Are Unions Good or Bad for Organizations? The Moderating Role of Management's Response

Union impact research has been hindered by an underdeveloped conceptualization of management response, contributing to inconclusive empirical findings. Integrating the collective voice/institutional response model with the appropriateness framework, we propose that an employee-focused business strategy is a critical moderating variable in the relationship between union density and organizational outcomes that mitigates the negative effects of unions and enhances the positive effects by sending a clear signal of management's intentions to co-operate. Using a panel dataset of Canadian organizations over six years, we provide empirical evidence to support our arguments. Implications for theory and practice are discussed.