Exploring the interaction of firm-level change and national institutional environments in shaping employment and union relations: a comparative case study of four European Airlines

Contrasting with earlier work on employee and union relations in the airline industry, we explore, in a longitudinal comparative case study, the question of how firm-level changes and national institutional environments interact in shaping employee and union relations. Our work shows that changes at the firm-level—mainly in the form of firm growth, acquisitions and the foundation of new subsidiaries—have an influence on how firm heritage is affected by institutional frameworks. These effects can be intended or unintended, and they can shape firms’ responses in employee and union relations. Our findings suggest that understanding firms’ responses in employee and union relations requires the adoption of a dynamic perspective that takes a close look at changes in the interaction between firm heritage and national institutional contexts over time. While changes in the nature of interaction are linked to changes in institutional contexts, they are, above all, related to changes in firm heritage. Hence, our work illustrates the importance of firm growth, acquisitions and the foundation of new subsidiaries in explaining the shifting interaction between the firm and its institutional environment and its implications for changing employee and union relations within firms.