Structural Knowledge: how executive experience with structural composition affects intrafirm mobility and structural change
Abstract
This paper explores organizational knowledge that is embodied in structures and executives by studying the relationship between the structural composition of units, the movement of executives between units, and the reconfiguration of those units. The ‘structural composition’ of a business unit includes its origin (as internally-developed, acquired, or a recombination of existing units) and its subsequent recombination history. Drawing on the knowledge-based view of the firm, we predict that executives will tend to move to units with similar structural composition. In addition, we expect that movement of executives with greater diversity of experience or specific experience with reconfiguration will increase the likelihood of subsequent structural change. The study tests these propositions in a sample of 250 firms in the U.S. medical sector over twenty years. We find that executives are more likely to be moved to units with similar structural composition, reinforcing the path dependent nature of intrafirm mobility. Units are more likely recombined that receive executives from internally-developed units, not necessarily executives with recombination experience. Finally, units receiving any executives from other units were retained, and those receiving executives from acquired units were most likely to remain unchanged. Together the findings highlight the influence of executives from core businesses.