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Mutual Gains or Zero Sum? Labor Relations and Firm Performance in the Airline Industry
Jody Hoffer Gittell Brandeis University - The Heller School for Social Policy and Management Andrew Von Nordenflycht Simon Fraser University - Faculty of Business Administration; Massachusetts Institute of Technology (MIT) - Sloan School of Management Thomas A. Kochan Massachusetts Institute of Technology (MIT) - Sloan School of Management March 2003 MIT Sloan Working Paper No. 4298-03; Institute for Work and Employment Research Working Paper No. 01-2003 Abstract: We 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 test them with 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. We 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.
Keywords: Labor Relations, Major U.S. Airlines Working Paper SeriesDate posted: May 15, 2003 ; Last revised: May 27, 2003Suggested CitationContact Information
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