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This paper theoretically and empirically engages the relationship between organizational identity and deception using the market for early jazz recordings as a setting. In this setting, pseudonyms (where a recording is reissued under a fictitious name) were used deceptively as a way to preserve a firm's identity while selling profitable but identity-threatening products to the mass market. Firms founded in the Victorian Era actively sought alignment with the cultural elite and used pseudonyms to deceive observers into believing that their production of cultural products was consistent with their Victorian Era identity. In effect, pseudonyms allowed these firms to decouple their position in identity space from their position in product space by inflating production of identity-preserving products. Using product data from jazz discographies, record company directories, and record advertisements in major U.S. newspapers, we provide strong empirical evidence that Victorian Era firms were active in using pseudonyms to preserve their identities.
Key words: organizational identity; deception; cultural markets
History: Published online in Articles in Advance April 27, 2009.
There is one and only one social responsibility of business ... free and open competition without deception or fraud. (Friedman 1962)
A deception that elevates us is dearer than a host of low truths. (Tsvetaeva 1980)
Introduction
Even the most casual observers of organizations and markets recognize that some organizations deceive their constituents. Indeed, much scholarship is devoted to better understanding when, why, and how organizations deceive. This interest is broad and longstanding, including but not limited to psychological models of persuasion in marketing research (Gardner 1975), institutional theory emphasis on decoupling and symbolic management (Pfeffer 1981; Perrow 1985; Westphal and Zajac 1994, 2001), impression management of stigmatizing actions (Sutton and Callahan 1987, Elsbach and Sutton 1992, Elsbach et al. 1998), as well as a vast literature on fraud (e.g., Akerlof and Romer 1993, Galbraith 2004).
Often the main targets of deception are those external constituents (or audience members) that affect the financial success of the focal firm (e.g., investors or consumers), where deception is done to financially benefit the firm at the expense of these constituents. For example, in product markets, deception may involve a firm's attempt to mislead consumers by inflating its products' consumption value. Deception would be considered successful if demand increased or consumers...