The seventh session of IACMR Research Seminar Series was launched on December 23 via Zoom. The speaker was Prof. Wei Shen from Arizona State University. The topic of this session was The Nearness of You: Competitive Rankings, Tiered Status Hierarchies, and Strategic Risk-taking, a project that he is doing with Chunhu Jeon and Jonathan Bundy. The webinar was hosted by Dr. David Zhu from Arizona State University, the co-chair of IACMR Research Committee. More IACMR Research Seminar sessions will be monthly delivered by scholars around the world.
Competitive rankings quantify organizations based on certain attributes and position them in social orderings. In doing so, they often create status hierarchies that affect what organizations compete for and delineate whom they compete with.
Prof. Shen and his team theorize and predict how an organization’s status tier membership and its position within that tier differentially induce competition with nearly placed peers in the same, upper or lower tiers to enhance or maintain its status position.
By the example of football teams ranking, Prof. Shen cited the two research questions he was going to talk about:
Their analyses of business group rankings in South Korea show that organizations in higher status tiers and those at the top of a given tier tend to engage in more acquisition activities to maintain or enhance their tier positions. They get more attention from their stakeholders and customers. The social status also helps these organizations attract better talents, such as better candidates and employers. These social and economic benefits give the highly ranked organizations advantage. Acquisition activities for organizations at the bottom of a status tier, however, are conditional upon the immediate threat to their survival in that tier from nearly placed peers at the top of the neighboring lower tier.
Their theory and supportive findings contribute to the understanding of how positions in a tiered status hierarchy created by competitive rankings motivate strategic risk-taking by organizations.