Organizational Perspectives on Stratification.

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PRESENTATION
Organizational Perspectives on Stratification

Organizations impinge on career outcomes in two important ways:
1) The division of labor among jobs and organizations generates a distribution of opportunities and rewards that often antedates the hiring of people to fill those jobs.
2) Organization procedures for matching workers to jobs affect the distribution of rewards and opportunities within and across firms and thus influence the likelihood of career success

Why Some Firms Pay and Promote More than Others
- ''Older approaches'': human capital, status attainment
-more recent approach: internal labor markets

INTERNAL LABOR MARKET: Competing Interpretations
1) Labor economists emphasize technical determinants: technological progress increases workers' skill monopoly in the firm and that internal advancement opportunities are required so that senior workers will train junior personnel
2) Williamson emphasizes informational constraints that favor internal labor promotion hierarchies over perfectly competitive labor market.
3) Neo-Marxists regarded internal labor markets as an effort by capitalists to control a volatile work force.

Researchers have documented the impact of internal labor markets in two ways:
1) Attempts to infer how internal labor markets operate from data on individual career paths. E.g. attainment researchers have attributed racial and sexual differences in the effects that schooling and first job have on career outcomes to the exclusion of women and minorities from internal labor markets. This research does not illuminate how or why this occurs.
2) Other investigators have analyzed career processes in their organizational setting directly, detailing the criteria that employers use in structuring rewards and opportunities. Unfortunately, this research has often been limited to specific work contexts.

THE IMPACT OF SIZE
-Wages are higher both in industries made up of large companies and in the larger companies within any given industry.
-Granovetter argues that these relationships only characterize manufacturing industries.
-Effects of schooling on income and status increase monotonically with the size of employee's work location (for white, male, nonagricultural workers) (Stolzenberg 1978).

Possible explanations:
- Large bureaucracies may pay and promote more because scale economies increase worker productivity, structure of demand allows higher wages to be absorbed in product pricing.
-Urban locations, where higher wages are necessary to offset competitors' offers
. -Large organization are more vulnerable to worker unrest and rewards are higher to reduce the chances of labor-management conflict.

IMPACT OF GROWTH
-Corporate growth increases promotion rates. (Even among those less likely to be promoted e.g. women).
-Economic contraction disproportionately harms those the growth helps.

IMPACT OF DEMOGRAPHY
-Individuals' careers are not independent (attainment research assumes they are).
-Size of one's organizational cohort and its relation to other cohorts significantly affects career outcomes. E.g. members of small cohorts experience enhances mobility prospects.

IMPACT OF TECHNOLOGY
-Automation raises the average level of worker skill and increases the variance within firms, giving rise to skill-based career lines that reflect job idiosyncrasies.
-Long-linked technologies (e.g. assembly lines) generate more lateral mobility because workers are interchangeable.
-Mediating and Intensive technologies (e.g. client-oriented banks and research labs, respectively) foster more upward mobility. (In specialized professions knowledge is crucial).

IMPACT OF UNIONIZATION
- ''Monopoly power'' perspective: unions push wages higher than productivity warrants, at the same time widening disparities between advantaged and disadvantaged groups.
- ''Collective violence'' perspective: regards union wage premiums as reasonable social reimbursements for the savings that unions generate in terms of proved governance and social control. Also viewed as equalizing agents.
-Unions emphasize seniority-based rewards, and collective bargaining often arises in work settings where it is difficult to discern the relationships between worker characteristics and rewards.

IMPACT OF ORGANIZATIONAL ENVIRONMENTS
-Good jobs are concentrated in ''core'' or monopolistic firms and industries. Explained by: technical mix; level of union and management interests in employment stability; ability to absorb higher labor costs due to market structure and demand schedules; growth, concentration, and change in organization forms; differences in the quantity and quality of managerial activity; and economic and political relationships with the state and foreign markets.

ORGANIZATIONAL DIFFERENCES IN MATCHING WORKERS TO JOBS - HOW CAREER DYNAMICS DEPEND ON THE ORGANIZATIONAL SETTING

Models of Employer Decision-Making
-Human Capital: workers possess vocational aspirations, which are treated as exogenous, and invest in human capital so as to maximize their utility and earnings, subject to various constraints (e.g. innate ability). Firm's labor needs are determined by its technology (capital-labor ratio) and product demand.
-marxian idea that ''control imperative'' shapes employment relations
-Contemporary models reject the underlying assumptions that both the worker and the firm have perfect information and pursue a maximizing strategy in their personnel decisions.
-Organizations face greatest uncertainty in evaluating employee potential early n their careers.
-How do employers cope with this dilemma?
-Education is one credential representing employee potential under imperfect information.
-Marxists argue that employers are motivated by a need to control the work force and use schooling to determine whether workers' values and traits are appropriate for the organizational control system in place.
-Kanter's idea of ''homosocial reproduction'' - similarities wrt sex, race, social background and family status indicate whether someone can be trusted and whether communication with him/her will be easy.

Organizational Career Stages
-Early career attainments are likely to reflect individuals' success in exploiting their ascribed and achieved attributes to pass initial ''tests.''
-Organization success is determined largely by one's immediate supervisor.
-Later, familial attachments constrain workers' achievements, particularly among women.
-Family commitments, habituation, and the aging process increase the attractiveness of extrinsic rewards and job security.
-Organization success is now defined more in terms specific to one's organization, profession, community, or other restricted reference group.

Interdependence of Workers' Career Outcomes
-The way specific attributes are evaluated depends on the demographic fit between an individual and the relevant organizational elites.
-Positions are clustered technically and administratively.
-Workplace norms promote social comparison.
-Wages are generally tied to ''key'' jobs, and thus other workers' salaries depend on the individuals serving in the ''key'' jobs.
-Granovetter's ''historical'' and ''structural embeddedness'' - career is constrained by how people have previously evaluated the worker and other relevant workers. Also, an individual's career cannot be predicted or understood apart from his or her relations with co-workers, collaborators, supervisors, and others.

SUMMARY
-In abandoning the status attainment and human capital approaches, researchers have acknowledged that not all organizations emphasize the same criteria in selecting and advancing workers.
-Orthodox labor market research assumes a simple ''wage competitive'' model, viewing workers as entrepreneurs who market themselves to the highest bidding employer.
- ''Instead of people looking for jobs, there are jobs looking for ... 'suitable' people'' (Thurow 1972).

Effects of Stratification on Organizations:
-Theorists and researchers disagree about how hierarchy and inequality influence organizational effectiveness and individual well-being.
-Weber and Durkheim - hierarchy is efficient and inevitable
-Others associate hierarchy with alienation and pathological conformity.
-Esp. Marxists regard workplace stratification as a means of controlling labor by reproducing class divisions within the firm.
-Lack of sound empirical research
-Effects relations among organizations, particularly personnel flows.

BECK, HORAN, AND TOLBERT
''Stratification in a Dual Economy''

Review of Other Stratification Approaches:
1.) Functional Approach: Workers are placed within the socioeconomic order through a competitive process in which skills and abilities of differing value and scarcity are carefully identified, evaluated, and matched with societal needs (Parsons; Davis and Moore).

2.) Human Capital: the rational worker invests in training which will maximize the economic return (earnings) on investments while free competition among firs for labor skills guarantees a price for that labor (Becker; Mincer).

Both of these theories set for an individualistic conception of the relationship between labor force participation and social rewards. Socioeconomic success or failure is tied directly to the characteristics brought into the marketplace by the individual workers. There have been other attempts to broaden the scope of models of earnings determination (e.g., Stolzenberg, Spilerman), but the nature of the relationships between individual factors and structural factors warrants further consideration. While others have addressed the issue of the dominance of individual characteristics, Beck, et al. focus on the issue of fixed returns, the assumption by human capital theorists that economic returns to worker characteristics are uniform.

In order to do this, they rely on sectoral economic differentiation models based on theories of economic dualism. These models divide the industrial structure into distinctive sectors within which employers and workers face fundamentally different conditions and operate according to fundamentally different rules. Beck, et al. focus on two sectors:

1.) The core industrial sector: This is dominated by large corporate enterprises which came to constitute an oligopolistic system of production. It includes those industries that comprise the muscle of American economic and political power. The firms are noted for high productivity, high wages, high profits, intensive utilization of capital, high incidence of monopoly, and high degree of unionization. E.g., automobile, steel, and rubber industries.

2.) The peripheral sector: This is characterized by small firms, operating in a more or less open, competitive capitalistic environment. They are concentrated in agriculture, nondurable manufacturing, retail trade, and subprofessional services. The peripheral industries are noted for their small size, labor intensity, low profits, low productivity, intensive productivity, intensive product market competition, lack of unionization, and low wages. unlike the core sector industries, the periphery lacks the assets, size, and political power to take advantage of economies of scale or to spend large sums on research and development.

Theories of dual economy suggest that these sectoral differences have important implications for the opportunity structures and experiences faced by individual workers. Furthermore, ethnic and racial group differences I the sectors may be the outcome of differential assignments of group members within the sectoral structure of the economic order.

There are three questions that the authors seek to answer:

1.) Are there differences in the labor force composition of the core and periphery sectors?
2.) Can differences in individual earnings between sectors be accounted for in terms of the individuals located within those sectors?
3.) How similar are the processes of earnings determination for core and periphery sectors?

In order to answer these questions, Beck, et al. perform empirical analyses on data from the 1975 and 1976 General Social Surveys. The sample consisted of 1,683 members of the experienced civilian labor force. The independent variables were:
1.) Human Capital Variables: parental education and occupational prestige, age, respondent's education (investment)
2.) Demographic Variables: gender and race
3.) Occupational Variables: occupational prestige, union membership, employment status, work stability, and industrial sector (core vs. periphery)

The dependent variables were the natural logarithm of annual earnings and a binary variable coded for earnings below the poverty threshold.

Answers to above questions:

1.) There are important differences in the labor force composition , work experiences, and earnings of the sectors. Core workers have larger, more homogeneous annual earnings than do periphery workers. They also have, on the average, more schooling, better educational credentials, parents with better education and higher occupational status, and they are more likely to be male and white than female and non-white. Also, core members are more likely to be in higher prestige occupations, to be employed full time, to work more hours per week, and to belong to a union.

2.) There are persistent sectoral differences in economic outcomes which cannot be explained by the racial, sexual, human capital, or occupational characteristics of their respective labor forces. hence a change in sectoral placement without altering the se characteristics of the average periphery worker, would yield a substantial increase in annual earnings.

3.) Within the core sector there is evidence of significant adverse race and gender main effects on the earnings even after controlling human capital and occupational variables, while there is no significant evidence of this in the peripheral sector. The process of earning determination differs between sectors even when the analysis is restricted to full-time employed white males. Among white males, sectoral placement makes a critical difference in economic well-being above and beyond the effects of differences in labor force quality. This persistent disparity must be attributed to the structural organization of the industrial economy.

Conclusion:

We should be very suspicious of any attempts to build models of occupational earnings processes in industrial society which consists exclusively on individual-level variables. Contrary to human capital and status attainment models, rates of return are not fixed and one important determinant of their variability is a distinction between sectors. Beck, et al. acknowledge that this dichotomous model is rather simplistic, but they see it as a starting point to link individual socioeconomic behavior to models of the industrial structure.

PETER BLAU
Inequality and Heterogeneity

Main Argument;
Variations in the sized of groups and the number of incumbents of social positions constitute basic structural conditions which affect and reflect people's role relations and social associations.

Outline:
Macrosociologically, a social structure can be defined as the multidimensional space of social position among which a population is distributed and which reflect and affect people's role relations and social associations. The most distinctive task of sociology is the structural analysis of various forms of differentiation (such as heterogeneity and inequality), their interrelations, the conditions producing them and changes in them, and their implications for social relations.
Heterogeneity - or horizontal differentiation - refers to the distribution of a population among groups in terms of a nominal parameter. The operational criterion of the degree of heterogeneity in a population is the probability that two randomly chosen persons do not belong to the same group.
Inequality - or vertical differentiation - refers to the status distribution in a population in terms of a graduated parameter. The operational criterion is that the greater the average status distance between all pairs of persons relative to their average status, the greater the inequality.
Status-diversity is the graduated-parameter equivalent of heterogeneity. The operational criterion of status-diversity is the probability that two randomly chosen persons do not belong to the same stratum.

For any dichotomy of society, the extent of intergroup relations is an inverse function of group size, ex:
1. the proportion of groups members intermarried
2. the mean number of intergroup associates
3. the mean amount of time spent in intergroup associations
4. the proportion of group members not insulated from the other group

Most members of a group the constitute a large majority have no close associate in small minority groups. The more a majority discriminates in social intercourse against a minority, the smaller is the discrepancy between the majority's lower and the minority's higher rate of intergroup associations.
High rates of mobility between groups promote high rates of association between their nonmobile as well as their mobile members. Net out mobility increases a group's interrelations more than net mobility. A parameter's pronounced salience inhibits social mobility. Increased rates of mobility among groups reduce a parameter's salience.

INEQUALITY:
Status distributions are nearly always positively skewed, with a majority of the population occupying less than average status and small numbers occupying status that is far above average.
For any discussion of status above the median, the upper status has more extensive relations with the lower than the lower has with the upper. Most people are insulated from social contacts with the elite. Except for the lowest strata, the probability of people's associating with others below their status is greater than the probability of their associating with others equidistant above them.
Downward mobility of any highest stratum diminishes inequality, unless its effect on the status distribution is outweighed by those of upward mobility of other highest, downward mobility of low or middle strata, differences in net fertility, or in net immigration.

HETEROGENEITY:
As race social practices in a group increase in frequency, group pressures that discourage them subside.
Ceteris paribus, the larger of two groups discriminates more than the smaller against associating with members of the other group. Increasing heterogeneity increases the probability of intergroup relations. The spatial segregation of groups counters the positive effect of heterogeneity on intergroup relations.

MULTIPLE PARAMETERS:
Intersecting parameters improve the integration of various groups by raising the rates of association between their members; increase structural complexity (nominal - heterogeneity; graduated - status diversity) and social mobility thereby promoting structural change. As group size in terms of one parameter declines, the probability of intergroup relations in terms of other intersecting parameters increases. Consequently, the smaller the size of a group, the greater is the probability that its members have cosmopolitan role sets.
The less graduated parameters intersect, the greater is the inequality. Consolidated graduated parameters attenuate the rates of social association among different strata and thus weaken their integration. Consolidated parameters inhibit social mobility and structural change.

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PETER BLAU AND OTIS DUNCAN
The American Occupational Structure

CHAPTER ONE

Blau and Duncan assert in the first paragraph the importance of this study of mobility for understanding modern industrial society, particularly its stratified character: ''In a democratic country where equality of opportunity - though never perfectly realized - is an important ideal, the question of the extent to which the class or ethnic group into which an individual is born furthers or hinders his career chances is of special theoretical as well as political significance'' (p. viii). Their objectives in this book are to analyze:
1. the patterns ...

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