How Industrial Relations Affects Plant Performance: The Case of Commercial Aircraft Manufacturing

39 Pages Posted: 22 Oct 2001

See all articles by Morris M. Kleiner

Morris M. Kleiner

Humphrey School of Public Affairs; National Bureau of Economic Research (NBER)

Jonathan S. Leonard

University of California, Berkeley - Finance Group; National Bureau of Economic Research (NBER)

Adam M. Pilarski

AVITAS, Inc.

Date Written: April 2001

Abstract

This analysis examines how changes in major industrial relations policies affected productivity over the years 1974-91 at one of the most important manufacturing plants in the United States. The authors find that productivity fell greatly, both in percentage terms and in absolute dollars, during strikes and a slowdown and during the terms of office of tough union leaders. In contrast with much of the firm performance literature, they find only small initial productivity effects of a movement from traditional adversarial management, which is the norm in this industry, to total quality management (TQM) and back again. How and why TQM is adopted, the authors suggest, may be as important as whether it is adopted. Finally, major industrial relations events like strikes, a slowdown, and the TQM program did not have long-term productivity effects; the firm returned to pre-event levels of productivity within one to four months.

Keywords: Industrial relations, productivity, impact of unions, effects of union and management leadership, impact of strikes and work to rule, effects of total quality management

JEL Classification: J0, J5, L2, L6

Suggested Citation

Kleiner, Morris M. and Leonard, Jonathan S. and Pilarski, Adam M., How Industrial Relations Affects Plant Performance: The Case of Commercial Aircraft Manufacturing (April 2001). Available at SSRN: https://ssrn.com/abstract=287305 or http://dx.doi.org/10.2139/ssrn.287305

Morris M. Kleiner (Contact Author)

Humphrey School of Public Affairs ( email )

Minneapolis, MN 55455
United States
612-625-2089 (Phone)

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Jonathan S. Leonard

University of California, Berkeley - Finance Group ( email )

Haas School of Business
545 Student Services Building
Berkeley, CA 94720
United States
510-642-7048 (Phone)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Adam M. Pilarski

AVITAS, Inc. ( email )

1835 Alexander Bell Drive
Suite 200
Reston, VA 20191
United States

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