if implemented correctly. Before
finalizing and implementing the changes that came with the merge, Southwest would have been
wise to spend more time preparing for the change and ensuring the customer experience was not
affected by using two airlines that have become one.
On the positive side, the organization did well in their communication, both with
customers and with employees. The explanation of the merge and the timeline are clearly
explained on Southwest’s company website and each step has been honestly communicated from
the leadership team (“About the acquisition,” 2013). They have never expressed that everything
is perfect; simply urging their loyal customers to be patient as they work through this change.
One thing that Southwest understands is the change process is a long one and they are working
tirelessly to ensure when they reach the final result, it is successful. Leaders that are successful
recognize the importance of the change process and work to keep morale high throughout the
organization (Gilley, McMillan, & Gilley, 2009). From what has been researched, Southwest has
maintained morale within the organization, even if there are rumblings of customer dissent.
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Unfortunately, as with every single other change ever implemented, Southwest knows they
cannot appease everyone.
Alternative Change Approach
If it was plausible to revisit the change from the beginning and make it more effective, as
a change agent I would choose to approach the change utilizing Kotter’s eight step change
process. One aspect that would have helped ease some of the headaches would coincide with the
second step of his model; creating the guiding coalition (Spencer, & Winn, 2005). By combining
the leadership team of Southwest and the leadership team of AirTran, it would be possible to
identify the discrepancies in culture and procedure. This would have solved some of the concerns
around business class standards, in flight procedures, and booking policies. Gilley, McMillan,
and Gilley (2009) explain the importance of leadership support and understanding when
organizations are in the midst of continuous change. With Southwest’s strategy to roll out their
changes across nearly four years, it is imperative that the leadership teams from both
organizations see the direction of the organization and are all in agreement of the future.
The change vision was clearly verbalized but Kotter’s fifth step, empowering broadbased action, would have helped the merge go smoother. According to Kotter’s guidance, step
five requires the company takes steps to “remove obstacles to change, change systems or
structures that seriously undermine the vision, and encourage risk-taking and nontraditional
ideas, activities, and actions” (Kotter International, n.d.). This would involve bringing in
employee ideas and creative solutions that would have married the two airlines together more
efficiently. This could have helped ensure the staff from both airlines clearly understood the
vision and the direction the organization was taking to ensure there was cohesion in the process.
Too often, changes are implemented by upper management without input from employees on the
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front line. Giving employees a voice in the change process would have helped potentially
identify challenges in advance and could have prevented customer complaints in advance.
Employees often feel more connected to the change and are willing to accept and adapt to the
changes if they are given a role in the process and feel they are being heard from management
(Shin, Taylor, & Seo, 2012). Taking the time to understand the vision of the organization
eliminates confusion from customers because employees at all levels can provide the same
message and service.
Conclusion
Organizations have to continually be forward thinking and make strides to ensure that
they are maintaining pace with a world that never stops changing. Southwest is one of the most
recognizable airline carriers and is well known for their exemplary customer service and lowfares. To keep up with other major airlines, Southwest took steps to acquire AirTran airways.
While the change is still in process, there have been some concerns raised about some of the
changes to the customer experience. Utilizing John Kotter’s 8 step process to implement change,
Southwest could have made the transition a bit smoother and reduced some of the headaches
experienced by customers around the country. Change is never easy but with proper steps taken,
success can be seen. All eyes are on Southwest as they work tirelessly to attain their goal of a
complete integration with AirTran by the end of 2014.
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References
About Southwest (2013). Retrieved from http://www.southwest.com/html/aboutsouthwest/index.html?int=GFOOTER-ABOUT-ABOUT
About the acquisition (2013). Retrieved from http://www.southwest.com/html/air/intl/intlhub.html
Boehmer, J. & Jonas, D. (2010). Delta sees opportunity in Southwest, AirTran Merger. Business
Travel News. 27(15). P. 4
Compart, A. (2010). Low-cost combo. Aviation Week & Space Technology. 172(36). P. 26-29.
Gilley, A., McMillan, H., & Gilley, J. (2009). Organizational change and characteristics of
leadership effectiveness. Journal of Leadership and Organizational Studies. 16(1). P. 3847.
Kotter International (n.d). The 8-step process for leading change. Retrieved from
http://www.kotterinternational.com/our-principles/changesteps
McCartney, S. (2013, Jul 18). The middle seat: Airline mergers and aggravations. Wall Street
Journal. Retrieved from
http://ezproxy.smumn.edu/login?url=http://search.proquest.com/docview/1400587911?ac
countid=28680
Mutzabaugh, B. (2013, Feb 18). Southwest, AirTran finally begin ‘connecting’ flights.’
Retrieved from http://www.usatoday.com/story/todayinthesky/2013/02/15/southwestand-airtran-finally-begin-connecting-flights/1922845/
Schlesinger, J. (2011). 10 minutes that changed Southwest Airlines’ future. Retrieved from
http://www.cnbc.com/id/43768488
Shin, H., Taylor, M., & Seo, M. (2012). Resources for change: The relationships of organizations
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inducements and psychological resilience to employees’ attitudes and behaviors towards
organizational change. Academy of Management Journal. 55(3). P. 727-748.
Spencer, M., & Winn, B. (2005). Evaluating the success of strategic change against Kotter’s
eight steps. Planning for Higher Education. 33(2). P. 15-22.