Labor Pains: Change in Organizational Models and Employee Turnover in Young, High-Tech Firms

James N. Baron, Stanford University
Michael T. Hannan, Stanford University
M. Diane Burton, Cornell University

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Suggested Citation
Baron, J. N., Hannan, M. T. & Burton, M. D. (2001). Labor pains: Change in organizational models and employee turnover in young, high-tech firms [Electronic version]. American Journal of Sociology, 106(4), 960-1012. http://digitalcommons.ilr.cornell.edu/articles/251/
Required Publisher Statement
©2001 by the University of Chicago Press.

Abstract

[Excerpt] Organizational theories, especially ecological perspectives, emphasize the disruptive effects of change. However, the mechanisms producing these effects are seldom examined explicitly. This article ex-amines one such mechanism-employee turnover. Analyzing a sample of high-technology start-ups, we show that changes in the employment models or blueprints embraced by organizational leaders increase turnover, which in turn adversely affects subsequent organizational performance. Turnover associated with organizational change appears to be concentrated among the most senior employees, suggesting "old guard disenchantment" as the primary cause. The results are consistent with the claim of neoinstitutionalist scholars that founders impose cultural blueprints on nascent organizations and with the claim of organizational ecologists that altering such blueprints is disruptive and destabilizing.