Shifts and Ladders: Comparing the Role of Internal and External Mobility in Executive Careers – Matthew Bidwell, Ethan Mollick. June 2015. Academy of Management Annual Meeting Proceedings 10/2015; 2014(1):10178-10178. DOI: 10.5465/AMBPP.2014.92
“Employees can build their careers either by moving into a new job within their current organization or else by moving to a different organization. We use matching perspectives on job mobility to develop predictions about the different roles that those internal and external moves will play within careers. Using data on the careers of MBA alumni, we show how internal and external mobility are associated with very different rewards: upwards progression into a job with greater responsibilities is much more likely to happen through internal mobility than external mobility; despite this difference, external moves offer similar increases in pay to internal , as employers seek to attract external hires. Consistent with our arguments, we also show that the pay increases associated with external moves are lower when the moves take place for reasons other than career advancement, such as following a layoff or when moving into a different kind of work. Despite growing interest in boundaryless careers, our findings indicate that internal and external mobility play very different roles in executives’ careers, with upwards mobility still happening overwhelmingly within organizations.”