Career Patterns and Organizational Performance

This chapter examines the question of how career patterns influence organizational performance. Much of the traditional research on careers in the 1970s and early 1980s viewed career streams as results of organizational and other macro-level influences and viewed career success as the product of matching individual traits with organizational needs (e.g., Holland, 1973). For example, studies of careers focused on career management from the perspective of the organization (e.g., Hall, 1976; Sonnenfeld & Peiperl, 1988) or as an intersection where both individual and organizational needs were met (e.g., Schein, 1978). At the time of publication of the Handbook of Career Theory (Arthur, Hall, & Lawrence, 1989), most of the research continued in this vein with articles on topics such as rites of passage at work and strategic staffing, but also expanded into then-emerging ideas about minority careers, work/life issues, the individual's perceptions/experience of a career, and individual career development. There was also an emerging theme at that time that advocated the need for people to take charge of directing their own careers—that rather than be shaped by external forces, careers might be shaped by individuals themselves (e.g., Bell & Staw, 1989; see Hall & Mirvis, 1996).

Adding back this notion of agency to the study of careers also laid the foundation for scholars to examine how the career patterns and choices of individuals might ultimately affect the performance of firms rather than simply the career consequences for individuals. Still, the notion of turning tradition on its head and studying how individuals' careers might shape organizations was quite a novel idea—an idea identified in a synthesis chapter of the Handbook (Nystrom & McArthur, 1989) but only barely discernable in the original Handbook chapters themselves. At the time, there was in fact little theoretical or empirical work linking careers to organizational outcomes.

One theory that would eventually lead the investigation into how career patterns influence organizational performance is upper-echelons [Page 423]theory. An upper echelon refers to the top management team (TMT) and/or board members of a focal firm.1 Upper-echelon theory was emerging in organizational theory in the mid-1980s, and throughout the past two decades it has focused on how the composition of a firm's senior-most executive ranks affects a variety of organizational outcomes (e.g., Hambrick & Mason, 1984; Useem, 1979).

This body of research began with theoretical work by Hambrick and Mason (1984) and grew rapidly with empirical work centered on examining the many ways in which top executives' backgrounds may affect organizational outcomes, including, but not limited to, the performance of firms (for a review, see Finklestein & Hambrick, 1996). Some of these effects were closely linked to specific aspects of executives' career histories. In early research, scholars proposed that the set of “givens” that executives bring to their work in an organization is influenced by certain aspects of their prior career paths, such as “tenure in the organization” and “functional background” (Hambrick & Mason, 1984, p. 196). As the empirical work in this area expanded in the 1990s, the career histories of executives and their influence in organizations were examined in several ways that have established important theoretical links between career histories and organizational outcomes.

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