Organizational responses to status loss: Symbolic and substantive action as alternative ways of recovery

Abstract

Given the dominant view of status as a stable asset, much research has considered organizations as passive recipients of a steady social hierarchy. Yet, status orders can be subject to predictable or unexpected changes, and actors have motivations to maintain and improve their social standing. This thesis adopts insights from performance feedback theory to explain how organizations respond when they fall behind status aspirations. I argue that organizations may try to recover the loss of social standing either by taking symbolic actions that aim to improve organizational prestige in the eyes of key stakeholders or substantive actions that directly target the improvement of organizational quality. Further, organizational orientation towards these action types will be shaped by the causal attribution of the status feedback and its reliability. I test study arguments with a longitudinal empirical investigation in the Turkish higher education field. The findings of the thesis have important implications for the literature on performance feedback and status in markets.