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Hidden Badge of Honor: How Contextual Distinctiveness Affects Category Promotion Among Certified B Corporations

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These slides accompanied a talk I gave at the 2016 Ivey Sustainability Conference on November 4, 2016, at the Ivey Business School in London, Ontario, Canada.

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Hidden Badge of Honor: How Contextual Distinctiveness Affects Category Promotion Among Certified B Corporations

  1. 1. The WellWiki Project Joel Gehman Assistant Professor Strategic Management & Organization Hidden Badge of Honor: How Contextual Distinctiveness Affects Category Promotion Among Certified B Corporations Joel Gehman & Matthew Grimes Ivey Sustainability Conference November 4, 2016
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  3. 3. The hurdle for membership 1. Score ≥ 80 out of 200 points on B Impact Assessment of sustainability (governance, workers, community, and environment) 2. Amend corporate charter to require officers and directors to “consider the interests of all stakeholders, not just shareholders” 3. Sign “Declaration of Interdependence” and pay annual fee of $500 to $25,000 3
  4. 4. Hidden badge of honor? “B Corp status has become a badge of honor.” – Entrepreneur magazine “I’m not sure our clients know that we are a B Corp. It’s just not something that we bring up.” – 2015 interview with a B Corp executive 6
  5. 5. Why would organizations pursue category membership and yet forego opportunities to promote the category*? *…organizational efforts to associate with or champion the labels or cultural artifacts signifying the category 7
  6. 6. Our solution to the puzzle The “same” category can have different meanings, depending on the context. We call this a category’s contextual distinctiveness, defined as the degree to which a particular categorical association provides an organization with technical, material and/or symbolic resources for distinguishing itself from other members of the basic category
  7. 7. Hypotheses The greater a subordinate category’s contextual distinctiveness relative to basic category members within a region (H1) or industry (H2), the greater the category promotion by members More subordinate category members within a region (H3) or industry (H4) will amplify the effect of a subordinate category’s contextual distinctiveness on category promotion
  8. 8. Scrape B-Corp text promotion Step 1 Scrape B-Corp image promotion Step 2 Mturk to append addresses Step 3 Data sources D&B to append $, FTEs, & SIC Step 4 Texas A&M Geocode Step 5 Append MSCI ESG data Step 6 10
  9. 9. Our DVs: text and images (captured in Oct/Nov 2015) B Corp* Certified B Corp* B Lab, benefit corp* B Impact Assessment B Impact Report Declaration of Interdependence Global Impact Investing Rating System, GIIRS The Change We Seek 11
  10. 10. Our IVs and CVs (captured on or before Dec 2013) Independent Variables Reg. context distinctiveness (= mean ESG concerns by state) Ind. context distinctiveness (= mean ESG concerns by industry) Reg. category peers (# of B Corps by state) Ind. Category peers (# of B Corps by industry) Control Variables # of Words or Images Revenue, Employees, Company Age Category founder, Born B “Best in Class” winner Social media presence # Months certified # Publicly traded firms by state/industry Census region dummies Service sector dummy 14
  11. 11. Results DV 1: # of Text Promotions DV 2: # of Image Promotions H1: Distinctiveness by region ✔ ✔ H2: Distinctiveness by industry ✔ ✔ H3: Regional peers x Distinctiveness ✔ ✔ H4: Industry Peers x Distinctiveness ✔ ✔
  12. 12. 14 sets of robustness checks • Alternative DVs (# of pages and pixel area) • Control for legitimacy effects/omitted variables with lagged DV (from Mar/Apr 2014) • Alternative measures of region (75 km radius) and industry (Waddock & Graves) • Alternative measures of Internet marketing competency (Twitter followers), alone and with social media presence • Alternative moderating effect using Twitter followers
  13. 13. Qualitative interviews • To further validate our proposed mechanisms, we conducted 29 semi-structured interviews, and drew on 20 published interviews • We sought to understand why a company chose to become certified, and what factors influenced the extent of its promotion
  14. 14. Drivers of B Corp membership 1. Alignment with a Company’s Mission, Purpose, Values or Identity 2. Validating and Legitimating a Company’s Sustainability Commitments 3. Innovation and Practice Improvement 4. Membership as Gateway into a Likeminded Community
  15. 15. Drivers of B Corp promotion 1. Conveying Distinctiveness vs. Category Nonmembers 2. Drawing Strength from the B Corp Community
  16. 16. Contributions 1. Promotional forbearance driven not just by stigma (e.g. ,Hudson & Okhuysen 2009), but by contextual distinctiveness. May explain other findings (e.g., Delmas & Grant 2014)
  17. 17. Contributions 2. Prior work assumes distinctiveness vis-à-vis contrast in features/practices. But what if certified members and nonmembers fully resemble one another? We show how distinctiveness can stem from situated and relational category structure. An organization can both fit in via basic categories and standout via subordinate categories.
  18. 18. Practical implications? • RE Organizational hybrids: shift in focus from internal profit-purpose tension to the external competitive distinctiveness challenge, especially as hybrid proliferate, meaning this is no longer a point of difference • RE Certification providers: possible tension between gaining members (which may be easiest in similar contexts), and gaining promotion (which we find is higher in dissimilar contexts)
  19. 19. Thank You!
  20. 20. EXTRAS

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