The Double-Edged Sword of Exemplar Similarity

Majid Majzoubi (), Eric Yanfei Zhao (), Tiona Zuzul () and Greg Fisher ()
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Majid Majzoubi: Schulich School of Business, York University, Toronto, Ontario M3J 1P3, Canada
Eric Yanfei Zhao: Saïd Business School and St Hugh’s College, University of Oxford, Oxford OX1 1HP, United Kingdom
Tiona Zuzul: Harvard Business School, Harvard University, Boston, Massachusetts 02163
Greg Fisher: Kelley School of Business, Indiana University, Bloomington, Indiana 47405

Organization Science, 2025, vol. 36, issue 1, 121-144

Abstract: We investigate how a firm’s positioning relative to category exemplars shapes security analysts’ evaluations. Using a two-stage model of evaluation (initial screening and subsequent assessment), we propose that exemplar similarity enhances a firm’s recognizability and legitimacy, increasing the likelihood that it passes the initial screening stage and attracts analyst coverage. However, exemplar similarity may also prompt unfavorable comparisons with exemplar firms, leading to lower analyst recommendations in the assessment stage. We further argue that category coherence, distinctiveness, and exemplar typicality influence the impact of exemplar similarity on firm evaluation. Leveraging natural language processing (NLP) techniques to analyze a sample of 7,603 U.S. public firms from 1997 to 2022, we find robust support for our predictions. By highlighting the intricate role of strategic positioning vis-à-vis category exemplars in shaping audience evaluations, our findings have important implications for research on positioning relative to category exemplars, category viability, optimal distinctiveness, and security analysts.

Keywords: exemplar similarity; optimal distinctiveness; security analysts; category viability; NLP (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:inm:ororsc:v:36:y:2025:i:1:p:121-144

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