Sifting and Sorting: Personal Contacts and Hiring in a Retail Bank

Fernández, Roberto; Weinberg, Nancy

doi:10.2307/2657345

Cited by 414 publications

(289 citation statements)

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“…Then, the researcher examined the relationship between the tie actually used to find a job and labor-market outcomes such as income, socio-economic status, and job satisfaction. However, because these classic studies only examined job searches that actually resulted in a job, their results-and the results of other studies conducted in the same way-might be artifacts of selection on the dependent variable (Montgomery 1992;Fernandez and Weinberg 1997).…”

Section: Within-individual Comparisonmentioning

confidence: 99%

“…First-generation studies focused on the particular job-search attempt that led to a job, ignoring all attempts that did not lead to a job. This selection on the dependent variable is likely to lead to misleading results (Montgomery 1992;Fernandez and Weinberg 1997;Korpi 2001). To avoid the problem of selection on the dependent variable, the second generation of studies focused on the relationship between a job seeker's social networks and her labor-market outcomes.…”

Section: Introductionmentioning

confidence: 99%

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Motivation vs. relevance: Using strong ties to find a job in Urban China

Obukhova¹

2012

Social Science Research

109

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While the idea that contacts matter in finding a job is intuitively appealing, we still do not know-after decades of research-how and why strong ties benefit job seekers. To resolve this confusion, we need to theorize how specific characteristics of ties are related to the mechanisms that make job search through contacts effective. We have reasons to expect that, while a contact's motivation influences the likelihood that a job seeker receives an offer, her homophily with the job seeker on occupation and other job-relevant attributes influences the quality of the offer. The use of strong ties among university students to find jobs in China provides a unique opportunity to empirically isolate the relationship between contact characteristics and the mechanisms through which contacts benefit the job seeker. I tested my hypotheses with data on both the successful and unsuccessful job searches of 478 graduates of China's flagship universities, who, as first-time job seekers, primarily used strong ties. Survey results are consistent with my hypotheses: Job seekers who used strong ties to look for jobs had more offers-but not better offers-than those who used only formal methods.

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Section: Within-individual Comparisonmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Motivation vs. relevance: Using strong ties to find a job in Urban China

Obukhova¹

2012

Social Science Research

109

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“…Researchers observed this behavioral pattern in studies on hiring (Fernandez & Weinberg, 1997;Williamson & Cable, 2003), financing (Shane & Cable, 2002), investing (Cohen, Frazzini, & Malloy, 2008) and strategic decision making (Geletkanycz & Hambrick, 1997;Carpenter & Westphal, 2001). Overall, these studies suggest that employees' use of their social capital benefits firm performance.…”

Section: Introductionmentioning

confidence: 82%

“…While this information is crucial to answer how social ties change resource allocation decisions and firm performance, it is frequently unavailable for data from other industries. Usually, the set of available workers is unobservable to researchers, because many workers change across industries during the course of their career, and because data on workers from other firms who could have been employed are missing (which raises concerns about selection biases in such studies (Fernandez & Weinberg, 1997)). …”

Section: Sample and Data Collectionmentioning

confidence: 99%

“…We focus on worker allocation decisions, as these are among the most important resource allocation decisions in firms. While previous work has frequently engaged in testing one of both aspects in isolation (Fernandez & Weinberg, 1997;Shane & Cable, 2002;Williamson & Cable, 2003;Cohen et al, 2008;Geletkanycz & Hambrick, 1997;Peng & Luo, 2000;Collins & Clark, 2003), no previous study has been able to estimate both effects from the same data. We thus provide a novel approach of examining the economic consequences of social ties.…”

Section: Introductionmentioning

confidence: 99%

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The Temptation of Social Ties: When Interpersonal Network Transactions Hurt Firm Performance

2012

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We introduce agency concerns to social capital theory and predict that managers can use individual social capital to reduce personal effort costs, which is not in the best interest of the firm. To test this prediction, we collect data on all 8,019 hiring decisions from general managers in the National Basketball Association between 1981 and 2011. We find that managers have a clear preference for hiring players through social ties. The probability that a manager hires players from an NBA franchise to which he is socially tied is 27.6% higher than for an untied franchise. To isolate the motivation for this behavior, we complement our data with information on the sporting performance of teams. In line with agency theory, we find that the hiring of players through social ties reduces team performance. The effect is large: on average, each social-tie player reduces team winning percentage by 5.4%. Overall, this paper documents first empirical evidence that decision makers' use of individual social capital can lead to reduced firm-level performance.

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