The Effect of Organizational Atypicality on Reference Group Selection and Performance Evaluation

Edward Bishop Smith () and Heewon Chae ()
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Edward Bishop Smith: Kellogg School of Management, Northwestern University, Evanston, Illinois 60208
Heewon Chae: W. P. Carey School of Business, Arizona State University, Tempe, Arizona 85281

Organization Science, 2017, vol. 28, issue 6, 1134-1149

Abstract: Recent research shows that audiences sometimes respond to organizational performance in ways that seem anomalous according to prior theory. In this paper we propose that variations in the extent to which an organization conforms to the norms and expectations of a known organizational category can affect the way evaluators construct reference groups, and subsequently shape their responses to organizational performance. In an experiment on investing in and evaluating the performance of a certain kind of financial organization, we show that organizational atypicality increases an evaluator’s likelihood of choosing a nonconforming referent for the purpose of making (enhancing) evaluations of the organization’s performance. Evaluators’ ex ante feelings of commitment toward the organization further moderate this relationship. Our results have several implications for research related to organizational and categorical identity, performance evaluation, and judgment and decision making.

Keywords: economic sociology; categories; organizational identity; reference group selection; performance feedback (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:inm:ororsc:v:28:y:2017:i:6:p:1134-1149

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