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Mutual gains or zero sum? Labor relations and firm performance in the airline industry

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  • Jody Hoffer Gittell
  • Andrew von Nordenflycht
  • Thomas A. Kochan
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    Abstract

    The authors examine competing theoretical arguments regarding whether union representation, shared governance, wage levels, and two features of the quality of labor relations--workplace culture and conflict in negotiations--lead to better or worse outcomes for airlines, and they test these interpretations using a mix of historical and quantitative data from major U.S. airlines. Both the qualitative and quantitative results suggest that relational factors-conflict and workplace culture-are more important determinants of performance than the structural factors of unionization, shared governance, and wages. The authors conclude that efforts to recover from the current crisis in the airline industry that depend primarily on reductions in wages or union power will at best bring only short-term relief from immediate financial pressures. Sustained improvement in service quality and financial performance will require more fundamental improvements in the quality of labor relations. (Author's abstract.) (Free full-text download available at http://digitalcommons.ilr.cornell.edu/ilrreview/.)

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    Bibliographic Info

    Article provided by ILR Review, Cornell University, ILR School in its journal ILR Review.

    Volume (Year): 57 (2004)
    Issue (Month): 2 (January)
    Pages: 163-180

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    Handle: RePEc:ilr:articl:v:57:y:2004:i:2:p:163-180

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    Cited by:
    1. Eileen Appelbaum & Larry W. Hunter, 2004. "Union Participation in Strategic Decisions of Corporations," NBER Chapters, in: Emerging Labor Market Institutions for the Twenty-First Century, pages 265-292 National Bureau of Economic Research, Inc.
    2. Michael Kosfeld & Ferdinand A. von Siemens, 2011. "Competition, cooperation, and corporate culture," RAND Journal of Economics, RAND Corporation, vol. 42(1), pages 23-43, 03.
    3. Thomas Kochan & Eileen Appelbaum & Carrie Leana & Jody Hoffer Gittell, 2013. "The Human Capital Dimensions of Sustainable Investment: What Investment Analysts Need to Know," CEPR Reports and Issue Briefs, Center for Economic and Policy Research (CEPR) 2013-07, Center for Economic and Policy Research (CEPR).
    4. Hiller, Victor & Verdier, Thierry, 2014. "Corporate culture and identity investment in an industry equilibrium," Journal of Economic Behavior & Organization, Elsevier, Elsevier, vol. 103(C), pages 93-112.
    5. Piotr Niewiadomski, 2013. "International airline groups in Africa," Brooks World Poverty Institute Working Paper Series ctg-2013-36, BWPI, The University of Manchester.
    6. Greer, Mark, 2009. "Is it the labor unions' fault? Dissecting the causes of the impaired technical efficiencies of the legacy carriers in the United States," Transportation Research Part A: Policy and Practice, Elsevier, Elsevier, vol. 43(9-10), pages 779-789, November.
    7. Jody Hoffer Gittell & Kim Cameron & Sandy Lim & Victor Rivas, 2005. "Relationships, Layoffs, and Organizational Resilience: Airline Industry Responses to September 11," EERI Research Paper Series EERI_RP_2005_06, Economics and Econometrics Research Institute (EERI), Brussels.
    8. Sim, Khim Ling & Koh, Hian Chye & Shetty, Shekar, 2006. "Some potential issues of service quality reporting for airlines," Journal of Air Transport Management, Elsevier, Elsevier, vol. 12(6), pages 293-299.

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