Using detailed career history data for all top management team (TMT) members of all Forbes 500 publicly held pharmaceutical companies, we differentiate between managers who were externally hired into the TMT and those who were internally promoted and examine where their respective strategic preferences come from. Findings show that the strategic preferences of externally hired TMT members are primarily shaped by their work experiences, while those of internally promoted members emerge from a process whereby entry-level organizational newcomers are imprinted with the practices that prevailed in the organization and the industry at the time of joining the organization. Testing our hypotheses in the context of a firms’ choice of technology sourcing vehicles, our findings help explain why some organizations have a greater variety of strategic responses than others. We discuss the implications of our findings for the literature on managerial preferences and to the question of whether organizations are better off hiring a new manager from inside or outside the organization.
