Question

Examine the organizational structure of Southwest airlines and suggest ways it can be changed to improve the overall profitability.

Answer 1

The organization structure for SouthWest airline is shown below. From the structure we can see that the company has a very traditional, hierarchical structure in place. That is justified given the size of the company and the type of industry they are operating in. The airline industry is not a rapidly changing industry and undergoes changes very slowly. Considering that, SouthWest airlines is already doing quite well and have been very promising with their operation, customer focus and overall profitability.

Having said that, SouthWest is currently known for their customer centric approach and low cost solution for the consumers. Due to this, they have done quite well. However from the organization structure, we can see that they are extremely operations focused. Their focus on technology is comparatively low. This is evident by the fact that there aren’t that many divisions under the CTO at the company. The company should also look at incorporating technology into their business heavily and this could help them reduce cost. In terms of revenue, the pricing of the ticket may not be in their hand as it is dynamic and varies as per the market. However, they could reduce cost through technology investment and increase the overall profitability.