Inter-Unit Executive Redeployment in Multiunit Firms: Evidence from Korean Business Groups

Sea-Jin Chang (), Young-Choon Kim () and Sangchan Park ()
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Sea-Jin Chang: National University of Singapore Business School, Singapore 119245; Korea Advanced Institute of Science and Technology, Seoul 02455, Korea
Young-Choon Kim: Ulsan National Institute of Science and Technology, Ulsan 44919, Korea
Sangchan Park: Korea Advanced Institute of Science and Technology, Seoul 02455, Korea

Organization Science, 2024, vol. 35, issue 3, 815-834

Abstract: Building on the literature on resource reconfiguration theory, we formulate a new theoretical framework that explains how executive redeployment within a diversified firm transfers different types of human capital embodied in executives to different units facing specific business challenges. In the empirical context of Korean business groups, we find that executives with unit-specific human capital, like turnaround experience, competitive experience, and international expansion experience, are redeployed to units with corresponding business challenges like financial difficulties, intensifying competition, and early-stage international expansion, respectively. We also show that executives with unit-generic human capital, like corporate management practices and interunit coordination experiences, are redeployed to younger units seeking to establish corporate-level policies and practices. Additional analyses also show that the value of firm-specific human capital in driving the redeployment of executives is contingent on their functional orientation and seniority.

Keywords: resource-based theory of the firm; resource redeployment; executives; human capital; employee mobility; multiunit firms (search for similar items in EconPapers)
Date: 2024
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