When Your Problem Becomes My Problem: The Impact of Airline IT Disruptions on On-Time Performance of Competing Airlines

41 Pages Posted: 9 Mar 2018 Last revised: 24 Apr 2018

See all articles by C. Jennifer Tae

C. Jennifer Tae

Temple University - Fox School of Business and Management

Min-Seok Pang

Temple University - Department of Management Information Systems

Brad N Greenwood

University of Minnesota - Twin Cities - Carlson School of Management

Date Written: January 26, 2018

Abstract

We study the effect of firm disruptions on competitor performance in the presence of shared resources, and conditions under which competitors experience performance degradation. We propose that the impact of disruption is moderated by the routine complexity of both a disrupted firm and a competitor. We examine these questions in the context of the U.S. airline industry, leveraging four large IT outages from 2011-2016. Competitors’ flights which originated from, or were inbound to, a disrupted hub experienced significant changes in on-time performance, depending on the routine complexity of the disrupted airline. Performance deteriorated during the disruption of full-service carriers, but improved during that of a low-cost carrier. We also find that this effect is strongly moderated by the competitors’ routine complexity.

Keywords: Shared Resources, Routine Complexity, On-Time Performance, IT Disruption, Airlines

Suggested Citation

Tae, Chung Won Jennifer and Pang, Min-Seok and Greenwood, Brad, When Your Problem Becomes My Problem: The Impact of Airline IT Disruptions on On-Time Performance of Competing Airlines (January 26, 2018). Fox School of Business Research Paper No. 18-014. Available at SSRN: https://ssrn.com/abstract=3135500 or http://dx.doi.org/10.2139/ssrn.3135500

Chung Won Jennifer Tae

Temple University - Fox School of Business and Management ( email )

Philadelphia, PA 19122
United States

Min-Seok Pang

Temple University - Department of Management Information Systems ( email )

1810 N. 13th Street
Floor 2
Philadelphia, PA 19128
United States
215-204-3059 (Phone)

HOME PAGE: http://sites.google.com/site/minspang

Brad Greenwood (Contact Author)

University of Minnesota - Twin Cities - Carlson School of Management ( email )

19th Avenue South
Minneapolis, MN 55455
United States

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