THE WILLIAM DAVIDSON INSTITUTE
AT THE UNIVERSITY OF MICHIGAN
EXTENDING LINKAGES BETWEEN ORGANIZATIONAL
ANALYSIS AND SOCIAL STRUCTURE: A CASE STUDY OF
THE CELEBRITY-CONSTRUCTION OF A
By: Marc Jacobs
William Davidson Institute Working Paper Number 967
EXTENDING LIKAGES BETWEEN ORGANIZATIONAL
ANALYSIS AND SOCIAL STRUCTURE: A CASE STUDY OF THE
CELEBRITY-CONSTRUCTION OF A CHINESE MARKETPLACE
This paper examines the emergence of firm-celebrity, both an intangible-asset,
and a facilitator of competitive advantage. Institutional approaches have asserted
that organizations from the same organizational field and characterized by
comparable structural positions face similar structural forces. These result in
isomorphic tendencies, and similarities among firms. But, in any organizational
field, differences among firms also exist. Apart from research on variations
resulting from intra-organization factors, however, firm-differentiating processes
have not received much attention. This paper focuses on various firm-external
social constructions: legitimacy, reputation, and status, and how they impact the
emergence of firm-celebrity, a construct that helps to differentiate one firm from
another. The paper adopts a historical, relationally framed approach, which
features a firm-celebrity case study.
The recent calls by scholars for a greater coherence within management research between
organizational analysis and social structure have yet to be fully heeded (Lounsbury &
Ventresca, 2003). There remains much work to be done in order to reap the benefits
gained from an expanded understanding of the relationships existing between
organizations and other socially constructed, relationally situated, social-structures (and
between the social structures, themselves). Many have complained about a lack of effort
in this area (Dobbin, 2008; Emirbayer & Johnson, 2008). They have called for less
compartmentalized, relational studies examining inter-actions between agency and
structure, and between structure and structure. An existing problem, however, has been
the existence of a dichotomy in research positions, with those championing atomistic,
individualistic accounts tending to separate themselves from individuals promoting
structural positions and vice versa (Heugens & Lander, 2009: 61). Gaps exist.
This study seeks to bridge these gaps. Through an incorporation of the notion of
fields, or realms consisting “of all relevant actors in a social space” (Dobbin, 2008: 56), it
combines issues of agency with notions of social structure to show how a hierarchical
framework of social standing emerges (Vandenberghe, 1999: 53). Such an approach
involves a focus not only on agency, but also on how “structured structures…function as
structuring structures” (Bourdieu, quoted in Vandenberghe, 1999: 48). The paper posits
that the motivation for actors to undertake structurally influencing actions is not only the
actors’ own hopes of achieving an improved action-environment for themselves, but also
the actors’ cognizance, via an ongoing monitoring of their environment, of the
competitive environments they face (White, 1981). Individuals are aware of their social
embeddedness (Granovetter, 1985), and this realization influences the actions they
choose and the norms they follow. Such a view is in line with the conceptualizations of
social-exchange theorists, who believe that the success of social norms depends on
mechanisms inherent within ongoing social relationships (Nee & Ingram, 1998: 24).
In its formulation, the paper relies upon an inductively founded case-study, which
draws its principal strength from an integration of theory and interview results, to
investigate the manner by which a chosen organization, one situated in a non-U.S. based
environment, garnered competitive advantage in the form of firm-celebrity (Rindova,
Pollock & Hayward, 2006: 66). The study heeds the current suggestions of scholars
advocating a heightened focus on the “natural history” of organizations, wherein an
enhanced understanding of organizational change is achieved through a reliance on a
temporally based perspective, which gives weight to the manner by which organizational
changes occur over time (Davis & Marquis, 2005: 333). In addition, the paper also
adopts a relational view (Emirbayer, 1997; Emirbayer & Johnson, 2008; White, 1992). It
focuses on the processes of narration, presentation, and action relied upon in the initiation
and construction of the in-focus structural form. The principal foci of the investigation
are how, in a particular real-life situation, the celebrity-attainment process took place.
A specific goal of the paper, one that is intended to help extend further the linkages
between organizational analysis and social structure, is the fostering of understanding
regarding the inter-relations between celebrity and three socially constructed intangible
assets: legitimacy, reputation, and status. The little, existing work pertaining to firm
celebrity, apart from theorizing about the methods actors should rely upon to achieve
celebrity for their organizations, has actually tried to differentiate celebrity from these
other constructs (Rindova, et al., 2006). It has not attempted to relationally link celebrity
with them. In this paper, however, the center of attention is on how the processes of
celebrity attainment depend upon its inter-relations with legitimacy, reputation, and
status. Such an approach is important because it shows the inter-linkages between the
structures, not just at a particular instant, but also over time. The significance of such a
dynamic approach has been noted elsewhere (Barney, 2001: 51).
This focus is not only important in and of itself, but more so given the fact that the
research environment selected for the empirical portion of the paper is a non-U.S.
situated one. The preponderance of existing research concerning intangible assets has
paid overwhelming attention to developments within the U.S., only. The current study,
given its China-situated location, offers the potential to add to overall understanding by
unearthing insights regarding the possible outcomes in other, non-U.S. locales. For
example, with respect to issues of status in U.S.-focused research the key variable of
consideration has tended to be the market ties an actor has with other high-status actors
(Benjamin & Podolny, 1999; Han, 1994). These ties are said not only to promote
information flow and resource acquisition, factors of critical importance to success within
a market environment, but also to influence how others perceive an actor in terms of its
quality and performance. But the frameworks and results relied upon in these studies are
premised on the existence of a strong market context. It remains to be seen whether such
ties are of similar importance in other societies, places where the market is less of a
focus. In fact, in hybrid economies, economies transitioning from a state-led economy to
a more marketized one, a situation of “politicized capitalism” frequently exists (Nee &
Opper, 2007). And, under such a context, commercial action frequently depends on
political connections. Researchers have asserted that in these locales ties to the
government should thus be of more significance than would be the case in market
economies, where prices play more of a determining role (Ibid: 107).
With respect to the ordering of this paper, I divide it into this introduction and four
additional sections (one of which is the conclusion). The first section (following the
introduction) starts out with a discussion of celebrity, defining the construct and then
shifting to a consideration of the manner by which firm-celebrity attainment has been
characterized in existing literature. Past depictions have emphasized the role of the
media in this process, directing little attention to other important factors. While the
media certainly plays a critical role in the celebrity-development process, the stress in this
paper is on how other intangible assets, legitimacy, status, and reputation, also relate.
The paper puts forth various propositions concerning the roles of these constructs in the
celebrity-development process. The second section is made up of the empirical results
from the case study. It introduces the case-study subject, the Yiwu Small Commodities
Market (subsequently referred to as Yiwu or the Yiwu marketplace), and outlines how
this organization moved from a situation of near anonymity to become China’s most
famous center of trade. Given that in China there are now more than 4,000 marketplaces
having total sales of over 100 million RMB (around USD15 million) annually (Song,
Wang and Wang, 2008, P. 3), this has been no simple task. The section summarizes the
process of Yiwu’s celebrity development. The third section, in a general sense, focuses
on the relevance of the Yiwu story to celebrity scholarship interlinking the history of this
process with a discussion of the paper’s earlier comments and formulated propositions.
The paper’s fourth and concluding section presents a summary of the paper’s main
FIRM-CELEBRITY, EXISTING VIEWS OF ITS CONSTRUCTION, AND HOW
LEGITIMACY, REPUTATION AND STATUS RELATE
What Is Firm-Celebrity?
This paper defines firm-celebrity to be an outcome in which an organization garners
significant attention from the public, while at the same time realizing “positive emotional
responses from stakeholder audiences” (Rindova, et al., 2006: 50). Celebrity is a social
construction. It is both a strategic resource (Barney 1991), and an intangible asset (Hall,
1992). Strategic resources are valuable, rare, non-imitable (uneasily copied), and non-
substitutable forms of organizational property. Intangible assets are possessions that
cannot be touched or seen, but that have value. Scholars have directed significantly more
attention to intangible-assets like reputation, status and legitimacy than they have to
celebrity (Rindova, Williamson, Petkova, and Sever, 2005; Podolny, 1993, 2005;
Fombrun and Shanley, 1990; Suchman, 1995; Deephouse and Carter, 2005; Suddaby and
Greenwood, 2005). Celebrity remains an under-researched topic.
Existing Frameworks Relating to the Construction of Firm-Celebrity
In fact, firm-celebrity has received very little attention, and the attention it has
received relates more to theory than to empirical investigations. This is true of not only
firm-celebrity, but also of celebrity in general. Actually, the only paper to discuss
succinctly the topic of firm-celebrity, as well as the processes by which an organization
goes about achieving it, was a 2006, largely theoretical work by Rindova, et al. entitled,
“Celebrity Firms: The Social Construction of Market Popularity.” In their paper,
Rindova, et al. portray firm-celebrity in relational terms, referring to it as “a property of
[an] actor’s relationship with an audience, rather than a characteristic of the actor
him/her/itself” (2006: 51). They contend that celebrity is different from other intangible
assets, like reputation, status, and legitimacy, in at least three ways: theoretical
underpinnings, socio-cognitive foundations, and processes of emergence (Ibid: 54). A
large portion of the Rindova, et al. paper focuses on how firm-celebrity is unique as
compared to the other intangible assets noted above.
Two of the primary differences cited by Rindova, et al. pertain to how celebrity is
theorized, and to the manner by which firm-celebrity comes into existence. Although
studies of the three other intangible assets “focus on how a firm’s behaviors and
performance are evaluated, assuming that the firm is already noticed” (Ibid: 55), the
authors of the Rindova, et al. paper assert that the focus of celebrity research is different.
One difference is that celebrity does not emphasize evaluation (Ibid). In addition to
examining the unique qualities of firm-celebrity, Rindova, et al. also posit various
propositions pertaining to the means by which the celebrity-attainment process should
successfully unfold, stressing the role of the media, and asserting that in order to achieve
celebrity-related success those engaged in relevant processes must rely upon the
publicizing of dramatic narratives about the celebrity-seeking firm. The authors contend
that these narratives must encompass a conflict situation (involving a disruption of the
status-quo), in which the firm is portrayed in the role of a non-conforming, likeable
protagonist possessing a well-developed character (Ibid: 57-65). According to Rindova,
et al., agents of the firm need also be involved in the celebrity-construction process in the
sense that they take an active role in actions intended “to project desired images to
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1 Wuhan yes yes markets, disordered, many goods, women's jewelry perhaps Changshu no
2 Wuhan no yes markets, wealth, clothing producer no no
3 Hubei no yes manufacturing center, market, wealthy, cheap prices, many goods no not sure
4 Wuhan yes yes small commodities, market, wealth, many goods, production center no no
5 Wuhan yes yes market not sure not sure
6 Wuhan no yes market, many goods, wealth, production center no not sure
7 Hubei no yes small commodities, market, business ability, wealth, civilized Shaoxing not sure
8 Hubei no yes market, good business environ., wealth, product selection, bus. Skills Changshu not sure
9 Fujian no yes small commodities, production center, market, bus. Ability no no
10 Wuhan no yes production center, tourism, market, business ability not sure no
11 Hubei no yes small commodities, market not sure no
12 Hubei no yes production center, market, wealth, government support no no
13 Fujian yes yes developed, market, total dependence on market, wealth, well ordered not sure no
14 Wuhan no yes small commodities, poor quality of goods (early), cheap prices, market no inconsist. quality
15 Wenzhou no yes small commodities, exports, wealth, future potential no not sure
16 Hubei no yes large market, well-ordered, good selection, exports, wealth no no
17 Wenzhou yes yes market, good development, well ordered, wealth, many products yes culture, hygiene
18 Wuhan no yes ability to do business, market, openness not sure no
19 Fujian yes yes market, well developed, comprehensive selection, wealth no order
20 Hebei no yes small commodities, market, product selection,wealth yes, Baigou no
21 Hebei no yes market, small commodities, production center no not sure
22 Hebei yes yes dirty, disordered, wealth, smart in bus.,market yes, Shenyang dirty, disordered
23 Hebei no yes small commodities, production center, market, wealth, good economy no no
24 Jilin no yes small commodities, production center, wealth, market, well developed no no
25 Hunan no yes clothing not sure no
26 Wenzhou yes yes small commodities, hand made goods, export center, market Guangzhou no
27 Anhui no yes market, small commodities no no
28 Liaoning no yes small commodities, market not sure no
29 Hunan no no
30 Hubei no yes not sure where Yiwu is, many foreigners, market, distribution center no poor creditabilty
31 Wenzhou yes yes market,openness, wealth,convenience no
clothing just so-
32 Hebei no yes small commodities, small appliances, market, wealth, production area not sure suspect quality
33 Hebei no yes market area, production center, clothing Baigou suspect quality
34 Jiangsu no yes small commodities, production center, clothing Guangzhou not sure
35 Zhejiang no yes small commodities, clothing, markets, wealth, business acumen no no
36 Hubei yes yes small commodities, market, production center, high real estate prices Guangzhou no
37 Shandong no no
38 Fujian no yes small commodities, clothing, production, distribution center, market Guangzhou, Shenzhen not sure
39 Sichuan no yes not sure Guangzhou, Wuhan no
40 Wenzhou no yes small commodities, wealth no no
41 Jinan no yes small commodities, wealth, market
42 Jilin no yes market, clothing not sure no
43 Jinan no yes clothing market not sure no
44 Jinan no yes market, small commodities Changshu, Guangzhou no
45 Hubei no yes small commodities Wuhan no
46 Zhejiang yes yes small commodities, market no no
47 Zhejiang no yes small commodities Changshu no
48 Jinan no yes distribution center, market no no
49 Wenzhou no yes small commodities, production center, wealth no no
50 Jinan no yes small commodities, market Guangzhou no
51 Jinan no yes small commodities, market, wealth Guangzhou not sure
52 Zibo no yes wealth, small commodities Hangzhou, Changshu no
53 Zhejiang no yes big market no not sure
54 Jinan no yes not sure not sure not sure
55 Hubei no yes small commodities, market, wealth Wuhan no
56 Jinan no yes small commodities, clothing, market not sure no
57 Liaoning no yes small commodities, market, clothing no no
58 Jinan yes yes market, small commodities, wealth, developed Guangzhou, Changshu no
59 Jinan no yes small commodities, market, business acumen Wuhan, Guangzhou no
DAVIDSON INSTITUTE WORKING PAPER SERIES - Most Recent Papers
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