Weiyi Ng and Eliot L. Sherman. "In Search of Inspiration: External Mobility and the Emergence of
Technology Intrapreneurs." Forthcoming at Organization Science.
Recent scholarship has established several ways in which external hiring—versus filling a role with a comparable internal candidate—is detrimental to firms. Yet organizational learning theory suggests that external hires benefit firms: By importing knowledge that is unavailable or obscured to insiders, and applying it toward experimentation and risky recombination. Accordingly, and consistent with studies of learning-by-hiring and innovation, we predict that external hires are at greater risk of intrapreneurship than internal hires. We test this prediction via a study of product managers in large technology companies. We use machine learning to operationalize intrapreneurship by comparing product manager job descriptions to the founding statements of venture-backed technology entrepreneurs. Our research design employs coarsened exact matching to balance pre-treatment covariates between product managers who arrived at their roles internally versus externally. The results of our analysis indicate that externally-hired product managers are substantially more intrapreneurial than observably equivalent internal hires. However, we also find that intrapreneurial product managers have a higher turnover rate, an effect that is primarily driven by external hires. This suggests that hiring for intrapreneurship may be a difficult strategy to sustain.