Multiple Category Memberships in Markets: An Integrative Theory and Two Empirical Tests

By Greta Hsu, Michael T. Hannan, Özgecan Koçak. 2009

477 citations recorded by the source corpus.

This article examines the effects of market specialization on economic and social outcomes. Integrating two perspectives, we explore why products that span multiple categories suffer social and economic disadvantages. According to the audience-side perspective, audience members refer to established categories to make sense of products. Products that incorporate features from multiple categories are perceived to be poor fits with category expectations and less appealing than category specialists. The producerside view holds that spanning categories reduces one's ability to effectively target each category's audience, which decreases appeal to audience members. Rather than treating these as rival explanations, we propose that both processes matter and offer a systematic, integrated account of how penalties arise as a consequence of audience-side and producer-side processes. We analyze data from two dissimilar contexts, eBay auctions and U.S. feature-film projects, to test the central implications of our theory. Together, these tests provide support for our integrated approach and suggest that both processes contribute to the penalties associated with category spanning.

Subfields: Marketing, Sociology and Political Science, Visual Arts and Performing Arts

View Paper: https://www.semanticscholar.org/paper/f2f4f056d7b3201c5a5665ea0fbc5ca5926d0f8b

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Citations in the corpus

Category Stretching: Reorienting Research on Categories in Strategy, Entrepreneurship, and Organization Theory (2013, background): “At the core of this approach lies the idea that a high degree of similarity with a categorical prototype assists organizations in their founding, legitimacy, and effectiveness (Hannan et al., 2007; Hsu et al., 2009).”
Category Spanning, Evaluation, and Performance: Revised Theory and Test on the Corporate Law Market (2016, unknown): “That the effect of category spanning on performance could be negatively or positivelymediated by audiences’ evaluation as a function of their theory of value has been ignored in prior research, which focused on the direct negative effects of category spanning on performance (Hsu et al., 2009; Kovács”
Where Do Market Categories Come From and How? Distinguishing Category Creation From Category Emergence (2017, unknown): “…that places a limit on organizations’ maneuvering capacities since categorical membership both protects producers from audiences’ neglect and misinterpretations and constrains them to reside close to prototypical features (Hsu et al., 2009; Hsu, Negro, & Perretti, 2012; Paolella & Durand, 2016).”
Research in Cognition and Strategy: Reflections on Two Decades of Progress and a Look to the Future (2011, unknown): “Hsu et al. (2009) found that products (films or items for sale on eBay) that span many categories are less likely to attract customers than products where the categorization is clear.”
Funding the story of hybrid ventures: Crowdfunder lending preferences and linguistic hybridity (2017, background): “that category-spanning organizations are more difficult for audiences to comprehend (Hsu et al., 2009; Leahey et al., 2017).”
Categorical contrast and audience appeal: niche width and critical success in winemaking (2010, methodology): “Following Hsu et al. (2009), we set a producer’s GoM in a style to the proportion of the labels in its portfolio in a vintage in that style.”
Classical Deviation: Organizational and Individual Status as Antecedents of Conformity (2015, background): “6 role of categorical membership for organizations (Hsu et al., 2009; Negro & Leung 2013).”
Hybrid Vigor: Securing Venture Capital by Spanning Categories in Nanotechnology (2014, background): “While there is a general recognition that firms can unproblematically stake out unique identities within a category, the linked assumption is that category spanning is difficult to understand (Hsu, 2006; Hsu & Hannan, 2005; Hsu et al., 2009; Whetten, 2006; Zuckerman & Kim, 2003).”
An ecology of social categories. (2014, methodology): “In addressing these issues we employ a formal language proposed by Hannan et al. (2007) and further elaborated by Hsu et al. (2009) and Kovács and Hannan (2011).”
The consequences of category spanning depend on contrast (2010, background): “something like a constant-sum constraint (Hsu, 2006; Hsu et al., 2009).”
Dilettante or Renaissance Person? How the Order of Job Experiences Affects Hiring in an External Labor Market 1 (2014, background): “Candidates who present categorically inappropriate identities may be assumed to be less skilled or of lower quality3 (Leung and Sharkey 2013), or are harder to understand, evaluate, and value (Hannan 2010; Hsu et al. 2009; Zuckerman 1999) and are therefore ignored.”