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The OCR Glossary

Organizational Demographics

David L. Deephouse

The term organizational demographics has two meanings and research traditions. The first meaning and use concerns the demographic characteristics of individuals in organizational settings, whether within teams, subunits, or firms. Commonly examined characteristics include age, national origin, race, sex, and tenure in the job, team, or organization. The second use concerns the examination of the specific characteristics of organizations within societies, such as organizational age, industry sector, and organizational size. This use of organizational demographics emerged from the extension of the principles of population demography, which ordinarily relate to individuals, to the study of organizations. This entry focuses on the second use of organizational demographics and its relationship to corporate reputation. In particular, the organizational demographics of size, age, strategy, industry, and geographic origin are examined.

Demographic characteristics of corporations also influence three dimensions of corporate reputation: (1) being known (prominence), (2) being known for something (corporate associations), and (3) generalized favorability (public esteem).

Organizational Size

Large organizations are more likely to be known by more people. Their actions are likely to be more significant and important to more members of the audience than the actions of smaller organizations. As organizations grow in size, they are more likely to have structurally differentiated advertising and media professionals, who then get organized into an entire department; in contrast, in small organizations, these functions may be one of the many tasks performed by a single person. Larger organizations also use their communication professionals to get the word out about various attributes of the organizations and thus help them be known for something. Large firms also have more connections to their communities in terms of number of employees and volume of business. These connections may lead to more favorable general sentiments.

Organizational Age

In terms of organizational age, newness may be an asset for an organization. A new organization gets known because people are interested in novelty (Did you hear about the new restaurant down the street? How about the new app?) and news organizations like to report on new developments. As an organization ages, it blends into the social and economic landscape and becomes taken for granted, losing top-of-mind awareness. New organizations may be viewed favorably because they are assumed to be innovative and create jobs for people. When a corporation diversifies into a new domain, it receives the benefits of newness for its unit and that domain, and some of that benefit has a halo effect for the corporation as a whole.

Organizational Industry

An organization belongs to an industry or sector, and the reputation of the sector influences the reputation of all the companies in the group. Thus, polluting industries generally are well-known and not appreciated, whereas smartphone and food companies are generally liked, except when there is a glitch or food safety issue.

Organizational Strategy

Institutional theory directs our attention to conformity and its opposite, distinctiveness; these may influence corporate reputation. Like older organizations, conforming organizations become a natural, taken-for-granted part of the environment and lose their top-of-mind awareness. Organizations that stand out, especially in crowded sectors, may become better known because they are more worthy of comment and discussion. This commentary is likely to be opinionated and value laden because of the differences—some people will like the differences, and others will not. Over time, a consensus of positive or negative opinion may develop.

Geographic Origin

The geographic origin of an organization is a similar higher-level demographic characteristic that may influence corporate reputation. Much depends on the knowledge and biases of stakeholders and their attitudes toward their own country and other countries. For instance, products from Germany are known for superior engineering quality. Italian products are appreciated more by non-Italians than by Italians. Locals generally know more about local organizations and support them—similar to support for a local sports team.

To conclude, corporate demographics refers to a set of common characteristics of organizations that are analogous to population demographics. Demographic characteristics may have systematic relationships with different dimensions of corporate reputation.

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See Also

Conformity and Differentiation; Corporate Associations; Legitimacy; Paradoxes in Reputation Management; Prominence; Public Esteem; Strategy

See Also

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