Labor Pains: Change in Organizational Models and Employee Turnover in Young, High‐Tech Firms

Abstract

Organizational theories, especially ecological perspectives, emphasize the disruptive effects of change. However, the mechanisms producing these effects are seldom examined explicitly. This article examines one such mechanism—employee turnover. Analyzing a sample of high‐technology start‐ups, we show that changes in the employment models or blueprints embraced by organizational leaders increase turnover, which in turn adversely affects subsequent organizational performance. Turnover associated with organizational change appears to be concentrated among the most senior employees, suggesting “old guard disenchantment” as the primary cause. The results are consistent with the claim of neoinstitutionalist scholars that founders impose cultural blueprints on nascent organizations and with the claim of organizational ecologists that altering such blueprints is disruptive and destabilizing.