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Southwest adopted an unusual strategy.
Southwest’s fundamental strategy, as described by its management, was to compete against the car. They proposed to do this by providing friendly, reliable, low-cost service on short haul flights. What they required to do was delivering more for less, which would translate to deriving more from their employees for the same monetary compensation (as per industry standards). Therefore, Southwest had to think of ways to increase the non-monetary compensation component for its employees. By doing so they would create value for their employees and thereby motivate employees to convert some of that value to customer and firm value by designing operating processes, and encouraging behavioral norms that enable employees to reduce costs and to improve service...
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