The Strength of Weak Boundaries: Category Inferences and Evaluation Spillovers

• In Event: 571 - Section on Economic Sociology Roundtables (one-hour)
  In Refereed Roundtable: Section on Economic Sociology Roundtables (one-hour). Table 01. Categories and Categorization

Abstract

To explore the consequences of category spanning on audience appeal, most of the studies only take into account an overall evaluation of multiple category members, but not an evaluation for each category spanned. Everything takes place as if a multi-category firm receives a unique and all-encompassing evaluation. Yet, a multi-category firm gets several audience evaluations – one for each category spanned – that affect each other. This paper fills this gap between the empirical tests (1 unique overall evaluation for multi-category members) and the theoretical assumption in the literature (several specific evaluations connected by audiences leading to confusion). In the corporate legal services industry, this paper explores to what extent an organizations’ evaluation in a focal category is influenced by how appealing
audiences perceive the organization to be in other categories. First, I present empirical evidence that the strength of the inferences conveyed by past evaluations in non-focal categories impacts a firm’s evaluation in a focal category. Second when firm’s evaluations across different categories are more dispersed or unclear, a firm is more likely to receive a lower evaluation in the focal category. Third, I suggest that a firm’s evaluation in a focal category is likely to be lower affected by non-focal categories’ evaluation when the latter are more similar to each other.

Author

• Lionel Paolella, University of Cambridge