Cross-Cultural Factors and Corporate Governance Transparency in Global Airline Strategic Alliances

Abstract

This paper argues that a critical dimension in understanding the factors that inhibit the effectiveness and benefits of airline alliances is corporate transparency. Specifically, the issue of transparency in corporate governance is considered. Corporate governance is the set of institutional arrangements affecting corporate decision making, and deals with the relationship among various participants in determining the direction and performance of corporations. However, airline strategic alliances span an array of national cultures which influence the development of such relationships. The impact of national culture as a determinant of governance transparency is also investigated in this paper. This study draws on the literature which examines the impact of national culture on international joint ventures and governance systems. National cultures are described by Hofstede's five dimensions of power distance, uncertainty avoidance, individualism, masculinity, and temporal orientation. Governance transparency is investigated by the examination of corporate annual reports. Thus, this study investigates not only the level of corporate governance transparency demonstrated by participants in each of the three major airline alliances, but the relationship between said governance transparency and the cultural identity of each of the participants.