Firm Strategy and Internal Talent Markets

52 Pages Posted: 6 Apr 2023

See all articles by Bo Cowgill

Bo Cowgill

Columbia University - Columbia Business School

Jonathan Davis

University of Chicago - Harris School of Public Policy; University of Chicago - Harris School of Public Policy

B. Pablo Montagnes

Emory University - Department of Political Science

Patryk Perkowski

Yeshiva University

Date Written: March 24, 2023

Abstract

How should executives strategically allocate talent? Organizations have recently adopted talent marketplaces to address job assignment and internal mobility. We formalize the worker-to-division matching problem, in which executives match workers and divisions, and face agents' preferences as the primary constraint. Our main result is market-based assignments can benefit organizations, but only in particular settings. Internal markets fail to deliver a classic benefit of strategic management: coordination across business units. Nonetheless, markets do perform well on another managerial dimension: creating incentives for employee engagement and truthful reporting. The performance of internal talent markets thus depends on which factor is more important for the firm's strategic position. We show that this can depend on each firm’s production technology, workplace incentives, workforce preferences, turnover costs, and other business parameters.

Suggested Citation

Cowgill, Bo and Davis, Jonathan and Montagnes, B. Pablo and Perkowski, Patryk, Firm Strategy and Internal Talent Markets (March 24, 2023). Columbia Business School Research Paper No. 4399389, Available at SSRN: https://ssrn.com/abstract=4399389 or http://dx.doi.org/10.2139/ssrn.4399389

Bo Cowgill (Contact Author)

Columbia University - Columbia Business School ( email )

3022 Broadway
New York, NY 10027
United States

Jonathan Davis

University of Chicago - Harris School of Public Policy ( email )

1155 E 60th St
Chicago, IL 60637
United States

University of Chicago - Harris School of Public Policy ( email )

1155 E 60th St
Chicago, IL 60637
United States

B. Pablo Montagnes

Emory University - Department of Political Science ( email )

Atlanta, GA 30322
United States

Patryk Perkowski

Yeshiva University ( email )

500 West 185th Street
New York, NY 10033
United States

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