Organizational Failure and Intraprofessional Status Loss

39 Pages Posted: 17 Oct 2014

See all articles by Christopher I. Rider

Christopher I. Rider

University of Michigan, Ross School of Business

Giacomo Negro

Emory University, Goizueta Business School

Date Written: October 8, 2014

Abstract

We examine variation in intraprofessional status changes for employees displaced by organizational failure. We propose that failure-related reductions in bargaining power are moderated by individual status characteristics that influence potential employers’ evaluations of job candidates and, therefore, individuals’ status loss risks. Treating a prominent law firm’s failure as a quasi-experiment, we test our arguments by analyzing 224 firm partners’ transitions to subsequent employers. Most partners regained employment at firms of lower status than the failed firm. But, independent of their demonstrated productivity, a partner’s’ likelihood of status loss increased with tenure in the failed firm’s partnership and decreased with educational prestige. These results suggest that organizational failure can diminish cumulative career advantages but also that status characteristics that enable attainment, like education, can protect individuals against status loss.

Keywords: organizational failure, bargaining power, educational prestige, intraprofessional status, cumulative advantage

JEL Classification: J44, J60, J64, A14

Suggested Citation

Rider, Christopher I. and Negro, Giacomo, Organizational Failure and Intraprofessional Status Loss (October 8, 2014). Georgetown McDonough School of Business Research Paper No. 2510907. Available at SSRN: https://ssrn.com/abstract=2510907 or http://dx.doi.org/10.2139/ssrn.2510907

Christopher I. Rider (Contact Author)

University of Michigan, Ross School of Business ( email )

701 Tappan Street
Ann Arbor, MI MI 48109
United States

HOME PAGE: http://https://michiganross.umich.edu/faculty-research/faculty/christopher-rider

Giacomo Negro

Emory University, Goizueta Business School ( email )

1300 Clifton Road
Atlanta, GA 30322
United States

HOME PAGE: http://goizueta.emory.edu/faculty/academic_areas/organization_management/negro_giacomo.html

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