Ideological Misfit? Political Affiliation and Employee Departure in the Private-equity Industry

Though organizations are increasingly active participants in the political realm, little research has investigated how an organization's heightened focus on political ideology impacts employees. We address this gap by exploring how an individual's political ideological misfit with an organization's prevailing ideology impacts departure. By tracking the movements of over 40,000 investment professionals in the U.S. private equity industry over 10 years, we investigate the consequences of the ideological misfit that arises when individuals' political ideologies diverge substantially from the prevailing ideology of their firms. We hypothesize that ideological misfit increases the likelihood of departure, though the effects vary with liberal or conservative ideological orientation. Polynomial regression analyses reveal that the fit relationship between individual and organizational political ideology deviates from the idealized congruence relationship that underlies prevailing theory. Specifically, we find that departure is more likely for employees experiencing conservative misfit (a personal ideology more conservative than the firm's) versus liberal misfit (a personal ideology more liberal than the firm's). Conservatives are more likely to depart than liberals regardless of fit, and departing misfits tend to join new organizations that are closer to their own ideology.