Organizational identity is defined as members’ shared understanding of their organization’s subjective self-view—that is, the commonly understood answer to the question “Who are we?”—as a collective entity. Organizational identity is essentially analogous to individual identity and so could be seen as the “personality” or “character” of the organization. It is expressed as social claims about an organization—“This is who we are”—which are backed by social facts, or generally recognized notions of what the organization is and is about, and embodied in social understandings, that is, members’ efforts to make sense of their experiences with the organization. The concept traces its roots to a foundational essay by Stuart Albert and David Whetten, who proposed that an organization’s identity is that which is central, distinctive, and enduring. By central, they mean that identity is concerned with those things that are core rather than peripheral. By distinctive, they mean that identity consists of a set of core features and characteristics that stake out how the organization is both similar to and different from others. By enduring, they mean that identity is focused on those core elements that are relatively consistent over time and space, rather than those that are irregular or short-lived.
Organizational identity can also be described as the composite set of self-defining organizational attributes—descriptors that satisfy the central, distinctive, and enduring requirements. These attributes inform and shape an organization’s priorities and practices as a widely shared, taken-for-granted sense of “who we are as an organization.” As such, this corporate “self-view” facilitates several critical organizational functions, including interpreting the environment, identifying objectives, developing strategies, acquiring and allocating resources, and positioning the firm.
This entry describes individual identity as the foundation of organizational identity and details the different perspectives of organizational identity. It then discusses the existence of hybrid organizations and multiple identities and the connection between organizational identity and corporate reputation.
Individual Identity: The Foundation of Organizational Identity
Organizational identity has its roots in individual-level theories of identity, borrowing from both sociological and psychological conceptualizations of the self. Individual identity scholarship draws primarily on two conceptual foundations: role identity theory and social identity theory. Beginning with George Herbert Mead, there is a line of work in sociology that argues for an “interactionist” view of the self, which led to the development of the role identity construct. According to role identity theory, an individual’s self-view is shaped in part by his or her roles—that is, structurally determined patterns of behavior associated with a given social setting. To the degree that these roles reflect an individual’s self-definition—that is, that part of “who I am” is my role as a mother, teacher, community volunteer, and so on—they constitute identities, and these role identities provide stability and predictability as the person interacts with others. By extension, an individual embodies multiple role identities that match the various roles he or she plays. These multiple identities are arranged in a fluctuating “salience hierarchy,” such that the demands of the social context evoke the relative relevance and importance of a given role.
Recently, scholars have begun theorizing about organizational-level analogs of role identity theory. Similar to how role identities shape the individual self, an organization’s identity is defined at least in part by the structural-functional requirements associated with the operational roles or tasks that it performs. To the degree that an organization’s mission may have several distinct facets, or that the organization must interact with an array of diverse stakeholders, its identity will reflect these different role-related expectations about “who we are” and “what we do.”
A parallel line of thinking, influenced by social psychology, focuses on the ways in which memberships in social groups or categories shape one’s identity. According to social identity theory, an important part of “who I am” is reflected in what it means to be a member of subjectively salient groups. From this perspective, individuals internalize the defining characteristics and normative expectations associated with their membership in particular demographic categories or social groups, and thus, these “social identities” come to define the self. It is important to note that social identity theory characterizes a person’s identity as a unique social space—that is, the composite of an individual’s memberships in salient demographic categories and other types of groups constitutes a unique social identity profile. This identity profile provides the self with belongingness, through similarity with certain groups, and individuation, through the uniqueness of the composite identity. Thus, the self is defined in a subjective “middle ground,” offering an optimal level of distinctiveness.
Applied at the organizational level, an organization’s identity is derived from the collectives or categories it is associated with. It is from a culture-specific menu of social categories that founders construct a fledgling organization’s shared identity. This “social” identity reflects the organization’s similarity with others in the same group or category and highlights the distinctions between groups—that is, denoting “who” and “what” the organization is and is not. This line of argument has been set forth by organizational sociologists, who roughly equate organizational identity with the social forms adopted by organizations, characterized as salient identifying features shared by members of a particular population of an organization. In addition, an organization’s identity must denote how the organization positively distinguishes itself from similar others within its group. Once a shared identity has been recognized and accepted by external stakeholders, the organization then seeks to create distance between its identity and the identity of the group or category. Thus, like individuals, an organization seeks to position itself in a manner that strategically balances similarity and distinctiveness. In the end, its identity would embody both shared elements, with the resulting degree of comparability with other organizations providing recognition and acceptance, and distinguishing elements, with the consequential degree of uniqueness providing individuation and competitive distinction.
Different Perspectives of Organizational Identity
Two versions of the organizational identity concept have taken root: (1) a realist/essentialist approach (known as the social actor view) and (2) an interpretivist perspective (known as the social constructionist view). While recent scholarship has sought to highlight the complementary features of these perspectives, they are nonetheless deeply engrained themes in the literature. The social actor view begins from the perspective of individual identity and then, using the principle of functional equivalence for cross-level theorizing, argues that individuals and organizations alike have similar self-definitional needs and requirements. Hence, identity is viewed literally, not metaphorically, as a global property of organizational actors, operating as a sensegiving component of members’ shared experience. The empirical referent is a particular organization—a distinct, recognizable entity, with agentic properties like other types of social actors (individuals, nation-states). A view of “organizations as social actors” assumes that other actors view the organization as capable of taking action and that such action is seen as fully intentional (i.e., deliberate and self-directed). These attributions, in turn, serve as the basis for holding organizations accountable for their actions. This perspective of organizations is particularly salient to the concept of reputation—a social assessment of an organization’s behavior.
Furthermore, this realist, social actor view of identity adopts an institutionalist approach to what are referred to in the literature as organizational identity claims. Given that organizations are socially constructed entities, possessing no identifying properties equivalent to individual traits such as gender or ethnicity, it is argued that organizations are literally what or who they claim to be. Such identity claims are reflected in official statements of organizational purpose or direction (e.g., mission/vision/values) as well as in the organization’s association with certain specific entities (e.g., industry groups, trade associations). Together, these constitute a formal pronouncement of “this is who we are and what we are about.” An institutional perspective draws attention to the ways in which these identity claims follow from the social type or form that the organization belongs to or represents, and as such highlights the legitimacy requirements associated with these adopted social forms. These identity-related requirements are similar to the functional obligations accompanying roles in role identity theory and the group-related norms of social categories in social identity theory.
While the social actor view focuses on the sensegiving role of organizational identity (taken-for-granted attributes), the social constructionist view treats identity as a form of sensemaking, a more or less shared conception of “who we are” as members of an organization. Scholars employing this perspective tend to focus on how individuals make sense of their involvement as members of a particular organization, or what are often referred to as identity understandings. Thus, rather than identifying key self-defining attributes or characteristics, an organization’s identity is found in the relatively consensual ways in which members perceive, interpret, and give meaning to their experiences. From this perspective, organizational identity operates much like collective identity in social identity theory—that is, as the aggregate of individuals’ self-views. Whereas the social actor view sees the organizational identity construct as a social fact, the interpretivist perspective characterizes it as a shared emergent property of organizations. The answer to “who we are” as an organization is contextually dependent, varying between groups and over time. Thus, the social constructionist approach views organizational identity as inherently malleable and pluralistic.
These differences between the two perspectives have implications for how scholars conduct research on organizational identity. The objective, essentialist nature of the social actor approach makes it particularly useful for categorizing or comparing different types of organizations on the basis of their identity or studying the impact of an organization’s identity on various outcomes, such as commitment, legitimacy, reputation, or economic performance. In contrast, the social constructionist view has been shown to be particularly relevant when seeking to understand different conceptions of a single organization’s identity. Scholars using this approach have tended to focus on the process of organizational identity creation or change, especially in the face of major organizational crises.
Hybrid Organizations and Multiple Organizational Identities
In their foundational essay, Albert and Whetten identified the phenomenon of the hybrid organization—an entity fundamentally constituted with the core characteristics of two distinct identities. They proposed a generic type of hybrid, one that can be characterized as both normative (with values and beliefs, like a church) and utilitarian (having principles, like a business). They used the specific example of the modern research university, an organization embodying both normative and utilitarian identities in its dual teaching and research mission. Other commonly occurring normative-utilitarian hybrids include community hospitals, credit unions, development banks, and agricultural cooperatives. The authors further proposed that the hybrid identities may be manifested in two archetypal manners. In the holographic hybrid, every unit and every level of the organization embodies to a large degree elements of both identities, whereas in the ideographic hybrid, different divisions or functions are characterized primarily by one or the other identity.
From this initial notion of the hybrid identity organization, scholars now recognize the prevalent occurrence of multiple organizational identities. Much like the multiple social identities in an individual’s social identity profile, or the many role identities organized in a salience hierarchy, modern organizations frequently embody multiple identities. These result from an organization being founded on values stemming from distinct social forms (e.g., the Salvation Army), positioning itself in multiple categories (e.g., a development bank), and/or performing different roles or functions (e.g., a research university). These multiple identities often present competing demands, and as such, the task of managing them has become a focus of much research. Building heavily from work on individual identities, Michael Pratt and Peter Foreman propose a two-dimensional classification framework of management responses to multiple organizational identities. The type of approach can be characterized in terms of the degree of identity plurality that is maintained and the level of synergy among identities that is implemented.
The concept of multiple identities, and the effective management of identity plurality and synergy, has become increasingly relevant to the study of alternative forms of organizations, whereby different sets of values are combined into multifaceted missions and/or to achieve dual purposes. Particularly in the areas of family businesses and social enterprises, scholars have employed theory and research on multiple identities to examine several pertinent issues, such as navigating the competing claims of plural institutional environments, balancing and achieving compound strategic objectives, or managing conflicts of commitment among and between members. As society seeks to create more “socially responsible” business and as “hybrid” forms of organization become ever more popular, the notion of multiple organizational identities is likely to become even more relevant.
Connection to Reputation
In terms of corporate reputation, organizational identity serves several key functions for the organization, which can be seen as rooted in identity. First, reputation acts as a signaling device, providing a means of predicting present and future behavior, and the most reliable predictor of an organization’s conduct is arguably its identity. An organization’s identity can be seen as the precursor of its reputation—an organization generally acts in ways that are consistent with its “self-view.” Another key function of reputation is that it provides external stakeholders with an efficient mechanism for identifying and categorizing the organization, particularly in terms of its differentiation and distinctiveness from similar others. In this sense, reputation is an external manifestation of identity—a reflection of the self-defining characteristics of the organization.
Reputation has often been defined as how external constituents view the organization—similar to image. However, reputation is a comparative and evaluative construct. That is, more than just how others “see” the organization, reputation consists of stakeholders’ assessments of it, based on comparisons of their perceptions and expectations. Projected image reflects an organization’s intended statement of its identity. This desired self-definition includes declarations about the organization’s roles and categorizations, which then lead to certain identity-related expectations. Over time, external stakeholders then compare these expectations with what they actually see and experience, making an assessment of the consistency between them. In identity terms, reputation consists of an accumulation of identity comparisons, between what has been intentionally and unintentionally communicated regarding “who we are” and “what we stand for” and what stakeholders have come to actually believe about the organization’s identity.
Moreover, although reputation could be seen as similar to legitimacy, in that both represent external stakeholders’ evaluations of the organization, in identity terms a reputational assessment is qualitatively different. It focuses not on the appropriateness of an organization’s characteristics and conduct as a reflection of its identity but on the effectiveness of its performance—as a signal of that organization’s ability to fulfill its self-definitional claims. That is, reputation is essentially an evaluation of the authenticity and reliability of the organization’s identity: “Are you really who you say you are?” Additionally, the frame of reference is not the organization’s conformity to type but rather its uniqueness—that is, the ways in which it positively distinguishes itself from similar others as a specific example of that type.
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