Top management team demographic characteristics, business strategy, and firm performance in the US airline industry

Abstract

PurposeThe purpose of this paper is to focus on top management demographic characteristics, business strategy, and firm performance in the major US airlines.Design/methodology/approachThe relationships between management characteristics and business strategy are examined as well as the business strategy – firm performance relationships before and after airline deregulation. This is a longitudinal study (1972‐1995) that includes data from publicly available sources. Pooled cross‐sectional time series regression analyses were used with fixed‐effects to test specific hypotheses. The management demographics include age, tenure, education, and functional background. Business strategy was measured as low cost, differentiation, and scope. The study includes three measures of firm performance.FindingsThere were significant management demographics‐business strategy relationships in the deregulatory period. There were also significant business strategy‐firm performance relationships with deregulation.Originality/valueThis is a longitudinal study of management, strategy, and performance of the airlines from regulation to deregulation. It has performance implications for the major air carriers that are of interest to academics and managers.