Chapter 8: Heterogeneity Shifts Due to Member Mobility: New Insights on Demographic Diversity and Organizational Survival
INTRODUCTION The study of organizational demography in general, and that of top management teams in particular, has often been examined as a major precursor to strategic positioning and organizational outcomes (for example, Finkelstein and Hambrick, 1996; Hambrick et al., 1996). Past research has investigated the short-term performance consequences of top management entries and exits at the ﬁrm or at the individual level of analysis (Harris and Helfat, 1997; Groysberg, 2001). The consequences of inter-ﬁrm mobility for diﬀerent outcomes of the source and of the destination ﬁrm (for example, Agarwal et al., 2004; Madsen et al., 2003; Rao and Drazin, 2002; Rosenkopf and Almeida, 2003) have been likewise explored. Demography and inter-ﬁrm mobility have rarely been combined to explain organizational long-term performance. The investigation of the survival implications of diversity at ﬁrm and inter-ﬁrm levels due to mobility is the theme of this chapter. Speciﬁcally, we focus on three under-explored issues in organizational demography research: (i) the dynamics of demographic diversity variations within ﬁrms, (ii) the inﬂuence of demographic variation on the competitive overlap among ﬁrms, and (iii) the survival consequences of (i) and (ii), the intra- and inter-ﬁrm demographic variations. First, empirical research has focused on the study of the levels (that is, stock) of diversity, estimating the ‘average eﬀects’ of diversity changes on performance. Moving beyond this static approach to explore the dynamic impact of diversity variations on organizational performance, researchers have noticed that focusing on such variations produces a direct...
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