James N. Baron, "Organizational Perspectives on Stratification"

This essay links the organizations to social stratification. It is based on the idea that rewards are attached to organizational positions. The article focuses on two dimensions of inequality that are affected by organizations and their environment. These are 1) how rewards and opportunities vary as a function of organizational attributes, and 2) how enterprises differ in their criteria for matching workers and jobs. The focus area is essentially how the division of labor among jobs and organizations generates a distribution of opportunities and rewards, that have little to do with the people who fill the job. The second focus area is how organizational procedures for matching workers to jobs effects the distribution of opportunities, rewards, and future career success. This article is attempting to move beyond individualistic explanations of stratification and look at more structural reasons.

The first question: Baron looks at a series of factors that effect the distribution of opportunities: internal labor market, size, growth, demography, technology, unionization and organizational environments. He reviews the literature discussing each of these areas.

Internal Labor Markets: (hiring from within the company)

a) (Labor Economists) Technical progress increases workers' skill monopoly in the firm and that internal advancement opportunities are required so that senior workers will train junior personnel.

b) ((Neo-classical - NC) Informational constraints favor internal promotion hierarchies over perfectly competitive labor markets.

c) (Neo-Marxists-NM) Internal labor markets are an effort by capitalists to control a volatile workforce.

? To date there has not been a resolution on the theoretical debates about where and why promotion hierarchies and long-term employment contracts develop.

Size: (self-explanatory- the size of the company)

a) Wages are higher both in industries made up of large industries made up of large companies and in the larger companies within any given industry.

b) (NC) Large bureaucracies may pay and promote more because scale economies increase worker productivity, to which wages are tied.

c) (NC) Higher pay due to urban location- off set pay to workers for commute to work.

d) (NM) Large organizations are more vulnerable to unrest and rewards are higher to reduce the chances of labor management conflict.

e) Organizational rewards denote authority and status.

? These different approaches all assume that size is a proxy for

organizational attributes, although in different ways.

Growth: (defined in different ways)

a) Controlling for size, organizational growth improves chances for internal promotions.

b) The more growth occurs, the returns to benefits start to diminish- not all levels of growth bring equal rewards.

c) Growth doesn't necessarily mean that equalization will occur across all levels. Instead differences can be exacerbated.

d) Shapes organizational tenure distributions- lack of growth makes competition a zero sum game.

Demography: (the composition of the workforce)

a) Individual career growth is definitely tied to the fate of organizational superiors, subordinates and peers.

b) The size of one's organizational cohort and its relation to other cohorts significantly affects career outcomes.

c) An organization's tenure distribution (seniority structure) affects its sorting and opportunity structure. Older workers used less extensive, decentralized control mechanisms because of internalization of organization's goals and operating procedures.

d) Gender composition also helps determine opportunity.

Technology: (ranges from mechanical developments, skills, and technological developments.)

a) Look at whether the work process becomes more skilled or deskilled. No definite conclusions on which one dominates as a result of technology.

b) Look at differing levels of technological development and the type of technology and how this shapes the skill level.

? In general, however, stratification researchers know relatively little about the socioeconomic returns to specific job tasks and skills.

Unionization: (whether the industry of organization is unionized)

a) Monopoly power perspective: unions push wage higher than productivity warrants, at the same time widening disparities between advantaged and disadvantaged groups.

b) Collective Voice perspective: union wage premiums are reasonable reimbursements of the savings unions generate in terms of improved governance and control.

? Author thinks these views are over stylized.

c) In order to understand the interplay between unions, firms, and stratification, unions need to be studied as organizations. This will help emphasize their role in linking personnel practices and reward systems across firms.

Environments: (what exists outside of the organization- labor markets, political, social etc.)

? Stratification researchers should specify relevant organization subenvironments and examine their impact on work arrangements and reward structures. Look at how organizational environments affect wages and mobility.

a) Population Ecology Model: View organizational arrangements as a result of a selection process in which survival depends on fitness vis-a-vis the environment. Ecological analysis of stratification thus draw attention to the environmental circumstances favoring selection and institutionalization of

particular types of employment relations and reward systems.

b) Resource Dependence Approach: How individual firms define, adapt to, and transform their environments. Helps understand how the organization standing of specific members should be affected by changes in the environment. Individual's organizational standing reflects a person's ability to buffer the impact of key uncertainties outside (or inside) the organization.

Overall this is general idea of each topic. Baron argues that comparative organizational research is appropriate for resolving theoretical controversies about the origins and consequences of career hierarchies. He also notes that before the organization-stratification can be done, it is first necessary to have an explicit perspective on organization-environments relations first.

Then he looks at the second question. Not all organizations emphasize the same criteria in selecting and advancing workers. A common assumption is that all employers and employees have imperfect information so they use other tools to screen workers. One tool is statistical discrimination. Statistical discrimination is where employers possess less accurate indices of potential for one group of workers than for others. Inferior knowledge about a group's members and the costs of remedying that ignorance militate against hiring or promoting individuals from the disadvantaged groups. Even if they exhibit wonderful qualities that contradict past experience. Schooling is one signal that is used. Another tool is homosocial reproduction. Similarities with respect to sex, race, social background, and family status indicate whether someone can be trusted and whether communication with him or her will be easy (Kanter).

It might be expected that the longer a person has worked at a company, the more this type of discrimination will diminish. However this does not occur because 1) The standards used to evaluate performance become more ambitious and task requirements become increasingly vague as one moves up a hierarchy, 2) past expectations continue to influence behavior and 3) employers may escalate their commitment to bad choices by rationalizing it away.

Baron also suggests that more attention should be paid to organizational career dynamics. A career is distinguished by fairly discrete stages, each involving a different relationship between the worker and the firm. Baron also stresses the notion of interdependence. This interdependence has two

forms, 1) Links among individuals within an organization and, 2) interorganizational links that have an impact upon employment. The individual workers success is interdependent with the demographic fit between the individual and the relevant organizational elites. Furthermore there are administrative and technological clusters that also effect outcomes. The social relationships are also important in shaping the individual's success. Relations among organizations can effect personnel flows.

These general ideas are suggested by Baron to be applied to the study of the links between organizations and stratification. By doing research on these areas he suggests will help illuminate the link between organizations and the reward and opportunity structure in society will be better understood.