Interfirm Competition for Human Resources: Evidence From the Software Industry

To test a model of interfirm competition for human resources, firms’ responses to the loss of employees to single rivals were examined. Results suggest that attributes of hiring firms and of hired employees are associated with target firms’ decisions to defend and retaliate against labor market rivals. The findings have implications for the validation of intrafirm differences in human resource systems. This study opens the door for further theorizing and modeling of interfirm competition for intangible resources. A number of analysts have suggested that one of Wal-Mart’s sources of competitive advantage is its homegrown data warehouse and inventory management systems. In 1998, Internet retailer Amazon.com hired 15 of Wal-Mart’s information technology and logistics professionals intimately familiar with these systems. Alleging unfair competition, Wal-Mart responded by filing suit. Settling the lawsuit out of court, Amazon agreed to reassign most of the hired employees and refrain from actively recruiting Wal-Mart employees for 12 months (Schwartz & Salamone, 1999). Similar interactions have been observed between Microsoft and Borland; Sears and Montgomery Wards; and

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