Worker Redeployment in Multi-Business Firms

62 Pages Posted: 23 Jun 2020 Last revised: 10 Jun 2021

See all articles by Jasmina Chauvin

Jasmina Chauvin

Georgetown University

Christopher Poliquin

UCLA Anderson School of Management

Date Written: June 2, 2020

Abstract

We examine to what extent and when multi-business firms internally redeploy workers between their units. Research has emphasized that resource redeployment creates value by allowing firms to escape from declining industries to those with better prospects. We find multiple patterns consistent with this mechanism. However, we also find, surprisingly, that more than half of all redeployments occur between establishments in the same five-digit industry. Moreover, redeployment is often not associated with business exit or diversification, but rather, the opening of new establishments in industries that are growing within the firm. We argue that these patterns are consistent with the theoretical notion of "internal inducements" to redeployment. Overall, our findings suggest redeployment creates value not only in the process of diversification but also horizontal growth.

Keywords: corporate strategy, redeployment, human capital, diversification, firm growth

JEL Classification: J6, M12

Suggested Citation

Chauvin, Jasmina and Poliquin, Christopher, Worker Redeployment in Multi-Business Firms (June 2, 2020). Georgetown McDonough School of Business Research Paper No. 3614269, Available at SSRN: https://ssrn.com/abstract=3614269 or http://dx.doi.org/10.2139/ssrn.3614269

Jasmina Chauvin

Georgetown University ( email )

3700 O Street, NW
Washington, DC 20057
United States

Christopher Poliquin (Contact Author)

UCLA Anderson School of Management ( email )

110 Westwood Plaza
Los Angeles, CA 90095
United States

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