| Summary: | In their highly influential work on the labour market impact of unions termed the collective voice/institutional response model (CVIR), Freeman & Medoff (1984) proposed that whether the unions monopoly or voice face would prevail greatly depended on the unions and managements willingness to compete or cooperate, respectively. However, these authors and the researchers that tested their ideas afterwards neither theorized about nor tested this key moderating condition of a unions impact. The result has been a confusing, mixed and generally inconclusive litany of research findings about the impact of unions at both the individual and organizational levels of analysis. I attempt to resolve this gap in CVIR by using the appropriateness framework (March 1994) to identify when and under what conditions management and unions, along with their members, will respond cooperatively or competitively toward each other. My empirical results are consistent with the idea that management response is a key moderating mechanism of a unions power and thus impact, contributing to zero or negative sum outcomes when management chooses to compete (i.e., union power is exerted in the direction of harmful monopoly effects) and positive sum outcomes when management chooses cooperation (i.e., union power is exerted in the direction of beneficial voice effects). In particular, when environmental cues lead the union and/or unionized employees to believe that management values voice, they will consider cooperation an appropriate response under the circumstances and reciprocate in-kind with other-regarding behaviors. On the other hand, when environmental cues lead the union or unionized employees to believe that management may potentially behave opportunistically, they will consider competition appropriate under the circumstances, and respond in-kind with self-serving, competitive behaviours. Drawing upon the resource-based view of the firm, I argue how a cooperative union-management relationship can be a source of sustainable competitive advantage for the organization (Barney, 1991). === Human Resources Management and Industrial Relations
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