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In recent years, the term stigma has been widely applied to organizations. However, scholars have yet to advance a theoretically consistent definition or comprehensive theory of organizational stigma. The purpose of this paper is to define the construct of organizational stigma and provide a general theory that explains the conditions under which organizational stigmas are likely to arise, how this process unfolds, and the initial effects stigmas inflict on organizations. In doing so, we distinguish organizational stigma from both individual-level stigma and the organizational-level constructs of reputation, status, celebrity, and legitimacy. We then build upon multiple streams of research to develop a richer theoretical explanation of the roles social context, social processes, and social actors play in the origination and effects of an organizational stigma.
Key words: organizational stigma; stigma origination; social evaluation; value incongruence; social control; disidentification
History: Published online in Articles in Advance August 20, 2008.
A rash of corporate scandals and failures has stimulated recent interest in organizational stigmas (e.g., Semadeni et al. 2008, Wiesenfeld et al. 2008). However, although references to stigmatized organizations are commonplace, the term stigma is often applied to organizations in loose and ambiguous ways. We argue that several theoretical limitations contribute to this confusion. First, whereas social evaluation constructs such as reputation, status, celebrity, and legitimacy are regularly studied at the organizational level, extant stigma research occurs almost exclusively at the individual level of analysis (Devers et al. 2005). Although this research provides meaningful insight into the effects of stigmatization on the negative life consequences encountered by individuals stigmatized by their affiliation with particular organizations (e.g., elites of failed firms; see Semadeni et al. 2008, Wiesenfeld et al. 2008), our understanding of what an organizational stigma is and how organizational stigmas differ from individual stigmas and other more theoretically developed organizational-level evaluation constructs remains unclear.
Second, although, relative to organizational-level stigma research, the reputation, status, celebrity, and legitimacy literatures are more fully developed, theoretical and empirical examinations of these constructs generally focus on the neutral to positive end of their respective continua (Mannor et al. 2006). Organizational stigmas, on the other hand, clearly register only on the negative side of the social evaluation spectrum. Nevertheless, because the literature is mostly silent with respect to the "dark...