I worked as a flight attendant in the United States during a time of massive change in the airline industry. Previous to the mid 1970's the airline industry in the United States operated under strict market regulations that provided protections to airlines and shielded them from competition. They were granted market power by the government and thus life was pretty cozy for airlines big and small. Job security for all. And then, in the mid 1970's, in order to make air travel more accessible and affordable, the market regulations were removed. Thus ensued a 40 year war for market dominance that has only just begun to die down. Today, 4 legacy airlines hold about 70% of the US airline market. The remaining 30% is held by small and medium sized carriers that cater to niche markets. If you've ever wondered why US airlines have a reputation for bad service, it's because competition in the domestic market was so fierce, a constant "race to the bottom" in terms of costs and prices, that they were never really able to compete with overseas airlines (many of which enjoyed protections and subsidies by their respective governments). Today, however, with the domestic market finally settled, US carriers are starting to turn their sites toward international competition. They're offering better products and services and, more importantly from my perspective, they're able to offer higher pay and better job security for their employees.
That last part highlights the main point of my journal this week. In my study of organizational behavior I've made some previous assumptions that may have been wrong. One such assumption has been that "Big is bad". In previous management classes we've talked about things like the "iron cage" of bureaucracy and normative control, characteristics which tend to owe themselves to larger organizations that depend on a high level of rationality to function. These "flaws" in organizations reinforced my preconceptions that big is bad and that there are too many large corporations in our lives messing up our societies (and our environment).
However, I've been reflecting on the recent spectacular failure of our team in the Mike's Bike's simulation in terms of how it has affected our stakeholders, especially our employees. We had to fire almost all of our workers this last rollover because we could not afford to keep them. Suddenly, all of my beliefs about how an organization should treat its workers became moot. High wages and good benefits sounds like a great thing that all employers should give their workers. However, the reality is that weak companies that aren't able to compete can't even provide a job to people, let alone provide high pay. And so, I've come to rethink my previous assumptions about big organizations. The theories and criticisms that we've learned about are not flaws of organizations but, rather, they are challenges. Indeed, bigger organizations might be more capable of addressing said challenges because they have more resources.
A close friend of mine was a flight attendant for several years for United Airlines, one of the worlds largest carriers. He was laid off earlier this year along with many of his colleagues. However, in an unprecedented turn-around United secured an agreement with the flight attendant's union to hire back all of those who were previously laid off and instead offer early retirements to more seasoned workers with a very handsome (and also unprecedented) severance package. Through size and scope, the airline industry has been able to provide security to their employees in a way that they never previously were able to do. I will have to start investigating this new found appreciation and start to think about ways that large organizations can better deal with the challenges that come with size so that they can extend their wealth to all their stakeholders.