Joel M. Podolny

A Status-Based Model of Market Competition

This article explores the significance of status processes for generating and reproducing hierarchy among producers in a market. It develops a conception of a market as a status order in which each producers status position circumscribes the producers actions by providing a unique cost and revenue profile for manufacturing a good of a given level of quality. An examination of pricing behavior among investment banks in the underwriting of corporate securities provides impirical support for this status-based model of market competition. Extension are discussed.

Networks as the Pipes and Prisms of the Market1

This article draws an analytical distinction between two types of market uncertainty: egocentric, which refers to a focal actor’s uncertainty regarding the best way to convert a set of inputs to an output desired by a potential exchange partner, and altercentric, which denotes the uncertainty confronted by a focal actor’s exchange partners regarding the quality of the output that the focal actor brings to the market. Given this distinction, the article considers how the value of “structural holes” and market status vary with these two types of uncertainty. The article proposes that the value of structural holes increases with egocentric uncertainty, but not with altercentric uncertainty. In contrast, the value of status increases with altercentric uncertainty, but declines with egocentric uncertainty. Thus actors with networks rich in structural holes should sort into markets or market segments that are high in egocentric uncertainty; high‐status actors should sort into markets that are low in egocentric uncertainty. Support for this claim is found in an examination of the venture capital markets.

Networks, Knowledge, and Niches: Competition in the Worldwide Semiconductor Industry, 1984-1991

The authors develop a conceptions of an organization-specific niche in a technological network. This niche is defined by two properties: crowding and status. The authors hypothesize that crowding suppresses and organizations life chances and that status enhances life chances, especially for those organizations in uncrowded niches. They operationalize this conception of the niche using patents and patent citations, and they find support for these hypotheses in an examination of technological competition in the worldwide semiconductor industry. In the conclusion, they compare these findings to earlier research and highlight some of the particular advantages of this conception of the niche.

Status, Quality, and Social Order in the California Wine Industry

This paper examines how a producers status in the market influences its choices about product quality, and the outcomes that result. We compare economic models of reputation that emphasize the role of past quality as a source of information about current quality with sociological models of status that emphasize the role of affiliations. We test hypotheses about the complementary effects of status and reputation in an analysis of more than 10,000 affiliation decisions made by 595 wineries over a 10-year period. Results show that actors occupying high-status positions obtain greater benefit from subsequent high-status affiliations than do actors occupying low-status positions. As such, these actors are more willing and able to pay for subsequent high-status affiliations and to use them to advance their position in the larger status ordering.

Differentiation of Boundary Spanning Roles: Labor Negotiations and Implications for Role Conflict

In this paper we test the hypothesis that boundary spanning is a differentiated function that is not necessarily performed by one person, as assumed in much previous research. Using longitudinal network data collected during labor negotiations, we found that some individuals on the bargaining teams (representatives) broker ties toward their opponents, while others (gatekeepers) broker ties from their opponents; and some broker task-oriented ties (measured by flows of advice), while others broker socioemotional ties (measured by flows of trust). Differentiation of trust and advice brokerage roles was strong throughout the negotiations, while differentiation of representative and gatekeeper roles became more distinct as the contract deadline (and increased potential for role conflict) neared. This analytic distinction suggests that role conflict must be examined differently, both conceptually and methodologically, and widens the range of options available for managing potential role confllcts.

Social Status, Entry and Predation: The Case of British Shipping Cartels 1879–1929

The authors incorporate social status and regional affiliation--two variables of central sociological interest--into an economic analysis of entry and predation. They build on Scott Mortons (1997) examination of entry and predation in the merchant shipping industry and examine whether the social status of an entrant owner impacts on the predation behavior of the incumbent cartels. The authors find that high social status entrants are significantly less likely (40 percent) to be preyed upon than the low social status entrants. They discuss several interpretations of this result. Subsequent analysis supports the hypothesis that cartel members use social status as an indicator of an entrants propensity to be a cooperative cartel participant. Copyright 1999 by Blackwell Publishing Ltd

A Sociological (De)Construction of the Relationship between Status and Quality

Although many sociologists are strongly wedded to the idea of “social construction,” the contextual factors that influence the magnitude of construction are rarely considered. This article explores the decoupling of an actor’s status from the actor’s underlying quality and examines the factors that influence the magnitude of decoupling. The authors specifically consider the role of quality uncertainty, diffuse status characteristics, and the self‐fulfilling prophecy. To analyze the impact of each mechanism on decoupling, they simulate the evolution of thousands of small groups using a dyadic model of status allocation. The authors discuss the results of these simulations and conclude with the implications for future research and the practical management of groups.

Call for Papers ---Attaining, Maintaining, and Experiencing in Organizations and Markets

Status issues permeate social and organizational life. As sociologists and anthropologists have long noted, whenever social actors gather, a status hierarchy among these actors emerges, and through that process, some actors are afforded higher esteem and prestige than others. The impact of these status differences cuts across all levels of analysis, from the individual actor’s position within a group to an organization’s network and status position in an industry or a market. In each case, the actor’s status influences the opportunities and constraints that the actor experiences. For this reason, most domains of organizational research are directly related to the status concerns that individuals, groups, and organizations share in their social contexts. For individuals, status concerns are foundational to issues of inclusion and exclusion; one’s standing in the group, and the resources that the individual is able to marshal in aid of a favored cause. For organizations, the concern of being viewed as a legitimate or prestigious actor in their industry or market leads decision makers to strategically display and react to status-related signals that affect their legitimacy and market standing. Despite its prevalence and importance in individual, organizational, and market dynamics, and its long-standing prominence in disciplinary domains such as sociology and social psychology, the notion of status has only recently begun to receive attention in organizational research. Group, organizational, and market contexts are all settings in which status-related concerns are central to the social dynamics that take place. Each of these settings operates as a stage upon which the construction (and reconstruction), maintenance, and experience of social standing and status are played out on a daily basis. For this reason, research on status in these settings should not only inform organizational theory and research but also contribute to existing perspectives and research on status in disciplines. This special issue aims at invigorating the concept of status in organizational research by both extending as well as integrating perspectives in basic disciplines that have provided important knowledge and insights on status dynamics.