Conformity and Defiance of High- and Middle-Conforming Actors: The Case of Share Repurchase by U.S. Specialized and Diversified Firms in the 1997-2005 Period


Guilhem Bascle
  • Speaker
Louvain School of Management, Catholic University of Louvain

Event Information

Type
Research Seminar
Programme
Business-Society Management
Date
Wed. 30 Jan. 2008
Contact
Time
14:00-15:00 hours
E-mail
Location
Mandeville Building T7-67
Number


Abstract

This paper tackles the central question, in institutional theory, of substantive conformity and defiance by offering a detailed and nuanced framework to understand the impacts of conformity and defiance on external support. It advances that the rewards and penalties, linked to an actor's decision to conform or defy institutional norms, are a direct function of the actor's previous degree of conformity. Specifically, it is argued that while high- and middle-conforming actors will be rewarded when they conform, high-conforming actors will be significantly more rewarded than their middle-conforming peers. Similarly, while middle-conforming actors who reject a norm will be harshly punished, their highly-conforming counterparts will on the contrary secure external support. The validity of this framework is tested on the share repurchase behavior of U.S. publicly traded diversified and specialized firms in the 1997-2005 period. Results show that diversified firms are significantly less rewarded than their specialized peers when they repurchase. Diversified firms are also harshly punished when they stop repurchasing their shares, while specialized firms are not. Implications for research on social recognition, norms, conformity, deviance, and temporal dimensions of agentic actions are exposed.
 
Contact information:
Pursey Heugens
Email
Pursey Heugens
Professor of Organization Theory, Development, and Change, Scientific Director ERIM, Dean of Research RSM
  • Coordinator