Business Decision Analysis: Downsizing Dilemma in Southwest Airlines

SBM1108 Business Decision Analysis
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Table of Contents
Part 1: Comparative Review Report...........................................................................................3
1.1 Introduction.....................................................................................................................3
1.2 Overview of the case problem.........................................................................................3
1.3 Evaluation of Decision Model..........................................................................................4
1.4 Conclusion........................................................................................................................5
Part 2: Decision Model Proposal................................................................................................6
2.1 Introduction.....................................................................................................................6
2.2 Evaluation Decision Tree approach..................................................................................6
2.3 Linear programming Approach........................................................................................9
2.4 Decision Tree vs Linear Programming..............................................................................9
Part 3: Decision Model application..........................................................................................11
3.1 Model Overview.............................................................................................................11
References................................................................................................................................14

Part 1: Comparative Review Report
1.1 Introduction
In the field of the management, Management Decision Making is known as a subjective
procedure, which results in an accumulation of a lot of activities from current numerous
options. Sooner or later, decision – making is the procedure which is performed by each
person in everyday life; it's not possible for anyone to deny it. As to, Management Decision
Making is a customary procedure or just a propensity. Management Decision Making is a
standout amongst the most basic procedures in each association. Fruitful and powerful basic
leadership gives gainful results, while ineffective basic leadership causes an extraordinary
misfortune (Brickley, Smith and Zimmerman, 2015). The utilization of a few apparatuses and
procedures is conceivable in the whole procedure, as the supervisory group needs to pick
one useful choice from a scope of many. In addition, a few recognitions can likewise
recognize and explain any issue. Moreover, a couple of directors additionally prefer to settle
on choices all alone or offer need to an aggregate choice. As Management Decision Making
is a hard procedure, so now and then, it includes disappointment of another gathering. For
averting all the real clashes and obstacles in Management Decision Making, chiefs ought to
pursue the expert procedure of settling on administrative choices. Coming up next is the
whole procedure of Management Decision Making (Van Knippenberg et al. 2015).
The very basic purpose of this study is to evaluate a given case study and associated
Management Decision Making. To be more specific, the researcher will perform an
investigation and present a report on the business case, the decision-making process or
model, the value added to the business, any relevant assumptions and advantages and
disadvantages by the application of the model to the business scenario. Considering this, in
this case, the researcher has considered the “Southwest Airline: Decisions about whether,
when and how to downsize (restructure)” case study.
1.2 Overview of the case problem
This case depicts a difficult strategic choice about downsizing in Southwest Airlines. From
one perspective, the organization must lessen costs (all things considered, it is a low cost
aircraft) and is displayed a chance to do as such because of the achievement of its e‐
commerce activities while then again, the organization is committed to give its employees a

steady workplace and has a culture of professional stability and treating representatives
well.
Hence, the case study is indicating one issue, “After providing customers with the
opportunity to book tickets online, Southwest Airlines found that it had too many call centre
agents and hence whether can they decide to downsize without affecting the job security
image?”
1.3 Evaluation of Decision Model
Prior to stating whether Southwest Airlines went for downsizing or not, it is essential to
understand the perspective that leads the decision made by the management of Southwest
Airlines. The study has shown that the organisation did not go for downsizing even though
they had found that a significant employee base will be unutilized because of the online
presence. It has seen that there were three different pillars based on which the decision was
taken (Havig, 2017). The first one is cost argument, the second one is Strategy argument
and the final one is cultural argument.
While analysing the cost aspect, it has found that the introduction of online booking system
disintermediate the requirement for call centre agents. Under such circumstances, the need
for call centre agents become nil and it was nothing but the extra cost. On the other hand,
the strategic argument has shown that southwest is a large low-cost airline. Airlines rely on
key inputs such as aircraft, fuel and labour in order to operate (Seamster, and Redding, 2017).
Like any airline it is sensitive to jet fuel prices and other operating costs. So, withdrawing the
decision of downsizing will further lead loss towards the organisation. It has seen that the
organisation believes in, "On the off chance that you don't treat your own employee well,
they won't treat other individuals well."
The organisation generally trust that their employee came as first priority. A portion of the
business colleges viewed that as a problem. They would state: Which starts things out, your
kin, your clients, or your investors? However as per the CEO of Southwest Airlines, it is
anything but not a problem.
The organisation concentrated on their representatives as individuals. They needed them to
realize that they're essential to the organisation not on the grounds that they're grinding
away uh, similar to they were gear-teeth in a machine. So they gave a great deal of