Organizational size and the use of firm internal labor markets in high growth establishments

Common to all accounts of firm internal labor markets (FILMs) is the primary role they assign to organizational size. Despite the importance attached to size, the size-FILM relationship has remained rather ambiguous. More importantly, the relationship has been examined only for static measures of size. In addition to the time at which size is measured, other unresolved issues include the conceptualization of the size-FILM relationship and the level at which size is measured. The results of an analysis of FILM use in high growth establishments confirm the importance of size in predicting the use of FILMs, but only as it interacts with the prior level of growth. In particular, the evidence highlights the significance of the dynamic aspects of organizational structure for the use of FILMs.