Category Stretching: Reorienting Research on Categories

abstract We advocate for more tolerance in the manner we collectively address categories and categorization in our research. Drawing on the prototype view, organizational scholars have provided a 'disciplining' framework to explain how category membership shapes, impacts, and limits organizational success. By stretching the existing straightjacket of scholarship on categories, we point to other useful conceptualizations of categories -i.e. the causal-model and the goal-based approaches of categorization -and propose that depending on situational circumstances, and beyond a disciplining exercise, categories involve a cognitive test of congruence and a goal satisfying calculus. Unsettling the current consensus about categorical imperatives and market discipline, we suggest also that audiences may tolerate more often than previously thought organizations that blend, span, and stretch categories. We derive implications for research about multi-category membership and mediation in markets, and suggest ways in which work on the theme of categories in the strategy, entrepreneurship, and managerial cognition literatures can be enriched

Holier than thou? Identity buffers and adoption of controversial practices in the Islamic banking category

Existing scholarship on categories frequently highlights how some category members may violate codes that others diligently abide by. In this paper, we take into account the differences in identity across category members, and ask how these relative differences determine their response to a code-violating change. Taking a case where category members are clearly identified as ‘insiders’ and ‘outsiders’, we argue that insiders’ reaction to a code violation depends upon the extent to which they believe their identity to be distinct from the code violator’s, who might be an insider or an outsider. Specifically, we suggest that it is the presence or absence of an ‘identity buffer’ – i.e., a relative identity advantage – which determines insiders’ reaction. We hypothesize that when a code violation is introduced by a fellow category insider, the focal insider will be more likely to refrain from the practice. When it is an outsider who introduces the code violation, insiders will be more likely to adopt the code violation as long as they can retain an identity buffer. We further posit that when outsiders adopt code-preserving behavior, thus narrowing the identity buffer between insiders and outsiders, it will mitigate insiders’ likelihood of code violation adoption. We test and find support for our hypotheses using data on Islamic banking industry in 12 countries (2003-2014)

Category spanning, evaluation, and performance: revised theory and test on the corporate law market

Studies suggest that category-spanning organizations receive lower evaluation and perform worse than organizations focused on a single category. We propose that (1) these effects are contingent on clients' theory of value and that as clients expect more sophisticated services, they tend to value category spanners more positively and (2) the evaluation of producers mediates the relationship between category spanning and performance. We test our hypotheses using original data on corporate legal services in three markets (London, New York City, and Paris) over the decade 2000-2010. We find that (1) category spanners receive a better evaluation, and more so when their categorical combination is more inclusive and (2) evaluation mediates significantly the relationship between category spanning and performance. This study enriches our understanding of how audiences apprehend a whole market category system and why organizations span categories.The HEC Foundation and the Society & Organizations Research Center provided financial support for this research

Le Droit et le (Dés)Ordre : L'Impact des Stratégies d'Extensions Catégorielles sur la Performance et l'Evaluation des Entreprises. Le Cas du Marché des Cabinets d'Avocats d'Affaires (2000-2010)

This dissertation explores how market categories - clusters that share cognitive and cultural similarities - impact firms' performance and evaluation. Pervasive consensus in literature indicates organizations that do not fall into a single category suffer economic and social disadvantages.Unsettling this current consensus about the categorical imperative, this dissertation advocates that external audiences have a more complex role than simply patrolling the boundaries and sanctioning any infringement of established categories. They scrutinize categories in various ways depending on their needs. They infer some characteristics of firms from one category membership to another. They diverge about the category memberships and evaluation of firms. This dissertation provides evidence that in such cases, spanning categories both leads to positive social evaluations for organizations, but decreases performance in case of inconsistency across categories. Empirically I study the corporate legal services market in three major financial locations (New-York City, Paris and London) over a decade (2000-2010). My findings are twofold:(i) multi-category law firms- those that are engaged in several practice areas of law - receive better social evaluation from clients both at the firm level and at the practice area level; (ii) disagreement among clients' evaluation about law firms' practice areas undermines their financial performance. This dissertation deepens our understanding of the role that categorical structures play in markets and the category-stretching strategies firms implement to better navigate the "category map". This work contributes also to research in legal studies and has implications for law firms' business developmentCette thèse examine comment les catégories de marché -ensembles qui partagent des similarités cognitives et culturelles- impactent la performance et l'évaluation des entreprises.Le consensus répandu dans la littérature indique que les organisations qui évoluent dans plus d'une catégorie sont sanctionnées tant au plan économique que social.Remettant en cause ce consensus actuel sur "l'impératif catégorique", cette thèse avance l'idée que les acteurs d'un marché ont un rôle plus complexe que simplement réprimer toute violation des catégories établies. Aussi dans ce contexte, être engagée dans plusieurs catégories de marché pour une organisation à la fois améliore son évaluation sociale mais réduit sa performance en cas de perceptions divergentes de ses affiliations catégorielles. Les données empiriques de cette thèse portent sur les cabinets d'avocats d'affaires dans trois grandes métropoles (New-York, Paris et Londres) au cours d'une décennie (2000-2010). Les cabinets d'avocats multi-services - ceux qui exercent dans plusieurs domaines du droit- obtiennent une meilleure évaluation de la part des clients tant au niveau global du cabinet que pour chacune de leurs spécialités juridiques. Toutefois, les désaccords entre clients en terme d'évaluation portant sur chacune des spécialités juridiques offertes détériorent la performance financière des cabinets. Cette thèse approfondit notre compréhension du rôle que jouent les catégories sur les marchés et les stratégies d'extensions catégorielles que les entreprises mettent en oeuvre. Ce travail contribue également aux études sur le champ juridique et a des implications pour la conduite stratégique des cabinets d'avocats d'affaire

Category Stretching: Reorienting Research on Categories in Strategy, Entrepreneurship, and Organization Theory

We advocate for more tolerance in the manner we collectively address categories and categorization in our research. Drawing on the prototype view, organizational scholars have provided a ‘disciplining’ framework to explain how category membership shapes, impacts and limits organizational success. By stretching the existing straightjacket of scholarship on categories, we point to other useful conceptualizations of categories – i.e. the causal model and the goal-based approaches of categorization – and propose that depending on situational circumstances, and beyond a disciplining exercise, categories involve a cognitive test of congruence and a goal satisfying calculus. Unsettling the current consensus about categorical imperatives and market discipline, we suggest also that markets may tolerate more often than thought organizations that blend, span, and stretch categories. We derive implications for research about multi-category membership and mediation in markets, and suggest ways in which work on the theme of categories in the strategy, entrepreneurship, and managerial cognition literatures can be enriched

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abstract We advocate for more tolerance in the manner we collectively address categories and categorization in our research. Drawing on the prototype view, organizational scholars have provided a 'disciplining' framework to explain how category membership shapes, impacts, and limits organizational success. By stretching the existing straightjacket of scholarship on categories, we point to other useful conceptualizations of categories -i.e. the causal-model and the goal-based approaches of categorization -and propose that depending on situational circumstances, and beyond a disciplining exercise, categories involve a cognitive test of congruence and a goal satisfying calculus. Unsettling the current consensus about categorical imperatives and market discipline, we suggest also that audiences may tolerate more often than previously thought organizations that blend, span, and stretch categories. We derive implications for research about multi-category membership and mediation in markets, and suggest ways in which work on the theme of categories in the strategy, entrepreneurship, and managerial cognition literatures can be enriched

A Rivalry-Based Theory of Gender Diversity

We offer a rivalry-based perspective of gender diversity as a form of competitive action. We theorize that a firm adjusts its senior-level female representation when they identify business opportunities that may be seized by demonstrating alignment to gender parity expectations. Examining US corporate law firms and potential buyers of their services, we theorize and find that when the buyers of rivals of the focal firm increase their gender diversity, the focal firm responds by increasing its female partner representation. Reinforcing the strategic approach to managing gender diversity, we also show that a focal firm reduces its gender-related response to rivals’ buyers as the opportunity to attract those buyers decreases, and when the focal firm can use racial diversity as a credible substitute for gender diversity

Microfoundations of institutional change in the career structure of UK elite law firms

We investigate institutional change as the co-occurrence of deinstitutionalization and institutionalization, while accounting for its determinants at multiple levels of analysis to further our understanding of how individual characteristics aggregated at the organizational level and organizational characteristics together account for the erosion and emergence of practices within the field. We empirically explore this question in a multi-level dataset of UK law firms and their employees, looking in particular at how the practice of equity partnership faded away and how non-equity partnership emerged as a new practice. Our results contribute to the literature on institutional change and the micro-foundation of institutions