Committed Diversification: Why Authenticity Insulates Against Penalties for Diversification
accepted organization science
with Jae Kyung Ha
Work in organization theory has highlighted that diversification triggers concerns over the newly diversified firm’s capability or commitment to serve its audience. While this work has shown that perceived lack of commitment may be an important problem for diversifying firms, it has not been established what might resolve these commitment concerns and reduce demand-side penalties for diversifying to serve new customers. We argue that a firm’s ability to signal authenticity will increase perceptions of commitment and resolve ambiguities about commitment generated by diversification. We use a multi-method approach including qualitative evidence from a case in behavioral health industry and experimental methods to isolate these observed effects. In a qualitative study, we examine a case where two firms saw divergent outcomes when they tried to engage in the exact same diversification activity and show that when a firm signals that they are highly authentic—i.e., when stakeholders perceive the firm to be willing to fulfill commitments even while sacrificing short-term rewards—diversification does not threaten perceived commitment. However, those who cannot signal authenticity are less likely to be selected in the market because diversification is seen as a threat to perceived commitment. We then test these findings in two experiments using the primary customer audience, addiction recovery therapists, as participants. In a final experiment, we test some key boundary conditions of our argument, finding support in the context of markets for car mechanics, which suggests that our argument may be applicable more broadly than healthcare into markets for various types of credence goods.
Too Good to Hire? Capability and Commitment Inference in Labor Markets
Forthcoming Administrative science quarterly
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with Roman Galperin, Jerry Guo, and Adina Sterling
A key and often unquestioned assumption in labor markets research is that employers hire the highest quality candidate at a given wage. In this paper, we theorize an aspect of screening that leads higher quality job candidates to experience lower chances of advancing in the screening process to receive job offers. We argue screeners perceive high-quality candidates to have lower commitment to the organization relative to lower quality candidates. To test our arguments, we conduct three experimental studies that use hiring managers as subjects. In Study 1, our findings indicate screeners have concerns about a high-quality candidate’s commitment to an employer, and that under the conditions we specify, high-quality candidates are more likely to be screened out of the hiring process than are lower quality candidates. In Study 2, we find that commitment concerns remain even when screeners have assurances that high-quality candidates will accept job offers. Finally, in Study 3, we test ways in which high-quality candidates can provide credible signals of commitment to reduce the quality penalty. We conclude with a discussion of the contributions of our study to theories of quality inference in labor markets.
The Authentic Appeal of the Lying Demagogue: Proclaiming the Deeper Truth about Political Illegitimacy
February 2018 American Sociological Review
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with Minjae Kim and Ezra W. Zuckerman
We develop and test a theory to address a puzzling pattern that has been discussed widely since the 2016 U.S. presidential election: how can a constituency of voters find a candidate “authentically appealing” (i.e., view him positively as authentic) even though he is a “lying demagogue” (someone who deliberately tells lies and appeals to non-normative private prejudices)? Key to the theory are two points: (1) “common-knowledge” lies may be understood as flagrant violations of the norm of truth-telling; and (2) when a political system is suffering from a “crisis of legitimacy” (Lipset 1959) with respect to at least one political constituency, members of that constituency will be motivated to see a flagrant violator of established norms as an authentic champion of its interests. Two online vignette experiments on a simulated college election support our theory. These results demonstrate that mere partisanship is insufficient to explain sharp differences in how lying demagoguery is perceived, and that several oft-discussed factors—information access, culture, language, and gender—are not necessary for explaining such differences. Rather, for the lying demagogue to have authentic appeal, it is sufficient that one side of a social divide regards the political system as flawed or illegitimate.
Why elites love authentic lowbrow culture: overcoming high-status denigration with outsider art
August 2017 AMERICAN SOCIOLOGICAL REVIEW
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with Ezra Zuckerman and Minjae Kim
Going beyond the distinction-seeking explanation for why “cultural omnivorousness” (the tendency for Western elites to consume a wide range of genres) extends to lowbrow genres, we develop and test the idea that demonstrating appreciation of authentic lowbrow culture affords authenticity-insecure elites an effective way of shoring up their authenticity. This argument, which builds on recent sociological research on the “search for authenticity” (e.g., Grazian 2005), on Bourdieu’s (1993) notion of artistic “disinterestedness,” and on Hahl and Zuckerman’s (2014) theory of “high-status denigration,” is validated through experiments with American subjects in the context of “outsider” art (Fine 2004). The first study demonstrates that preference for lowbrow culture is higher when individuals feel insecure in their authenticity—i.e., when their social category attained status in a manner whereby extrinsic motives are salient. The second study demonstrates that audiences perceive the members of erstwhile denigrated social categories to be more authentic if they consume lowbrow culture but only if the cultural producer is perceived as authentic. We conclude by noting how this “authenticity-by-appreciation” effect might be complementary with distinction-seeking as a motivation for elite cultural omnivorousness and we draw broader implications for when and why particular forms of culture are in demand.
TURNING BACK THE CLOCK IN BASEBALL: THE INCREASED PROMINENCE OF EXTRINSIC REWARDS AND DEMAND FOR AUTHENTICITY
AUGUST 2016 ORGANIZATION science
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This paper addresses why customers at times prefer traditional practices deemed more authentic to a domain, particularly where these practices had previously been discarded as inferior. I argue that customer demand for authenticity can be triggered when extrinsic rewards (i.e., fame or money) increase in prominence in a market, causing audiences to doubt the motives of the market’s producers. I examine this dynamic in the context of Major League Baseball, where appreciation for traditional stadium features seemingly arose after the advent of free agency heightened awareness and coverage of the economic rewards in the sport. Experimental analysis validates the proposed mechanism, whereby increased fan exposure to extrinsic rewards increases concern about player inauthenticity, which increases preference for traditional stadium features. Difference in Difference analysis of attendance patterns (home-away) provides external validation for these experimental findings by showing that authenticity was more highly preferred, in the form of higher relative attendance in traditional-style ballparks, by those fans more affected by free agency. Conclusions are drawn about the role that perceptions about motives play in market perceptions of authenticity and valuation of authentic cultural objects.
KNOWLEDGE ASYMMETRY AND STRUCTURAL HOLES: LINKING NETWORK PERCEPTION TO POSITION IN STRUCTURAL HOLES
MAY 2016 STRATEGIC ORGANIZATION
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with Olenka Kacperczyk and Jason Davis
Although brokers who span structural holes have been shown to occupy a valuable position in organizations, emerging research suggests that the returns to these brokers can vary depending on whether alters can credibly threaten to disintermediate the broker and close the structural hole. Yet the factors that shape the likelihood of disintermediation have not been extensively explored. In this paper, we argue that local network perception influences both 1) alters’ ability to disintermediate, and 2) the likelihood that individuals occupy high-performing brokerage positions in intra-organizational networks. Drawing on prior research about cognitive social structures, we argue that individuals are most likely to be in a structural hole under the condition of knowledge asymmetry—that is, when brokers know about the structural hole, but alters do not—which reduces the likelihood of disintermediation by alters and benefits to brokers. Using advice network data from a high-tech organization, we find evidence of knowledge asymmetry in existing structural holes, and moderation of this relationship by two factors also related to disintermediation: (1) broker’s reputation and (2) alter’s position in the resource flow. We also show that knowledge asymmetry is related to higher returns for brokers. The broader theoretical contribution is a better understanding of how network perceptions are related to positions across structural holes, an important structure from which power is derived in organizations and markets.
BUY TERM AND INVEST THE DIFFERENCE REVISITED
MAY 2015 JOURNAL OF FINANCIAL SERVICE PROFESSIONALS
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with David F. Babbel
The decision whether to buy term or permanent life insurance, or some combination of both, is among the most challenging elements of the purchasing process for many people. This study demonstrates that financial analyses which purport to show that the Buy Term and Invest the Difference (BTID) concept dominates the combination of permanent life insurance supplemented with term life are deficient in many ways and incapable of establishing this dominance. It also shows that the assumed financial discipline necessary to successfully implement the BTID approach is an unrealistic expectation for many consumers. Accordingly, it should not be claimed that one approach necessarily dominates the other for all consumers.
THE DENIGRATION OF HEROES? HOW THE STATUS ATTAINMENT PROCESS SHAPES ATTRIBUTIONS OF CONSIDERATENESS AND AUTHENTICITY
SEPTEMBER 2014 AMERICAN JOURNAL OF SOCIOLOGY
(READ COPY HERE)
with Ezra Zuckerman
We develop theory and report on experiments that address the tendency for high-status actors to be deemed—even by high-status actors themselves—less considerate and more inauthentic than low-status actors. We argue that this tendency, which potentially contradicts the fact that status is accorded on the basis of an actor’s capability and commitment, stems from two paradoxical features of typical status attainment processes: (a) The benefits of a high-status position typically carry an incentive to feign capability and commitment, thereby leading to suspicions of inauthenticity; and (b) Status is typically achieved through interaction patterns in which the high-status actor asserts its superiority and another’s inferiority, thereby leading to suspicions of inconsiderateness. Three experimental studies are designed to validate this theory and help rule out an alternative hypothesis, whereby the negative correlation between status and morality derives from a psychological need for viewing the world as just or fair–leading evaluators to compensate those who lack status with higher attributions of morality. Our studies, based on the “minimal group” paradigm, ask subjects to evaluate two arbitrary social categories based on members’ performance in a joint cognitive task. Implications are drawn regarding high-status insecurity and the sources of instability in status hierarchies.
WORk in Process
He’s Overqualified, She’s Highly Committed: The Effect of Job Candidate Gender and Capability on Perceptions of Commitment and Labor Market Selection
with Elizabeth Campbell
Hiring managers make inferences from signals to determine if job candidates are capable and committed to performing the job to which they are applying. Building on how prior research has tended to speak about men in terms of their firm commitment and women in terms of their career commitment, we argue signals of capability can be helpful to women in the labor market because these signals help overcome concerns about women’s career commitment, but hinder men’s hiring outcomes because they heighten concerns about men’s firm commitment. To test our argument, we used a mixed methods approach combining two experiments and qualitative analysis of justifications used in hiring decisions. Results showed that while high capability signals negatively affected men’s perceived firm commitment and hiring outcomes (no effect on men’s perceived career commitment), these same signals boosted women’s perceived career commitment, firm commitment, and hiring outcomes (Study 1), but only when women were inferred to be leaving firms that did not provide them with equal advancement opportunities (Study 2). This research highlights the importance of distinguishing between perceptions of firm and career commitment and contributes to the growing body of literature on the different challenges facing men and women in the labor market.
Smoke and mirrors: institutional change, leader iconicity, and perceptions of authenticity in the market for cuban cigars
with Cameron Verhaal and Kevin Fandl
Many products become imbued with the cultural resonance or identity of the country in which they are produced. Yet, the way in which this occurs, and how consumers perceive these products when a country’s cultural institutions or identity change, is not well understood. We propose that this cultural resonance can be tied to iconic national leaders, and when those leaders leave power, it can impact how consumers value products from that country. Specifically, thorough a mixed method study on the market for Cuban cigars, we find that the external shock of Fidel Castro stepping down from power is associated with a drop in quality ratings for Cuban cigars. Moreover, we argue that the mechanism driving this effect is attributions of authenticity that tie iconic national leaders to culturally resonant products in their countries.
INGROUP 'Flexibility': Evidence of social influence in third-party regulation markets
with Sae S. Park and Sunkee Lee
We propose and test a group-based mechanism, ingroup bias, as a source of organizational failure for third-party regulators. Extant research examining third-party regulation has mainly investigated threats to objectivity resulting from strategic motivations for regulatory leniency and dyadic exchanges between regulators and regulated entities. We argue that regulatory organizations can fall short of objectivity even unintentionally through ingroup bias, a group-based mechanism that does not rely on either prior or future expected business with the regulated firm, incorporating the larger social environment in which a regulator is embedded. Using proprietary data from a prominent firm in the marine survey industry, which regulates the maritime sector, we exploit a natural experiment based on a high-profile industry accident that dramatically heightened the risks of regulatory leniency. We find that regulators were more lenient with their ingroup clients than outgroup clients, by observing a convergence in outcomes for these groups only after the accident. We further find that this leniency is driven by individuals who exhibit low identification with their regulatory profession and are thus more susceptible to ingroup bias. Our findings underscore the importance of categorical biases and identities in regulatory processes and how regulatory firms can inadvertently fail to maintain objectivity.
anomie and Authenticity: Overcoming the dark side of success in Music
with Pete Younkin
We suggest that the commercial-artist tension can create a challenge to one’s identity that could create anomic tensions and help explain why musicians are more likely to die than non-musician counterparts. The inauthenticity charges that follow upon commercial success can generate identity crises: if I perceive myself as an artist, but am now perceived as a charlatan, the basis of my character is now in question. Such a challenge can precipitate a sense of being outside of or unintegrated with society—if my community does not see me as I see myself, then perhaps I am in the wrong community? At a minimum, this disorientation can negatively affect productivity or a sense of belonging in the group, resulting in disbanding or dissolving the group’s venture. At an extreme, this begets a dangerous form of anomie that Durkheim (1951) identifies as a cause of egoistic suicide, where a sense of belonging functions to constrain such behavior: “For they cling to life more resolutely when belonging to a group they love, so as not to betray interests they put before their own.” (Durkheim 1951:209–10) The sudden revocation of this experience can provoke the opposite sentiment. We test this theory through archival quantitative analyses and experimental methods. This work speaks to the tensions inherent in artistic careers and the relationship between perceived authenticity, felt authenticity, and organizational and individual outcomes related to success and identity.
May I Deviate, Please? Status Effects on Anticipatory Impression Management
with Renee Richardson Gosline
How can firms effectively reduce penalties for categorical deviance? Past research on organizational impression management indicates that firms can minimize penalty for deviance by pre-emptively using verbal accounts, or language that presents deviant behavior in a way that makes it acceptable to an audience. However, this work has yet to explore the role that organizational status plays, a factor that has also been shown to affect how audiences interpret a firm’s activities. This paper builds a bridge between these perspectives by showing how organizational status influences the effectiveness of anticipatory impression management tools like pre-emptive verbal accounts. We propose that high-status firms, unlike middle-status counterparts, are more effective at avoiding penalty for deviance when they employ the use of assertive verbal accounts that convey confidence. We design a series of experiments to test this argument in the context of the food industry. Specifically, we show that high-status firms are better off when they do not appear deferential, or overly apologetic, in anticipatory impression management signaling – while the opposite is true for middle-status firms. Mediation analysis shows that the same type of framing differently affects perceptions of skill and confidence depending on the status of the firm, but that too much perceived effort in framing the deviance will lead to negative results. Our findings support the claim that an organization’s attempts to manage audience impressions with verbal accounts must be aligned with the perceived status of the firm, such that status positively interacts with confident styles of anticipatory impression management and negatively interacts with more deferential styles.