Human Capital, Inter-firm Mobility and Organizational Evolution

Human Capital, Inter-firm Mobility and Organizational Evolution

Johannes M. Pennings and Filippo Carlo Wezel

The authors of this fascinating and original work contend that by analysing the conduct of organization members, a great deal can be learnt about firm behaviour and about the cooperative and competitive forces that underlie industry evolution.

Chapter 9: Competitive Consequences of Routine Spillovers Due to Inter-firm Mobility

Johannes M. Pennings and Filippo Carlo Wezel

Subjects: business and management, human resource management, organisation studies


9. Competitive consequences of routine spillovers due to inter-firm mobility INTRODUCTION The recruitment, development and retention of employees are central factors for organizational survival. While the focus on people as a source of superior performance is hardly new (for example, Penrose, 1959; Pfeffer, 1994; Grant, 1996), the importance of people has recently become even more salient on the grounds that a firm’s stock of routines is enacted by its members (Cyert and March, 1963; Nelson and Winter, 1982; Coff, 1997). Not surprisingly, recruiting individuals from rival organizations has been increasingly used to access resources and routines not available in-house (see Rao and Drazin, 2002). Likewise, firms attempt to limit outbound movement of members to competing firms (see for example, Coff, 1997). Much of the theory and research to date has focused on the antecedents of turnover with general inquiries on voluntary turnover (for a review see, for example, Williams and O’Reilly III, 1998). Inquiries on possible turnover consequences have revolved around the impact of the transferring member’s performance (Harris and Helfat, 1997; Huckman and Pisano, 2006). Another subset of research studies has examined cases of turnover limited to inter-firm mobility, and their consequences for the source firm (Sørensen, 1999b), the destination firm (Agarwal et al., 2004; Rao and Drazin, 2002; Wezel and Saka, 2006), or both the source and destination firms (Phillips, 2002). Evidence suggests that spin-offs are speedier than de novo firms in mobilizing resources (Ruef, 2005), and tend to replicate or modify an...

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