Alumni effects and relational advantage: The impact on outsourcing when a buyer hires employees from a supplier's competitors

Seth Carnahan, Deepak Somaya

Research output: Contribution to journalArticlepeer-review

Abstract

Research examining the impacts of employee mobility on interfirm relationships suggests that firms earn positive "relational spillovers" when their former employees, or alumni, depart to join other organizations. Drawing on the theory of relational advantage, we extend this line of work by examining how a supplier firm is affected when a buyer hires alumni from the supplier's competitors. Using detailed data on mobility involving patent law firms and their Fortune 500 clients, we find that supplier firms receive less outsourced business when buyers hire employees from the focal supplier's competitors. Further, this negative effect decreases when the focal supplier has its own alumni already working for the buyer firm and increases when the buyer firm has higher turnover or hires locally from competing suppliers. The article thus underscores the importance of firm alumni in the competition for valuable business relationships and highlights a form of "talent war" waged through the placement of and relationships with former employees.

Original languageEnglish (US)
Pages (from-to)1578-1600
Number of pages23
JournalAcademy of Management Journal
Volume56
Issue number6
DOIs
StatePublished - Dec 1 2013

ASJC Scopus subject areas

  • Business and International Management
  • Business, Management and Accounting(all)
  • Strategy and Management
  • Management of Technology and Innovation

Fingerprint Dive into the research topics of 'Alumni effects and relational advantage: The impact on outsourcing when a buyer hires employees from a supplier's competitors'. Together they form a unique fingerprint.

Cite this