Stine Grodal on Market Label Strategies in Nanotech

in Emerging Research
January 13th, 2012

Article Forthcoming in Organization Science

Winner of 2009 European Group for Organizational Studies (EGOS) Best Paper Award

Stine GrodalStine Grodal’s article “Hedging Your Bets: Examining Executives’ Market Labeling Strategies in Nanotechnology,” is forthcoming in the journal Organization Science (2013). Grodal is Assistant Professor of Strategy and Innovation at Boston University School of Management.

She co-authored the paper with Nina Granqvist, Aalto University, School of Economics, Department of Management, Helsinki, Finland; and Jennifer Woolley, Santa Clara University, Leavey School of Business, Santa Clara, CA. “Hedging Your Bets” also won the 2009 European Group for Organizational Studies (EGOS) Best Paper Award.

Article Abstract:

Executives use market labels to position their firms within market categories. Yet, this activity has been given scarce attention in the extant literature that widely assumes that market labels are simple, prescribed classification brackets that accurately represent firms’ characteristics. By examining how and why executives begin to use the nanotechnology label, we uncover three strategies: claiming, disassociating, and hedging. Comparing these strategies to firms’ technological capabilities we find that capabilities alone do not explain executives’ label use. Instead, the data show that these strategies are driven by executives’ aspiration to symbolically influence their firms’ market categorization. In particular, executives’ perception of the label’s ambiguity, their avoidance of perceived credibility gaps, and their assessment of the label’s signaling value shape their labeling strategies. In contrast to extant research, which suggests that executives should aim for coherence, we find that many executives hedge their affiliation with a nascent market label. Thus, our study shows that in ambiguous contexts, non-commitment to a market category may be a particularly prevalent strategy.