Executive career advancement in career moves across employers: the role of organization-level predictors

Abstract

This paper examines the career moves of executives between different organizations and looks at the characteristics of executives employing organizations as a predictor of the outcome of the moves. The paper uses a retained executive search firm's proprietary data set that contains information on the career paths of executives in the financial services industry. The results show that the perceived operational excellence of executives employing organization has a significant signalling power for other employers and strongly impacts the success of executives' moves across different organizations. The data also reveal that executives may use their employment spell at large-sized organizations that are perceived as excellent as a conscious career-building mechanism and accept smaller promotions to join such organizations.

Keywords:

• Career advancement
• executives
• financial services industry

Acknowledgements

Funding from the Marie Curie International Reintegration Grant is gratefully acknowledged. Thanks to Peter Cappelli, Emilio Castilla, Martin Conyon and Mike Useem for helpful comments.

Notes

1 The coefficients, standard errors (in parentheses) and p-values for the financial performance variables: Sales growth: .180 (.291) p = .535. Net income: .190 (.449) p = .672. Net income as a percentage of sales: .001 (.057) p = .979; Net income as a percentage of total assets: − .069 (.173) p = .690.

2 The coefficients, standard errors and p-values of the financial indicators of the organizations that executives move to are the following: Net income: coefficient: .266, standard error: .174, p = .127; Net income as a percentage of sales: coefficient: − .009, standard error: .010, p = .408; Net income as a percentage of total assets: coefficient: .106, standard error: .284, p = .709.