When two become one: The organizational antecedents and consequences of inter-firm mobility

In a time in which employment relationships are characterized by a decline in tenure and an increasing reliance on inter-organizational career ladders, the traditional mechanisms of management of the employees described by organizational theorists (i.e., rules, internal careers), require further scrutiny. This problem is even more relevant when considering that employees that move to competitors (i.e., inter-firm mobility) bring with them knowledge and resources that are likely to disrupt the functioning and performance of the source organization. Addressing this problem requires reconsidering how organizations manage the alignment of interests between employees and employers beyond the mere use of hierarchical control and monetary incentives. In an effort to grant autonomy to more educated and mobile employees, organizations may offer to their employees external autonomy, namely the discretion to pursue one or more external jobs while being employed in a given organization. The effect of this increasing tendency in markets for the retention of the employees and the performance of organizations remains unclear though. We dig into this question by proposing that external autonomy represents an underexplored way in which employee engagement can be sustained in modern organizations. In particular, I propose that granting to employees the opportunity to engage in multiple jobs, one of which is located outside the boundaries of the focal organization provides several benefits to an organization: (a) it improves employee alignment with the organization, (b) the odds of internal promotion, and (c) benefits organizational performance, both directly (i.e., by reducing costs and improving knowledge development) and indirectly too (i.e., by improving employee matching).