Lessons from the Whorearchy: What Can Sex Workers Teach Us about Stigma?

Here is one popular myth that many people hold dear: Those who are discriminated against, pursued, and stigmatized have at least one comfort in life – each other. Have we not seen many movies and heard many stories about how the downtrodden in life will band together and support each other, and may even fight back and gain the status they deserve?

In research published in Administrative Science Quarterly, Madeline Toubiana and Trish Ruebottom find a bleaker reality. They studied sex workers, meaning burlesque dancers, strippers, pornography actors, webcam actors, escorts, and dominants, who are stigmatized in society to such an extent that they typically try not to reveal the work they do. Given the difficult experiences that come as part of their work, they would seem like a group inclined to band together. Would it not be natural for them to confide in each other and help each other? Perhaps so, but as the researchers found, this is not exactly what happens.

Sex workers are united in being stigmatized by others but divided by how they stigmatize each other. They have different jobs, and the ones with greater physical exposure and contact with clients are stigmatized more. They have different backgrounds, and those who are minorities or come from poverty are stigmatized more. So, sex workers need to be careful in selecting who to interact with and how much to reveal even when they are interacting with each other, because there is always a risk that they will encounter stigma instead of support. Those who have enough initiative can still build or join groups that provide mutual support, but those groups are likely fractured and small as a result of all these divisions.

Does this seem like a specialized outcome from an unusual kind of stigmatized group? Maybe. But keep in mind that the myth of unity among the stigmatized is rarely questioned, and those of us who read online blog posts lack experience with such groups and know little about them.

In fact, we also know little about the groups who are not stigmatized but hold low-status positions in organizations we work for or buy products and services from. Are the cleaning personnel earning minimum wages (who everyone seems to ignore) at least on friendly terms with each other and willing to offer support? What about the servers working for the type of restaurant that offers little pay or tips, or the ubiquitous delivery-van drivers?

These questions are important because organizations are better off if employees at all levels work for them for a more positive reason than lack of a better alternative. If lack of a better alternative is the reason, as might be the case if pay is low and support from peers is hard to find, then employees will stay employed only as long as they have no better alternative. And usually, people are worth more to the organization than they are paid, sometimes much more, so assuming that the myth of mutual support keeps them happy can be costly.

One of the biggest changes in the US economy that has accompanied the Covid pandemic is the great resignation – a wave of resignations and retirements from industries with many low-status workers. Maybe this trend is unrelated to the research at hand. Or maybe workers in jobs with little money and no social support have found that they had a better alternative – not working.

Toubiana, Madeline  and Trish Ruebottom. 2022. Stigma Hierarchies: The Internal Dynamics of Stigmatization in the Sex Work Occupation. Administrative Science Quarterly, Forthcoming.

Shout or Discuss? Social Movements and Firm Collaborations

Firms are often targeted by social movements seeking to reform their behaviors. Think of the environmental destruction from fast-food packaging, the climate change driven by carbon emissions, and the wildlife reserves threatened by land development or mining. Often a single firm will attract attention from multiple social movement organizations that all want to change the same thing it is doing—such as air pollution—and its decision-makers may try to engage in discussions with them to find effective solutions. Will such engagement be possible, and if so, which social movement organizations will collaborate with the firm?

As Kate Odziemkowska demonstrates in research published by Administrative Science Quarterly, the answer lies in networks. If you read this earlier blog post and the one before, you have become used to networks being the answer to many questions, but this time you may wonder what kind of networks are in action. The answer is surprising but intuitive once you consider it: Because each social movement organization is fueled by its membership’s devotion to its cause, and some are more radical than others, what matters is the network of connections between the very radical social movement organizations and the moderate ones.

How does this work? First, firms prefer to collaborate with moderates, and moderate social movement organizations are much more likely than radicals to collaborate with firms. Second, social movement organizations collaborate with each other before they collaborate with firms, but moderates and radicals collaborate only in some social movements, not all. The effects of this collaboration (or lack of it) may seem counterintuitive: Moderates who collaborate with radicals in the social movement are more likely to work with firms, while moderates operating in a social movement where collaboration with radical groups does not happen are much less likely to work with firms. In the latter situation, moderates may fear that collaborating with firms will destroy their relationships and audience support within the social movement. Moderates connected to radicals are thus able to discuss, while moderates who lack that connection must shout in order to maintain their credibility in the movement.

What about the firm’s willingness to have discussions with social movement organizations? That part of the story is much simpler. To start, firms generally prefer to change nothing, especially along the dimensions of environmental and social responsibility that movements typically target. That is exactly why social movements target firms. Once they have been targeted by a social movement, firms do in fact seek collaborations. And they are interested in neutralizing the entire social movement, not just the social movement organization they start collaborating with, so for firms, it may be better to have discussions with moderate social movement organizations that are connected to radicals. This tactic is riskier for the social movement organization than for the firm, because radical social movement organizations may be critical of the collaboration.

This research brings up an interesting dilemma facing social movement organizations. To fulfill their goal of changing firm behaviors, they should engage in discussions with the firms and collaborate to find the best way forward. But many social movement organizations are built on the anger of their members, so talking to “the enemy” can weaken the movement. They need to have the strength to weaken themselves for the sake of fulfilling their goals.

Odziemkowska, Kate. 2021. Frenemies: Overcoming Audiences’ Ideological Opposition to Firm–Activist Collaborations. Administrative Science Quarterly, forthcoming. 

How to Use Authority: Peer Pressure Works Best

Have you encountered organizations with authority structures that don’t quite match the training and status of the people holding each position? They are more frequent than you might think. Engineers and scientists doing research and development often work in teams and departments headed by managers who know much less than they do. Waiters in restaurants want their orders to arrive on time but are at the mercy of the cooks. And importantly for this blog post, police officers have years of training and experience but are moved around by dispatchers who receive all the calls for help (911 calls, if they are in the USA) but have much less training and status.

So, are there any problems when the authority and status do not match? This was the question Arvind Karunakaran explored in a paper recently published in Administrative Science Quarterly. As you might expect, the main problem is that the higher-status workers who have lower ranking in the organization (at least for a specific function) often feel free to ignore instructions or even orders from lower-status superiors. That sounds strange when the workers are police officers who are in uniform, need others to comply with their own orders, and are supposed to be highly disciplined.

Why do they ignore instruction? First of all, they think the dispatchers do not understand their work well enough, so they resent being told how and when to work. Also, the dispatchers often keep the officers busier than they would like to be, so officers may be interested in taking a break or not responding to dispatch calls that sounds unimportant. Indeed, not responding to dispatch calls over the radio is a common way for officers to avoid complying with orders.

How can an organization handle this type of situation, where the low-status superiors give instructions that sometimes get ignored by high-status workers? The research on police officers gave some useful lessons. First, organizations often have discipline procedures that allow immediate supervisors to refer problems upwards to higher-level managers. The dispatchers did that sometimes, and the results were… not much change. So at least for police officers, this conventional approach seems to be ineffective in the long run.

Second, people often use social approaches, such as trying to build a personal connection and using informal pressure in addition to the formal commands. Dispatchers could do that, and it was especially easy because they could choose to communicate more or less formally: to use the formal shared radio channel or a direct private channel. The results of the informal approach were… not much change. That didn’t work in the long run either.

So, what did work? One simple trick that dispatchers used was to talk to the non-responding officer informally, often with some humor, and to do it over the formal shared channel. When that was done, often other officers would join in, and the non-responding officer would end up responding and complying with orders both at that moment and going forward. So that worked.

The most interesting part of this research is why it worked. Informal talk over a shared channel could be heard by other officers with the same status and rank as the non-responding one. They would join in the chat to tease the officer but also implicitly to pressure the officer to respond. Coworkers often do so, because seeing someone else ignore instructions often means that they are slacking off, which can mean more work for others or ultimately that the non-responding team member is not reliable. People are usually sensitive to such problems, and same-status coworkers like the fellow officers can put pressure on more effectively than lower-status workers such as the dispatchers.

As always, peer pressure wins the day.

Karunakaran A. 2021. Status–Authority Asymmetry between Professions: The Case of 911 Dispatchers and Police Officers. Administrative Science Quarterly forthcoming.

Learning about Hardly Ever: The Role of Storytelling

Have you encountered the senior member of the organization who always tells stories? The one who is initially fascinating but who you gradually learn to avoid longer conversations with because the same stories are repeated over and over and have nothing to do with your work? What a bore. But storytelling can actually be very important in organizational learning, especially if it involves rare and important events.

This is what Christopher G. Myers examined in a paper published in Administrative Science Quarterly. The research looked at flight nurses in helicopters, the kind of people who have dramatic work that TV series love to portray, and on TV they typically do heroic stuff that calls for a lot of knowledge about how the patient is affected. How much of that is reality?

The learning problem is obvious. Helicopter patient pickups are done as rarely as possible because they are very expensive, and the patient conditions are always urgent and critical because that’s when helicopter pickups make sense. So, the need for heroic work is not an exaggeration. But the heroic work needs to be accurate too, and here the problem is that there are so many ways that a patient can become urgent and critical that it is very difficult for a flight nurse to learn on the job. They still need to learn about “hardly ever” events because these events occur, and incorrect treatment can be very consequential for the patient.

So what do they do? Tell stories. When changing shifts, they will chat, and the chat is regularly about what has happened in the previous shift, especially if it was unusual. That way they can learn on the job using not only their own experience but also the experience of others, as told through stories. If the story is dramatic enough, it will not just spread to the next shift but will also be retold a few times to different people, who will all learn about the “hardly ever” event and how it was solved.

This is the same social mechanism as the boring senior worker who you may have encountered, but it is a great way to learn fast in work that has much variation. Come to think of it, even that senior worker could be a source of learning because the stories most often told are usually about something from the past that does not happen often these days. Are these stories relevant? Sometimes they turn out to be. It is nearly two years ago that airlines encountered a sharp drop in the passenger traffic because of Covid. Did any of them benefit from stories about the drop in passenger traffic following the 9/11 attack? Possibly so.

Stories often involve mainly socializing and bonding, and they are ways that people form ties in organizations by sharing their experiences, whether useful or not. But in some forms of work, and on some occasions, storytelling is also a crucial learning process that helps the organization deal with “hardly ever” events.

Myers, Christopher G. 2021. Storytelling as a tool for vicarious learning among air medical transport crews. Administrative Science Quarterly, forthcoming. 

Networking for Success: Is It Only for the Successful?

Those who do research on social networks, and most of those who are in occupations where contacts with others give ideas, opportunities, and deals, know what a network engineered for success looks like. They are brokers at the center of a web that reaches far, where many of the people they know do not know each other. In such a network, the person at the center can combine knowledge, connect opportunities, and make deals.

So how can one get such a network? The answer is simple – by being successful. Those who have proven success become attractive to others, so they can pick and choose among those who want to connect with them. But of course, here lies the problem for those who want to build a network for success because they don’t have success yet. Can it be done? This is the question answered by Yonghoon G. Lee and Martin Gargiulo in a paper published in Administrative Science Quarterly. In addition to solving a very practical problem, this research is done in a context that we all know, directly or indirectly: songwriting in the Korean pop (K-pop) industry. Yes, this is research with BTS, not BS.

The problem for people early in their careers, or even later in their careers with no proven success yet, is that it is very difficult to get the spider-web network that combines knowledge. If they cannot benefit from such a network because they are not prominent enough yet, instead they should have a close-knit network of friends who help each other, right? And naturally, these friends will also be unsuccessful – otherwise they would have formed the looser brokerage network. That means having a network of helpful people who cannot offer much help. How can they make the transition into a better network?

The songwriters in this research were more likely to improve their networks in two circumstances: if they had peers who became successful or if they were stuck in a rut of writing unsuccessful songs that were quite similar to each other. Seeing your network contacts achieve success in collaborations not involving you is a signal that you are—or your network is—not good enough. Imagine how it feels to collaborate with someone, maybe even multiple times, without writing a successful song. But then suddenly this collaborator has another project not involving you, and it becomes a success. Feels like a failure? Absolutely – and Lee and Gargiulo show that songwriters exposed to the success of peers would reach out to new distant collaborators. Getting stuck doing the same thing over and over again with no success is also a clear signal that you are—or your network is—not good enough. Songwriters in this research who kept writing songs in the same style with no success would reach out to new distant collaborators as well.

The transition to a larger network with brokerage occurred faster for songwriters who eventually became successful than for those who never succeeded. Songwriters who get these signals that either they or their networks are not good enough—and who more quickly conclude that it is their networks’ fault—seem to have a better chance to make it. It is not easy to become successful in the music industry, and many songwriters fail even after reaching out to new collaborators. But hope springs eternal, and adding a good network seems to help. 

Lee, Yonghoon G. and Martin Gargiulo. 2021. Escaping the Survival Trap: Network Transition among Early-Career Freelance Songwriters. Administrative Science Quarterly, forthcoming.

Risk Taking in Venture Capital: Chasing Performance, using Networks, or Something Else?

Venture capital is all about risk. The firms find young ventures, or more often select from many ventures seeking funding. These ventures have in common that they are at such an early stage that their market and offerings are unproven, and they cannot succeed unless they receive the funding, and often also advice and instructions. In other words, they are all risky.

There are still ways of adjusting the risk. Some ventures are more risky than others, and even the same venture has different risk levels depending on whether the venture capital firm participates in the first round of funding or a later round of funding. But if venture capital is essentially about risk, and they need to take this risk to gain the high returns they want, what determines the risk level they take at each funding opportunity? This is what Songcui Hu, Qian (Cecilia) Gu, and Jun Xiac studied in research just published in Organization Science. The answer, or should I say answers, are very informative.

The first part is that venture capitalists chase performance: if their performance has been disappointing, they will take greater risk than if it has been good. This is not just how venture capitalists act – firms make more changes when their executives fall behind their goals, and often these changes are risky. Indeed, the most special thing about venture capitalists is that they control the risk very easily by choosing more first-stage investments when their performance is disappointing. Other firms also try to control risk, but sometimes their risk taking is unplanned.

The second part is that venture capital firms form networks with each other through participating in funding syndicates. These syndicates divide up investments and spread risk, but they also produce collaboration, information exchange, and friendship. They result in networks that look different for each venture capital firm. Some place themselves in the center of spider-web networks that spread out widely. Others find positions between different groups of venture capitalists, becoming brokers of information. And here is the main finding from their research. These networks not only determine the information available; they also influence how venture capitalists think about opportunities available. So, what is the result?

Broker venture capitalists see more investment opportunities, and greater variety of opportunities, giving them practice assessing and experimenting with risk. As a result, they can make big adjustments of risk taking according to performance. Spider-web venture capitalists also get many offers, but they are more similar to each other, and this compromises their ability to adjust risk. The result is clear: All venture capital firms try to adjust risk to reach their performance goals, but the firms that are brokers in their networks are much more able to do so.

So, risk taking is a result of chasing performance goals, and of having the right kind of networks. Some decision makers are half aware of these adjustments, but many do not know that these factors influence risk. If they were, would they more carefully consider how goals are constructed? Would they pay closer attention to how their networks are built? I think the answer to both questions is yes. Gaining and spreading this knowledge is why we do research and teach the results.

Hu S, Gu Q, Xia J. 2021. Problemistic Search of the Embedded Firm: The Joint Effects of Performance Feedback and Network Positions on Venture Capital Firms’ Risk Taking. Organization Science forthcoming.

How Conservative is the CEO? Two Answers with Different Implications

Researchers have spent some time documenting that political ideology creeps into CEO thinking, and through that, influences firm decision making. This is especially true for decisions that are political to begin with, such as whether to counter economic problems with downsizing or whether to retain staffing and instead let investors take more losses. But we also know that a wide range of decisions are influenced by CEO political ideology, even those that do not look so political.

What we have not known until now is that political ideologies are more complex than the liberal versus conservative spectrum that defines US politics. A paper by M.K. Chin, Stephen X. Zhang, Asghar Afshar Jahanshahi, and Sucheta Nadkarni published in Academy of Management Journal has now given a vivid demonstration of how this complexity influecnes firms. In most other nations, conservative can mean either economically conservative, as in the type of person who values competition as a source of economic strength, or socially conservative, as in the type of person who values traditional judgment and intuition over analytical thinking. And, the same person can be either economically or socially conservative, or both, or none of them.

What does this mean for the decision making? The authors looked at corporate entrepreneurship, which is a strategically important decision that is difficult to justify analytically because the uncertainty is so high. After all, corporate entrepreneurship means diverting resources from the main business of the firm in order to enter a less familiar form of business. Corporate entrepreneurship is sometimes successful, and spectacularly so, but often it leads to losses. So how do firms decide when to engage in corporate entrepreneurship?

This is where CEO ideology comes into play. The economically conservative CEO wants to see analysis that justifies corporate entrepreneurship and wants the corporate entrepreneurship sponsors to win resources through competition with the rest of the firm. But how can they? The rest of the firm already delivers results; they just have ideas and hopes. This swings decision making away from corporate entrepreneurship.

The socially conservative CEO relies more on intuition, including the intuition of other decision-makers in the leadership team, and will be less driven by numbers and unaffected by ideas of resource competition. This is exactly the winning formula for a firm to take the risk of entering the uncertain world of corporate entrepreneurship.

These propositions make sense when considering economic and social conservativism separately, and the only problem has been to realize that these are different forms of conservative (versus liberal) ideologies. Both exist, and they have independent effects. Indeed, the research spurred by these ideas found solid support for these effects when examining how firms in Iran made their decisions on corporate entrepreneurship. Using data from Iran, which is rarely studied, is another merit of this research, but it seems fair to guess that many other nations will show exactly this division between different types of political ideology.

Chin MK, Zhang SX, Jahanshahi AA, Nadkarni S. 2021. Unpacking Political Ideology: CEO Social and Economic Ideologies, Strategic Decision-Making Processes, and Corporate Entrepreneurship. Academy of Management Journal 64(4): 1213-1235.