Organizational Failure and Intraprofessional Status Loss

Christopher I. Rider () and Giacomo Negro ()
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Christopher I. Rider: McDonough School of Business, Georgetown University, Washington, DC 20057
Giacomo Negro: Emory University, Atlanta, Georgia 30322

Organization Science, 2015, vol. 26, issue 3, 633-649

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 not only that organizational failure can diminish cumulative career advantages but also that status characteristics that enable attainment, such as education, can protect individuals against status loss.

Keywords: organizational failure; bargaining power; educational prestige; intraprofessional status; cumulative advantage (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (12)

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Persistent link: https://EconPapers.repec.org/RePEc:inm:ororsc:v:26:y:2015:i:3:p:633-649

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