Andrew von Nordenflycht

Mutual Gains or Zero Sum? Labor Relations and Firm Performance in the Airline Industry

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.

Contrasting Management and Employment-Relations Strategies in European Airlines

We discuss deregulation (liberalization) and some of the international institutions that influence the management of people in airlines. As a point of departure, we summarize contrasting models from successful ‘new entrant’ airlines: Ryanair and Southwest. We consider examples of various categories of airlines in different ‘ideal types’ of institutional context: liberal-market economies and coordinated-market economies. These are two varieties of advanced capitalism. The former include the USA, Britain, Ireland (and Australia). The latter include the Germanic and Scandinavian countries. We classify airlines according to which strategies dominate their efforts at cost reduction. Alongside these differences in strategies, we analyse differences in two aspects of employment-relations strategies. First, employers can focus on controlling employee behaviour or seeking their commitment to the goals of the airline. Second, employers can seek to avoid, accommodate or partner with unions. We show that, in terms of employment relations, the variety of capitalism context helps to influence employers’ strategies, but airlines (and other enterprises) still have some scope for exercising strategic choice, in spite of their institutional and regulatory context.

The Public Corporation - Friend or Foe of Professional Ethics? Ownership and Ethics in Securities Brokerage

Professions have long debated the desirability of outside investment and public ownership in particular. The traditional view holds that outside investors undermine professional ethics, and this fear underpins bans on public ownership. Others argue such restrictions are a way to reduce competition and that public ownership may improve adherence to professional ethics. I address this debate both conceptually and empirically. Conceptually, I develop several arguments both “for�? and “against�? public ownership and its effect on professionally ethical behavior. I also identify hypotheses to distinguish among these various arguments. Empirically, I test the hypotheses by assessing the incidence of professionally unethical behavior in the US securities industry across different ownership modes. I measure unethical behavior with a database of broker-client disputes resolved through arbitration. Using models with firm fixed effects to partially mitigate endogeneity concerns, I find that transitions to public ownership are followed by higher rates of ethical violations. Additional findings suggest the adverse effect on ethical behavior arises either because of public investors’ short-term preferences or the visibility of public firms’ performance. The results suggest that the regulators of a profession might indeed want to be cautious about liberalizing ownership rules or at least design disclosure and monitoring policies that acknowledge a greater risk of ethical violations at public firms. Public ownership should also be investigated as a predictor of organizational misconduct more broadly.

Management and Employment-Relations Strategies in the Airline Industry: Perspectives on Asia, Australia and the Middle East

This chapter discusses the variety of approaches to the management of people in airlines from the Asia / Pacific / Middle East region in the face of increasing deregulation. We identify key differences between the institutional environment for airlines in the US versus those in Asia-Pacific nations and discuss their competitive implications. Then we describe the competitive and employment relations strategies of seven airlines (both incumbents and new entrants) from four countries. We note that incumbent airlines show little change to their basic employment paradigm, despite major restructuring efforts. New entrants show more variety, both in their approach to union relationships and their approach to relations with employees. However, we find that none of these airlines fully matches the model of Southwest Airlines, one of the world‘s most successful airlines, and suggest that there may be unexploited opportunities to turn employment relationships into a source of advantage.