Case StudyThe coronavirus pandemic drastically reduced the number of people flying in the United States. Because of this, every major airlineexperienced a drop in stock prices from February 2020 to November 2020. But these drops ranged from 57% for American Airlines to21% for Southwest Airlines. Why such a difference? Investopedia points out that Southwest has extremely efficient operations, low-costpricing, and innovative logistics solutions. In addition, they incorporate customer experience and forward planning into their strategy. Allof these things helped Southwest to weather the pandemic, and they all require that Southwest maintains careful control over itsoperations.One of the other things that helped Southwest during the pandemic was their superior service desk performance. They achieved thisperformance, in part, through measuring key factors in customer service, looking at customer service leaders (benchmarking), andmaking changes to bring their customer service costs and customer satisfaction up to the level of their highest competitors.To start this process, Southwest looked at overview measures for their customer service desk, including the annual operating expense,monthly inbound contact volumes for different media (e.g. voice, email, web portal, chat), monthly outbound contact volume, andpersonnel headcounts. They also looked at quality measures such as customer satisfaction, technician measures such as scheduleadherence, and service level measures such as call abandonment.Next, they contacted numerous companies that they considered to be key competitors or excellent at customer service. They talked tothese companies about cost, productivity, service level, quality, technician, and contact handling measures, and found that their cost perinbound contact was higher than other companies, but their customer service ratings were also high. This put Southwest in the middlequartile of a cost vs. quality graph - they were effective, but not efficient.Knowing this, Southwest started to measure six key performance metrics: cost per inbound contact, customer satisfaction, technicianutilization, net first contact resolution rate, technician job satisfaction, and percent of calls answered in 30 seconds. They found that onthese metrics, they were above average, but not at the top of the scale. In particular, their customer satisfaction, productivity metricsand technician metrics were all strong. They were growing in the chat and portal channels, and they scored well on process maturity.But their costs were above average, the average speed of answer rate was low and call abandonment was high. Interviews also pointedout concerns about Southwest's ability to retain new technicians and a perceived lack of opportunities for career advancement.Southwest implemented several key initiatives, including establishing a technician career path, increasing chat volume, implementingtechnician scorecards, allowing their six key processes (strategy, human resources, process, technology, performance measurement,and communication) to mature, and allowing their metrics to mature. At the end of one year, they saw an increase in customersatisfaction, and more importantly, a decrease in their costs.Sources: Company Profiles. Investopedia, . (2020, May 22). How is Southwest Different from Other Airlines? Retrieved fromhttps://www.investopedia.com/articles/investing/061015/how-southwest-different-other-airlines.asp; HDI 2018 Conference and Expo.Rumburg, J. (2018, April 10). Leveraging Metrics to Take Southwest Airlines to a Higher Plane. Retrieved fromhttps://www.hdiconference.com/files/pdfs/hdi2018handouts/Session302.pdfSouthwest managers can't just measure things like technician utilization once and be done with the control process they have to measureperformance repeatedly over time to make sure that their employees are staying on track. this is because control is aSouthwest has a strong corporate culture, and the company proclaims that it's purpose is to "Connect people to what's important in their lives throughfriendly, reliable, low-cost air travel. All Southwest employees are committed to making the company as low cost as possible, and they are constantlylooking for ways to help Southwest reduce costs while maintaining outstanding customer service. This is an example ofSuppose you are a gate manager for Southwest Airlines. Which of the following actions should you take if you want to use the balanced scorecardapproach to control? Check all that apply.ооооMeasure customer satisfactionMeasure operating expensesprocess.Measure technician job satisfactionMeasure competitor fare rates

This is a cost management query which uses concepts like continuous improvement, continuous…

Southwest managers can't just measure things like technician utilization once and be done with the control process they have to measure performance repeatedly over time to make sure that their employees are staying on track. this is because control is a Southwest has a strong corporate culture, and the company proclaims that it's purpose is to "Connect people to what's important in their lives throu friendly, reliable, low-cost air travel. All Southwest employees are committed to making the company as low cost as possible, and they are constant ooking for ways to help Southwest reduce costs while maintaining outstanding customer service. This is an example of process. Suppose you are a gate manager for Southwest Airlines. Which of the following actions should you take if you want to use the balanced scorecard approach to control? Check all that apply. Measure customer satisfaction Measure operating expenses Measure technician job satisfaction Measure competitor fare rates

Southwest managers can't just measure things like technician utilization once and be done with the control process they have to measure performance repeatedly over time to make sure that their employees are staying on track. this is because control is a Southwest has a strong corporate culture, and the company proclaims that it's purpose is to "Connect people to what's important in their lives throu friendly, reliable, low-cost air travel. All Southwest employees are committed to making the company as low cost as possible, and they are constant ooking for ways to help Southwest reduce costs while maintaining outstanding customer service. This is an example of process. Suppose you are a gate manager for Southwest Airlines. Which of the following actions should you take if you want to use the balanced scorecard approach to control? Check all that apply. Measure customer satisfaction Measure operating expenses Measure technician job satisfaction Measure competitor fare rates

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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