Tenure of top management team, employee relationship, and value of airlines

Abstract

This research aims to examine (1) how the tenure of the top management team (TMT) affects firm employee (CSR) (e.g., creating promotion opportunities, maintaining relationships with labor unions, programing high-quality retirement plans, protecting employee health and safety, and so on) and (2) how such strategic implementation influences the performance of airlines. We examined 13 airlines publicly traded on the American stock market between 1998 and 2013 and collected relevant data from various sources (e.g., COMPUSTAT, EXECUCOMP, and the Kinder, Lydenberg, and Domini (KLD) database). Panel feasible generalized least square regression was employed to analyze the data. We found an inverted U-shaped relationship between TMT tenure and firm employee-related strategic execution. We also confirmed that firm employee-related strategic implementation positively impacts the value of airlines.