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Organizational Perspectives on Stratification

Author(s): James N. BaronSource: Annual Review of Sociology, Vol. 10 (1984), pp. 37-69Published by: Annual Reviews

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Ann. Rev. Sociol. 1984. 10:37-69Copyright? 1984 by Annual Reviews Inc. All rights reserved

ORGANIZATIONALPERSPECTIVESONSTRATIFICATION

James N. BaronGraduate choolof Businessand Departmentf Sociology,StanfordUniversity,Stanford,California 4305

Abstract

This essay reviews recent theory and research on organizationsand socialstratification,focusing on two dimensions of inequalitythat are affected byorganizationsandtheirenvironments:a) how rewardsandopportunitiesvary

as a functionof organizational ttributes nd(b) how enterprisesdiffer in theircriteria for matchingworkersandjobs. The effects of rewardstructuresandsorting processeson workers, organizationalperformance,andinterorganiza-tional relationsare also consideredbriefly. Since many hypothesesabout abormarketsconcern inks betweenorganizationsandsocioeconomicachievement,there s a needforcomparative rganizational esearch ocomplementanalysesat the individualandaggregate evels. Moreover, heinterdependencef careeroutcomes within and among enterprisesis widely recognized but requiresexplicit study. Futureresearchwill benefit immeasurably rom the develop-ment and testing of hypotheses about how organizationsand environmentsinfluence labor marketprocesses.

INTRODUCTION

Manystudentsof inequalityhaverecentlychallengedthestatusattainment ndhuman capital approachesbecause of their exclusive focus on individualdeterminantsof career outcomes. Researchershave increasingly recognized

that rewards are attachedto organizationalpositions and that organizationsdiffersystematically n theirpersonnelpracticesand rewardsystems. Accord-ingly, thelink betweenorganizations nd stratification asbeenrevivifiedas anareaof research nterest.The status attainmentandhumancapital paradigms

37

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38 BARON

have been competentlyreviewed by others, as have specific strandsof newer"structuralist" pproaches Gordon 1972, Kalleberg& SOrensen1979, Baron

& Bielby 1980, Featherman1981, Hodson & Kaufman 1982). However, acritical review of literature xaminingthe organizationalbases of inequality stimely.

Organizations mpingeon careeroutcomesin two importantways. First,thedivision of labor among jobs and organizations generates a distributionof

opportunitiesandrewards hat oftenantedates,bothlogically and temporally,the hiringof people to fill those jobs. Second, organizationalprocedures ormatchingworkers to jobs affect the distributionof rewardsand opportunitieswithin and across firms and thus influence the likelihood of career success(Granovetter1981). This reviewconsequently ocuses on these two aspectsofstratification.The first section examines why some firms pay and promotemore thanothers.Afteroutliningtheoreticalcontroversiesabout nternal abormarkets, I will review analyses that link opportunitystructures o specific

facets of organizationsandtheir environments.The secondsection focuses onorganizationaldifferencesin matchingworkers ojobs, describinghow careerdynamics depend on the organizationalsetting. A brief third section draws

attention otheimpact hatstratificationegimeshaveonworkersandorganiza-

tions. Theconcludingsection summarizes hisreview and outlines its implica-tions for futureresearch.

THE ARCHITECTUREOF INEQUALITY:ORGANIZATIONALVARIATIONIN OPPORTUNITYAND REWARDS

OrthodoxApproaches

Contemporary esearchon organizationaldifferences in rewardsystems hasfocused on the workingsof internal abor markets. Neoclassical microecono-mists, institutionalists,organizational ociologists, andneo-Marxistsacknowl-

edge the importanceof bureaucratic ierarchiesof opportunityn determiningworkers' achievements.Whilesome career adderscut across firms(Althauser& Kalleberg 1981), unequalaccess to avenues of advancementwithin orga-nizations is a principalsource of inequality (Spilerman 1977, Kalleberg &S6rensen 1979).

Much of thisresearchreflects a dissatisfactionwith orthodoxeconomic and

sociologicaltheoriesof wagedetermination.Orthodox conomictheoryrelateswage differentials to variations in worker productivityand labor supply.Employeesarecompensated or investments n productivity-enhancinguman

capital. Sociological analysesof statusattainmentprocesses, like humancapi-tal research, typicallyembracesome variantof the functional heoryof strati-







ORGANIZATIONSSTRATIFICATION 39

fication (Horan 1978). However, productivity efersto an individualattribute,whereas functionalismdifferentiateseconomic roles in terms of their societal

importance.In other words, althoughfunctionalismand marginalproductivitytheory both assume that rewardsequitablyreflect the value associated withwork, the functional theory of stratification s a rudimentary"positional"

perspectiveon inequality. It is not an organizationalperspective, however,since accordingto thisapproach, t is societiesrather han ndividual irms thatencounterrecurringproblems o be solved, therebygeneratinga distribution f

power, privilege, and income (Lenski 1966, Treiman1977).'Thus "positional"analyses of inequalitydo not necessarilycontradictthe

theories underpinningconventional individualisticstudies of labor market

achievement, nor can specific variables be neatly pigeonholed into thosemeasuring"humancapital" versus those reflecting "social structure."Forexample, investigators generally concur that education strongly affectssocioeconomic attainment,butthey disagreeabout he natureof those effects-i.e. whether schooling increases workerproductivity, trainability (Thurow

1972), culturalcapital (Collins 1979), orconformity o capitalist deology andorganizationaldiscipline (Bowles & Gintis 1976:Chap. 5; Edwards 1976).

Perspectiveson labor marketsdiffer most in theirassumptionsabout how and

why organizationsstructure ewards and matchpeople to jobs-assumptionsthatoften arenotexaminedempirically (Baron& Bielby 1980). To reconcilecompeting interpretations f internal abormarkets,stratification esearchersmustdirectlyexamine how particularorganizationalandenvironmentalattri-butes affect opportunitystructuresand the matching process.

The InternalLabor Market:CompetingInterpretations

The origins and functionsof internal abor marketshave been hotly debated.

Many labor economists emphasizetechnicaldeterminants,arguingthattech-nological progress increases workers' skill monopoly in the firm and thatinternal advancementopportunitiesare requiredso that senior workerswill

trainjunior personnel (Doeringer & Piore 1971). In his classic essay on

bureaucracy,Weber (1947 [1922]) makes a similarargumentregardingthe

efficiency of lifetimeemploymentand internaladvancement n large organiza-tions, given societal trends toward rationalizationand specialization.

Williamson(1975) emphasizesinformational onstraints hatfavorinternal

'Strategiccontingencytheoriesof powerrepresent norganizational ounterparto the function-al theoryof stratification e.g. Hicksonet al 1971). It is hypothesized hatorganizational tanding

reflectsthe extent to which workerscontrolcritical resourcesdemandedby thefirm, make unique

contributions,and affect theabilityof otherorganizationalmembers o carryout theirduties. This

perspective may help clarifywhat"productivity" r"functional mportance"meansand provide a

clearer basis for relating specific organizationalcontributions o rewards.







40 BARON

promotionhierarchiesover perfectlycompetitive abormarkets.He arguesthatperfect markets fail because neitheremployersnor employees possess com-pletely accurate informationaboutpresentand future laborsupplies andjob

requirements;because technical interdependenciesrequireharmonyamongworkers;and becausethe bilateralmonopolyof employersandemployeesoveridiosyncratic obs and skills, respectively, could lead to destructiveshort-run"opportunism" y both partiesin the absence of long-termemploymentcon-tracts. Like accounts thatemphasizethe technologicalandbureaucratic ffi-ciency of internal abormarkets,Williamson'sframeworkneednotbe viewedas a departurefrom neoclassical orthodoxy; an employer's investment inlong-termcontracts is viewed as a rationalresponseto turnoverand training

costs, andanyshort-run isequilibriabetweenmarginalproductivity ndwagesshould cancel out throughouta worker'scareerwith the firm.Neo-Marxists, in contrast, regardinternal labor markets as an effort by

capitalists o controlavolatile work force(Stone 1974, Marglin1974, Edwards1979, Gordonet al 1982). Employers mpose gradedhierarchies hatfoster adocile "status" orientationand dissuade workers from utilizing the powerimplicitin theirskills (Wachtel1974). Internal abormarketsalso institutional-ize cleavages among workersalong racial, sexual, and ethnic lines, therebyreducingthe likelihood of working-classcohesion. Otheranalystsemphasize

organized labor's active role in formalizingand rationalizingemploymentpracticesand promotionladders;work place hierarchy s not forced on em-ployees, they argue,butrather s in their,as well as management's,collectiveinterest(Douty 1963; Kahn 1976, 1980; Rubery 1978).2

Unfortunately,while researchon internal abor marketshas demonstratedthe career benefitsensuing from them-and the distributionof these benefitsacrosssubgroups n the laborforce-in general t hasnot resolvedthetheoreti-cal debatesaboutwhere andwhy promotionhierarchies ndlong-termemploy-

ment contractsdevelop. Researchershave documented he impactof internallabormarkets n two differentways. First, lackingdataon personnelpractices,many researchershave attempted o inferhow internal abormarketsoperatefromdataon individualcareerpaths.Forexample,attainment esearchershaveattributed acialand sexual differences in the effects thatschooling and firstjobs have on career outcomes to the exclusion of women andminoritiesfrominternal abormarkets e.g. Featherman& Hauser1978, Rumberger& Carnoy1980, Sewell et al 1980; cf Rosenfeld 1980, Felmlee 1981).3 Although

2Some allege that craft unions, such as the longshoremen,have traditionallyopposed these

arrangements,since workers resist any employer practice that subdivides jobs, dilutes unioncontrol over work assignments, or restrictspossibilities for changing employers (Finlay 1983).

3Sewell et al also found that social origins have a much stronger impact on occupational

attainmentsamong menthanamong women, buttheydid not maketheorganizational onnectionthere-that is, that class background s important n determiningwhethermen will advance uporganizationalhierarchies.







ORGANIZATIONS& STRATIFICATION 41

these conclusions are both plausible and provocative, they demonstrate hedifficulty of making nferencesabout nternalabormarkets romconventionalattainment tudies.4Differentialcareeroutcomes areattributedoorganization-

al arrangements hat are not examined. Even if internal labor marketsareresponsible or the observed nequalities,thisresearchdoes notilluminatehowor why this occurs.

Second, other nvestigatorshaveanalyzedcareerprocesses ntheirorganiza-tional setting directly, detailingthe criteriathatemployers use in structuringrewardsandopportunities.Unfortunately, hisresearchhas often been limitedto specific work contexts. For example, careful and illuminatingstudies ofstratificationregimes have been undertakenn virtuallyevery type of firm,

industry, and occupationimaginable(e.g. see Burawoy 1979, Kalleberg &SOrensen1979). The cases andapproaches mployedin these studies,howev-er, are so diverse as to limit their comparability.Concepts, methods, andfindings areunlikelyto be cumulativewithoutsystematiccomparativeanalysesthat identify the crucial dimensions of organizationsalong which rewardstructuresand sorting processes vary.

Fortunately, some researchunderwayis designed with this objective inmind. Variousgroups nterested n personnelpolicies, such as the ConferenceBoard, also conductregularsurveys of the employmentpracticesthat affect

opportunities ndrewards.In theremainder f thissection, I will reviewrecentstudies that relateopportunitiesand rewards o the specific attributesof orga-nizationsand their environment.

TheImpact of Size

Organizational esearchershave probablydevoted more attentionto the linkbetween organizational ize and work arrangementshanto any othertopic.5Researchershave demonstrated, or example, that wages are higherboth in

industries made up of large companies (Masters 1969) and in the largercompanieswithin any given industry (Lester 1967; but see Gordon& Thal-Larsen1969:Chap.10). However, Granovetter1984) arguesthat these rela-tionships only characterizemanufacturingndustries,whichconstituteaneversmaller share of the economy. Even the income of small business ownersincreases with employment size (Aldrich & Weiss 1981). The effects ofschooling on income and status increasemonotonicallywith the size of theemployee's work locationfor white, male, nonagriculturalworkers(Stolzen-berg 1978) 6 Thisfinding mayreflecttheoperationof internal abormarkets n

4Some studentsof attainmenthave also underscored he dangerof inferringcareerprocessesfromcross-sectionalretrospectivedata(e.g. Spilerman1977, Spenneret al 1982, Sorensen1983).

5Indeed, S6rensen (1983) argues that in recent research most of the aspects of industrial

structure hat are linked to earningsactuallymeasure economic "bigness."6Thispatternapparently oes not holdforfemale workers Kalleberg t al 1981, Bielby & Baron

1983).







42 BARON

largeorganizations,which use education o screenemployees forpromotions;schooling may also be (or may be thoughtto be) more relevantto job taskswithin largerorganizations.7

There is no straightforward, ubstantive interpretation,however, of theeffects of size (Kimberly1976).8Perspectivesas diverse as neoclassicaleco-nomics and neo-Marxism can explain the impact of organizationalsize onopportunitiesand rewards.Largebureaucraciesmay pay and promotemorebecause scale economies increase workerproductivity,to which wages aretied, andbecause the structure f demandallowshigherwagestobe absorbed nproductpricing(see PhelpsBrown1977:225-26). PhelpsBrownalso attributesthe higher wages and opportunities n large firms to their urbanlocations,

where greater rewards are necessary to offset competitors' offers and tocompensateworkersfor longerjourneysto work. Alternatively,neo-Marxistsargue hat argeorganizationsaremorevulnerable o workerunrestandrewardsarehigherto reduce the chancesof labor-managementonflict. Simon (1957)andLydall(1959) havesuggestedthateconomic rewardsdenoteorganizationalauthority nd status-i.e. wagedifferentialsacrosspositionsreflectdifferencesin organizationalstanding. Since large organizationshave more layers ofstructure,one mightexpectanassociationbetween scale andaveragewages on

these groundsas well.In otherwords, proponentsof competingapproachesassumethatsize is aproxy for very differentorganizationalattributes.Consequently,it is worth-while to examine covariates of size that might account for organizationaldifferences n opportunities ndrewards,particularlyince size is probably hedimensionof organizationmoststronglyrelated o allothers(R. H. Hall 1982).The remainderof this section will review researchon other organizationalcharacteristics hat may explain variation n labormarketoutcomes.

TheImpactof GrowthManystudiesinterpret ross-sectionalsize differencesas areflectionof organi-zationaldevelopment.A few researchers,however, have examinedrelationsbetween organizational hange and stratificationdirectly. Rosenbaum 1979)studiedpromotionsamongwhite men between 1962and 1972in aFortune500corporationand found thatcorporategrowthincreasespromotionrates. New

7Theemploymentadvantagesof working nlargeorganizations ranscend imeandplace. Large

companies were the first to implement "welfarework" in the early 1900s (Eilbert 1959), andGitelman 1966) documents he careerbenefitsof an internal abormarket n themid 1800s. Wageandmobilitydifferences acrossorganizationsof varying size arepervasivenotonly in the United

States, but in other countriesas well (Phelps Brown 1977:275; Gallie 1978;Cole 1979).

80perationalizing this variable s not straightforwardither. Mostresearchersmeasuresize byestablishment mployment,but otherlevels of analysisanddimensionsof scale maybe relevant othe relationshipbetween size and stratification.








opportunitiescreatedby growth "spillover"to groupsthatareotherwise lesslikely to advance-e.g. older, educated and younger, less-educated men.Bielby & Baron(1983) distinguishedthe effects of establishmentgrowthon

employee tenureand promotionsfrom the impactof organizational ize andlocationaldifferentiationwith whichgrowth s associated.Controlling orsize,which increasestenureandpromotionchances, theyfound thatorganizational

growth between 1962 and 1967 improvedchances for internalpromotions,

particularly mongwomen. This result is consistentwithRosenbaum'sasser-

tion that opportunitiesassociated with growth extend to workers who are

otherwise ess likely to be promoted alsosee J. Pfeffer& J. Ross, unpublished

work).

While growth improves promotionchances, it does not necessarily implyequalization across organizationallevels; rather it can exacerbateexistingdifferencesin promotionprobabilities Stewman& Konda 1983). Moreover,growth has diminishing effects on opportunity.9Rosenbaum'sstudy does not

includeany years of organizationalcontraction only diminishedgrowth), so

one can only speculate about the applicabilityof his results to economic

downturns.Yet, if growthbenefits those workerswhose careersare otherwise

stalled, presumably hey arealso the ones who aremostaffectedby economic

contraction. Seniority and "bumping"arrangements, or example, dispro-portionatelyharm women and minorities(Parker 1981, Schervish 1983).In short, while growth undeniablycreatesopportunities, t is unclear who

benefitsmostfrom them. Jobgrowthhas beengreatestwithinsmall, new firms

in so-called high technologyindustries,as well as in the service sector(Birch

1981). The latterhas traditionallyprovidedfewer career opportunitiesand

benefitsthan the highly skilled, privilegedjobs in high technology industries

thataretypicallymonopolizedby white men. As a result,growth may simplyexacerbate nequalities.Ontheotherhand,otherresearchon equal opportunityprograms ndicatesthatgrowth has generallyreduced barriers or disadvan-

taged workers, particularlyn female-intensive ndustries Shaeffer& Lynton

1979, O'Farrell& Harlan1984).

TheImpactof Demography

Individuals'careers arenot independent,as they are assumed to be in attain-mentresearch,butareinextricably ied to the fateof organizational uperiors,

subordinates,andpeers.The size of one's organizational ohortandits relation

to other cohorts significantlyaffectscareeroutcomes(Pfeffer 1983); membersof small cohorts, for example, experienceenhancedmobility prospects(Reed

9That s, eachadditional ncrement f growth ncreasespromotion hancesby thesame absolute

amount. Therefore, the proportionatencreases in mobility chances attributable o each unit of

growth become smaller (see Stewman & Konda 1983:653-55).







44 BARON

1978, Stewman& Konda 1983). In the absenceof sustainedeconomic growth,opportunity s a zero-sumgame, as the baby-boom generationhas realized alltoo painfully. Growth also affects promotionopportunitiesby shapingorgani-

zational tenuredistributions Pfeffer 1983:311-13). It reduces average senior-ity by expanding he entry-level componentand by prompting urnoveramongcompeting firms whose personnel are "raided" rom each other. At the sametime, it smoothes the tenure distribution,thus creating a graded promotional

ladderthat induces youngerworkers to stay with the firm. Bielby & Baron's(1983) results were consistent with this hypothesis: after controlling for rel-

evant individual and organizationalvariables, they found that employees ofgrowing enterpriseshad worked there less time.

An organization's enuredistribution ffectsits sortingprocesses and oppor-tunity structure; igh-tenureorganizations ely more on seniority n rewardingworkers (Halaby 1978, Pfeffer 1983). Organizations taffed by "oldcomers"also utilize less extensive, decentralizedcontrol mechanisms, since experi-enced workers have internalized the organization's goals and learned therelevant proceduresand expectations (J. Pfeffer, J. Ross, M. W. Meyer,unpublishedpaper). Higherturnoveralsoresultsfrom both theintergeneration-al conflicts and the lack of communication hatoccurwhen thereis a discon-

tinuous tenure distributionand/orweak cohort bonds (McCainet al 1983;M.G. Wagner, J. Pfeffer & C. A. O'Reilly, unpublishedwork).Gendercomposition s anotherdimensionof organizational emography hat

helps determineopportunity.The relationshipbetween minoritygroupsize and

inequalityhas been studied at the communitylevel (e.g. Frisbie & Neidert

1977), butrarelywithinorganizations.Kanter 1977) hasargued hatwomen's

organizationaldisadvantagereflectsthe powerlessness implicitin skewed sexratios,andSpangleret al (1978) havedocumented he barriershatwomen facewhenthey are a minority n law schools. Sex ratios also affect and are affectedby organizational hangesin technical andadministrative rrangements.Lon-gitudinal analyses by Baron (1982:Chap. 7) indicate that organizational

changes widen the distance between men and women with respect to skills,

training,and opportunity,and thatorganizational ex ratios aretilted towardmen when skills arebeing upgradedor advancementopportunities reexpand-ing. Dubnoff(1978a)hasreported imilarresultsforthe Americanoccupation-al structureas a whole since 1940. Future research should examine otherdemographicdeterminantsof stratification.

TheImpact of Technology

The effect of technologyon workandopportunitys one of the mostcontested

issues in social theory. Case studies and aggregate analyses have examined

changesin technical skills (Warner& Low 1947, Bright 1958, Blauner1964,Horowitz&Herrnstadt 966, Scoville 1969, Braverman1974, Blauet al 1976,








Dubnoff 1978b, Spenner 1979, Rumberger 1981) and tried to determinewhether societal evolution increases work demands, resultingin more chal-lenging and rewardingwork, or has the opposite effect, leading to workers'

immiserationand restricting heir careerdevelopment.These studies sustainvirtually any predictionabout the impactof changes in skills, by no meansresolving the controversy.Giventhediversityof unitsstudied-e.g. workers,

jobs, occupations, firms, and industries-methods employed, and skill mea-sures utilized, the lack of consensus is not surprising see Spenner 1983).

Organizationalheoristsand researchershave also documented he effects oftechnologyon careerstructures.Blauner 1964) positedthatautomation aisesthe average evel of workerskill and increases hevariancewithinfirms, giving

rise to skill-basedcareer inesthatreflect ob idiosyncracies also see Doeringer& Piore 1971). Thompson (1967) hypothesizedthat there is a relationshipbetween technology and mobility, which Vardi& Hammer(1977) verified.Long-linked echnologies (e.g. assembly lines) generatemore lateralmobilitybecause workers are interchangeable.In contrast, mediating and intensivetechnologies (e.g. client-orientedbanksand research abs, respectively)fostermore upwardmobility, but the type differs. By favoring bureaucratic pe-cialization,mediating echnologies intensifytherolethatcredentialsandspon-

sorship (in addition o merit)play in shapingorganizational areers.Intensivetechnologiesarecomplexandnonroutine.Workersarereciprocally nterdepen-dent and specializedprofessional knowledge is crucial; consequently,career

paths often transcend pecific organizations.Both tasks andworkersare more

homogeneous in long-linked settings; thus, objective criterialike senioritygovern mobility.Incontrast,workers personalattributesxertagreater mpacton career attainmentswhen intensive technologies are involved (Vardi &Hammer1977, Vardi 1980).

Jacobs (1981) conceptualizedthe link betweentechnologyand mobility insimilarterms, focusing on problemsof organizational ontrol. He suggestedthat career opportunitiesreflect the relationshipbetween individualperfor-mance and organizationalsuccess. Mediatingtechnologies, found in manyservice organizations,attenuate he impactof a specific worker'soutputonorganizationalperformance, herebyreducing ncentivesfor rapidor frequentpromotions.Furthermore,whenskills arediverse andspecializedandworkersare highly interdependent,organizational eaders cannot easily distinguishamong individuals'output (Ouchi & Maguire 1975, Ouchi 1977). Poor indi-

vidual performance an significantly hamperorganizational uccess, so inter-nalmobility may be usedto bindemployees' interests othe firm's. At the sametime, interdependence ntensifiespressurestoward collective bargainingandnonmeritocraticpersonnel decisions, since positive individual contributionsare difficult to detect.

While administrative cientistshave studiedtheconnectionsamong organi-







46 BARON

zationaltechnology, structure,and control in detail, stratification esearchersknow relativelylittle aboutthe socioeconomic returns o specific job tasks andskills. Some researchershave shown thatjob content differs significantly by

race and sex andthat minoritiesreap fewer dividendsfrom specific skills andexperience(e.g. Thurow& Lucas1972;Lucas1974; Brown1975; McLaughlin1978a,b; Rosenfeld 1980; Baron & Bielby 1982;Spenneret al 1982). Howev-

er, researchersoften operationalizeskills andjob demands n terms of educa-tion, experience, occupation, and similar variables that not only are weaklyrelated to actual abilities and job content, but may actually measure quitedifferent characteristics rom one particularsubgroupof the labor force toanother.A fair assessmentof humancapitaltheoryand of the functional heory

of stratification equiresmore precisionin measuring he productiveworth ofworkers, tasks, andjobs and its impact on careeroutcomes (Bielby & Baron1983).

The Impact of Unionization

The presence of unions and collective bargaining arrangements s anotherimportantorganizational attributeaffecting opportunitiesand rewards. Be-cause the incidence of unionismcovaries with the otherorganizationaldimen-

sions discussed above-particularly size and technology-its independenteffects on stratificationare difficult to disentangle.10This problemis exacer-bated by the fact that most analyses of unions' influence on earnings andinequalityareundertaken teitherthe individualoraggregate i.e. industrialorareal)level of analysis. Unfortunately, n many cases evidence about unions'effects on careeroutcomesatthe individual evel does not concurwithresearchat the industrial evel, illustrating he confusion encountered n moving be-tweendisparateevels of analysis.1 Unionizationexemplifieshow "structural"constraintson wages andopportunity reinadequately epresentedateithertheindividual or industrial evels. Like firms, unionsdiffer in size, growth rate,demography,history,andthe like, and the meaningandoutcomeof collectivebargainingdepend largely on the organizationalcontext.

Freeman & Medoff (1979) summarized wo competingviews of the rela-tionshipbetweenunionism andinequality.Accordingto the "monopolypow-er"perspective, unions push wages higherthanproductivitywarrants,at the

"0Masters1969), for instance, attributed bout 30% of the tendencyfor big firms to pay higher

wages to greaterunionizationamong those enterprises."Kalleberget al (1981), for example, reported hat ndividualmen are more likely to belong to

unions when theywork in labor-intensivendustries,whereasWallace& Kalleberg 1981) found a

strong positive relationship between unionization and capital intensity at the industrial level.

Similarly, there is a much stronger relationship between work force composition (race, sex,

education, andthe like) and industrialattributes e.g. unionization,market tructure,and average

firm size) than is observed among the same variables at the individual level.







ORGANIZATIONS STRATIFICATION 47

same timewideningdisparitiesbetweenadvantaged nddisadvantaged roups.Incontrast, he "collectivevoice"perspectiveregardsunionwage premiumsasreasonable reimbursements or the savings unions generate in terms of im-

provedgovernanceandsocialcontrol.Moreover,unions areviewed asequaliz-ing agents, narrowingtraditional acial and sexual disparities n rewardsandjob assignments.

These views are overly stylized, since unions have had both effects indifferent contexts. Takingan organizationalapproach o unions, Ashenfelter(1972) has arguedthat the impact of unionism on racial income inequalitydependson whether black workers are available within the union's environ-ment who can substitutefor advantagedworkers.Industrialunions have nar-

rowed black-white income differentials, since a minoritywork force eitheralreadyexists or is easily mobilizedin the organizational ettingswheretheseunions thrive. Craft unions, in contrast, have seldom embraced minoritymembers Aronowitz1973), thusincreasinggroup ncomedifferences.12 Thisdifferencemay also explain why blacks(especially males) receive greaterneteconomic benefitsfrom unionmembership hanwhitesdo (Beck 1980, Pfeffer& Ross 1981a). Unlike white workers,who dominatefavored nonunionizedjobs and industries,blacks areconcentratedn work settingswhere unioniza-

tion is often the only basis of job securityand of obtaining higher wages.Similarreasoningmightbe appliedto therelationshipbetweenunionizationand sexual inequality. Among women, however, the division between goodand bad jobs does not overlap as much with the presence or absence ofcollective bargainingarrangements.Teachingand nursing-two of the mostlucrativeoccupationsfor women-are highly unionized, as are some lower-status inesof worksuch ascertainservicejobs inretailtrade,communications,and public administration.Career advancementamong unionized womenseems to dependless on firm-specifichumancapitalthanit does amongmen,particularly lacks(Pfeffer& Ross 1981a,b). Whereasmen benefit most frompossessing generalhumancapitaland adesirablesocialbackground utside theunionsector,theoppositeis trueamongwomen. Thisfactsuggeststhatwomenare more likely to belong to unions in labormarketsthat span organizations(wherebackgroundand schooling would be applied to hiring decisions whenwomen switched employers), ratherthan in labor marketswhere unions tiesuccess to firm-specificservice. On the otherhand, women generallyenjoyhigherprestigeandreceive greaterreturns or theirexperience andtraining n

nonunionjobs (Pfeffer & Ross 1981b). Like their white male counterparts,

'2Public ector unions have also mademoreprogress owardequality,perhapsbecausethe costsof transforming iscriminatory ersonnelpractices nto anondiscriminatoryystemcanmoreeasilyandinvisibly be passed through o consumers(i.e. taxpayers) n that sector. Lawsuitsregarding

comparableworth, for instance, have almost invariablybeen aimed at public sector employers.







48 BARON

nonunionwomenmay have alternateroutes to success throughorganizationaladvancementavailable to them, albeit with less pay and prestige than menreceive.

Unions emphasizeseniority-based ewards,andcollective bargainingoftenarisesin worksettings where it is difficult to discern the effects of individualperformance Jacobs 1981), thus weakening the relationshipbetween workercharacteristicsndrewards Pfeffer1983). Consequently,attainmentmodelsinwhich the effects of personaland organizational haracteristics re notcontin-gentonunionmembership andvice versa)areprobablymisspecified.Moreov-er, unionstend to be consideredonly as individualor industrialattributes.Inorderto understand he interplaybetween unions, firms, and stratification,

however, scholarsneed to studyunionsas organizations,examininghow theirinternal makeup and their surroundingenvironment affect the relationshipbetweencollective bargainingand inequality.

Adoptinganorganizational erspectiveon unionsalsounderscores heirrolein linkingpersonnelpracticesand rewardsystems acrossfirms. The effects ofunionbargains ncertainoccupations,firms,and ndustries"spillover" o otherworkers, although there is considerable debate about the nature of wageinterdependencyFlanagan 1976, Mehra 1976, Mitchell 1980, Lawler 1981).

Interorganizational omparisons of rewards and working conditions are astandardpart of labor-managementnegotiations. Unions are thus central in

defining organizationalnetworksand environments hat, in turn, shapestrati-ficationoutcomes.

TheImpact of OrganizationalEnvironments

In recent researchon economic and labor marketdualism, attentionhas beenfocused (wittinglyor unwittingly)on how organizational nvironmentsaffectwages andmobility. Institutionalists nd Marxistssuggestthatfirms'relationsto theirproductmarketsand their control over industrialandpoliticalenviron-ments influence how work is organized and rewards distributed(Galbraith1967, Averitt 1968, Bluestone 1970, O'Connor 1973, Friedman1977, Ed-wards1979, Berger& Piore 1981, Gordonet al 1982). Whilethe combinationof factors stresseddepends on the investigator'stheoreticalperspective, the

expectation hatgoodjobs areconcentratedn "core"ormonopolisticfirmsandindustries s explainedby some combinationof the following attributes:ech-

nical mix; level of union and management nterestin employment stability;

ability to absorb higher labor costs due to market structure and demandschedules;growth, concentration,andchange in organizational orms;differ-ences in the quantityand quality of managerialactivity;and economic andpolitical relationships with the state and foreign markets. Accordingly, re-searchershave operationalizedeconomic sectorsin termsof industrialdiffer-ences along these dimensions, examining in turn, whether workers' sectoral








locations affect theircareers(see Hodson& Kaufman1982). Some analystshave also developedtypologiesof good (primary) ndbad(secondary)occupa-

tions, demonstratinghatopportunities nd rewardsdiffer between these labor

markets(for a review, see Kalleberg& Sorenson 1979).Despite its initialpromise,this approach o inequalityhas neithergenerated

sustainedinquirynor producedcumulativefindings. Many hypothesesabout

how economicstructure onstrains areersareorganizational,butinvestigators

have implicitlyequatedenvironmentswith industrialphenomena.Yet those

industryattributes hat are used to demarcatesegmentsdo not cohere neatly

(Kaufmanet al 1981, Wallace& Kalleberg 1981), and the effects of industrial

structure n attainment ependvery muchon thevariablesandtypologiesused

to representworkers' sectoral locations (Kalleberg et al 1981, Zucker &Rosenstein 1981). Furthermore,ndustrial ector schemesfail to capturemany

hypothesizeddifferencesinorganizational rrangementsndcareeroutcomes.

For example, Cohen & Pfeffer (1984) found that distinctionsamong broad

industrialsectors did not capture much of the variation in organizational

personnel practices that is predictedby dualists. Similarly, Jacobs (1983)

reported hat careermovement s not demarcatedby industrial ectors andthat

sectoralboundariesdo notdisproportionatelympedemobility amongminority

workers.Ratherthan focusing on coarse dimensions and typologies of industrial

environments,stratification esearchers houldspecify relevantorganizational

subenvironments ndexaminetheirimpacton workarrangements ndreward

structures.No doubt the most conspicuous environmentaldeterminant of

opportunitys the locationaldistribution f firms. Becausegeographydelimits

productand labormarkets,as well as areal customsaffecting employer prac-

tices, competingfirms in a locale often developsimilarpersonnelpolicies and

reward ystems(Dunlop 1957). Accordingly,wagedetermination ndmobility

processesdiffer markedlyacross areas(Gordon& Thal-Larsen1969, Rees &

Schultz 1970).Verydifferent heoreticalexplanationsof therelationship etween spaceand

stratification ave been advanced.Arealdifferences nwagesandopportunities

may reflect residentialsegregation,productivitydifferences, and the relative

size of minoritypopulations Parcel1979). Since information lows arespatial-

ly constrained,contactnetworksamong employersandemployeesalso diffuse

informationabout personnelpractices, ob opportunities,andwages withinan

area Rees 1966, Granovetter1974). Pred(1977) linkedregional nequalities ocorporate nformationalnetworksand locational decisions. Since the value of

informationdiminisheswith the distancetravelled,employers develop local

networks and business activities agglomeratespatially.Thus, informal busi-

ness networksoffset the effects of improvedcommunication ndtransportation

infrastructure,which otherwise might reduceregionaleconomic disparities.







50 BARON

Marxistshave suggested that this process is not benign; rather, the spatialdivision of labor is partof capital's strategyof segmenting the working class(and the rewardsreceived) in order to minimize its collective power (Clark

1981, Storper& Walker 1983).Other nvestigatorsattributeareal affects to culture.Comparative rganiza-

tional analyses show how culturalpractices nfluenceworkarrangements ndreward tructuresFreedman1969,Gallie 1978). Aftercontrolling orregionaldifferences in tenure, professionalization,and civil servicecoverage, Halaby(1978) foundthatSoutherngovernment inancebureaus mphasizedsuperiors'evaluations(versusformalexaminationsandseniority) n promotiondecisionsmore than bureaus located elsewhere did; he interpretedhese differences as

legacies of culturaldifferences in the bureaus'environments.Analyzingwage determination mongfederalgovernmentagencies, Borjas

(1980) developed anotherperspectiveon the spatialbases of inequality. Hetreated he spatialconcentrationof each agency's constituencyas an indicatorof theconstituency's political organization. 3He also measured he numberofconstituents as the population n states where an agency's expenditureswererecorded,andhe used personnelhomogeneitywith regard o education, age,and tenureas an indexof thedegreeof bureaucratic owerin agencies. Borjas

concludedthat"employeesin agencieswith small andwell-organizedconstit-uencies, and with [homogeneous]bureaucracies hatapparentlyharecommoninterests, generallyreceive higher wages" (1980: 1142).

Clarifyingthe spatialand environmentalbases of inequalityrequires den-

tifying majortheoreticalapproaches hatmightbe used in studyingthe effectsof organizationalenvironmentson stratification. In the remainderof this

section, I will review two currentapproachesto the study of organization-environmentrelations-population ecology and resourcedependence-sug-gesting how they might inform studies of labor marketoutcomes.

Proponentsof the populationecology model view organizationalarrange-ments as the resultof a selectionprocessin which survivaldependson fitnessvis-a-vis the environment Aldrich& Pfeffer 1976;Carroll1984). Organiza-tions evolve forms, i.e. combinationsof goals, structures, echnologies, and

boundaries,that are appropriate iven their resourceenvironments(Aldrich1979). This formulation s quite similar to some portraitsof economic seg-mentation. Like organization analysts who study environment-structureits

(e.g. Ashby 1968, Hannan& Freeman1977), segmentation heoristspositthat

organizationalforms and environmentscohere: large, "core"bureaucracies

'31t is not coincidentalthatthe effect of the politicalenvironmenton wage determinationhas

been studied principallywithin the public sector, where its influence is most conspicuous. Yet

public sectorwages dependon settlementsreached n monopoly ndustrieswherewages alsoreflect

political "clout" (O'Connor 1973: 30-32).








dominate complex, central, interdependent environments, while small,"periphery"nterprisesaboundin marginal, competitiveindustries.The twoideal types, in turn, arehypothesizedto differ in theiremploymentpractices.

Population cologists, however,wouldtakeissuewiththisdichotomybetweencore andperipheryorganizations,emphasizing hediversityof formsthatexistas a resultof variedorganizational nvironmentsMcKelvey& Aldrich1983).

Wholey (1983) used a populationecology model to study mobility in thelegal profession. He examinedpersonnelflows among law firms in order toisolatepopulationsof firmsthatoccupy a sharedresourceniche, namely, theyrecruit from the same labor pool and have similar personnel policies. Ifgeneralizable,his approachmight be employedto specify the organizational

ecology of opportunityby identifyingnetworks of firms having comparablestratification ystems.

Populationecologists suggest thatorganizationalarrangements remoldedby the environmentthat exists when an organizationis founded. Althoughorganizationsadaptto changes in theenvironment, heiractivities also tend tobecome institutionalized ver time because too muchrapidchange in specificorganizationalpracticeswould threaten helong-termviabilityof theorganiza-tion as a whole. Stinchcombe(1965; see also 1979) describedhow the condi-

tions thatprevailedwhen industrieswere foundedaffect theirwork arrange-ments and reward systems. His findings were substantiatedby Meyer &Brown's (1977) analysis of "origineffects" on personnel practices amonggovernmentalfinance agencies. As both Stinchcombeand Starbuck(1965)predicted,organizationsfounded recently resemble the Weberianmodel ofbureaucracieshe most. The financeagenciesalso developedmoreformalizedand bureaucratic ersonnelproceduresas they aged. Maniha(1975) reportedsimilar resultsin a studyof the St. Louis Police Department ince 1869;meritandseniorityincreasinglydominatedpromotiondecisions as the organizationaged andbecame more bureaucratic.

Ecologicalanalysesof stratification husdrawattention otheenvironmentalcircumstancesavoringthe selection andinstitutionalization f particularypesof employmentrelationsand rewardsystems. The ecological approachpaysless attention to the specific actors and mechanismsthat perpetuateor alterorganizationalforms, however, and focuses insteadon how changes in theresourceenvironmentaffectthedistribution f practicesacrossenterprises.Theresourcedependence approach,in contrast, examines how individual firms

define, adaptto, andtransform heirenvironments Pfeffer& Salancik1978).More thanthe populationecology model, this perspective nspireshypothesesabouthow theorganizational tandingof specific membersshouldbe affectedbychangesin the environment.Forinstance,businesses'politicalenvironmenthas become increasingly important n determining personnel practices andreward ystems, as forcesoutside the firm(e.g. governmentagencies and civil







52 BARON

rights groups) have intervened n the employmentrelationship.Accordingly,

job opportunities or disadvantagedworkershave improvedsubstantially n

those firms and industriesthat depend on government supportand/or are

subjected o the mostextensiveregulatorypressure Salancik 1979, Shaeffer&

Lynton 1979, Beller 1982, O'Farrell& Harlan1982). 4

Resource dependence theory implies that an individual's organizational

standing reflects his or her ability to buffer the impactof key uncertainties

outside (or inside) the organization.For example, executives tend to havebackgroundsin the function that is most crucial in linking the firm to its

environment: esearchanddevelopment ncraftsettings;productionandopera-tions management n mass production;andmarketingand sales in continuous

processing (Woodward1965). Consequently,changesin thecrucialdilemmasconfrontingorganizationsalter the distributionof rewardsand opportunities,

favoringthose individualsand subunits hatcancontrolkey areasof uncertain-

ty. For instance, the changing regulatoryclimate has heightenedbusinesses'

dependence on specialized personnel managementto avoid discriminationlawsuits (O'Reilly & Anderson1982). The enhancedorganizational tanding

of human resourcemanagement llustratesthe potential applicabilityof re-

sourcedependencetheoryto stratification esearch,which to my knowledge,

has not been pursued. 5The resourcedependenceperspectivealsoprovidesa framework orexplicit-

ly modeling the interorganizational ependenceof personnel practices that

some dualist theoristsemphasize.Justas firms have "key jobs," to which the

wages of otherjobs arepegged (Dunlop 1957), industrieshave key firms and

unionswhose policiesaffectpersonnelpracticesandemploymentopportunitieselsewhere(Averitt1968). Becausedependencycreatesuncertainties, irmstryto manage interdependencies hroughformal and/or informalcoordination.

When such coordination s successful, personnelpractices, wage schedules,

and mobility regimesarelikely to diffuse acrossorganizations.Aiken & Hage

(1968) have found thatorganizationswith similarstructures re morelikely to

engage in formalized nterorganizationalelations.The reverseseems equallylikely, however, i.e. linkagesenhance"social comparison,"as when unions

"'The evidence is far from conclusive, however; see, for example, Smith & Welch (1977),

Burstein(1982), and the literature hey cite.

'5The resource dependenceview resemblesthe functionaltheoryof stratification,which has

been examined empirically (e.g. Cullen & Novick 1979). However, the lattertheory and theresearch estingit refer o thefunctional mportance f tasks to societyas a whole. Key requisitesof

societies areassumed o be relatively nvariant,accounting orthe observedstability noccupation-

al prestige ratings across time and place. Functional requisites may not be so inert within

organizations,and researchon executive compensationshows no link between managerialcon-

tributions if these are indeed measurable)andorganizational ewards Broom& Cushing 1977,

Allen 1981).








and managementconduct marketwage surveys, and thusorganizational nter-dependence should encourage shared practices for managing all types ofresources see DiMaggio & Powell 1983). Personnelmovement,forexample,

is one kind of interorganizationalxchange that s bothcause andconsequenceof organizationalsimilarity (Baty et al 1971, Pfeffer & Leblebici 1973).

Thereis little evidence abouthow (or whether) nterorganizationalelationsaffect personnel practicesand rewardsystems. The proliferation f personnel

management associations, human-resourceconsulting firms, government

agencies, watchdog groups monitoringemployment practices, industrialandregional employer associations, unions andotheremployee associations, andbusinessschools has helpeddiffuseemploymentpracticesacrossfirms, indus-

tries, and locales. Personnelpolicies should disseminate most among largefirms and within monopolistic industries, where organizationscan manage

their dependencies (cf. Starbuck 1976; see National IndustrialConferenceBoard1940andGordon& Thal-Larsen1969on firms' useof communitywage

surveys).

Summary

The recent nterest n internal abormarketshas focusedattentionon organiza-

tional determinants f stratification. have argued hatcomparativeorganiza-tional research s appropriateor resolvingtheoreticalcontroversiesabout the

originsandconsequencesof careerhierarchies.Accordingly,this section has

reviewed the impact of specific organizationaldimensions-size, growth,demography, echnology, and unionization-on the distribution f opportuni-tiesandrewards.Researchon economic dualism mplicitlyconcernstheeffects

that organizationalenvironmentshave on personnel practices and reward

systems. It is difficult to interpret pecific environmental, ectoral,orindustrialeffectson labormarketoutcomeswithoutarticulating nexplicit perspectiveon

organization-environmentelationsfirst, as the diverseexplanationsof spatialvariation n earningsdemonstrate. discussed two reigning approaches o the

study of organizationalenvironments-population ecology and resourcede-

pendence-and theirapplicability o labormarketanalysis.This sectionhas concentrated n aspectsof organizationsandtheir environ-

mentsthathaveanimpacton the structure f "empty lots" intheeconomy. Bydeterminingthe distributionof positions and the rewardsattachedto them,organizationsexertan effect on labor marketoutcomes that is independentof

the characteristics f workers.Moreover,organizationsalsoshapeattainmentsby virtueof how they matchspecific workersand slots, the topic of the next

section of this review. The division betweenthese two sections is admittedly

imprecise,since manyof the factorsthatdeterminean organization's evel of

opportunitiesand rewardsalso affect the criteriaby which workersaresorted

into jobs.







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ORGANIZATIONALVARIATIONIN SORTINGPROCESSES

Models of EmployerDecision-MakingConventional economic theorists discuss sorting processes in terms of an

equilibriumbetween labor supply and demand. Workerspossess vocational

aspirations,which are treatedas exogenous, and invest in humancapitalso as

to maximize theirutilityandearnings, subject o variousconstraints includinginnateability). (See D. T. Hall 1976, Schein 1978, and London& Stumpf 1982

for reviewsof thepsychological iterature n vocationalchoice.) A firm'slabor

needs are determined by its technology (capital-labor ratios) and product

demand.Thepricemechanism s assumed o clear themarket,andthequestionof which workersarematched o whichjobs does not appear o be problematicto neoclassical microeconomists.

The proponentsof variouseconomic and organizationalmodels reject the

underlyingassumptions hatboththeworkerandthe firm haveperfect nforma-

tion andpursuea maximizingstrategy ntheirpersonneldecisions. Theydo not

necessarilyembrace the neo-Marxian dea thata "control mperative" hapes

employmentrelations, however. Indeed, currenteconomic models of labor

marketsroutinelyacknowledgethe limits of employerand worker nformation(Lippman& McCall 1976). March& March(1977, 1978) have shown how

these limits affect organizationalcareers.They posit thatemployerspossess

imperfect nformationaboutemployee performance ndthat heprocessmatch-

ing indistinguishablendividuals o indistinguishableobs is stochastic(also see

Romanow 1983);similarprocessesarepresumablyat workinrecruitment lso.

Variability n employers'procedures or samplingworkerbehaviorproducesdifferentialpromotionrates. In fact, "sampling phenomenaassociated with

performanceevaluation can become significantenough to mask variations nthe underlyingattributesof individuals,even in cases in which those under-

lying attributesare known to affect job performance" (March & March

1978:448). Their model implies that the longer workers remain with the

organization, he moreaccuratelyemployerscanassess theemployee's under-lying capabilities, since the sampling variabilityof any proportion here, the

candidate's "success ratio") diminishes as the number of trials increases.

Organizations hus face greatestuncertaintyn evaluating employee potential

early in their careers.

Diverse accounts have been offered as to how employers cope with thisdilemma. Some theorists propose models of "statisticaldiscrimination" n

which employers possess less accurate ndices of potentialfor one groupof

workers hanforthe others.Inferiorknowledgeabout tsmembersand thecostsof remedyingthat ignorancemilitateagainsthiringor promotingindividuals








fromthedisadvantagedgroup,even if they exhibitstellarqualitiesthatcontra-dictpast experience(Aigner & Cain1977, Lundberg& Startz1983). Econom-ists and sociologists have proposed formal models and provided empiricalevidence about educational credentials as one organizationalsignal of em-ployee potential underimperfectinformation e.g. Berg 1971, Spence 1974,Wilensky & Lawrence 1980, Faia 1981). Marxists(Bowles & Gintis 1976,Edwards1976) arguethatemployers are motivated by a need to control thework force and use schoolingto determinewhetherworkers' values andtraitsareappropriateortheorganizational ontrolsysteminplace. Marxistssuggestthatthe form and content of schoolingmirrors he modem workplaceandthateducationalstratificationprovides a basis for differentiatingworkers. High

schoolgraduates, orinstance,are likelierto follow therigidbureaucraticulesusedto controlworkers n thejobs to whichthosestudentsare destined.Highereducation, in contrast, promotesthe internalizationof norms and values re-quiredfor higherstatus"primary"obs. Collins (1979) has also discussedtheuse of educationalcredentialsas a means of organizationalcontrol;withoutassuming the existence of underlyingclass antagonisms,he claims that anindividual'sschooling signifiesto competingorganizational oalitionswhetherone is a likely ally.

Schoolingis only one of manysignalsemployersuse to cope withevaluativeuncertainty.Kanter(1977) has arguedthatmanagersengage in "homosocialreproduction"ecausesimilaritieswithrespect o sex, race, socialbackground,andfamily status indicatewhether someone can be trustedandwhethercom-municationwith him or her will be easy (also see Dalton 1951, Coates &Pellegrin 1957, Pfeffer & Ross 1982). Pfeffer (1977) found that class back-groundaffectedmanagers' ncomes more when evaluationwas difficult, as instaffpositionsand smallerfirmswithless comprehensivenformation ystems,and in industrieswhere personalcontact is likely to be

important.Stinchcombe(1965) relatedthis homosocialreproductiono organizationallife cycles. Lackingestablishedproceduresand stable contactnetworks, neworganizations ely on diffuse indices of competenceandloyalty, such as socialbackgroundand educational credentials. Collins (1979) has suggested thattechnologicalchangemayhave the same effect as newness, since well-definedbenchmarksof performanceare less reliable. Since normative control is ahallmarkof managerialandprofessionalpositions(R. H. Hall 1975:Chap.4),theseoccupationsandthesubunits heyconstituteareparticularlyusceptibleto

homosocialreproduction.Once in place, the practice of hiring andrecruitingsimilar ndividualsoftenbecomes institutionalized, speciallywhen organiza-tionalmemberswho monopolizea credentialorbackground rait can define itas a prerequisite or employmentor advancement.

Since employersfacegreateruncertaintyn evaluatingnew orinexperienced







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employees, they shouldrely more on backgroundcharacteristics arly in thecareer. 6 Interestingly,while Pfeffer(1977) found that educationalcredentialsaffect salarymost at the beginningof the career,the opposite is trueof socialclass background.Unless social class is a proxy for specific vocationalabili-ties, this finding implies that employment decisions do not become moreobjective over the course of an individual'scareer, even though employerspossess more reliable information. The finding that early career stardomfacilitatessubsequentachievementpoints in the same direction(Kanter 1977,Rosenbaum 1979); severalexplanationsare available.

First, the standardsused to evaluateperformancebecome moreambiguousandtaskrequirements ecomeincreasinglyvagueas one moves up a hierarchy

(Dornbusch & Scott 1975), so ascriptive characteristicsmay become moreimportantor advancement.Second, expectationsstrongly nfluencebehavior;employees designatedearlyas "stars"arelikely to behave and to be treatedassuch (Berlew & Hall 1966). Third,employers mayescalate theircommitmentto ill-fated prior choices; instead of changing behavior in light of negativefeedback,individualsandgroups"seektorationalize heirpreviousbehaviororpsychologically defend themselves against adverse consequences" (Staw1976:27). These processescould accountforhomosocialreproduction ven in

the face of accurate nformationregarding ob candidates.Employerrationality s not simply"bounded"March& Simon 1958), it is

sometimes illusory. Personnel decisions may reflect random variation, asMarch & March(1978) assert,butorganizationalmembershave considerableincentivesforbelievingthatmanagerialbehavior s purposiveandefficacious.As Salancik(1977:71)notes, "itwould not make sense to say it does notmatterwho is chosen [for a job]. It is supposedto matter; he myth is that it doesmatter.Withoutthis mythwe would not investmuchauthoritynto those whoare chosen. And thatwould make a differencefor an organization."

Evenif employersmakeperfectlyrationalpersonneldecisionsthatoptimallymatchworkers, skills, and obs, organizationalmembersbelieve thatdecisionsabouthiring,promotions,andrewardsdocontrolbehavior.Personnelpracticesandreward ystemsarea central eatureof anorganization's ultureandcontrolsystem. Thus, thediscrepancybetween"efficiency"and"control"mperativesin organizationaldecision-makingseems greater n theorythan in reality (cf.Dunlop 1957:14;Sorensen1983). One need not believe thatemployers inten-tionally organizework andopportunityo coopt dissent in order to agreethat

their actions havethoseconsequences.Moreover,variousmodels of organiza-tionalbehavior,suchas Williamson's(1975, 1981)"marketailure"approach,embraceefficiency and controlaspects of the employmentrelation.

160f course, some employers may opt for elaboratetrainingand socialization or pay higher

wages to attractqualifiedpersonnel, in lieu of extensive screening procedures(Ullman 1968).








OrganizationalCareer Stages

Personaland organizational esourcesdo nothavethe same effects on achieve-ment throughoutan individual's career. While researchersoften distinguish

between a person's firstjob and his or her current ob in studiesof socioeco-nomic attainment,as well as noting differences across age cohorts, more

attentionshouldbe paidto organizational areerdynamics.A career s distin-

guished by fairly discrete stages, each involving a differentrelationshipbe-

tween the workerandthe firm(D. T. Hall 1976:Chap. 3, G. W. Daltonet al

1977; Schein 1978: Chap. 4; Viega 1983). Previous researchindicates that

earlycareerattainmentsarelikely to reflectindividuals'success in exploiting

their ascribed and achievedattributes o pass initial "tests"(formalandinfor-

mal) and become effectively socialized. Organizational uccess is determinedlargely by one's immediatesupervisor.Duringthis stage, peer groupsarean

importantsource of formal training and informal shaping. Later, familialattachments onstrainworkers'achievements,particularly mongwomen. The

searchfor mentorsand a networkof organizational ontactsintensifies, nowthat both the worker and the organizationhave greater experience with oneanother.Family commitments,habituation,and theaging processincreasetheattractivenessof extrinsic rewardsandjob security. Organizational uccess is

now definedmorein termsspecific to one's organization,profession,commu-nity, or other restrictedreference group and may approximatea Markov

process (i.e. reflectingpriorsuccesses andtenure)morethan ntheearly stagesof the career(Halaby 1978:481;Rosenbaum1979).

Interdependenceof Workers'Career Outcomes

Kanter's(1977) discussionof homosocialreproduction hows how the criteria

appliedin hiringandpromotiondecisions dependon organizationaldemogra-phy. Social psychological theory inksinterpersonal ttractiono similarity,so

in-groupmembersshould search or obvioussignsof homogeneitywithrespectto sex, race, age, social background,and the like. The way specific attributes

are evaluateddependson the demographic it between an individual and therelevantorganizational lites. Ceterisparibus, individualcharacteristics uch

as backgroundand schooling are likely to yield greatercareerbenefits: (a)whensharedby apowerfulorganizational oalition;and(b)when anintermedi-atepercentageof organizationalmembershas thoseattributes.7 Whilebeinga"token" an havethebenefitof attracting ttention Northcraft& Martin1982),

one is unlikelyto be able to definehis orherattributes srelevant.On theother

17Careeradvancementoften occurs withinoccupationalcategories. Moreover, ncomechanges

and ob advancement,while correlated,arenotproxiesfor one another,since eitherone canchange

alone. Consequently, it is worth noting that specific criteriamight be strongly relatedto job

advancementbut bear little or no directrelationship o income or occupationalstatus attainment.







58 BARON

hand, an attributesharedby too many people does not help to discriminate

among workers.

Careeroutcomes are also interdependentbecause positions are clustered

technicallyandadministratively,andbecauseworkplacenormspromotesocialcomparison e.g. amongfemaleworkers).Wagesandopportunitieswithin and

acrossfirms are inkedto "key"rates,whichtypicallyarederivedfrom obsthat

arestable, prominent,not specific to one organizationor subunit,more desir-

able, and staffedby manyworkersrather hanby a single individual(Dunlop1957, Livernash1957, Hildebrand1963). Therefore,workers' fates depend

considerablyon the wages and mobility among employees in these key jobs,both within one's own firm and in comparableenterprises.

M. S. Granovetter unpublishedwork)hasmade these samepointsdifferent-ly, noting that orthodoxeconomic theories abstractactors from history andfrom one another.Socialrelationshipsn theworkplaceareconstrainedby pastpracticesandinterdependencies mongindividuals.A career s constrainedbyhow people have previouslyevaluatedthe workerand other relevantworkers.

Moreover,an individual'scareercannotbe predictedorunderstoodapart romhis or her relations with co-workers, collaborators, supervisors, and even

people outside the organization.Granovetter efersto these complicationsas

"historical"and "structural mbeddedness."As noted above, certainkinds of personal nterdependence e.g. with entrycohorts,peers, mentors, amily, andprofessionalcolleagues)aremoredecisiveat particular stages of the career (Granovetter 1974; Lin et al 1981a,b).

Moreover,embeddedness s more importantn some contexts than in others.

For instance, interdependence mongcareersmaybe greateramong membersof anorganizationalminority,since theirvisibilitycauses actions to be general-ized to all members of the category and the pressures of minority status

strengthensolidaritywithin the group (Kanter 1977:214). Settings requiringon-the-job rainingalso makeworkers andtheirattainments)moreinterdepen-dent, enhancingsocial comparison processes and concerns aboutworkplaceequity (Doeringer& Piore 1971, Williamson 1975, Thurow 1975). Contactnetworks are particularly mportant or careersin the professions, manage-ment, and some crafts-where extraorganizationalies are crucial-and in

organizations hatexhibit task ambiguity,normativecontrol, and intense col-laboration Granovetter1974, Kanter1977, Collins 1979).

Another source of career embeddedness reflects the fact that individuals

often monopolize organizational ob titles, so it is hardto distinguishbetweenthe characteristics f jobs and of theincumbentswho fill them.18 Many obs areshapedaround he distinctivecompetenciesof specific individuals; hejob does

"8Baron 1982) found that 47% of the jobs in a sample of 415 organizations only had one

incumbent, althoughonly 8% of workers were in such jobs.








not precedethe individual,eitherlogicallyortemporally A. S. Miner, unpub-lished study). This phenomenonoccurs more often where personalcontactsplay a majorrole in careerprocesses, as in "independent rimary" ccupations

and certain industries (e.g. entertainmentand finance). Furthermore,Minerargues that environmental urbulenceand change favor molding jobs around

individual attributes n order to deal with uncertaintyand that high status,

powerful, senior employees and subunitsuse this strategy most often. Whenjob attributes evolve around incumbents, career outcomes depend on the

idiosyncraticrelations between the worker and the organization(includingrelations with co-workersand supervisors).

Theconceptualandmethodological mplicationsof careerembeddednessare

staggering. Interdependent areer outcomes imply two methodologicalcom-plications: (a) error terms are dependentacross individuals;and (b) more

importantly,one worker's attributesand relationshipswill affect other indi-

viduals' outcomes. Consequently,the methodologyof attainment esearch-which usually employs national labor force surveys-appears ill suited to

studyingcareers in organizations,where people, jobs, and rewardsare both

objectivelyandsubjectively nterdependent.Thisreview hasindicatedsome of

the contexts within which career outcomes are most intertwined, so that

investigatorscan at least determinewhen ignoringthat interdependencewillproduce biased empiricalresults.

Summary

Inabandoninghestatusattainment nd humancapitalapproaches,researchers

have acknowledgedthatnot all organizationsemphasizethe same criteria n

selecting and advancingworkers.Orthodox abor marketresearchassumes a

simple "wage competitive" model, viewing workers as entrepreneurswho

market hemselvesto the highest biddingemployer (Thurow 1975). However,"insteadof people looking forjobs, therearejobs looking for . . . 'suitable'

people" (Thurow 1972:68). Therefore,researchersmustexplicitly studyhow

employersstructureobs and screenprospectiveemployees. This section has

described certain organizationalaspects of that process matching workers,jobs, and firms.

THE EFFECTSOF STRATIFICATIONONORGANIZATIONS

Stratificationnot only reflectsbut determinesattributes f workers,organiza-

tions, andenvironments.Ironically,theimpacts hatorganizational ierarchieshave on individualsandsociety area centralconcernin classical social theory

(Giddens 1971), buttheyhave receivedtoo little attention nrecentmainstream

research.By abstracting he attainmentprocess from its organizationaland







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institutional ontext, investigatorshave focused on thedeterminants f person-al success or failure, ratherthan on how the distributionof labor marketoutcomes affects individuals, firms, and society.

Theorists and researchersdisagree vehemently over how hierarchy andinequality influence organizationaleffectiveness and individualwell-being.Followersof Weberand Durkheimregardhierarchyas efficient andinevitable(e.g. Dahrendorf1959, Hage 1965). As job skills become increasinglycom-plex andthe division of labor moredetailed,workers dentifymore withtheirwork roles, experience greater security by having organizationalcareers,understandwhatis expectedof thembetter,andare morecohesive as aresultoftheirinterdependence Blauner1964, Kohn 1971). Others,however,associate

hierarchywith alienation and pathological conformity (Aiken & Hage 1966,Tannenbaum t al 1974). Marxists,in particular, egardworkplacestratifica-tion as a meansof controlling aborby reproducing lass divisions withinthefirm. Mobility systems foster organizational oyalty by cateringto workers'preoccupationswith status and prestige, but they can also foment unrestbyunderscoringthe capriciousnessand arbitrarinessof organizationalcontrol(Sennett & Cobb 1972, Wachtel 1974, Kanter1977, Edwards1979).

Ironically,both advocatesof the radical"control" erspectiveandefficiency

theoristsapparentlyagree thathierarchy s functionalin organizations,eventhough they emphasize different functions. Yet there is remarkablylittlesystematic researchaboutwhetherstratification ctuallydoes enhanceorgani-zational performance.In fact, some investigatorshave argued that gradedmobilityhierarchiesreduce turnoverandpromotean instrumental rientationtowardwork, diminishinginnovationandorganizationalperformance D. R.Dalton & Todor 1979, Staw 1980, Pfeffer 1983). Paulson(1974) found thathealthorganizationshavinglower rates of internalmobility (i.e. greaterexter-nalrecruitment)were less effective insatisfyingtheirgoalsbut moreinnovativethantheirmorestratified ounterparts.Hiscross-sectionaldesignandrestricted

samplelimit the generalizabilityof his findingsandinterpretations, owever.

Regrettably,the absence of sound empiricalresearch on the organizationalconsequencesof inequalityhas not preventednumerouspopular pronounce-mentson thetopic, asevidencedbyrecentdiscussionsof Japaneseemploymentsystems.

Stratification egimesalso affect relationsamongorganizations,particularlypersonnelflows. Brittain& Freeman 1980, 1983) traced the high volume of

interfirmmovementandentrepreneurship ithinthesemiconductorndustry omobilityblockagesin companiesstaffedby youngexecutives. Paulson(1974)argued hatby encouragingworkers, nternal pportunitiesorupwardmobilityfacilitate communicationand innovation,which in turn,necessitate linkageswith otherorganizations n orderto obtainnecessaryresources.His empiricalresults,however,wereambiguous:a highrateof internalmobilitydidfacilitate








interorganizational elations by fostering communication,but it also had theoppositeeffect by increasingeffectiveness anddiminishing nnovation.Orga-nizations with similar structures re morelikely to developformal nterorgani-

zationalrelations.DiMaggio & Powell (1983), forinstance, hypothesized hatorganizations relying on educational and professional credentials in hiringbecome isomorphicwith the other membersof their interorganizational et-

work, since thecosmopolitanismassociatedwith formalschoolingandprofes-sionalism promotesthe diffusion of organizationalarrangements.Future re-

searchshould devote more attentionto the impactthat a firm's opportunitystructureand screening procedureshave on interorganizationalelations.

SUMMARY AND CONCLUSIONS

Researchersanalyzingstatus attainmentandhumancapitalinvestment ookedat the labor marketand observed individualsstrivingto get ahead.Recently,investigatorshave takena differentview of the labormarket, ocusingon whatcannotbe so directlyobserved-i.e. the positionsindividualsoccupy in orga-nizations and the processes that match workers and roles. Stratification sinherent n the way organizationsstructurepositions and sortpersonnel, and

this has been the focus of a burgeoning iteraturerelating organizationsandstratification.Comparativeorganizationalresearch is essential if we are to understand

opportunity tructures nd theprocesses by which workersand obs arematch-ed. Although wage determination,advancement,and matchingoccur withinworkorganizations,manyrecent studies have examinedorganizationalnflu-ences on labor marketoutcomes only obliquely, if at all. Researchersoftenattempt o make inferencesabouthow andwhy internal abormarkets unctionfromindividual-levelanalysesof careerattainment;whenorganizationalnflu-ences areexamined,industrialattributes retypicallyusedas proxies.Another

groupof researchershasrecentlyusedoccupationsand ndustriesas the units of

analysis, seeking to identify segmentsof the labor marketand economy thatexhibit distinct stratificationregimes. These analytic strategiesare likely to

experience diminishing returns, since the hypotheses of interest primarilyconcernwhy certain firmsprovide greateropportunities hanothers andwhythey utilize particularproceduresin hiring and promotion. This paper hasreviewed recent theory and research that addresses those concerns, linking

specific dimensions of organizationsand theirenvironments o stratificationoutcomes. Because it would be prematureo characterize his field in termsofclear-cutparadigms,I have focused instead on the diversityof organizationalapproachesand variablesemployed in studying inequalityand opportunity.

By eschewing organizationalapproaches o inequality, analysts have over-looked two kinds of interdependencehat affect labor marketoutcomes: links







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among ndividualswithin anorganizationandinterorganizationalelations hathaveanimpactuponemployment. Studies of attainment t the individual eveltreateach actor as independent,which is implausibleonce the organizational

context of careers is acknowledged. Similarly, recent "structural" nalysestreateach firm or industryas independent,which seems unjustifiedgiven thatinterorganizationalelationsdefine industriesand theboundariesamong them.Everyunit of analysis implies a set of priorities, andI believe it will becomeincreasinglydifficult for investigators o justify analytic strategiesthat ignorethe interdependence f careeroutcomes within and across organizations.

Researchersoften explaindifferentialattainmentsas a function of job char-acteristics,such as authorityandskill. Theydo notspecifywhenjob character-

istics affect labor marketoutcomes most, however, because it is occupationsabstractedrom their organizational ontext, notjobs, thathavetypically beenstudied. Since many workershave molded their jobs around heir individualtraits, it is difficult to disentanglethe effects of personal attributesandjobcharacteristics n wages andopportunities.Similarly,because many jobs areidiosyncratic o one organization, it is hard to distinguishjob-level determi-nants of careeroutcomes from firm-level determinants.Many autonomous,"independentprimary"occupations (e.g., law, plumbing) involve interfirmmovement,so job contentis comparableacross settingsandmarket orces are

likely to equilibrate wages and opportunities across organizations. At thebottomof theoccupationalhierarchy,"secondary"obs arealso similar across

organizations,providinglow wages and little opportunity or advancement,regardlessof setting. In contrast, the content of "subordinateprimary" obs(e.g. semiskilledfactorywork, low-level administrative ndclericalpositions)varies more across firms, so that the effect of specific job characteristicsonattainmentshould depend most on the organizationalcontext within thatsegmentof the labormarket.Therelationshipbetweenspecific job characteris-

tics andcareeroutcomes should also be stronger n some firmsthanin others.Older,larger,and morebureaucratic rganizations end to have standardizedandformalizedemploymentpractices.They are more likely to makeexplicitcomparisonsamong jobs in structuring ewards, and consequently, the dis-tribution f job characteristics houldbe related o outcomes morethan n otherenterprises.This discussion illustrateshow organizational easoningcan helpgeneratea contingencymodel of labormarketoutcomes that identifieswhen agiven employee or organizationalattributewill be most decisive and why.

Advocates of "open system" perspectives in administrativescience linkorganizationalarrangementso environmentaldemands.Accordingly, I havespeculatednthis reviewonhow dependenciesbetweenorganizationsandtheirenvironmentsnfluencepersonnelpolicies and rewards.Organizationalnter-dependence and environmentalturbulence are increasing and having morevisible effects on work and opportunity,so I expect thatfuture stratificationresearchwill devote greaterattention o studyinginterorganizationaletworks








and discovering how firmsmediateenvironmental ffects on employmentandattainment.19Accordingly, I have illustratedthe potential applicabilityofpopulationecology and resourcedependenceapproaches o labormarketstud-

ies.Futureresearchno doubtwill also recognize the international imension of

stratification.Multinationalization,abor migration, domestic plant closingsdue to the transferof productionoverseas, and a changing international co-nomic hierarchyhave highlightedthe "modernworld system" of inequality.

Recent collaborative ffortsbetweenAmericanandforeigncorporations nder-

scorehow workarrangements,personnelpolicies, opportunities,andrewardsin US enterprisesdependon practices abroadand vice versa.

In conclusion, organizationalstudies of inequality have altered the keytheoreticaldebates,therelationships xplored,the dataunitsanalyzed,andthemethods employed in stratificationresearch.Methodological pluralismhasbeen one consequenceas researchon inequalityhas becomemore catholic andinterdisciplinary.Many students of organizationsand stratificationwho hadpreviouslyspecializedinone of thosetwo subdisciplinesarenow applyingdatasources and researchmethodsdevelopedin one of themto answera new set of

questions. Samplingorganizationss clearlymorecomplicatedandcostly than

sampling ndividuals,so futurework s likelytocontinueblendingcase studies,

comparativeorganizationalanalyses, andindividual-levelattainment esearchincorporatingorganizationalvariables.

Regardless of methodology, however, the study of mobility and wage

determinationhas become inextricablyand irreversibly ied to the study of

organizations. tis increasinglyderigueur or stratification nalysts o consider

(or at least mention) organizational actorsaffectingcareeroutcomes, whilerecentadministrative cience reviews entreat nvestigators o pay attentiontoworkplace nequalities(Scott 1981, R. H. Hall 1982). By outliningthe deter-

minants and consequences of organizationalstratification,this review willhopefully aid in formulatinghypotheses and designing studies for futureresearch.

ACKNOWLEDGMENTS

The author was supportedin part by a grant from the National ScienceFoundation SES 79-24905). DavidCallaway'stechnicalwizardry s dutifully

acknowledged.HowardAldrich,WilliamBielby, YinonCohen,Alison Davis-

Blake, Neil Fligstein, Mark Granovetter,Arne Kalleberg, Donald Palmer,Jeffrey Pfeffer, Allyn Romanow, W. RichardScott, and Ross Stolzenbergoffered very helpful comments on far too many draftsof this review.

'9Historical esearchon thelaborprocessis also likely to continue,since understandingurrent

workarrangements equiresknowinghow andwhy organizations esponded o changingenviron-

ments.







64 BARON

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