Exploring the impact of specialist and generalist stars on organizational performance

Abstract

By linking the literature strands on star employees and specialization, we analyze the impact of specialist and generalist stars on organizational performance. Since the degree of specialization and diversification can change over time, we propose a dynamic framework for our analysis, allowing specialist and generalist stars to switch their roles. In a first step, we develop a game-theoretical model from which we derive our main hypotheses. In a second step, we empirically test theses hypotheses using data from professional basketball. In line with the theoretical predictions of our model, we find that teams with generalist stars outperform teams with specialist stars. Moreover, while a generalist star switching role to a specialist always worsens team performance, a specialist star in basketball switching role to a generalist may improve team performance. Further estimations are suggestive that these findings hold for teams which rely on a unique star rather than for teams which employ multiple stars.

Keywords: stars, human capital, specialization, performance, NBA

JEL Classification: J24, M51, Z22