Human Resource Management and competitive advantage in the airline industry

The Challenge

To understand the role of Human Resource Management (HRM) on competitive advantage in the airline industry.

The method

Professors Geraint Harvey and Peter Turnbull (University of Bristol) adopted a process study approach, the purpose of which is to gain a comprehensive understanding not only of the firm, but its stakeholders, internal context and external environment. Harvey and Turnbull have undertaken a decade long, multiple method research study including several large scale international questionnaire surveys, multiple focus group and individual interviews with a variety of stakeholders (e.g., management, trade union officials and workers) and secondary sources.

The impact

More than a decade of research into HRM in the airline industry undertaken by Harvey and Turnbull, has shown that competitive advantage of the most successful airline in Europe, Ryanair, can be explained far better by understanding who the airline recruits and how they recruit staff. The way in which the airline engages with the labour market, especially for pilots and cabin crew, has given the airline an advantage over its competitors.

The research is important for several reasons

• It illustrates a new way of understanding how HRM offers the firm a competitive advantage;
• It draws attention to the way in which firms exploit loopholes created by the differences between national systems of regulation and legislation that prevent imitation;
• It highlights the crucial role played by context (for example, the legal system and role of trade unions, so often omitted by scholarship in HRM) and how the change in context means that firms can no longer operate the same policies.

The research findings have important implications for scholars in the discipline, setting out a revised research agenda for HRM. The project also has implications for organisations as it explains novel ways in which a competitive advantage can be achieved through people, but more importantly perhaps it also highlights the problems of a HRM strategy that is considered objectionable by labour, its representative trade unions and the state.