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ALLIANCE PARADOX: AN EMPIRICAL STUDY OF ALLIANCE PORTFOLIO EFFECTS ON CUSTOMER SERVICE QUALITY IN THE U.S. AIRLINE INDUSTRY

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Date Issued:
2009
Abstract/Description:
This dissertation studies the potential paradoxical effects of alliance participation. Over the past two decades, alliance participation has become a popular firm strategy to obtain benefits that are difficult for a firm to obtain on its own. Yet, as firms increasingly participate in alliances, boundedly rational managers may not effectively manage all aspects of alliances to achieve intended alliance outcomes. Paradoxically, alliance participation may cause harm to the participating firms. To unveil an alliance paradox, this dissertation first examined the relationships between alliance portfolio attributes (i.e., alliance portfolio size, multilateral alliances, alliance partner country diversity, and alliance type) and customer service quality in the U.S. airline industry. Further, I examined whether alliance experience moderates the relationships between alliance portfolio attributes and customer service quality. Altogether, five hypotheses were tested. This dissertation relied exclusively on the longitudinal quarterly data of nine U.S. major airlines over a 20-year period between 1988 and 2007 that include Alaska Airlines, American Airlines, America West, Continental, Delta, Northwest, Southwest, United Airlines, and U.S. Airways. Data pertaining to alliance variables were collected from the Securities Data Company (SDC) database. Quarterly service quality data pertaining to customer complaint, mishandled baggage, on-time arrival, and involuntary denied boarding were collected from the Air Travel Consumer Report published by the U.S. Department of Transportation (DOT). To detect the temporal effects of alliance portfolio attributes on service quality, a three-month lag was created between the alliances data and the service quality data. The results show that although the relationship between alliance portfolio attributes and service quality seems to be more complex than initially proposed, the overall finding confirms the existence of an alliance paradox in that increases in alliance portfolio size, partner country diversity and channel-dominated alliances (versus backward competitor-dominated alliances) are associated with decreases in certain key dimensions of service quality. This dissertation seeks to make several important contributions. First, by exploring the alliance paradox, this dissertation attempts to demonstrate that despite the anticipated alliance benefits such as cost reduction or revenue enhancement, managers need to be aware of the cost of alliance participation with respect to customer service quality, which has paramount impact on firm performance. Second, this dissertation also contributes to services marketing literature by investigating alliance portfolio attributes as antecedents of service quality. Third, this dissertation investigates whether firm-level alliance experience moderates the relationship between alliance portfolio attributes and service quality.
Title: ALLIANCE PARADOX: AN EMPIRICAL STUDY OF ALLIANCE PORTFOLIO EFFECTS ON CUSTOMER SERVICE QUALITY IN THE U.S. AIRLINE INDUSTRY.
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Name(s): zhang, zhe, Author
Barringer, Bruce, Committee Chair
University of Central Florida, Degree Grantor
Type of Resource: text
Date Issued: 2009
Publisher: University of Central Florida
Language(s): English
Abstract/Description: This dissertation studies the potential paradoxical effects of alliance participation. Over the past two decades, alliance participation has become a popular firm strategy to obtain benefits that are difficult for a firm to obtain on its own. Yet, as firms increasingly participate in alliances, boundedly rational managers may not effectively manage all aspects of alliances to achieve intended alliance outcomes. Paradoxically, alliance participation may cause harm to the participating firms. To unveil an alliance paradox, this dissertation first examined the relationships between alliance portfolio attributes (i.e., alliance portfolio size, multilateral alliances, alliance partner country diversity, and alliance type) and customer service quality in the U.S. airline industry. Further, I examined whether alliance experience moderates the relationships between alliance portfolio attributes and customer service quality. Altogether, five hypotheses were tested. This dissertation relied exclusively on the longitudinal quarterly data of nine U.S. major airlines over a 20-year period between 1988 and 2007 that include Alaska Airlines, American Airlines, America West, Continental, Delta, Northwest, Southwest, United Airlines, and U.S. Airways. Data pertaining to alliance variables were collected from the Securities Data Company (SDC) database. Quarterly service quality data pertaining to customer complaint, mishandled baggage, on-time arrival, and involuntary denied boarding were collected from the Air Travel Consumer Report published by the U.S. Department of Transportation (DOT). To detect the temporal effects of alliance portfolio attributes on service quality, a three-month lag was created between the alliances data and the service quality data. The results show that although the relationship between alliance portfolio attributes and service quality seems to be more complex than initially proposed, the overall finding confirms the existence of an alliance paradox in that increases in alliance portfolio size, partner country diversity and channel-dominated alliances (versus backward competitor-dominated alliances) are associated with decreases in certain key dimensions of service quality. This dissertation seeks to make several important contributions. First, by exploring the alliance paradox, this dissertation attempts to demonstrate that despite the anticipated alliance benefits such as cost reduction or revenue enhancement, managers need to be aware of the cost of alliance participation with respect to customer service quality, which has paramount impact on firm performance. Second, this dissertation also contributes to services marketing literature by investigating alliance portfolio attributes as antecedents of service quality. Third, this dissertation investigates whether firm-level alliance experience moderates the relationship between alliance portfolio attributes and service quality.
Identifier: CFE0002505 (IID), ucf:47686 (fedora)
Note(s): 2009-05-01
Ph.D.
Business Administration, Department of Management
Doctorate
This record was generated from author submitted information.
Subject(s): Alliance
Service Quality
Paradox
Persistent Link to This Record: http://purl.flvc.org/ucf/fd/CFE0002505
Restrictions on Access: public
Host Institution: UCF

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