Christopher I. Rider

A Garage and an Idea: What More Does an Entrepreneur Need?

There exists a common belief that entrepreneurs commonly start businesses in garages (or basements or dorm rooms or kitchens).The garage entrepreneur is a highly popular contemporary legend, but not quite accurate. An emergent notion in academic research is that entrepreneurs are often organizational products. They typically acquire confidence, business knowledge, and social connections via prior experience at existing organizations. These psychological and social resources aid entrepreneurs informing companies. Although the belief of the garage entrepreneur contributes to the preservation of the American ideals of opportunity and upward social mobility, it offers misleading insights to would-be entrepreneurs because it suggests an under socialized view of the entrepreneurial process. Individuals, companies, policy makers, and business schools will benefit from recasting the garage as a contemporary legend and focusing instead on the lessons that can be derived from an understanding of entrepreneurs as organizational products.(Publication Abstract)

How Employees’ Prior Affiliations Constrain Organizational Network Change A Study of U.S. Venture Capital and Private Equity

This paper investigates how organizations’ reliance on employees’ prior educational and employment affiliations for both employment relationships and interorganizational relationships contributes to inertia in organizational networks. Analyses of data from U.S. venture capital and private equity firms support the theory I develop. First, increasing differences in educational prestige decrease both interpersonal co-employment rates and interorganizational co-investment rates. Second, two individuals who share a prior educational or a prior employment affiliation are more likely to be employed by the same organization than are two individuals who do not share such an affiliation. Third, the likelihood of two organizations forming a co-investment relationship increases with the number of prior educational or employment affiliations shared by their employees. I propose that these tendencies stabilize advantaged organizations’ positions and limit disadvantaged organizations’ positional mobility, thereby constraining change in interorganizational networks. Implications for studies of network evolution and socioeconomic inequality are discussed.

Labor Market Advantages of Organizational Status: A Study of Lateral Partner Hiring by Large U.S. Law Firms

Prior research demonstrates product market advantages of organizational status but largely neglects factor market advantages. We propose that status is advantageous in labor markets because individuals generally consider employer status a nonpecuniary employment benefit. Dyadic analyses of lateral partner hiring by large U.S. law firms demonstrate two status-based advantages in employee hiring and retention. First, high-status firms are more likely than low-status ones to hire an employee from a more profitable competitor. Second, high-status firms are most likely to lose an employee to a lower-status competitor when the competitor is-atypically-more profitable. We discuss implications of these findings for individual and organizational status attainment and for the stability of industry status hierarchies.

Why Are Firms Rigid? A General Framework and Empirical Tests

We present a general framework for understanding why firms are slow to make major strategic changes in a wide range of empirical settings. We then apply this framework to investigate, more specifically, the relationship between firm age and scope in hedge funds. Our empirical analyses demonstrate that younger hedge funds outperform older hedge funds both before and after the launch of a new fund. Based on our framework, these results suggest that age-based rigidity in hedge funds is more attributable to internal political frictions that influence project selection than to constraints associated with exchange partners or implementation costs. We conclude by discussing how our framework can be used to identify the dominant source of rigidity in other contexts.

Educational Credentials and Intra-Occupational Inequality: Evidence from Law Firm Dissolutions.

Social networks are widely believed to facilitate hiring by reducing information asymmetries between individual job candidates and employing organizations. Causal effects of network contacts on organizational hiring and individual attainment are unclear, though, because networks probably influence both the likelihood that an individual changes employers and the quality of the position they attain by doing so. In this study, I theorize how prior education and prior employment networks differentially alleviate information asymmetries to influence labor market matching and intraprofessional status attainment. Leveraging the unexpected dissolutions of six U.S. law firms as an exogenous shock to mobility, I analyze 1,426 lawyers’ post-dissolution labor market outcomes. The results demonstrate that both law school alumni and co-worker contacts influence hiring; however, status attainment is aided by former co-workers and hindered by alumni. Implications for studies of networks and inequality are discussed.This study examines how the matching of individuals and employers based on educational credentials contributes to intra-occupational inequality. Treating six U.S. law firm dissolutions as mobility quasi-experiments, I analyze 1,426 lawyers’ post-dissolution labor market outcomes and establish two key findings that reconcile technical-functional and sociocultural accounts of educational stratification. First, consistent with an ability-signaling mechanism, graduates of more prestigious law schools regained employment at more rewarding employers but this tendency weakened with one’s work experience. Second, consistent with a social network mechanism, lawyers were more likely to regain employment at an organization the more former law school classmates were employed by the organization. The results imply that the signal function of educational credentials influences the matching of inexperienced individuals to employers and that social networks reproduce the distribution by structuring opportunities to change employers.

Employees' Prior Affiliations Constrain Organizational Network Change: Evidence from U.S. Venture Capital and Private Equity

I theorize that in order to alleviate information asymmetries organizations embed both employment relationships and inter-organizational relationships in their employees’ prior education and employment affiliations. Analyses of employment and investment data from U.S. venture capital and private equity firms support the theory. First, increasing educational prestige differentials decrease both inter-individual co-employment rates and inter-organizational co-investment rates. Second, two individuals who share a prior education or a prior employment affiliation are more likely to be employed by the same organization than are two individuals who do not share such an affiliation. Third, the likelihood of two organizations forming a co-investment relationship increases with the number of prior education or employment affiliations shared by their employees. I propose that these tendencies constrain inter-organizational network change by stabilizing advantaged organizations’ positions and limiting disadvantaged organizations’ positional mobility. Implications for studies of network evolution and socioeconomic inequality are discussed.

Racial Disparity in Leadership: Performance-Reward Bias in Promotions of National Football League Coaches

Organizational leaders remain predominantly white despite increasing U.S. workforce diversity and efforts to increase racial minority representation in leadership. We propose that performance-reward bias (i.e., lesser rewards for equivalent performance) generates racial disparity in leadership by suppressing the rate at which minorities, relative to equally-performing whites, are promoted to positions considered prerequisite for organizational leadership. Career history analyses of over 1,200 National Football League coaches from 1985 to 2012 support this claim. Various fixed-effects specifications hold constant a coach’s initial and current position, enabling us to differentiate performance-reward bias from allocative mechanisms that match minorities, at hire and post-hire, to positions with inferior upward mobility prospects. We also examine racial disparity before and after implementation of a league-wide policy explicitly designed to increase the number of minorities interviewed for leadership positions. Although the disparity in head coach representation decreased after implementation, pre-implementation demographic trends prevent us from conclusively attributing this increase to the policy. Less equivocally, after implementation white assistant coaches continued to be promoted at higher rates than similarly-performing minority ones. Moreover, consistent with our arguments, this white advantage in promotion rates is specific to the transition from lower level positions to the one typically occupied prior to promotion to head coach (i.e., coordinators); no racial advantage is evident among occupants of this position. We conclude that racial disparity in organizational leadership is largely attributable to performance-reward bias in lower level positions.