Author: Kochan, Thomas A.
Source: Rebuilding the Social Contract at Work: Lessons from Leading Cases, Institute for Work and Employment Research, MIT Sloan School of Management
Company Name: Southwest Airlines
Number of pages: 2
Southwest Airlines has consistently been successful in terms of profitability, good employee and union relations, and customer satisfaction – at a time when most airline carriers are struggling in all these areas. Central to the company's success is a culture of flexibility, family-orientation, and fun. (This case is one of seven that are examined in the article, “Rebuilding the Social Contract at Work: Lessons from Leading Cases,” by Thomas Kochan (1999). The article can be found in References on this site. The article contains footnotes and references not included in this version of the case.) While 90% of its employees are unionized, labor relations have been remarkably positive, especially by industry standards. There are no formal structures for labor or union participation in management decision making, but the company – led by top managers who actively solicit and respond to employee views – has taken the lead on developing and maintaining this culture. One critical cornerstone of the company's success in a fairly unstable industry (since deregulation in the 1980s) is the fact that the unions are not interested in pushing their roles beyond the traditional collective bargaining and grievance functions they perform. In this regard, Southwest differs from some other well-known cases of Human Resource-based and customer-oriented success stories.
Southwest Airlines (22k)