National Culture and its Impact on Airline Corporate Culture

Abstract

The airline industry comprises a range of stakeholders including governments, industry organizations, local carriers, shareholders, and competitors seeking to access bilateral traffic rights between countries. The airline industry is required to work under a regulatory framework crafted sixty years ago to force all airlines to operate under the same international rules. These rules simultaneously aimed to maximize safety while restricting competition. Suppliers of aircraft, engines, reservation systems and airports are accessed by all competitors and provide airlines with little opportunity to achieve greater efficiency or competitive advantage. Despite this, each airline finds its place within the industry. The differences result from many factors including the economic freedom of their home country, their business model, nationality and ownership. Using mixed methods approach, a series of interviews with airline executives in Germany, Switzerland, Singapore, Thailand, Japan and Australia were positioned in Hofstede’s model of national cultures. Analysis of the interview transcripts using Hofstede’s keywords enabled the impact of national culture on airline decision-making to be studied. While airlines from small power-distance and individualist cultures are somewhat more likely to base decision-making on a broader involvement between employees and management, the overall finding of the interviews with airline executives is that Hofstede’s framework is not a strong predictor of airline executive behavior.