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Herb Kelleher is both a leader and a manager. What classifies him as a leader is the way he inspires his employees who are ready to go out of their way to get things done. He exercises the various forms of power he possesses to bring out the best in them. His employees accept him as a leader. Given the way the employees responded to the cost cutting challenge, it shows they value his appreciation. His charisma, which inspires loyalty and enthusiasm from his employees, enables him to motivate and inspire change, which keeps Southwest Airline on top of its competition.

He communicates the challenges the Airline encounters and asks for cooperation from all employees in line with the team spirit he emphasizes thus aligning employees to make sure everyone is on the same footing. At the inception of the Airline, he had a vision of making flying fun and he has established direction to that effect by for instance, surrounding himself with employees with the right attitude and frame of mind. As a manager, Kelleher has kept the costs low and profits high. This is in line with the planning aspect of management.

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In organizing and staffing, he has for instance established guidelines to be followed in the selection of the employees. Also, through controlling and problem solving, he has maintained the profitability of the Airline. The CEO who will succeed Kelleher should be a well-focused fun loving person. This is to ensure that the organization culture is kept alive which gives the Southwest Airlines the sustained competitive advantage it has. He or she should be both a leader and a manager and someone of vision.

He or she should be someone who is both job centered and employee-centered who holds employees in high esteem and a good promoter of team spirit. He or she can be an initiator of change but change, which strengthens the organizational culture and ensures flexibility and faster decision-making process to maintain the position currently held by the Airline. Southwest looked for a CEO that would continue to employ the strategic principles that helped the Airline become a profitable company in commercial aviation. Jim Parker embodied the principals by which Herb Kelleher founded the company in 1971.

Parker took over his job because of his strong commitment to keeping the organization running at an optimal level. He was widely depicted as an astute, dedicated, and unselfish executive. His significant caveat was that as a general counsel, he helped negotiate an innovative 10-year pilot contract in 1995 which encouraged the union to agree on a freeze pay for five years in exchange for stock options. As general counsel, he learned significantly from Kelleher about the organizational behavior and the inter-workings within all the personnel divisions. His successful tenure as CEO will be judged by his ability to lead by example.

The chief executive has already made significant provisions to keep costs down by having the airline devote its resources toward creating winglet technology for its 737-700 aircraft. This allowed the airline to save up to an average of 92,000 gallons of jet fuel per plane per year. Many business analysts assert that to survive without Kelleher’s guidance, Southwest must be able eradicate internal dissention and the threat of new entrants that might steal some of the Airline’s corporate secrets. One current example of turmoil at Southwest is that the flight attendants are dissatisfied with their current labor contract.

Union members are already attempting create a negative campaign against their company by informing them of the working conditions at Southwest. They are extremely dissatisfied with their work schedule, the longer flights, and the working environment is not as harmonious as in the past. But Southwest may be resilient in this particular conflict because of their history of ameliorating any calamity involving its large-union worker population. Management carefully uses strategic methods in dispute resolution to resolve contract disputes because they want to improve overall job satisfaction.

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