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Individuals often enter similar jobs via two different routes: internal mobility and external hiring. I examine how the differences between these routes affect subsequent outcomes in those jobs. Drawing on theories of specific skills and incomplete information, I propose that external hires will initially perform worse than workers entering the job from inside the firm and have higher exit rates, yet they will be paid more and have stronger observable indicators of ability as measured by experience and education. I use the same theories to argue that the exact nature of internal mobility (promotions, lateral transfers, or combined promotions and transfers) will also affect workers' outcomes. Analyses of personnel data from the U.S. investment banking arm of a financial services company from 2003 to 2009 confirm strong effects on pay, performance, and mobility of how workers enter jobs. I find that workers promoted into jobs have significantly better performance for the first two years than workers hired into similar jobs and lower rates of voluntary and involuntary exit. Nonetheless, the external hires are initially paid around 18 percent more than the promoted workers and have higher levels of experience and education. The hires are also promoted faster. I further find that workers who are promoted and transferred at the same time have worse performance than other internal movers.

This paper explores how the structure of decision making affects the way that firms manage their boundaries. Achieving transaction alignment requires firms to balance multiple goals. Drawing on the behavioral theory of the firm, I note that firms often assign different goals to different organizational units. As a consequence, simple problems about whether to make or buy can be affected by multiple decisions taken by multiple, locally rational units. I use a case study of the management of IT consultants in a financial services firm to explore how make-or-buy decisions are made. I find that senior managers at the firm focused on cost and organizational flexibility, whereas frontline managers concentrated on exploiting workers' existing knowledge. The narrow focus of these two groups interacted with the complex demands of transaction alignment to create three problems: separation of related decisions about internal capacity and project staffing, incomplete information when deciding on organizational capacity, and incentive misalignment in staffing consultants. These problems led the firm to become dependent on its consultants. I build on the case study to develop theoretical propositions about the characteristics of decisions and organizational structure that are most likely to lead boundary decisions to deviate from existing predictions.

Recent declines in the average length of time that U.S. workers spend with a given employer represent an important change in the nature of the employment relationship, yet it is one whose causes are poorly understood. I explore those causes using Current Population Survey data on the tenure of men aged 30–65, from the years 1979–2008.I argue that long-term employment relationships primarily occur when workers pressure employers to close off employment from market competition, reducing the attractiveness of external mobility relative to internal opportunities and increasing employment security. I then explore how two changes in organizations' environments—a decline in union strength and increased turbulence from changes in technology and globalization—might have affected workers' ability to secure such closed employment relationships over the last 30 years.My results support the argument that declines in tenure reflect the reduced power of workers to secure closed employment relationships. Recent declines in tenure have been concentrated in large organizations, and many of those declines are explained by controlling for the changing levels of industry unionization. I find little evidence that foreign competition or technological change affected mobility. The results are robust to measures of changing industry growth rates and within-industry reorganization. Supplementary analyses suggest that layoffs are associated with different industry pressures than tenure and that voluntary mobility may have played an important role in declines in tenure.

How does managers' pursuit of their own intraorganizational interests affect decisions about what work to outsource and how to contract with vendors? I study this question using a qualitative study of outsourcing in the information technology department of a large financial services firm.Traditional transaction cost-based theories argue that decisions about which transactions to outsource should reflect the characteristics of those transactions, yet I find only a weak link between transaction characteristics and outsourcing decisions. Qualitative evidence suggests that managers' pursuit of their own intraorganizational interests helps to explain why outsourcing decisions were often divorced from transaction characteristics. I found that the consequences of outsourcing projects were consistent with the assumptions of transaction cost and capabilities-based theories: managers had less authority over outsourced projects than internal ones, those projects were subject to weaker administrative controls, and outsourced vendors provided different capabilities than internal suppliers. However, the way that those consequences were evaluated often reflected managers' own interests rather than those of the organization.I highlight three aspects of organizational structure that affected how managers evaluated outsourcing: the nature of differentiated goals and responsibilities, the administrative controls that managers faced, and the pressures caused by interdependent workflows within the organization. I also show how the distribution of authority and other resources shaped which projects were outsourced. The analysis highlights the value of understanding make-or-buy decisions as an endogenous consequence of the structure in which those decisions take place, rather than as isolated decisions that are maximized regardless of their context.

We explore the role that contracting plays within the careers of managerial workers. Contracting distances workers from organizational coordination and politics, aspects of organizational life that are often central to the managerial role. Nonetheless, managerial workers make up a substantial proportion of the contracting workforce. Qualitative interviews with managerial contractors indicate that the tension between the natures of contracting and managerial work means that managerial contractors carry out substantially more bounded work than regular employees, and that this boundedness can shape the role that contracting plays in their careers. Examining the employment histories of MBA alumni of a U.S. business school, we show that workers with fewer subordinates and greater personal demands are more likely to enter contracting. We also find that contractors report better work–life balance but receive lower pay both while contracting and in subsequent regular employment. Whereas prior research has highlighted the financial benefits and temporal demands of contracting for highly skilled workers, our findings introduce important boundary conditions to our understanding of high-skill contracting: the nature of the occupation is critical.

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.

This paper examines differences in the jobs for which men and women apply in order to better understand gender segregation in managerial jobs. We develop and test an integrative theory of why women might apply to different jobs than men. We note that constraints based on gender role socialization may affect three determinants of job applications: how individuals evaluate the rewards provided by different jobs, whether they identify with those jobs, and whether they believe that their applications will be successful. We then develop hypotheses about the role of each of these decision factors in mediating gender differences in job applications. We test these hypotheses using the first direct comparison of how similarly qualified men and women apply to jobs, based on data on the job searches of MBA students. Our findings indicate that women are less likely than men to apply to finance and consulting jobs and are more likely to apply to general management positions. These differences are partly explained by women's preference for jobs with better anticipated work–life balance, their lower identification with stereotypically masculine jobs, and their lower expectations of job offer success in such stereotypically masculine jobs. We find no evidence that women are less likely to receive job offers in any of the fields studied. These results point to some of the ways in which gender differences can become entrenched through the long-term expectations and assumptions that job candidates carry with them into the application process.

How do workers build careers across organizations? We propose that increased worker mobility means that workers may now build their careers using interorganizational career ladders, working in certain kinds of organizations earlier in a career and in other kinds of organizations later in the career. We develop a matching framework that predicts such interorganizational moves based on how systematic changes in workers' needs and resources over the course of their careers alter the kinds of organizations they will best match. We specifically propose that workers will be more likely to work for organizations that provide more training early in their careers, and work for organizations that have higher demands for skills later in their careers. We use this argument to make three broad predictions: first, that interorganizational transitions are more likely to take place from larger to smaller workplaces, and into organizations in industries that employ a higher proportion of workers in the focal occupation; second, that such skill-based career paths are more common where the labor market provides more opportunities that reward those skills; and third, that the nature of external opportunities will disproportionately affect turnover from organizations on the lower rungs of the career ladder. Data from the career histories of college-educated information technology workers support our hypotheses.

We examine how long-term relationships affect brokers' returns, using project-level pricing data from an information technology staffing firm. We argue that long-term relationships between brokers and their counterparties affect both acquisition of private information and bargaining power, helping brokers to create and capture economic value. The results show that the staffing firm is able to charge a higher price and capture a higher proportion of that price when it has a long-term relationship with the worker. We also show that the staffing firm's ability to generate returns from its relationships is constrained when the brokered parties (worker and client firm) have a long-term relationship with each other. We discuss the implications of these findings for the study of market brokerage and long-term exchange relationships.

How do managers' moves across jobs affect the subordinates they leave behind? Manager mobility disrupts established manager-subordinate relationships, as subordinates must now learn to work with a replacement. We explore how this relational disruption affects subordinates' objective career success—specifically, their financial rewards and subsequent promotion chances. We argue that manager mobility may have both positive and negative implications for subordinate outcomes. The loss of an established relationship may reduce subordinates' performance and managers' propensity to reward them; on the other hand, relational disruption may make subordinates more willing and able to seek out valuable opportunities elsewhere in the organization. We also argue that these effects are likely to be greatest for those subordinates who had worked with the previous manager for longer. Using eight years of personnel data from the U.S. offices of a Fortune 500 healthcare company, we show how managers' mobility is associated with a decrease in subordinates' financial rewards but an increase in their promotion prospects.