Professors, like most people, respond to the incentives of power, influence, and money.
The institution of tenure reduces uncertainty regarding money, and focuses the incentives on power and influence.
Power in academia comes from the number of bodies a professor has under him. These bodies might be apprentices (graduate students he advises), journeymen (post-docs who have a PhD and work at the lab, or staff researchers), or simple workers (lab technicians, etc).
Influence in academia comes from the extent to which one is successful in influencing one’s peers. This is typically measured in terms of influence scores, which are a product of how often the academic is cited, weighted by how important of a publication he is cited in.
The best route to both power and influence is to earn grant money. For example, consider a professor who receives grant money from a federal agency. Some of this money goes to equipment, but the majority goes to employing several graduate students to work on this large project. Likewise, with this funding, he and his team will be writing numerous articles using the latest techniques on very large data sets, and can be expected to quickly become influential in that area. Because these graduate students have him both as an employer and as an academic adviser, when they graduate with their own doctorates, they will be experts at creating ways to detect bad standardized tests (after all, it’s what they’ve been doing for years), in a few years his influence on their careers will be apparent, and they will likewise go about working on similar problems — citing him and each other as they go along.
Because both power and influence are social activities, people and location matter. Grant-funding agencies typical consider an individual’s prior work, and an institution’s prior history of receiving grant funds, in making distributions. An individual who has previously earned grant money and delivered what was promised is more likely to win a grant, all other things being equal, than a researcher who hasn’t. Likewise, an institution that has a history or providing the foundations for success (is it possible for the researcher to actually hire the projected number of assistants quickly? are research facilities available for the work to actually be conducted? etc). This is true whether the institution is quasi-federal, like the National Science Foundation, private, like the Gates Foundation, or private, such as a corporate sponsor.
Peer-reviewed attempt to be blind to the writer. Nonetheless, the editor and the reviewers are public, and the more one knows of their concerns (what are the important questions of the day? what issues must be taken as assumptions? etc.), the more successful one is likely to be. Access to other researchers, both on-site, through personal networks, and through travel to professional conferences, are thus critical.
The importance of location means there is a fierce competition to be a faculty at a large research institution. Bias in working with others in academia is as self-destructive as bias in taking clients in law or in any eat-what-you-kill situation, and you’re spending your time and resources on a luxury rather than a necessity. I’m sure there’s bias in both, but that bias would be most pronounced on those who have found a steady-but-dull existence at the bottom of the heap.
Racism is a disease of the poor. Political bigotry is a disease of the weak. Life is better at ‘big’ schools because you are learning from winners of the system who are focused on expanding their power and influence, instead of acting as tinpot dictators.