Two Sides of the Same Coin: How Category Ambiguity Affects Multiple Audience Evaluations
Recent research indicates that when organizations are hard to categorize they will suffer in terms of external evaluations. Here, I suggest this depends on the type of audience that is evaluating the organization. Some audiences have little influence over organizations and look for products and services that fulfill particular requirements. They use classification systems as maps to navigate an organizational world and are put off by unclear categorical affiliations. Other audiences have a voice in shaping organizations and seek novelty. Members of these audiences are motivated to understand organizations that do not easily fit into a category structure. For the first type of audience, ambiguous categories make organizations unclear and less appealing. For the second type, the same ambiguity is flexible and more appealing. I test these ideas in the context of the software industry for audiences of consumers as opposed to venture capitalists. As predicted, organizations in ambiguous categories are less appealing to consumers, but more appealing to venture capitalists. Differences between category-level and organization-level measures of ambiguity, and implications for the emergence of category structures are discussed.