WHEN GOOD NAMES GO BAD: SYMBOLIC ILLEGITIMACY IN ORGANIZATIONS

We empirically examine the institutional dynamics attending the process whereby legitimate organizational symbols become illegitimate. We conducted two studies, one historical and one comparative, of those firms that appended “dot-com” to their names during the period of “Internet euphoria,” 1998–1999. The first study analyzes the legitimacy over time for one case, that of Egghead software, the first organization to affix “dot-com” to its name. The second study compares the legitimacy of firms named “dot-com” in the wake of the “dot-com” crash, using both public perceptions and financial valuations. Results from the two studies indicate that good organization names can go bad rather quickly and illustrate how swift and definitive the process of deinstitutionalization can be.

[1]  David L. Deephouse,et al.  Does Isomorphism Legitimate? , 1996 .

[2]  Gerald F. Davis,et al.  The Decline and Fall of the Conglomerate Firm in the 1980s: The Deinstitutionalization of an Organizational Form , 1994 .

[3]  Rikki Abzug,et al.  Institutionalizing Identity: Symbolic Isomorphism and Organizational Names , 2002 .

[4]  Peggy M. Lee.  What's in a name.com?: The effects of ‘.com’ name changes on stock prices and trading activity , 2001 .

[5]  M. Lounsbury.  Cultural Entrepreneurship: Stories, Legitimacy and the Acquisition of Resources , 2001 .

[6]  Matthew S. Kraatz,et al.  Exploring the Limits of the New Institutionalism: The Causes and Consequences of Illegitimate Organizational Change , 1996 .

[7]  W. Powell,et al.  The New Institutionalism in Organizational Analysis , 1992 .

[8]  John P. Robinson,et al.  Social Implications of the Internet , 2001 .

[9]  John W. Meyer,et al.  Institutionalized Organizations: Formal Structure as Myth and Ceremony , 1977, American Journal of Sociology.

[10]  Kimberly D. Elsbach,et al.  Acquiring Organizational Legitimacy Through Illegitimate Actions: A Marriage of Institutional and Impression Management Theories , 1992 .

[11]  C. Fombrun,et al.  What's in a Name? Reputation Building and Corporate Strategy , 1990 .

[12]  L. Zucker.  The role of institutionalization in cultural persistence. , 1977 .

[13]  J. Pfeffer,et al.  Organizational Legitimacy , 1975 .

[14]  A. Hughes.  A Rose by Any Other Name... , 1979 .

[15]  Neil Fligstein,et al.  FROM THE TRANSFORMATION OF CORPORATE CONTROL , 2021, The New Economic Sociology.

[16]  Mark C. Suchman.  Managing Legitimacy: Strategic and Institutional Approaches , 1995 .

[17]  K. Davis.  Illegitimacy and the Social Structure , 1939, American Journal of Sociology.

[18]  Ezra W. Zuckerman,et al.  The Categorical Imperative: Securities Analysts and the Illegitimacy Discount , 1999, American Journal of Sociology.

[19]  Michael J. Cooper,et al.  A Rose.Com by Any Other Name , 2000 .

[20]  C. Ansell.  Symbolic Networks: The Realignment of the French Working Class, 1887‐1894 , 1997, American Journal of Sociology.