Current Issue

korean management review - Vol. 53 , No. 1
[Paper List]

[ Article ]
korean management review - Vol. 50, No. 4, pp. 887-912
Abbreviation: kmr
ISSN: 1226-1874 (Print)
Print publication date 31 Aug 2021
Received 05 Aug 2020 Revised 02 Feb 2021 Accepted 24 Feb 2021
DOI: https://doi.org/10.17287/kmr.2021.50.4.887

Unintended Consequence of Strategic Change Strategic Sources of Airline Accidents
Doyoon Kim ; Dongyoub Shin
(First Author/Corresponding Author) Yonsei Business Research Institute (doyoon.kim@yonsei.ac.kr)
(Co-Author) Yonsei University. School of Business (dshin@yonsei.ac.kr)

전략적 조직변화의 의도치 않은 결과: 항공사고의 전략적 원인

Copyright 2011 THE KOREAN ACADEMIC SOCIETY OF BUSINESS ADMINISTRATION
This is an open access article distributed under the terms of the Creative Commons Attribution License 4.0, which permits unrestricted, distribution, and reproduction in any medium, provided the original work is properly cited.
Funding Information ▼
Abstract

In this paper, the accident-inducing effects of strategic change which is intended to adapt to environment flexibly are examined. Unlike previous studies in which accidents were commonly attributed to operational malfunctions or errors, we draw attention to the accident-inducing effects of strategic factors associated with strategic changes, such as niche change, structure change, and core strategic resource change. We suggest that these particular factors, while increasing flexibility, may also cause an unintended increase in the risk of accidents because they reduce reliability and increase complexity. The results of our analysis of accident rates in the U.S. airline industry from 1978 to 2011 showed that these three strategic factors affected the occurrence of accidents positively, as predicted in our hypotheses.

Keywords: Accident, Strategic Change, Niche Change, Structure Change, Core Strategic Resource Change
Acknowledgments

This research is supported by Yonsei University, School of Business and Yonsei Business Research Institute

References
1. Aaker, D. A., and B. Mascarenhas(1984), “The need for strategic flexibility,” Journal of Business Strategy, 5(2), pp.74-82.
2. Amburgey, T. L., D. Kelly, and W. P. Barnett(1993), “Resetting the clock: The dynamics of organizational change and failure,” Administrative Science Quarterly, 38(1), pp. 51-73.
3. Argyris, C.(1968), “Some unintended consequences of rigorous research,” Psychological Bulletin, 70(3), pp.185-197.
4. Barabási, Albert-László(2003), Linked: The new science of networks, Basic Books.
5. Barnett, A., M. Abraham, and V. Schimmel(1979), “Airline safety: Some empirical findings,” Management Science, 25(11), pp.1045-1056.
6. Barnett. A., and M. K. Higgins(1989), “Airline safety: The last decade,” Management Science, 35(1), pp.1-21.
7. Barney, J. B.(1991), “The resource-based view of strategy: Origins, implications, and prospects,” Journal of Management, 17(1), pp.97-211.
8. Baum, J. A. C., and K. B. Dahlin(2007), “Aspiration performance and railroads’ patterns of learning from train wreck and crashes,” Organization Science, 18(3), pp.368–385.
9. Baum, J. A. C., and P. Ingram(1998), “Survival-enhancing learning in the Manhattan hotel industry, 1898-1980,” Management Science, 44(7), pp.996-1016.
10. Baum, J. A. C., and C. Oliver(1996), “Toward an institutional ecology of organizational founding,” Academy of Management Journal, 39(5), pp.1378-1427.
11. Bittlingmayer, G.(1990), “Efficiency and entry in a simple airline network,” International Journal of Industrial Organization, 8(2), pp.245-257.
12. Blau, P.M. and W.R. Scott(2003), Formal organizations: A comparative approach. Stanford University Press.
13. Bordia, P., E. Hobman, E. Jones, C. Gallois, and V. J. Callan(2004), “Uncertainty during organizational change: Types, consequences, and management strategies,” Journal of Business Psychology, 18(4), pp.507-532.
14. Borgatti, S. P.(1997), “Structural holes: Unpacking Burt’s redundancy measures. Connections,” 20(1), pp.3538.
15. Borgatti, S. P., and C. Jones(1996), “A measure of past collaboration,” Connections 19(1), pp. 58-60.
16. Brueckner, J.K, and Y. Zhang(2001), “A model of scheduling in airline networks: how a hub-and-spoke system affects flight frequency, fares and welfare,” Journal of Transport Economics and Policy, 35(2), pp.195-222.
17. Burke, W.W., D.G. Lake, and J.W. Paine, eds.(2008), Organization change: A comprehensive reader (Vol. 155). John Wiley and Sons.
18. Burnes, T., and G. M. Stalker(1961), The Management of Innovation. Oxford, NY: Oxford University Press.
19. Burnes, B.(2005), “Complexity theories and organizational change,” International Journal of Management Review, 7(2), pp.73-90.
20. Burt, R. S.(1992), Structural Holes: The Social Structure of Competition. Cambridge, MA: Harvard University Press.
21. Burt, R. S.(2001), Structural holes versus network closure as social capital. In N. Lin, Cook, K. S., and Burt, R. S. (Eds.), Social capital: Theory and research, pp.31-56. NY: Aldine de Gruyter.
22. Carroll, G. R.(1985), “Concentration and specialization: Dynamics of niche width in populations of organization,” American Journal of Sociology, 90(6), pp.1262-1283.
23. Chandler, A. D. Jr.(1962), Strategy and Structure: Chapters in the History of the American Industrial Enterprise, Cambridge, MA: MIT Press.
24. Chandler, A. D. Jr.(1990), Scale and Scope: The Dynamics of Industrial Competition. Harvard University Press, Cambridge, MA.
25. Chatterjee, S., and B. Wernerfelt(1991), “The link between resources and type of diversification: Theory and evidence,” Strategic Management Journal, 12(1), pp. 33-48.
26. Child, J.(1972), “Organizational structure, environment and performance: The role of strategic choice,” Sociology, 6(1), pp.1-22.
27. Coleman, J. S.(1988), “Social capital in the creation of human capital,” American Journal of Sociology, 94(S), pp.95-121.
28. Cyert, R. M., and J. G. March(1963), A Behavioral Theory of the Firm. Englewood Cliffs, NJ: Prentice Hall.
29. Czerwinski. D., and A. Barnett(2006), “Airlines as baseball players: Another approach for evaluating an equal-safety hypothesis,” Management Science, 52(9), pp.1291-1300.
30. Daft, R.L., J. Murphy, and H. Willmott(2010), Organization theory and design. Cengage learning EMEA.
31. D’aveni, R.(1994), Hypercompetition: Managing the Dynamics of Strategic Maneuvering. New York, NY: The Free Press.
32. Demchak, C.(1991), Military Organizations, Complex Machines. Ithaca, NY: Cornell University Press.
33. Demchak, C.(1992), “Complexity, rogue outcomes and weapon systems,” Public Administration Review, 52(4), pp.347-355.
34. DiMaggio, P. J., and W. W. Powell(1983), “Iron cage revisited: Institutional isomorphism and collective rationality in organizational fields,” American Journal of Sociology, 48(2), pp.147-160.
35. Dobrev, S., T. Kim, and M. Hannan(2001), “Dynamics of niche width and resource partitioning,” American Journal of Sociology, 106(5), pp. 1299-1337.
36. Dyer, J. H., and H. Singh(1998), “The relational view: Cooperative strategy and sources of interorganizational competitive advantage,” Academy of Management Review, 23(4), pp.660-679.
37. Feldman, M. S., and B. T. Pentland(2003), “Reconceptualizing organizational routines as a source of flexibility and change,” Administrative Science Quarterly, 48(1), pp.94-118.
38. Friedland, R., and R. R. Alford(1991), Bringing society back in: Symbols, practices, and institutional contradictions. In Powell, W. W., and P. J. DiMaggio(Eds.), The new institutionalism in organizational analysis, pp.232-266. Chicago, IL: The University of Chicago Press.
39. Global Airline Industry Program(2013), Retrieved Jan 10, 2013, from http://web.mit.edu/airlines/analysis/analysis_airline_industry.html.
40. Granovetter, M. S.(1985), “Economic action and social structure,” American Journal of Sociology, 91(3), pp.481-510.
41. Greenwood, R., and C. R. Hinings(1996), “Understanding radical organizational change: Bringing together the old and new institutionalism,” Academy of Management Review, 21(4), pp.1022-1054.
42. Greve, H. R.(1999), “The effect of core change on performance: Inertia and regression toward the mean,” Administrative Science Quarterly, 44(3), pp.590-614.
43. Greve, H. R.(2003), Organizational Learning from Performance Feedback. Cambridge, UK: Cambridge University Press.
44. Hambrick, D. C., and P. A. Mason(1984), “Upper echelons: The organization as a reflection of its top managers,” Academy of Management Review, 9(2), pp.193-206.
45. Hannan, M. T., and J. Freeman(1977), “The population ecology of organizations,” American Journal of Sociology, 82(5), pp.929-964.
46. Hannan, M. T., and J. Freeman(1984), “Structural inertia and organizational change,” American Sociological Review, 49(2), pp.149-164.
47. Hannan, M. T., and J. Freeman(1989), Organizational Ecology. Cambridge, MA: Harvard University Press.
48. Harrigan, K. R.(1985), Strategic Flexibility, Lexington, MA: Lexington Books.
49. Haunschild, P. R., and B. N. Sullivan(2002), “Learning from complexity: Effects of prior accidents and incidents on airlines’ learning,” Administrative Science Quarterly, 47(4), pp.609-643.
50. Helfat, C.E., S. Finkelstein, W. Mitchell, M. Peteraf, H. Singh, D. Teece, and S.G. Winter(2009), Dynamic capabilities: Understanding strategic change in organizations. John Wiley and Sons.
51. Henisz, W. J., and A. Delios(2001), “Uncertainty, imitation, and plant location: Japanese multinational corporations, 1990-1996,” Administrative Science Quarterly, 46(3), pp. 443-475.
52. Hitt, M. A., B. W. Keats, and S. M. DeMarrie(1998), “Navigating in the new competitive landscape: Building strategic flexibility and competitive advantage in the 21st century,” Academy of Management Executive, 12(4), pp.22-42.
53. Huber, P. J.(1967), The behavior of maximum likelihood estimates under nonstandard conditions. In L. M. LeCam, and J. Neyman (Eds.), Proceedings of the Fifth Berkeley Symposium on Mathematical Statistics and Probability I. Berkeley, CA: University of California Press.
54. Ingram, P., and J. A. C. Baum(1997), “Opportunity and constraint: Organizations’ learning from the operating and competitive learning of industries,” Strategic Management Journal, 18(S1), pp.75-98.
55. Jehn, K. A., G. B. Northcraft, and M. A. Neale(1999), “Why differences make a difference: A field study of diversity, conflict, and performance in workgroups,” Administrative Science Quarterly, 44(4), pp.741-763.
56. Kiel, L. D.(1994), Managing chaos and complexity in government: A new paradigm for managing change, innovation, and organizational renewal. San Francisco, CA: Jossey-Bass Publishers.
57. Kim, J., and A. S. Miner(2000), “Crash test without dummies: A longitudinal study of interorganizational learning from failure experience in the U.S. commercial banking industry, 1984-1998,” in Academy of Management Best Paper Proceedings. (vol. 2000, No. 1, pp. G1-G6.
58. Kim, J.-Y., J.-Y. Kim, and A. S. Miner(2009), “Organizational learning from extreme performance experience: The impact of success and recovery experience,” Organization Science, 20(6), PP.958-978.
59. Lal, D.(2001), Unintended consequences: The impact of factor endowments, culture, and politics on long-term employment performance. Cambridge, MA: MIT Press.
60. Levinthal, D. A, and J. G. March(1993), “The myopia of learning,” Strategic Management Journal, 14(S2), PP.95-112.
61. Levitt, B., and J. G. March(1988), “Organizational learning,” Annual Review of Sociology, 14(1), pp.319-340.
62. Madsen, P. M., and V. Desai(2010), “Failing to learn? The effects of failure and success on organizational learning in the global orbital launch vehicle industry,” Academy of Management Journal, 53(3), pp.451-476.
63. March, J. G., and H. A. Simon(1958), Organizations. NY: John Wiley and Sons.
64. Merton, R. K.(1936), “The unanticipated consequences of purposive social action,” American Sociological Review, I, pp.894-904.
65. Miner, A. S., J. K. Kim, I. W. Holzinger, and P. Haunschild(1996), “Fruits of failure: Organizational failure and population level learning,” In Academy of management proceedings (Vol. 1996, No. 1, pp. 239-243). Briarcliff Manor, NY 10510: Academy of Management.
66. Morel, B., and R. Ramanujam(1999), “Through the looking glass of complexity: The dynamics of organization as adaptive and evolving systems,” Organization Science, 10(3), pp. 278-293.
67. Nelson, R., and S. Winter(1982), An evolutionary theory of economic change. Cambridge, MA: Harvard University Press.
68. Nohria, N, and R. Gulati(1997), “What is the optimum amount of organizational slack? A study of the relationship between slack and innovation in multinational firms,” European Management Journal, 15(6), pp.603-611.
69. NTSB (National Transportation Safety Board)(2001), Code of Federal Regulations. Title 49, vol. 5, chap. 8, part 830, sect. 830.2.
70. Orton J. D., and K. E. Weick(1990), “Loosely coupled systems: A reconceptualization,” Academy of Management Review, 15(2), pp.203-223.
71. Oum, T.H., and M.W. Tretheway(1990), Airline hub and spoke systems. In Journal of the Transportation Research Forum (Vol. 30, No. 2).
72. Perrow, C.(1984), Normal accidents. New York, NY: Basic Books.
73. Perrow, C.(1994), “Accidents in high-risk systems,” Technology Studies, 1, pp.1-19.
74. Reason, J. T.(1987), “The Chernobyl errors,” Bulletin of the British Psychological Society, 40, pp.201-206.
75. Reason, J.T.(1997), Managing the risks of organizational accidents. Sydney, Australia: Ashgate.
76. Rijpma, J. A.(2002), “Complexity, tight-coupling and reliability: Connecting normal accident theory and High reliability theory,” Journal of Contingencies Crisis Management, 5(1), pp.15-23.
77. Roberts, K. H.(1990), “Some characteristics of one type of high reliability organizations,” Organization Science, 1(2), pp.160-176.
78. Roberts, K., and G. Gargano(1990), Managing a high reliability organization: A case for interdependence. In Glinow, M. A. von, and Mohrman, S. (Eds.), Managing complexity in high technology organization, pp.46-159. NY: Oxford University Press.
79. Rosenkopf, L., and A. Nerkar(2001), “Beyond local search: Boundary-spanning, exploration, and impact in the optical disk industry,” Strategic Management Journal, 22(4), pp. 287-306.
80. Rundmo, T., and A. R. Hale(2003), “Manager’s attitudes towards safety and accident prevention,” Safety Science, 41(7), pp.57-574.
81. Sanchez, R.(1995), “Strategic flexibility in product competition,” Strategic Management Journal, 16(S1), pp.135-159.
82. Singh, K.(1997), “The impact of technological complexity and interfirm cooperation on business survival,” Academy of Management Journal, 40(2), pp.33-367.
83. Smith, M. J. Jr.(2002), The airline encyclopedia 1909-2000. Boston, MA: Scarecrow Press.
84. Teece, D. J.(1993), “The dynamics of industrial capitalism: Perspectives on Alfred Chandler's Scale and Scope,” Journal of Economic Literature, 31(1), pp.199-225.
85. Teece, D. J., and G. Pisano(1994), “The dynamic capabilities of firms: An introduction,” Industrial Corporate Change, 3(3), pp.537-556.
86. Teece, D. J., and G. Pisano, and A. Shuen(1997), “Dynamic capabilities and strategic management,” Strategic Management Journal, 18(7), pp.509-533.
87. Thornton, P. H., and W. Ocasio(2008), Institutional Logics. In Greenwood, R., C. Oliver, R. Suddaby, K. Sahlin-Anderson, (Eds.), The sage handbook of organizational institutionalism. Thousand Oak, CA: SAGE publications. Ltd.
88. Tushman, M., and L. Rosenkopf(1992), Organizational determinants of technological change: Towards a sociology of technological evolution. In Cummings, L. L., and B. M. Staw, (Eds.), Research in organizational behavior, 14, pp.311-347. Greenwich, CT: JAI Press.
89. Uzzi, B.(1996), “The sources and consequences of embeddedness for the economic performance of organizations: The network effect,” American Sociological Review, 61(4), pp.674-698.
90. Uzzi, B., and J. Spiro(2005), “Collaboration and creativity: The small world problem,” American Journal of Sociology, 111(2), pp.447-504.
91. Vaughan, D.(1990), “Autonomy, interdependence, and social control: NASA and the space shuttle Challenger,” Administrative Science Quarterly, 35(2), pp.225-257.
92. Vaughan, D.(1996), The challenger launch decision: risky technology culture, and deviance at NASA. Chicago, IL: University of Chicago Press.
93. Vickery, S., C. Dröge, and R. Germain(1999), “The relationship between product customization and organizational structure,” Journal of Operations Management, 17(4), pp.377-391.
94. Volberda, H. W.(1996), “Toward the flexible form: How to remain vital in hypercompetitive environments,” Organization Science, 7(4), pp.359-374.
95. Wasserman S., and K. Faust(1996), Social network analysis: Methods and applications. NY: Cambridge University Press.
96. Weick, K. E.(1993a), The vulnerable system: An analysis of the Tenerife air disaster. In Roberts, K. H. (Ed.), New challenges to understanding organizations, pp.173-198. NY: Macmillan.
97. Weick, K. E.(1993b), “The collapse of sensemaking in organizations: The Mann Gulch disaster,” Administrative Science Quarterly, 38(4), pp.628-652.
98. Weick, K. E., K. M. Sutcliffe, and D. Obstfeld(1999), Organizing for high reliability: Processes of collective mindfulness. In Sutton, R. I., and B. M. Staw, (Eds.), Research in Organizational Behavior, 21, pp.81-123. Stamford, CT: JAI Press.
99. Weick, K. E., and K. M. Sutcliffe(2007), Managing the unexpected. San Francisco, CA: Wiley and Sons, Inc.
100. Wernerfelt, B.(1984), “A resource-based view of the firm,” Strategic Management Journal, 5(2), pp.171-180.
101. White, H.(1982), “Regularity conditions for Cox’s test of non-nested hypotheses,” Journal of Econometrics, 19(2-3), pp.301-318.
102. White, H. C., S. C. Boorman, and R. L. Breiger(1976), “Social structure from multiple networks: Blockmodels of roles and positions,” American Journal of Sociology, 84(4), pp. 730-780.
103. White, H. C.(1992), Identity and control: A structural theory of social action. Princeton, NJ: Princeton University Press.
104. Wilcox, A. R.(1973), “Indices of qualitative variation and political measurement,” The Western Political Quarterly, 26(2), pp.325-343.
105. Williamson, O. E.(1985), The economic institutions of capitalism. New York, NY: The Free Press.
106. Worren, N., K. Moore, and P. Cardona(2002), “Modularity, strategic flexibility, and firm performance: A study of the home appliance industry,” Strategic Management Journal, 23(12), pp.1123-1140.
107. Zaheer S., and E. Mosakowski(1997), “The dynamics of the liability of foreignness: A global study of survival in financial services,” Strategic Management Journal, 18(6), pp. 429-463.
108. Zeger, S. L., and K.-Y. Liang(1986), “Longitudinal data analysis for discrete and continuous outcomes,” Biometrics, 42(1), pp.121-130.

∙ The author Doyoon Kim is professional research at the Yonsei Business Research Institute, Seoul, Korea. He received his Ph.D. from Yonsei University. His past works were published in academic journals from diverse backgrounds including Korean management Review, Journal of Strategic Management, Knowledge Management Research. He teaches organization theory, strategic management, and venture creation and management through Korea University, Yonsei University, and Hanyang University Business School. His research interests include organization theory, organizational learning, technology management, startup and entrepreneurship.

∙ The author Dongyoub Shin is professor of organization theory at the School of Business, Yonsei University, Seoul, Korea. He received his Ph.D. from Yale University. His past works were published in academic journals from diverse backgrounds including Administrative Science Quarterly, Organization Science, and Poetics. His research interests include organizational politics and institutional change, relational sources of organizational dysfunctions, sources and consequences of decoupling, coevolution between technological systems and institutional systems, organizational changes in the currently ongoing paradigm shift, and organizational analysis of cultural industries.

 
Mail : editor_kmr@daum.net
COPYRIGHT ⓒ 2011 Korean Academic Society Of Business Administration. All rights reserved