This study proposes that the level from which managers are recruited to the top management team is an important, overlooked indicator of the knowledge and quality of the manager. We hypothesize that rookie managers – those from below the top management level – outside the firm offer three distinct advantages: fresh knowledge for renewal, links to the functional activities of other firms, and a pool of quality recruits who are willing to move. Using data from the US cellular industry 1983-1998, we find evidence consistent with our hypotheses. The study shows that hiring rookies can support renewal by linking to reservoirs of functional knowledge outside the firm. It also highlights that different labor pools face different incentives, potentially mitigating adverse selection problems with outside executives.
- top management,
- rookie executives
Available at: http://works.bepress.com/charles_williams/7/