Proceedings of 13th Asian Business Research Conference
26 - 27 December, 2015, BIAM Foundation, Dhaka, Bangladesh, ISBN: 978-1-922069-93-1
Corporate Elite Mobility: Relationship between
Internationalization and Top Executive’s Job Prospect
Rimi Zakaria
It is believed that executives learn a great deal about the overall business
environment and the details of markets and products from being actively involved
in firms’ international operations (Zahra et al., 2000). Internationalization,
commonly referred to a process of extending firm operations beyond national
environments, is a phenomenon of importance for the firms since it has useful
knowledge implications to the executives and the firms (Athanassiou and Nigh,
2000, 1999; Zahra et al., 2000).
This study examines the implications of knowledge-based theory of the
firm by underscoring the appropriability, portability, and transferability aspects of
tacit knowledge that is attributable to top-level organizational members, particularly
considering the phenomenon of corporate executive migration. Acknowledging
that firms appropriate rent from the managerial human capital, i.e., knowledge,
skills, abilities, and experience of their corporate elites, this paper argues that the
level of a firm’s internationalization is an essential determinant of their bargaining
capacity with regards to their future employment. More specifically, the topic of
interest is whether the knowledge gained from internationalization of an
organization positively contributes to an executive’s job prospect in terms of size
and performance of the new firm, complexity of the position, level of compensation
on the new job, and time taken to find reemployment.
Because favorable firm attribute is a source of enhanced self-esteem of
an organization’s top employees, we expect that high-caliber top executives would
value joining larger and/or more profitable firms. Therefore, we develop and test
the following hypotheses:
Hypothesis 1: A firm's degree of internationalization is positively related
to the migrating executive’s new firm’s size where he or she accepts
reemployment.
Hypothesis 2: A firm's degree of internationalization is positively related
to the migrating executive’s new firm’s performance where he or she accepts
reemployment.
Hypothesis 3: A firm's degree of internationalization is positively related
to the complexities in the position that the migrating executive holds in the new
firm.
Hypothesis 4: A firm's degree of internationalization is positively related
to the level of compensation offered to the migrating executive at the time of
employment in the new organization.
Hypothesis 5: A firm's degree of internationalization is negatively related
to the time taken by the migrating executive in finding the new job.
Results, analyzed from a sample of 356 top executives who migrated from
one U.S. multinational to another within the period of 1999 to 2007, generally
support this perspective that knowledge gained from internationalization relates to
executives’ negotiation power with regards to future employment prospect.
Considering the theoretical, empirical, and managerial implications of the current
study, the directions for further research are discussed.
KEYWORDS: Knowledge-based Theory; Internationalization; Corporate Elite
Mobility; Managerial Human Capital; Rent Appropriation; Bargaining Power
Submission Track: Management
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Rimi Zakaria, Assistant Professor of Management, University of Wisconsin – Whitewater, 800 W.
Main Street, HH 4523, Whitewater, WI 53190, USA, Email: zakariar@uww.edu