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Strategic Responses to Deregulation and Their Performance Implications in the U.S. Airline Industry

Published online by Cambridge University Press:  20 January 2017

Irene Goll ,
Nancy Brown Johnson  and
Abdul A. Rasheed
Irene Goll*
Affiliation:
University of Scranton
Nancy Brown Johnson*
Affiliation:
University of Kentucky
Abdul A. Rasheed*
Affiliation:
University of Texas - Arlington
*
Kania School of Management, University of Scranton, Scranton, PA. 18510, e-mail: golli2@scranton.edu.
School of Management, University of Kentucky, Gatton College of Business and Economics, Lexington, KY. 40506–0034, e-mail: nbj@pop.uky.edu.
Abdul A. Rasheed, Department of Management, College of Business Administration, University of Texas at Arlington, Arlington, TX.76019, email: abdul@uta.edu.
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Abstract

This study examines the relationships between deregulation, business strategy (low cost, differentiation, and scope), size, and firm performance in the U.S. airline industry based on archival data for the Major, National, and Large Regional air carriers in the U.S. from 1972 to 1995. Cross-sectional time series regression analysis shows that deregulation had a significant impact on the strategic choices made by airlines. Results also support a significant relationship between business strategy and firm performance. Further, the study found that firm size moderates the environment-business strategy relationship and the business strategy-firm performance relationship, thereby supporting the salience of firm size as a contingency variable in strategy studies.

Keywords

business strategyairline industryfirm performanceorganizational size
Type
Article
Information
Business and Politics , Volume 8 , Issue 2 , August 2006 , pp. 1 - 37
Copyright
Copyright © V.K. Aggarwal 2006 and published under exclusive license to Cambridge University Press 

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