IDEAS home Printed from https://ideas.repec.org/a/inm/ororsc/v26y2015i6p1629-1645.html
   My bibliography  Save this article

Shifts and Ladders: Comparing the Role of Internal and External Mobility in Managerial Careers

Author

Listed:
  • Matthew Bidwell

    (The Wharton School, University of Pennsylvania, Philadelphia, Pennsylvania 19104)

  • Ethan Mollick

    (The Wharton School, University of Pennsylvania, Philadelphia, Pennsylvania 19104)

Abstract

Employees can build their careers either by moving into a new job within their current organization or else by moving to a different organization. We use matching perspectives on job mobility to develop predictions about the different roles that those internal and external moves will play within careers. Using data on the careers of master of business administration alumni, we show how internal and external mobility are associated with very different rewards: upward progression into a job with greater responsibilities is much more likely to happen through internal mobility than external mobility; yet despite this difference, external moves offer similar increases in pay to internal, as employers seek to attract external hires. Consistent with our arguments, we also show that the pay increases associated with external moves are lower when the moves take place for reasons other than career advancement, such as following a layoff or when moving into a different kind of work. Despite growing interest in boundaryless careers, our findings indicate that internal and external mobility play very different roles in executives’ careers, with upward mobility still happening overwhelmingly within organizations.

Suggested Citation

  • Matthew Bidwell & Ethan Mollick, 2015. "Shifts and Ladders: Comparing the Role of Internal and External Mobility in Managerial Careers," Organization Science, INFORMS, vol. 26(6), pages 1629-1645, December.
  • Handle: RePEc:inm:ororsc:v:26:y:2015:i:6:p:1629-1645
    DOI: 10.1287/orsc.2015.1003
    as

    Download full text from publisher

    File URL: http://dx.doi.org/10.1287/orsc.2015.1003
    Download Restriction: no

    File URL: https://libkey.io/10.1287/orsc.2015.1003?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Gibbons, Robert & Katz, Lawrence F, 1991. "Layoffs and Lemons," Journal of Labor Economics, University of Chicago Press, vol. 9(4), pages 351-380, October.
    2. Matthew Bidwell & Forrest Briscoe, 2010. "The Dynamics of Interorganizational Careers," Organization Science, INFORMS, vol. 21(5), pages 1034-1053, October.
    3. Stanislav D. Dobrev, 2012. "Career Change and the Iron Cage: Organizations and the Early Labour Market Experience of Professional Managers," Journal of Management Studies, Wiley Blackwell, vol. 49(5), pages 843-868, July.
    4. Brown, Charles & Medoff, James, 1989. "The Employer Size-Wage Effect," Journal of Political Economy, University of Chicago Press, vol. 97(5), pages 1027-1059, October.
    5. Michael Waldman, 1984. "Job Assignments, Signalling, and Efficiency," RAND Journal of Economics, The RAND Corporation, vol. 15(2), pages 255-267, Summer.
    6. Bruce C. Greenwald, 1986. "Adverse Selection in the Labour Market," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 53(3), pages 325-347.
    7. Matthew J. Bidwell, 2013. "What Happened to Long-Term Employment? The Role of Worker Power and Environmental Turbulence in Explaining Declines in Worker Tenure," Organization Science, INFORMS, vol. 24(4), pages 1061-1082, August.
    8. Marianne Bertrand & Claudia Goldin & Lawrence F. Katz, 2010. "Dynamics of the Gender Gap for Young Professionals in the Financial and Corporate Sectors," American Economic Journal: Applied Economics, American Economic Association, vol. 2(3), pages 228-255, July.
    9. Benjamin A. Campbell & Martin Ganco & April M. Franco & Rajshree Agarwal, 2012. "Who leaves, where to, and why worry? employee mobility, entrepreneurship and effects on source firm performance," Strategic Management Journal, Wiley Blackwell, vol. 33(1), pages 65-87, January.
    10. Ethan Mollick, 2012. "People and process, suits and innovators: the role of individuals in firm performance," Strategic Management Journal, Wiley Blackwell, vol. 33(9), pages 1001-1015, September.
    11. Jovanovic, Boyan, 1979. "Job Matching and the Theory of Turnover," Journal of Political Economy, University of Chicago Press, vol. 87(5), pages 972-990, October.
    12. McCue, Kristin, 1996. "Promotions and Wage Growth," Journal of Labor Economics, University of Chicago Press, vol. 14(2), pages 175-209, April.
    13. Oliver E. Williamson & Michael L. Wachter & Jeffrey E. Harris, 1975. "Understanding the Employment Relation: The Analysis of Idiosyncratic Exchange," Bell Journal of Economics, The RAND Corporation, vol. 6(1), pages 250-278, Spring.
    14. Gina Dokko & Lori Rosenkopf, 2010. "Social Capital for Hire? Mobility of Technical Professionals and Firm Influence in Wireless Standards Committees," Organization Science, INFORMS, vol. 21(3), pages 677-695, June.
    15. Lisa E. Cohen, 2013. "Assembling Jobs: A Model of How Tasks Are Bundled Into and Across Jobs," Organization Science, INFORMS, vol. 24(2), pages 432-454, April.
    16. Stefan Bender & Till von Wachter, 2006. "In the Right Place at the Wrong Time: The Role of Firms and Luck in Young Workers' Careers," American Economic Review, American Economic Association, vol. 96(5), pages 1679-1705, December.
    17. Robert H. Topel & Michael P. Ward, 1992. "Job Mobility and the Careers of Young Men," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 107(2), pages 439-479.
    18. William Chan, 2006. "External Recruitment and Intrafirm Mobility," Economic Inquiry, Western Economic Association International, vol. 44(1), pages 169-184, January.
    19. George Baker & Michael Gibbs & Bengt Holmstrom, 1994. "The Internal Economics of the Firm: Evidence from Personnel Data," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 109(4), pages 881-919.
    20. Heckman, James J & Sedlacek, Guilherme, 1985. "Heterogeneity, Aggregation, and Market Wage Functions: An Empirical Model of Self-selection in the Labor Market," Journal of Political Economy, University of Chicago Press, vol. 93(6), pages 1077-1125, December.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Waldman, Michael, 2013. "Classic promotion tournaments versus market-based tournaments," International Journal of Industrial Organization, Elsevier, vol. 31(3), pages 198-210.
    2. repec:eee:labchp:v:3:y:1999:i:pb:p:2373-2437 is not listed on IDEAS
    3. Robert Gibbons & Michael Waldman, 2006. "Enriching a Theory of Wage and Promotion Dynamics inside Firms," Journal of Labor Economics, University of Chicago Press, vol. 24(1), pages 59-108, January.
    4. Bas Klaauw & António Dias da Silva, 2011. "Wage dynamics and promotions inside and between firms," Journal of Population Economics, Springer;European Society for Population Economics, vol. 24(4), pages 1513-1548, October.
    5. John, Kose & Ravid, S. Abraham & Sunder, Jayanthi, 2017. "Managerial ability and success: Evidence from the career paths of film directors," Journal of Corporate Finance, Elsevier, vol. 44(C), pages 425-439.
    6. Cassidy, Hugh & DeVaro, Jed & Kauhanen, Antti, 2016. "Promotion signaling, gender, and turnover: New theory and evidence," Journal of Economic Behavior & Organization, Elsevier, vol. 126(PA), pages 140-166.
    7. Kampkötter, Patrick & Sliwka, Dirk, 2014. "Wage premia for newly hired employees," Labour Economics, Elsevier, vol. 31(C), pages 45-60.
    8. Xin Jin, 2014. "The Signaling Role of Not Being Promoted: Theory and Evidence," Working Papers 0314, University of South Florida, Department of Economics.
    9. Li, Jin, 2013. "Job mobility, wage dispersion, and technological change: An asymmetric information perspective," European Economic Review, Elsevier, vol. 60(C), pages 105-126.
    10. Alan Benson & Ben A. Rissing, 2020. "Strength from Within: Internal Mobility and the Retention of High Performers," Organization Science, INFORMS, vol. 31(6), pages 1475-1496, November.
    11. Jin, Xin, 2014. "The Signaling Role of Note Being Promoted: Theory and Evidence," MPRA Paper 58484, University Library of Munich, Germany.
    12. Matthew Bidwell & Forrest Briscoe, 2010. "The Dynamics of Interorganizational Careers," Organization Science, INFORMS, vol. 21(5), pages 1034-1053, October.
    13. Ghosh, Suman, 2007. "Job mobility and careers in firms," Labour Economics, Elsevier, vol. 14(3), pages 603-621, June.
    14. Dato, Simon & Grunewald, Andreas & Kräkel, Matthias & Müller, Daniel, 2016. "Asymmetric employer information, promotions, and the wage policy of firms," Games and Economic Behavior, Elsevier, vol. 100(C), pages 273-300.
    15. Jed DeVaro & Michael Waldman, 2012. "The Signaling Role of Promotions: Further Theory and Empirical Evidence," Journal of Labor Economics, University of Chicago Press, vol. 30(1), pages 91-147.
    16. C. Sofia Machado & Miguel Portela, 2011. "Age and opportunities for promotion," NIPE Working Papers 03/2011, NIPE - Universidade do Minho.
    17. Jeronimo Carballo & Richard K. Mansfield & Charles Adam Pfander, 2024. "U.S. Worker Mobility Across Establishments within Firms: Scope, Prevalence, and Effects on Worker Earnings," NBER Working Papers 32420, National Bureau of Economic Research, Inc.
    18. Michael Waldman, 2012. "Theory and Evidence in Internal LaborMarkets [The Handbook of Organizational Economics]," Introductory Chapters,, Princeton University Press.
    19. Alexander K. Koch & Eloïc Peyrache, 2011. "Aligning Ambition and Incentives," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 27(3), pages 655-688.
    20. Carrillo-Tudela, Carlos & Kaas, Leo, 2015. "Worker mobility in a search model with adverse selection," Journal of Economic Theory, Elsevier, vol. 160(C), pages 340-386.
    21. Kameshwari Shankar & Suman Ghosh, 2005. "Favorable Selection in the Labor Market: A Theory of Worker Mobility in R&D Intensive Industries," Working Papers 05006, Department of Economics, College of Business, Florida Atlantic University.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:inm:ororsc:v:26:y:2015:i:6:p:1629-1645. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Asher (email available below). General contact details of provider: https://edirc.repec.org/data/inforea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.