BUS 374 –
Organization Theory
Session 5
Consequences of acting differently
Jack of all trades and master of
none – the case of generalist
 Generalists vs Specialists
 Niche width broader for generalists
 Broader the niche more the audience
 But appeal is lower for broader niche occupants
 So there is a trade-off
 How to resolve this?
 Audience assessment is the key
Audience expectations and
legitimacy
 Audience set expectations
 They evaluate organizations based on level of fitness to
their expectations – greater fitness, greater legitimacy
 i.e., conforming to audience expectations provides
legitimacy
A study of Hollywood movie
makers’ appeal to gatekeepers
and audience
 Producers have limited resources
 Producers can choose to focus on limited or broad
audience
 i.e., producers could use the same amount of resources
to either cater to one genre or multiple genres
 All producers aim to cater to a wider audience
 But is it acceptable behavior?
The role of the film critics
 Critics influence audience interest in a film
 How do critics evaluate?
 Step 1: Decides if he/she will evaluate a movie
 Asks if film is within any of the genres he evaluates
 Step 2: Evaluates the movie
 Asks how the film fares in comparison to other films in its genre
 So a film producers should
 First, gain the attention of the critics
 Second, increase their appeal
No engagement, no audience
 A film caters to a genre only if it engages with the
audiences in that genre through different types of
promos
 Critics will consider a movie for evaluation only if they
have been engaged by the film producer
 If a film doesn’t engage audience of a genre, it doesn't
cater to that audience
 So if a genre can be seen as a niche, a film occupies a
niche only if it engages with the audience in that genre
 Film producers want to engage a wide range of audience
 But engagement is a costly affair.
More engagement, more appeal
 Given limited resources, film producer have to allocate
their engagement with audience carefully
 The more genres they engage with, the less they can
engage with each.
 The less genres they engage with, the more they can
engage with each.
 i.e., more engagement with a limited audience increases
their appeal and less engagement with a wide audience
limits their appeal
Some predictions about number
of audience and appeal
 The more the niches occupied, the larger the audience
 The more the niches occupied, the lesser the appeal
Role of consensus
 All critics should agree that a movie belongs to a certain
genre
 But more genres the film producer engages with, the
less the consensus among critics
 Greater the consensus among critics, the more the
number of audience
 The greater the consensus among critics, the greater the
appeal to focal audience
The model
Niche
Width
Consensus
Appeal
Limits of new institutionalism –
Kraatz and Zajac, 1996
 So is spanning genres always harmful?
 A new institutional answer would be, yes!
New institutional expectations
 In highly institutionalized organizational fields
 Organizations do not deviate from institutional expectations
 Organizations do not pay attention to technical environment
 If there is any deviation at all, it reinforces homogeneity
 Organizations tend to copy high status players
 Diversity in local environment does not predict change
 Illegitimate change (deviance) is punished
 Technical considerations only predict early adopters, late
adopters are merely copying the high status early adopters.
Non-profit liberal arts colleges
and change in curriculum
 They operate under highly structured environments
 They are very similar to one another in practices
 But… technical requirements are changing in the
environment
 Shift in student life goals – from meaningful life to wealth
 Emphasis on specialized skills
 Decline in college-age students
 But adapting to such technical changes will be viewed as
deviant
Did they deviate?
 Yes, they did…
 Towards a more vocational curriculum
 More in tune with changing student life expectations
 But less homogeneity due to this change
 Greater variation in types of vocational programs offered
 Increasing divide between identity of low and high status
liberal arts colleges
 Low status became more professionalized
 Organizational change did result from diversity in
environmental demand
 Greater reliance on fee based income than endowments
adapted most to new student expectations
 Deviance did not significantly decrease survival rate
 Motivation for early and late adopters of change was not
significantly different
So does deviance hurt?
 Audience is the key!
 Audience provide vital resources for survival
 Appealing to audience is crucial
 More so, when an organization is more reliant on its
audience
 If audience want predictability, deviance hurts
 If audience demand change, deviance pays, or at least
doesn't hurt
That’s it for today
 For next session: How do organizations evolve?