EQUAL-OPPORTUNITY LAW AND THE CONSTRUCTION OF INTERNAL LABOR-MARKETS

Internal labor markets have been explained with efficiency and control arguments; however, retrospective event-history data from 2 7 9 organ izations suggest that federal Equal Employment Opportunity (EEO) law w as the force behind the spread of formal promotion mechanisms after 19 64. The findings highlight the way in which American public policy, wi th its broad outcome-oriented guidelines for organizations, stimulates managers to experiment with compliance mechanisms with an eye to judi cial sanction. In response to EEO legislation and case law, personnel managers devised and diffused employment practices that treat all clas ses of workers as ambitious and achievement oriented in the process of formalizing and rationalizing promotion decisions.