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Introduction: The Power of Status
JONE L. PEARCE
“My classmates who got jobs at investment banks now don’t like to admit where
they work. They’ll mumble, ‘I work in finance but am getting out…’ When they
got jobs at Goldman Sachs at graduation, they expected everyone to be jealous,
but now they are too embarrassed to tell anyone they work there (personal
communication, Ivy League university graduate, January 21, 2010).”
Status matters to people. The new financiers drop in the social standing after the
2008 financial collapse is something they clearly feel. Status was once a central concern
of social scientists. This is reflected in its early prominence in sociology and social
psychology (Simmel ([1908] 1950; Harvey & Consalvi, 1960; Weber, [1914] 1978).
Mirroring this early interest, status was also featured in early management and
organization theory. For example, Barnard ([1938] 1968) suggested that status (what he
called prestige) was an important inducement in organizations, and Vroom (1964)
proposed that seeking status is one of the major reasons why people work. Maslow
(1943) proposed that the esteem of others was one of the fundamental human needs.
However, since that time a relative respected social standing, or status, has
occupied a rather minor place in the management and organization literature. The desire
to occupy a respected social standing as a driving force in managerial and organizational
work has not been completely neglected, but only in the past few years have scholars
turned their attention to the powerful role of social status in explaining organizational
behavior, team dynamics, the development of new industries and entrepreneurial firms,
management strategies, and market behavior. While many of those working in different
organizational science traditions, such as, Belliveau, O’Reilly and Wade (1996), Podolny
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(1993), Brint and Karabel (1991), Chung, Singh and Lee (2000), D’Aveni (1996),
Dollinger, Golden and Saxton (1997), Eisenhardt and Schoonhoven (1996), Elsbach and
Kramer (1996), Gioia and Thomas (1996), Kilduff and Krackhardt (1994), Kirkbride,
Tang and Westwood (1991), Kraatz (1998), Long, et al. (1998), Sundstrom and
Sundstrom (1986) and Tyler (1988), Waldron (1998), Weisband, Schneider and Connelly
(1995), have noted status’s importance to the markets, organizational, or team settings
they have studied, these works are not in-depth theoretical or empirical studies of status
itself.
The scattered attention to status in management and organization research is
costly. First, the diversity of subfields in which status is introduced means that scholars
working in these fields focused on their specific problems, and while they find that status
and status striving are useful ways to think about their problems, they remain unaware of
each others’ work and so cannot build on it and develop our understanding of status in
organizations. Second, the lack of sustained theoretical conversation about the role of
status in management and organizational research means that many empirical phenomena
that might be better explained as status effects are explained in other, less powerful ways.
For example, Van der Vegt, Bunderson and Oosterhof (2006) deplore their finding that
those group members who have the most expertise receive the most help from their
fellow group members, when those with less expertise needed it more. Those familiar
with the status literature, and in particular, that expertise bestows status and those with
more status receive more attention and assistance, would not be surprised by this finding.
Similarly, Tsui, Egan, and O’Reilly (1992) found that American White men found
racially homogeneous workplaces more attractive than did Blacks. Again, research on
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status indicates that most people prefer to interact with those of high status, making high
status individuals appear more homophilous than those of lower status (Sidanius, et al.
2004). Thus, status seeking may better explain Tsui et al.’s (1992) findings than the
similarity-attraction they propose. Given the demonstrated power of status and status
striving in social settings, the wide unavailability of theoretical explanations based in
well-established status seeking explanations can produce misleading organizational
theory and action.
From across the wide range of organization and management topics scholars are
increasingly turning to status to account for empirical puzzles. As is reflected in the
following chapters, recent programs of research on the role of status on strategic
diversification and alliance formation, intra-tem conflict, discrimination and harassment,
organizational change, employee identify and organizational commitment are timely and
important. These scholars, all focusing on differing problems, have come to the
conclusion that status is an important theoretical explanation of their empirical
observations.
This resurgence of interest may have arisen because as scholars across the
management and organization disciplines have turned their attention to understanding the
problems of markets, strategies and organizations, their observations inevitably direct
their attention to the role of status in driving action in social settings. For example, how
do members of boundary-less open source communities organize themselves, evaluating
and elevating the influence of those with useful expertise without the evaluation and
control that formal hierarchies provide? When firms decide to expand or shift into new
markets, which choices are more successful and why? What leads some nascent firms to
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receive more support from funders and supporters than others before there has been any
market test of their new product or services? How do team members size up the various
cues they receive about the expertise of their new colleagues in multifunctional teams?
Why haven’t racial and gender discrimination given way to meritocracy in organizations
so dependent on employee performance for their own success? These are the kinds of
practical strategic, organizational, and workplace problems we increasingly face as
organizations depend on innovation and ad hoc teams to do their work. It is ironic that
those who seek to understand these challenges have discovered that status, traditionally
associated with the most static of traditional societies, has become such an important
explanatory concept.
However, this renewed scholarly attention to the role of status is scattered across
the disparate disciplines of the management and organizations fields. Many scholars have
increasingly found that status provides valuable insights, but because the problems they
address are so different they rarely discover one another’s work. This volume seeks to
bring together those international scholars conducting current research on the role of
status in their diverse management and organization disciplines. Bringing these scholars
together can help to clarify the role of status in organizations and management research,
expand and build theories of status, and further develop theories in their disciplines by
including status effects. This volume is intended to introduce the promise of status to
those conducting research across all of the subfields of management and organization
scholarship, as well as engages those who have an interest in status with new research
and provocative theorizing addressing management and organization problems. It is
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intended to spur and further a conversation on the role of status in understanding
organization and management.
This chapter has two purposes. First, it serves as a brief introduction to what is
known about status as it is used in the fields of strategy, organizational theory, and
organizational behavior; it provides readers with a foundation for the issues and debates
regarding status in and between organizations developed by the chapter authors. Second,
it explains how each of the subsequent chapters fit into and advance this foundation. The
chapter authors have been collected together to represent the wide range of problems and
issues that scholars are increasingly using status to better understand, but they have all
worked hard to make their often highly specialized scholarship accessible to scholars in
other disciplines. Nevertheless, the works included in this volume are quite diverse and
so this chapter and the last one serve to identify commonalities and opportunities for
cross fertilization. This first chapter begins with a discussion of the fairly extensive
definitional debates about status, then it addresses the well-established benefits of holding
higher status for individuals, teams, and organizations. What research can tell us about
how relatively higher status is secured follows, and this chapter concludes with a brief
introduction to the chapters included in this volume.
Competing Understandings of Status
The study of status is as old as the social sciences themselves (see Scott, 1996, for
an historical review) so it is no surprise that there have long been debates about what
status is or is not. Medieval writers used the term “estate” to describe existing social
hierarchies which they characterized as comprised of three estates: “a religious estate of
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priests, a military and political estate of knights or lords and the ‘common’ estate of the
ordinary people” (Scott 1996, p. 6). Historically, an individual’s status derived from the
particular category that person occupied in a social setting. With modernization, as social
divisions became more complex and fluid, terms orders, degrees and ranks were added to
refer to the multitude of social hierarchies in more mobile societies. Later, political
economists introduced the term class, a social ordering based on economic condition
(Marx, 1894/1967). Yet, Weber’s (1914/1978) work is still widely cited in sociology,
largely for his descriptions of the complex ways people are differentiated through party,
class and status.
Weber’s original works were written in German presenting an English translation
issue. Weber uses the German word Stände which was translated directly into the word
status and interpreted as status groups varying in their relative hierarchical social standing
in the community by Roth and Wittich in their widely accepted English translation of
Weber’s (1914/1978) Economy and Society. Weber (1914/1978, p. 932) proposed that
status “is a quality of social honor or a lack of it, and is in the main conditioned as well
as expressed through a specific style of life.” Most individuals accept this translation, but
Scott (1996) and Murvar (1985) proposed an English translation of Stände into the word
estate and use the phrase “social estate” to make the direct English translation less
specific to the feudal context.
Sociologists have struggled with the distinction between status as a subjective
evaluation and status as an objective structural reality. That is, is status simply a
perception of individuals, however much those perceptions may disagree with one
another, or is status something about which some degree of social consensus should be
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expected, and that acts on individuals whether or not they personally approve or accept
it? Wegener (1992) argues for the former perceptual conceptualization proposing that
while the two may have been conflated in earlier times when there was more social
stability, modern mobility has had the effect of destroying any consensus on the relative
standing of different social groupings. The way he handles the problem is to call the
subjective evaluation prestige, and the structural condition (office, occupation,
neighborhood, etc.) status. However, for Weber (1914/1978) like most others
sociologists, prestige is an aspect of relative status, it is not synonymous with it. To add
more confusion, many organizational scholars follow neither Wegener (1992) nor Weber
((1914/1978) but equate status with prestige (e.g., Conway, Pizzamiglio & Mount, 1996;
Gioia & Thomas, 1996; Kraatz, 1998, Still & Strang, 2009). Another slightly different
variation that is popular in management and organizational literature is the definition of
Berger (Berger, Conner, & Fisek, 1983), who defines status as having characteristics that
are differentially evaluated in terms of honor, esteem or desirability. That is, status is
deconstructed into its component characteristics. Finally, Parsons’s (1937) work is widely
cited, and to him status is the result of a person’s structural position along several
dimensions – kinship unit, personal qualities, achievements, possessions, authority and
power, not a subjective individual evaluation. This is echoed in D’Aveni’s (1996) use of
hierarchical organizational rank as his measure of relative status. This inconsistent
terminology makes cross-fertilization in our scholarship difficult.
This concern with the distinction between individual subjective and objective
structural status is of less interest to the more person-focused social psychologists. For
example Secord and Backman (1974) suggest, "which attributes contribute to status will
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depend on the persons making the evaluations (p. 274)," making status a wholly
subjective assessment by individuals. However, this hyper-individualism is as
unsatisfactory as a wholly structural definition. Status is a judgment within a social
context and so most would expect evaluations of it to have at least some social consensus.
While status must be perceived by individuals to affect their actions, those perceptions
are expected to be grounded in a modicum of social consensus to avoid being considered
autistic. Further, the concept’s usefulness as a predictor of individuals’ attitudes and
behavior becomes limited if it is reduced to an idiosyncratic intra-psychic state, since
theories of causality among purely intra-psychic perceptions cannot be tested.
This potential dissensus on the meaning of status across the social sciences and
within the management and organization fields is addressed here by proposing that status
is grounded in a social consensus, must be perceived by individuals, and can be assessed
via structural characteristics (but is not reduced solely to these measurement indicators).
To state a formal definition: status refers to position or standing with reference to a
particular group or society. To have high social status is to have a respected or honored
standing in that group or society. Thus, a person’s status is always with reference to a
particular social grouping and involves evaluations that one occupies a respected position
there.
The frequent reference to honor among status theorists merits our attention. Status
connotes respect. This helps differentiate status from power (see also Magee & Galinsky,
2009). Although some in the management and organization fields use status and power
interchangeably (e.g., Ibarra, 1993) we suggest the distinction is an important one,
particularly in management and organizational scholarship. When people defer to those
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with high status, they do so because they think deference is the proper thing to do, not
because the person wields power over them. Status may be correlated with power in
many circumstances, and research indicates that each one can lead to another (Magee &
Galinsky, 2009), nevertheless, it is necessary to distinguish deference to those with the
power to help or hurt you from deference to those you honor and respect.
Just as status is not synonymous with power, it is not equivalent to position in an
organizational hierarchy of authority. Clearly, those occupying higher hierarchical
positions are not always the most honored and respected members -- those with the
highest status -- in organizations (any university professor could tell you that). In the
organizational sciences, too many have equated hierarchical position with status. For
example, Driskell and Salas (1991) used status interchangeably with organizational rank
in their study of stress and decision making. Nor is status the same as self-esteem
(Schlenker & Gutek, 1987) or social capital (Belliveau et al., 1996), although having a
high status may contribute to both.
Finally, so a wide range of theoretical perspectives on status form the foundation
for the chapters in this volume as they form the foundations of the various subfields in
management and organizations. For example, one major area of inquiry centers on how
people of differing status behave in interaction with one another (e.g., Blau, 1994;
Brewer & Kramer, 1985; D’Aveni, 1996; Greenberg, 1988; Levine & Moreland, 1990;
Tyler, 1999; Webster & Hysom, 1998), with several chapters building on and developing
this stream of status research. An important variant of this work is the study of how status
differences affect participants’ expectations of one another, most prominently Berger et
al. (1983) and Berger and Zelditch’s (1998) Expectation States Theory. Expectations
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States Theory is particularly useful in understanding how people use cues to determine
another’s status, which in turn colors a host of other perceptions and evaluations
important to individuals’ commitment and performance that are further developed in this
chapter. Similarly, normative expectations regarding interaction patterns that support
others’ claimed status, called “facework” by Goffman (1959), is receiving increased
attention with studies of East Asians’ cultural preference for interactional support of a
respected social standing (e.g., Doucet & Jehn, 1997; Earley, 1997). In addition, the ways
in which interaction patterns condition status assessments is further developed in several
chapters in this volume. Social Dominance Theory has proven useful in understanding
racial discrimination in societies at large and here is applied to understanding the
persistence and change in status differences in organizations. In addition, Podolny’s
(1993) seminal idea that status is an indicator of product or service quality in
marketplaces is critiqued, expanded, and developed in this volume. Finally, Social
Identity Theory has become central to much research on team performance and
workplace discrimination. In several chapters here theory about how identity is driven by
conflicting status implications of various selves is described. Yet, as various as the
different theories of status included in this volume, all authors conceive of status as a
judgment of the relative worth and value of another in a particular social setting;
performance quality, expertise, power, formal hierarchical rank, and a host of other
features, may influence judgments of a person’s relatively status, but they are not
themselves status.
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High Status Is Advantageous
If a desire for higher status drives action, it is important to understand why this
should be so. First, many have argued that the drive for status is fundamental. For
example, Troyer and Younts (1997) suggest that one of the primary motivations for
individuals’ participation in groups is the avoidance of status loss. Waldron (1998)
further proposes a biological need to strive for status,
“Founded in the principles of natural selection, the central thesis from
evolutionary psychology is that particular psychological and physiological
mechanisms – in this case for status – would have been selected for in the history
of our species because of the adaptive advantages that … status afforded
individuals would have been greater access to scarce and sought-after resources
(Waldron, 1998, p. 511).”
Certainly it would appear obvious that having high status leads to desirable
advantages and that people will make efforts to obtain those advantages. After all, a
major component of the world economy is the production of costly display goods whose
primary purpose is to signal high relative status. Economists call these positional goods,
ones valued not for their intrinsic value but because they compare favorably with what
others have (Hirsch, 1976). A documentation of the value of status for those in
organizations and for organizations themselves makes the point vividly.
In organization-focused research, there is extensive documentation of the fact that
an actor’s relatively higher social status leads to others’ assumptions that the actor is
competent and a high performer. For example, status in one domain tends to generalize to
other domains. Webster and Hysom (1998) found that higher levels of educational
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attainment led laboratory subjects to assume that those with more education had greater
task competence, even when such competence was unrelated to education. Further, those
with more status do not have to work as hard as those with lower relative status to be seen
as good performers; Szmatka, Skvoretz and Berger (1997) found that those with higher
status were held to easier performance standards than were those with lower status, as did
Washington and Zajac (2005). Similarly, Kilduff and Krackhardt (1994) found that being
perceived to have a high-status friend boosted a person’s reputation as a good performer.
Status also generalizes from organizations to the members who participate in them (e.g.,
Elsbach & Kramer, 1996), such that employees of higher status organizations are
assumed to be better performers than those in relatively lower status organizations.
Furthermore, those with high status receive disproportionately higher rewards,
particularly financial ones. For example, Stuart, Hoang and Hybels (1999) showed that
having high-status affiliates shorten a firm’s time to initial public stock offering, and
produced greater valuations compared to firms who lacked high status affiliates. D’Aveni
(1996) found that high-status university degrees increased upward mobility opportunities.
This effect seems to be particularly pronounced under ambiguous circumstances – as
others seek some evidence of the person’s competence when concrete evidence is
unavailable. For example, Chung et al. (2000) found that high-status investment banks
were more likely to form alliances with others of high status under the more ambiguous
circumstances of an initial public offering then in less uncertain underwriting deals.
Similarly, Pfeffer (1977) found that occupying a higher social class was a better predictor
of organizational advancement in the (pre-deregulated) U.S. banking industry than in
manufacturing where there were clearer measures of individual job performance. This
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effect seems to be quite generalizable: for example, those with higher status are less
likely to be harassed (Aquino, et al., 1999), and those with higher status also achieve
better outcomes in negotiations (Ball & Eckel, 1996).
What is more, those with high status appear to be able to obtain more deference
from others, and so to be able to get more of what they want. Berger and Zelditch (1998),
Lovaglia, et al. (1998), Okamoto & Smith-Lovin (2001), Szmatka et al. (1997), and
Webster and Foschi (1988) all found that those with higher status received more
deference from others and were more influential in group discussions. Levine and
Moreland (1990) concluded from their review of social psychological experiemental
research on the subject, that people with higher status have more opportunities to exert
social influence, try to influence other group members more often, and become more
influential than people with lower status. Others have documented differences in behavior
patterns consistent with this expected pattern of deference. For example, high-status
individuals were characterized as more dominating and smiled less in interaction (Carli,
LaFleur & Loeber, 1995).
The advantages of status are reflected in research on those who find themselves
with conflicting statuses – they tend to emphasize their high-status characteristics and
downplay their low ones (Elsbach & Kramer, 1996). What is more, those who lose status
at work tend to be less satisfied, have lower self-esteem, and report more work-related
depression (Schlenker & Gutek, 1987). Elsbach and Kramer (1996) found that when an
organization’s status was denigrated, its members experienced dissonance and acted to
emphasize those dimensions on which their organization had higher rank. Pearce,
Ramirez, and Branyiczki (2001) suggested that relative status incongruence was the
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primary motivator of executives’ organizational change strategies in communist
transition economies. Further, there is substantial evidence that those who have
inconsistent status roles in organizations experience greater stress and strain (Bacharach,
Bamberger & Mundell, 1993).
In Summary, occupying comparatively higher status positions provides many
advantages, such as the assumption of competence in unrelated domains, greater financial
rewards and other benefits, and more deference from others. And this probably is only a
partial list of the advantages of relatively higher status. So, given these status advantages,
and the likelihood of many other benefits, we should not be surprised that people in
organizations and markets, as in other social settings would seek high status, and struggle
to prevent a loss of status. High status is actively pursued and vigorously defended
because it provides so many advantages -- power, wealth, dispensations, and longevity,
within organizations or in any other social setting. The importance and centrality of status
to social life is reflected in literature, mass entertainment, and is the foundation of the
popular leadership and management self-help industries.
How Status Differences Arise
If status is so advantageous, how do some people and organizations get more of
it? Unfortunately, the research on how relatively high status is obtained is not as
extensive as that on the advantages of status. Weber (1914/1978) proposed that social
status was based on occupational prestige, lineage prestige, style of life, formal education
and, with some time-lag, material wealth. Having more money seems to be a universal
route to higher status. For example, Nee (1996) recorded that as market reforms were
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introduced in China, the status value of being a cadre (communist party activist) declined
in favor of working in private businesses, because the economic changes meant cadres
controlled an increasingly smaller proportion of financial resources. Similarly, higher
levels of education (Bidwell & Friedkin, 1988), working in high-status occupations
(Kanekar, Kolsawalla & Nazareth, 1989; Riley, Foner & Waring, 1988), and
memberships in elite organizations (D’Aveni & Kesner, 1993; Kadushin, 1995) are
avenues to higher social status in unrelated social domains.
Job performance also appears to be a reliable ways to gain status in the
workplace. Shackelford, Wood, and Worchel (1996) found that individuals enhanced
their status by demonstrating superior ability at the task assigned to the group. This
suggests that behaviors that are useful to the group or organization may be the basis for a
gratitude that generalizes to respect and high social standing.
Yet there appear to be easier ways to gain high status than the hard slog of high
performance. For example, Sundstrom and Sundstrom (1986) documented the value of
status-object displays. In addition, those who spoke more, and were more articulate and
assertive without being hostile and dominating received attributions of higher status
(Driskell, Olmstead & Salas, 1993; Skvoretz & Fararo, 1996). He and Huang (2009) and
Tansuwan and Overbeck (2009) found that expressing contempt (implicitly) or pride
(implicitly or explicitly) led others to grant the actor higher status. Finally, non-verbal
behavior such as maintaining eye contact and voluntarily sitting at the head of the table
also resulted in others’ attributions of higher status (Berger & Zelditch, 1998).
Finally, Podolny (1993) proposed that organizations acquire relatively higher
marketplace status by delivering, or being perceived to be able to deliver high-quality
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products. Similarly, client organizations expect the higher status of vendors such as
advertising agencies (Baker, Faulkner, & Fisher, 1998) and law firms (Uzzi & Lancaster,
2004), and endorsements by prominent institutions (Stuart, Hoang, & Hybels, 1999) all
contribute to their own organization’s relative status.
Because status pertains to particular social settings, it may well be that the routes
to higher status will vary in different groups, organizations, industries and cultures,
making generalizations more difficult. Like power, status is advantageous and often
sought, but exactly how it is achieved may be highly situation-specific. Several of the
chapters in this volume directly address how relatively high status is obtained, finding
that in their research settings, status attainment is a more complicated matter than this
brief review indicates.
In conclusion, status is a respected social position that may be associated with
hierarchical authority, power and money, but is distinct from them. Having relatively
higher status provides many advantages and so individuals, groups and organizations
actively pursue and defend it. This is well known, and provides the foundation for the
scholarship provided in this volume. However, taken as a whole, what is clear from the
new work in this volume is that much historical status research has focused on status in
comparatively stable social settings. Much of the new research focuses on emergent,
innovative, virtual and changing workplaces and markets, finding that the ambiguity of
such settings makes social status an important anchor of perceptions and evaluations. The
attainment and defense of status is both more important, and more complex in these
ambiguous and shifting environments.
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The Contributions to This Volume
This volume contains work from many of the the leading scholars in status from
across the range of management and organization studies – those with basic disciplinary
roots in economics, political science, sociology, social and other branches of psychology.
The chapters are grouped into five sections and a concluding integrative chapter.
Part I, How status differences are legitimated, includes two chapters that extend
our knowledge of how status operates in markets and organizations. In the first chapter in
this section, Chapter 2, Bilian Ni Sullivan and Daniel Stewart directly confront the bias
toward stable social systems in status research by addressing the persistent status
variability or uncertainty of some participants in an online open-source software
developers’ community. In these settings expertise is critical to the community’s
effectiveness, but expertise needs to be evaluated and judged in the absence of face-toface interaction or formal hierarchy of authority. Their research questions several
established theories of how individuals interact to form collective judgments. For
example, much theory and scholarship predicts convergence and consensus of important
social features like status, yet they find that high-status long-tenure participants grow
increasingly divergent in their assessments of the performance of others in the opensource developer community. Performance-based status positions in these communities
were not produced by consensus, as is so often found in face-to-face social settings. The
members of this community interact, and interact frequently over long periods of time,
but do not converge in their assessments of the status of others. Bilian Ni Sullivan and
Daniel Stewart’s work in these new organizational communities helps to identify the
limitations of our bureaucracy-based theorizing about interaction and consensus.
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Next, in Chapter 3, James O’Brien and Joerg Dietz develop insight into why there
has been so little progress in understanding the persistence of racial, ethnic and gender
bias which undermines the oft professed desire to recognize and reward organizational
participants based on their performance. Their chapter introduces scholars in
management and organization to the role that Social Dominance Theory can play in
explaining the maintenance of ascriptive (class or demographic) status through self
reinforcing dynamics. They describe how social status hierarchies are legitimated and
sustained even when they conflict with professed organizational merit-based status
hierarchies. James O’Brien and Joerg Dietz draw on research showing that individuals
vary in the extent to which they support ascriptive status hierarchies to suggest how such
biases can better be attenuated in organizations.
Part II, The influence of status on markets, contains two chapters addressing how
markets are affected by status. In Chapter 4 Michael Jensen, Bo Kyung Kim and Heeyon
Kim develop new theory to help explain which firm strategic moves into different
product or service markets will be attractive and successful. They address the widespread
assumption of those who study the role of status in strategy and firm performance: that
status is equivalent to firm quality. They make a persuasive case that bringing the original
understanding of status as social prestige back into strategy research allows fertile
theorizing about the effectiveness of different kinds of diversification strategies. Their
exciting work distinguishes between horizontal status (the status of the product or
service) and vertical status (the status of a firm within a particular product or service
niche or industry). By placing firms within this theoretical grid Michael Jensen, Bo
Kyung Kim, and Heeyon Kim produce provocative and original predictions about such
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questions as whether it is better to pursue higher status within your own industry or move
horizontally or diagonally to another product or market.
In Chapter 5 Michael Nippa addresses the market for labor, and how a popular
economic theory of executive compensation insufficiently considers the confounding
effects of status seeking. He demonstrates how the inclusion of status can extend and
improve the increasingly popular Tournament Theory applications to managerial
compensation. Tournament Theory has been used to account for the extremely high
levels of motivations in structures, such as competitive sports, that resemble tournaments.
More recently the theory has been used to rationalize the recently rapidly increasing gap
between the compensation of firms’ chief executives and other highly-paid employees.
Michael Nippa systematically demonstrates that very high executive compensation
cannot result from tournament compensation structures, and argues for the exploitation of
high status and power as a more powerful driver of high executive compensation. His
chapter concludes with practical suggestions for the design of tournaments within
organizations.
The next two chapters address the powerful role of status in shaping emerging
innovation-based industries and firms (Part III, The role of status in new industries and
ventures). Tyler Wry, Michael Lounsbury, and Royston Greenwood, in Chapter 6,
directly address the lack of context in so much research on status. They note that scholars
from the range of social science disciplines treat status -- that most social of phenomena - as surprisingly de-contextualized. In a study of innovation in the emerging
nanotechnology industry they found support for the varying circumstances under which
high-status star researchers do, and do not, influence the development of innovation
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paths. Their work contradicts the widespread assumption that relative status always
drives attention in innovation-driven industries. Tyler Wry, Michael Lounsbury, and
Royston Greenwood’s chapter draws on their research to directly address one of the
central problems in institutional analyses of organizations: when does social system
change come from low-status marginal participants, and when from high-status central
participants?
In Chapter 7 Kim Saxton and Todd Saxton propose a conceptualization of the role
of status in the external funding of emerging firms, and argue that the study of venture
capital funding has been under-socialized. For emerging firms in the high-startup-cost
technology and pharmaceutical industries (entrepreneurial ventures that do not yet have
products or customers) important decisions to fund and provide support are made before
any objective performance can be evaluated; such judgments would be expected to be
influenced by the social standing of the entrepreneurial team. When the technologies and
markets are unproven, and failure rates and the potential gains are high, funders cannot
rely solely on conventional financial and market benchmarks in evaluating potential
investments. Scholars of venture capital have noted that social information seems to play
a role in these highly ambiguous circumstances. However, with a limited understanding
of social processes they are reduced to labeling these ill-understood processes as
reputation, or sometimes legitimacy. Kim Saxton and Todd Saxton distinguish
legitimacy, reputation and status and theorize that their relative importance in venture
funding decisions varies based on the emerging venture’s stage of development. They
draw on the popular status-producing rankings and “Best” listings in business periodicals
to describe how and when status drives new venture funding.
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In Part IV, When ascriptive status trumps achieved status in teams, the chapter
authors theorize about how team members use cues to assess status and expertise in faceto-face teams. In Chapter 8, Stuart Bunderson and Michelle Barton focus on the
challenge of those who must work together on interdependent tasks who face the
challenge of correctly identifying who has relevant task expertise. Expertise is often
difficult to assess, and so individuals rely on more visible cues, cues that may reflect the
person’s expertise, but may just as well reflect non-task relevant ascriptive or other social
status. They note the powerful effects of status on influence and attention and so seek to
better understand how individuals assess and combine conflicting visible cues. In their
chapter they develop an integrative typology of different status cues, based on their
insight that some cues are more reliable (that is, accurately assessed) but may not validly
represent expertise. Drawing on well established research regarding our bias toward what
is reliably measured, Stuart Bunderson and Michelle Barton make provocative
predictions about which status cues will dominate in the absence of cues that are clearly
both reliable and valid.
Melissa Thomas-Hunt and Katherine Phillips, in Chapter 9, address how and when
racial stereotypes are activated in teams of functionally diverse high-achieving
individuals. Such teams increasingly are used with more complex technologies, rapidly
changing markets, and increasingly globalized work. Here they seek to explain the
conflicting research on the impact of race on teams’ effective use of members’ expertise
by proposing that low-ascribed status is cued when individuals display stereotype
consistent actions, when they report activities that cue lower ascriptive status, or when
they act in ways that violate normative expectations for team behavior. By drawing on
22
our knowledge of status-cueing Melissa Thomas-Hunt and Katherine Phillips help
identify actions individuals and organizations can take to reduce one of societies’ and
organizations’ most persistent challenges.
The two chapters in Part V, Status in the workplace, both draw on how status
affects individuals, addressing two of the most prominent lines of scholarship in
organizational behavior: identity and justice. Kimberly Elsbach, in Chapter 10, draws on
her own work and others’ research on status signaling to make innovative contributions
to Identity Theory. She provides evidence that directly questions Turner’s (1987)
assertion of functional antagonism, or that if the salience of one self-categorization
increases the salience of another one decreases. She provides a persuasive argument that
those doing work develop quite savvy systems to signal both high distinctiveness and
high status, even when these may conflict. Individuals can deploy a varying mix of
physical markers and behavioral actions to send complex and sophisticated identity
signals. By building on scholarship on status Kimberly Elsbach provides a powerful
critique and extension of Self-categorization Theory.
In Chapter 11 Jerald Greenberg and Deshani Ganegoda draw on recent research to
explain how individuals’ status affects their reactions to just or unjust treatment by their
organizations, offering numerous powerful new ideas. For example, they propose that
both distributive injustice (getting less than you feel you deserve) and procedural
injustice (the rules for reward distributions are unfair) serve as signals that the person
occupies a disrespected, low status. Similarly, low-status organizational members look to
just procedures as a source of security, whereas high-status employees expect just
treatment as a right due their high status. Because justice theorizing forms the basis for
23
our understanding of the effectiveness of organizational reward and incentives systems,
Jerald Greenberg and Deshani Ganegoda’s propositions hold promise to move status to
the center of the field of organizational behavior.
The final chapter, Chapter 12, the editor, Jone Pearce, highlights and explores the
chapter authors’ theorizing about both the role of status in better understanding
management and organizations, and to possible cross-fertilizations provided by bringing
these diverse scholars’ ideas together. The contributions status can make to theorizing
and research in organizational behavior, organization theory and strategy, are noted as
well as how they have helped advance our understanding of this powerful and complex
phenomenon, status.
24
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