celebrity firms: the social construction …celebrity firms: the social construction of market...

CELEBRITY FIRMS: THE SOCIALCONSTRUCTION OF MARKET POPULARITY

VIOLINA P. RINDOVAUniversity of Maryland

TIMOTHY G. POLLOCKThe Pennsylvania State University

MATHEW L. A. HAYWARDUniversity of Colorado at Boulder

We extend the concept of celebrity from the individual to the firm level of analysis andargue that the high level of public attention and the positive emotional responses thatdefine celebrity increase the economic opportunities available to a firm. We developa theoretical framework explaining how the media construct firm celebrity by creatinga “dramatized reality” in reporting on industry change and firms’ actions. Firmscontribute to this process by taking nonconforming actions and proactively seeking tomanage impressions about themselves.

Imagine a country-club dinner dance, with abunch of old fogies and their wives shufflingaround halfheartedly to the not-so-stirringsounds of Guy Lombardo and his All-Tuxedo Or-chestra. Suddenly young Elvis comes crashingthrough the skylight, complete with gold-lamesuit, shiny guitar, and gyrating hips. Half thewaltzers faint; most of the others get angry orpouty. And a very few decide they like what theyhear, tap their feet . . . start grabbing new part-ners, and suddenly are rocking to a very differenttune.

In the staid world of regulated utilities andenergy companies, Enron Corp. is that gate-crashing Elvis. Once a medium-sized player inthe stupefyingly soporific gas-pipeline business,Enron in the past decade has become far andaway the most vigorous agent of change in itsindustry, fundamentally altering how billions ofdollars’ worth of power— both gas and elec-tric—is bought, moved, and sold, everywhere inthe nation (O’Reilly, 2000: 148).

The quotation above compares a now infa-mous utility company—Enron—to one of Ameri-ca’s most beloved celebrities. The comparisonlauds the norm-breaking nature of Enron’s stra-

tegic behavior and dramatizes its impact on theutilities industry. In this article we argue thatjournalists often attribute extraordinary quali-ties to some firms and their actions and, in theprocess, endow these firms with celebrity. Wedevelop a theoretical framework to explain whyand how the media socially construct firm ce-lebrity and discuss the implications of achiev-ing celebrity for firm performance. As Enron’scurrent predicament suggests, achieving celeb-rity is not necessarily indicative of the long-termeffectiveness and success of a firm. Yet celebrityalters the economic opportunities available tothose who achieve it (Frank & Cook, 1995; Gam-son, 1994), and therefore needs to be recognizedand studied as a potentially important intangi-ble asset of a firm.

According to Rein, Kottler, and Stoller, celeb-rity refers to an individual “whose name hasattention-getting, interest-riveting and profit-generating value” (1987: 15). These authorstherefore define celebrity in terms of its conse-quences for audience members and celebrityindividuals, respectively, and suggest that ce-lebrity’s economic value derives from theheightened public attention and interest it gen-erates. Therefore, one defining characteristic ofcelebrity is that a social actor attracts large-scale public attention: the greater the number ofpeople who know of and pay attention to theactor, the greater the extent and value of that

The first two authors contributed equally to this work.This paper has benefited from the comments of ManuelBecerra, Arnold Cooper, Tim Folta, Gideon Kunda, Luis Mar-tins, Kent Miller, Antoaneta Petkova, Mark Shanley, KenSmith, and Xiaoli Yin and the research assistance of DmitryKhanin and Craig Weiner. The authors gratefully acknowl-edge financial support from the Boeing Endowment for Ex-cellence in Research, University of Washington.

� Academy of Management Review2006, Vol. 31, No. 1, 50–71.

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actor’s celebrity. A second defining characteris-tic of celebrity is that the actor elicits positiveemotional responses from the public. These re-sponses arise because the actor has a positivevalence (Heider, 1946; Trope & Liberman, 2000)for the audience to the extent that he or shehelps fulfill various behavioral goals,1 which, inthe case of celebrity, include meeting an audi-ence’s needs for gossip, fantasy, identification,status, affiliation, and attachment (Adler &Adler, 1989; Gamson, 1994; O’Guinn, 2000). Thus,actors who become celebrities have high sa-lience and positive emotional valence for theiraudiences, and celebrity arises from the audi-ence’s attention and positive emotional re-sponses to the actor. Celebrity is therefore aproperty of the actor’s relationship with an au-dience, rather than a characteristic of the actorhim/her/itself.2

In this article we extend the concept of celeb-rity from the individual to the firm level of anal-ysis in order to explain the sources and conse-quences of the disproportionate levels of publicattention and excitement that some firms at-tract. We define celebrity firms as those firmsthat attract a high level of public attention andgenerate positive emotional responses fromstakeholder audiences. Both public attention ofsignificant scale and positive emotional re-sponses are necessary to generate a firm’s ce-lebrity. Without the attention of an audience ofsignificant size, a firm’s ability to generate pos-itive emotional responses is likely to have lim-ited economic consequences. Without positiveemotional responses, the level of attention afirm commands may be insufficient to influencestakeholder choices. Together, the ability to at-tract large-scale public attention and to stimu-

late positive emotional responses provides ce-lebrity firms with access to critical resources(e.g., human capital, capital markets, andsources of raw material or product inputs) andstrategic opportunities (e.g., alliances and part-nerships, M&A opportunities) that it might haveonly limited access or no access to otherwise. Tothe degree that access to such resources andopportunities increases a firm’s competitive ad-vantage (Rindova & Fombrun, 1999), celebrity isan intangible asset of the firm.

How a firm may benefit from differential lev-els of public attention and positive emotionalresponses is a question that has not been widelyconsidered in the strategy literature on intangi-ble assets. Research on other intangible assets,such as reputation, status, and legitimacy, de-scribes how stakeholders evaluate firms (Ben-jamin & Podolny, 1999; Fombrun & Shanley, 1990;Rindova & Fombrun, 1999; Suchman, 1995), whilepresupposing that these firms have attractedsufficient attention and interest to motivatestakeholders’ continued evaluations of their dif-ferent attributes. Further, this research empha-sizes how stakeholders evaluate firms based onrational self-interest or socially acquired valuesand beliefs (Suchman, 1995; Weigelt & Camerer,1988). In contrast, the concept of celebrity fo-cuses on how firms attract public attention andhow they generate positive emotional re-sponses.

Some organizational researchers have begunto examine celebrity CEOs, who are highly vis-ible individuals that often command significantpublic attention in their own right (Chen &Meindl, 1991; Hayward, Rindova, & Pollock, 2004;Khurana, 2002; Meindl, Ehrlich, & Dukerich, 1985;Wade, Porac, Pollock, & Graffin, in press). Fur-ther, such CEOs often command high-valuecompensation packages without commensu-rately high levels of firm performance, attestingto the idea that the “ownership” of celebrityleads to the ability to appropriate its economicbenefits (Wade et al., in press). Extending thisargument, here we are concerned with firm-level characteristics and behaviors that create afirm-level intangible asset allowing the firm,rather than individuals associated with the firm,to gain access to the benefits associated withcelebrity.

We base our theoretical framework for thefirm-level celebrity creation process on the ideathat modern-day celebrities are products of

1 Some individuals may also attract significant publicattention with negative emotional responses. Analysis ofthis type of relationship, which may be termed infamy, isbeyond the scope of this article. The reason for this is thatpsychologists have shown that positive and negative emo-tions affect individual cognition and behavior differently(Fiske & Taylor, 1991) and should be viewed as two distinctcontinua (Brief & Motowidlo, 1986).

2 Whereas we define celebrity through the nature of thestakeholder audience’s response to an individual or firmactor, in the reminder of the paper we also use the term torefer to the individual or the firm that evokes such re-sponses. We do so in order to avoid more cumbersome terms,such as individuals or firms that have achieved celebrity, orcelebrity individual and celebrity firms.

2006 51Rindova, Pollock, and Hayward

mass communication (Boorstin, 1961; Gamson,1994; Rein et al., 1987). This view draws on con-siderable evidence that mass media play a pow-erful role in setting the agenda of public dis-course and directing the public’s attentiontoward particular actors and issues (Gans, 1979;Gitlin, 1981; McCartney, 1987; Schudson, 1978).Further, we view the media as “a social institu-tion . . . directed toward the production of knowl-edge and culture” (McQuail, 1985: 97). In thiscontext, the journalists who represent mediaoutlets face the challenge of creating productsthat are “supposed to be creative, novel, origi-nal, or unexpected (news) yet produced with ex-treme regularity and often against much moredemanding schedules than apply to other indus-tries” (McQuail, 1985: 97). To manage these de-mands for novelty, originality, and the ongoingdelivery of news about business, journalistsseek out obtrusive events in the environmentand turn them into news (Lippmann, 1922). Tofurther increase the attractiveness of their newsreports to readers, viewers, or listeners, journal-ists create dramatized representations of theseevents, along with the individuals and organi-zations participating in them (Lippmann, 1922;Shoemaker & Reese, 1996). These dramatic nar-ratives then direct stakeholder interest in andattraction toward the firms they feature (Dyer,1979; Gamson, 1994; O’Guinn, 2000; Reeves, 1988;Rein et al., 1987), thereby socially constructingtheir celebrity.

To summarize, in our view, firm celebrityarises as the media search for firms that serveas vivid examples of important changes in in-dustries and society in general. The media tendto focus on firms that take bold or unusual ac-tions and display distinctive identities. Suchfirms lend themselves to the construction of a“dramatized reality” (Bryant & Miron, 2002; Zill-mann, 1994) that engages audiences emotion-ally and increases the appeal of the culturalproducts the media creates (Bryant & Miron,2002). In our model firms also contribute to theconstruction of their celebrity by taking noncon-forming actions and seeking to manage the im-pressions about themselves presented in themedia (Elsbach, 1994; Lounsbury & Glynn, 2001).As strategy research increasingly focuses onhow firms gain competitive advantage fromnovel actions (Ferrier, Smith, & Grimm, 1999;Schumpeter, 1934), there is a need for richer the-ory on the consequences of such actions. Our

theoretical framework examines how the non-conforming behaviors of a firm underlie the cre-ation of a valuable intangible asset for the firm.It also underscores the role of the media in thisprocess and draws the attention of organization-al and strategy scholars to the cultural produc-tion of firms’ images by the media.

In the remainder of the paper, we first providesome background on the history of the constructof celebrity and compare it to other intangibleassets of firms. Next, we discuss how the mediaproduce celebrity firms by using elements ofdrama in reporting about change and firm ac-tions. We then turn to discussing what firm be-haviors contribute to firms’ construction as ce-lebrities. We conclude with the implications ofthe concept of firm celebrity for future researchand practice.

FIRM CELEBRITY AS AN INTANGIBLE ASSETOF THE FIRM

Celebrity in Historical Perspective

Research in marketing and the sociology ofculture shows that although celebrities play im-portant roles in society and markets, the subjectof celebrity has been “tremendously under-examined” (Gamson, 1994: 6). Existing researchon celebrity is scattered among a number ofbodies of literature and academic disciplines,and all of the theoretical and empirical work wefound on the topic focuses on the creation ofcelebrity at the individual level. Below we dis-cuss key ideas from this literature that informthe conceptual development of our model of ce-lebrity creation at the firm level.

Marketing researchers characterize celebrityas a product of the “marriage of entertainmentand fame to create and sell highly visible prod-ucts called celebrities” (Rein et al., 1987: 21).Celebrity is created through the mass communi-cation of carefully selected, prearranged, andoftentimes manipulated information about anindividual’s personality, talent, and style in or-der to create a “persona” that triggers positiveemotional responses in audiences (McCracken,1989; Reeves, 1988).

Reviewing the history of the celebrity con-struct, Gamson (1994) highlights the existence oftwo contrasting perspectives on celebrity thatlead to its paradoxical treatment as both desir-able and suspect. In one perspective, “fame is

52 JanuaryAcademy of Management Review

deserved and earned, related to achievementand quality.” In the other, “the publicity ma-chine focuses attention on the worthy and theunworthy alike, churning out many admiredcommodities, called celebrities, famous be-cause they have been made to be” (Gamson,1994: 15–16).

Scholars of celebrity tend to emphasize one oranother of these perspectives. Frank and Cookreflect the former perspective when arguing thatcelebrities are “people of enormous talent, en-ergy and drive” (1995: 8) who become winners ofcontests for the top positions in winner-take-allmarkets. Boorstin advocates the latter perspec-tive when he argues that celebrities result frommodern communication technologies heighten-ing an individual’s presence in the public eye,making that person “known for his well-knownness” (1961: 47). Examining reports of ce-lebrity from the turn of the twentieth centurythrough the 1990s, Gamson (1994) suggests thatthe themes of merit and ability were graduallyreplaced by an emphasis on personality andlifestyle with the rise of the modern consumerculture in the 1930s and 1940s. McCracken (1989)similarly argues that the attractiveness of mod-ern celebrities derives from their ability to sym-bolize the lifestyle aspirations of audiences andto embody highly self-relevant meanings re-lated to social categories, such as gender, class,and status.

The degree of manipulation in the productionof celebrity affects its extent, sustainability, andvalue. Whereas “celebrity personas” can be en-tirely fabricated, resulting in “minor,” “short-lived,” or “flash in the pan” celebrities, individ-uals with real ability and a unique style become“stars,” “superstars,” or “cultural icons” (Dyer,1979; Gamson, 1994; McCracken, 1989; O’Guinn,2000; Reeves, 1988). The extent of an individual’scelebrity affects the economic opportunities thatbecome available to her or him. With greatercelebrity, individuals attract more rent-generat-ing opportunities, including participation infilms, shows, games, and endorsement opportu-nities. Their participation also increases thevalue created through such projects, thereby en-abling celebrities to attain large shares of therents available from their involvement. At oneend of the continuum, the activities and fortunesof individuals such as Oprah Winfrey and Mi-chael Jordan demonstrate that individual celeb-rities can convert their names into valuable

brands,3 thereby further increasing the valuethey can appropriate from their celebrity status.At the opposite end of the continuum, the one-time celebrities of a recent television series,“American Idol,” sign away all future rights totheir names, identities, likenesses, and personalhistories.4

This review of the literature on individual ce-lebrity informs our theorizing about the con-struct at the firm level. Namely, celebrity restson the dissemination of carefully selected infor-mation that could be either largely fabricated orwell substantiated by evidence of individualachievement (Hayward et al., 2004). In eithercase, the provision of such information in-creases the attractiveness of celebrities to audi-ences by converting them into symbols of variedindividual aspirations (McCracken, 1989) andcollective myths about achievement and suc-cess (Rein et al., 1987). The media play a centralrole in the process by broadcasting the carefullycontrolled content of information about celebri-ties that embellishes both the extent of theirachievement and the attractiveness of theiridentities (Adler & Adler, 1989; Gamson, 1994).Celebrity varies in extent, and ultimately invalue as an intangible asset, as a function of thelevels of public attention and positive emotionalresponses it generates. To delineate the con-struct of firm celebrity as an intangible assetfurther, we now contrast it with other intangibleassets of the firm.

How Celebrity Differs from OtherIntangible Assets

Celebrity resembles other intangible assets,such as reputation, status, and legitimacy, be-cause it influences stakeholders’ perceptions ofand willingness to exchange resources with a

3 As we discuss later, while celebrity individuals, such asCEOs or company founders, are often an integral part of thefirm celebrity creation process, the presence of these indi-viduals alone is not sufficient to create a celebrity firm.

4 Epitomes of the fabrication of celebrity are shows suchas “American Idol,” which turns unknown individuals intoinstant celebrities when they win the votes of the contests’judges, and “reality” programs such as “Making the Band.”The newly created celebrity receives potentially lucrativeperformance contracts but must sign away any future rightsto the use of his or her name, image, and personal stories forprojects not sponsored by the creators of the show (Olsen,2002).


firm (Fombrun & Shanley, 1990; Lounsbury &Glynn, 2001; Podolny, 1994; Rindova & Fombrun,1999; Suchman, 1995). Yet celebrity also differsfrom these assets in (1) its underlying theoreticalfoundations, (2) the social basis of the asset, and(3) the mechanisms by which it is built. Table 1summarizes these differences.

A firm’s reputation refers to the beliefs of var-ious stakeholders regarding the likelihood thatthe firm will deliver value along key dimensionsof performance (Rindova & Fombrun, 1999),

chiefly product quality and financial perfor-mance (Fombrun & Shanley, 1990; Shapiro, 1983).These beliefs derive in large part from a firm’spast actions (Weigelt & Camerer, 1988), resourcedeployments (Dierickx & Cool, 1989), and perfor-mance (Fombrun & Shanley, 1990), which aretreated as signals of underlying, but unob-served, strategic characteristics of the firm thatcan create value for stakeholders.

Like reputation, status is an intangible assetbased on stakeholders’ evaluations of a firm’s un-

TABLE 1Comparison of Celebrity, Reputation, Status, and Legitimacy As Intangible Assets

Reputation Status Legitimacy Celebrity

Theoreticalfoundations

Signaling theory:strategic actionssignal underlyingstrategiccharacteristics ofthe firm, such asbeing a qualityproducer

Network theory:relationshipswith others serveas indicators ofquality

Institutional theory:endorsements bylegitimate orauthoritative actorsconfirm desirabilityand appropriateness

Sociology of massmedia: the mediadramatize activitiesof firms, guidingpublic attention andpositive emotionalresponses towardselect firms

Sociocognitivebasis of theasset

Perceived ability ofthe firm to createvalue forstakeholders

Relative position inthe network ofmarket actors asa proxy forquality

Fit with normativevalues and beliefs

Perceived potential toachieve importantresults and anattractive socialidentity

Processesthroughwhich theasset is built

Firms’ strategicchoices andoutcomes thatserve as signals:● advertising and

pricing strategiesas signals ofability to producequality products(Shapiro, 1983)

● persistent patternof investments(Dierickx & Cool,1989)

● market,accounting,institutional, andstrategy signals(Fombrun &Shanley, 1990)

● financialperformance,product quality,managementeffectiveness, ora combination ofthese (Dollinger,Golden, &Saxton, 1997)

Pattern ofaffiliations: pastdemonstrations ofquality combinedwith the actor’sexchangepartnerships(Benjamin &Podolny, 1999;Podolny, 1994)

External validationthrough:● structural

conformity withestablished norms(Meyer & Rowan,1977)

● ties to establishedsocial institutionsand externallegitimacy of theseinstitutionallinkages (Baum &Oliver, 1991)

● institutionalcertifications, suchas awards incontests (Rao, 1994)

● coverage byfinancial analysis(Zuckerman, 1999)

● communicationactivities of firms,such as storytelling(Lounsbury &Glynn, 2001)

Creation of adramatized realityby the mediathrough:● portrayal of

change as conflict● selection of firms

as protagonistsandoverattributingthem withresponsibility forresolving conflict(based on firm’snonconformingstrategic behavior)

● characterdevelopment toprovide identity-relevantinformation (basedon firm’simpressionmanagementefforts)


derlying quality and capabilities (Podolny, 1994).Unlike reputation, status derives not so much fromobservation of or direct experience with a firm’spast actions and investments but, rather, from ob-servation of its affiliations with prominent net-work partners and its centrality within market ex-change networks. The ability of status to increasethe confidence of stakeholders in the quality of afirm is based on the assumption that the willing-ness of others to associate with a firm provides agauge of the firm’s underlying quality (Podolny,1994; Podolny & Phillips, 1996). Overall, both statusand reputation are intangible assets of the firmthat derive from stakeholders’ attempts to ratio-nally evaluate a firm’s value-creating potential byobserving signals reflected in its past perfor-mance and transaction behaviors.

Legitimacy also has been associated with theability of a firm to gain access to resources and, assuch, is viewed as an intangible asset (Lounsbury& Glynn, 2001; Suchman, 1995).5 Legitimacy is thedegree to which broader publics view a compa-ny’s activities as socially acceptable and desir-able because its practices comply with industrynorms and broader societal expectations (Louns-bury & Glynn, 2001; Suchman, 1995). Legitimacycan be achieved through a variety of means, in-cluding structural conformity with establishednorms (Meyer & Rowan, 1977), ties to or certifica-tion by legitimated institutions (Baum & Oliver,1991; Zuckerman, 1999), the winning of certificationcontests (Rao, 1994), and organizational communi-cations (Elsbach, 1994; Lounsbury & Glynn, 2001;Wade, Porac, & Pollock, 1997). Thus, legitimacydiffers from reputation and status in that it focuseson the degree to which a firm’s products, practices,and structures are consistent with societal expec-tations, rather than on its distinctive performanceoutcomes. In other words, both firms with andwithout reputations as high-quality producersmust produce products with a minimum level ofquality in order to be legitimate.

Further, research on reputation, status, and le-gitimacy tends to focus on how a firm’s behaviorsand performance are evaluated, assuming thatthe firm is already noticed. As a result, this re-search is silent regarding how a firm attracts pub-

lic attention. In contrast, the construct of celebrityspecifically addresses how and why some firmsattract greater levels of public attention. Further,celebrity recognizes the emotional dimension ofstakeholder responses to firms. Positive emotionalresponses can influence stakeholders’ subsequentinteractions with the firm, because emotional re-actions underlie cognitive appraisals (Zajonc,1980) and influence behavioral responses (Reeve,1992). Positive emotions, for example, increase in-dividuals’ tendencies to engage in supportive be-haviors (Brief & Motowidlo, 1986) and to be “expan-sive, inclusive, and somewhat impulsive” (Fiske &Taylor, 1991: 449). Thus, positive emotional re-sponses may lead to favorable perceptions of afirm’s quality and ability, even if a firm’s perfor-mance history or network relationships do not pro-vide sufficient “evidence” to suggest such inter-pretations. Therefore, the benefits that celebrityconfers on a firm are distinct from those associ-ated with other intangible assets and may predis-pose stakeholders favorably in their subsequentevaluations of firms’ legitimacy, status, and repu-tation.6

PRODUCING CELEBRITY: HOW THE MEDIADRAMATIZE REALITY

Why the Media Create Dramatic Narratives

The pervasiveness of celebrity reflects thegrowing reach and range of media outlets, in-cluding television and the internet. Growth inmedia outlets provides “more space for morefaces” (Gamson, 1994: 43) and increases both thedemand for and capacity to produce celebrities.Gamson argues that the creation of celebrity isan enterprise “made up of highly developed andinstitutionally linked professions and sub-industries” (1994: 64). The workings of this enter-prise increase celebrity-related content in themedia and contribute to the convergence of in-formation and entertainment in media accountsthat cover not only the traditional domains of

5 The definition and usage of legitimacy as it pertains toits value as an intangible asset is most consistent withsociopolitical conceptions of legitimacy rather than with thetaken-for-grantedness typically ascribed to “cognitive” le-gitimacy (Suchman, 1995).

6 Reputation, status, and legitimacy similarly can beviewed as independent constructs. For example, a firm mayhave high status based on its pattern of affiliations, but itmay have low legitimacy if it is pursuing a new or untestedbusiness model, or is engaging in other unorthodox prac-tices. Similarly, a firm may be perceived as legitimate if ithas won certification contests or is certified as legitimate byan accrediting institution, even if it does not have an estab-lished history of performance or product quality (Rao, 1994).


celebrity, such as sports and entertainment, butall aspects of social life, especially business(Gamson, 1994; Khurana, 2002). Overall, thegrowth of mass communication technologies isan important factor contributing to the emer-gence of celebrity and its spread to a variety ofindustries.

The media play a central role in the process ofcelebrity creation because they control both thetechnology that disseminates information aboutfirms to large audiences and the content of theinformation disseminated. Although organization-al researchers have recognized that the mediainform the public about issues and events (Chen &Meindl, 1991; Deephouse, 2000), thereby influenc-ing stakeholders’ impressions of firms (Abraham-son & Fombrun, 1994; Deephouse, 2000; Lounsbury& Glynn, 20001; Pollock & Rindova, 2003), they haveseldom addressed the specific means throughwhich the media accomplish these tasks (Deep-house, 2000; Pollock & Rindova, 2003).

Understanding how the media socially con-struct firm celebrity requires a theoreticalframework that explicates how the mediapresent information about firms and how thepresentation of information may create dispari-ties in public attention and positive emotionalresponses to firms. We base this framework ontheory and evidence that the media represent “acomplex, sometimes private and enclosed worldin which people solve the practical problem ofproducing culture to order, routinely providingnews of the unexpected, and maintaining somekind of a stable relationship to a largely un-known audience” (McQuail, 1985: 97). In re-sponding to these dual demands to inform andengage audiences, the media do not simply pro-vide information about events, they also tell sto-ries that seek to engage their audience and in-crease their desire for more information on thesubject of a story (Hirsch, 1972; McCartney, 1987;Peterson, 1976, 1979). In other words, the mediaproduce and sell cultural products (Peterson,1976, 1979). Consequently, theoretical frame-works for analyzing media accounts as narra-tives, drama, and entertainment are now centralto mass communication research (e.g., Bryant &Miron, 2002; McCartney, 1987).

This perspective on the media further sug-gests that, in order to routinely provide news,journalists focus on obtrusive aspects of the en-vironment and so report on change rather than

on the status quo (Lippmann, 1992). According toAndreassen:

When change occurs there may be typically bothsets of facts that suggest that a change shouldhave happened and yet another set that suggestsit should not have occurred. To form a coherentand complete story, reporters will tend to focus onthe former set of information and omit the latter(1987: 490).

In other words, in fulfilling their role as purveyorsof news and information, journalists tend to pro-vide accounts of change processes. Moreover, theyseek to provide accounts that render these pro-cesses coherent and comprehensible. Providingsuch accounts often involves identifying individu-als and firms to whom journalists can attribute thecauses of change (Andreassen, 1987).

Further, journalists seek to make their “break-ing” stories more dramatic and newsworthy(Lippmann, 1922; Shoemaker & Reese, 1996).Thus, in presenting information, journalists im-plicitly or overtly invoke principles of drama inorder to enhance the impact of their story onstakeholder audiences, as well as on fellowjournalists (Darnton, 1975). By impressing theircolleagues, journalists rise to the top positionsin their profession, occasionally becoming ce-lebrities in their own right. By engaging audi-ences through the elements of drama, they bringinto relief the moral values and sentiments ofaudiences and increase their involvement withthe issues presented in their reports (Smiley,1971; Zillmann, 1994). Journalists thus seek infor-mation that highlights change and present thatinformation in dramatic narratives. In the pro-cess, the firms that they select to exemplify thechange, by featuring them as protagonists intheir dramatic narratives, become celebrities.

The idea that the media socially construct ce-lebrity firms by featuring them in dramatic nar-ratives is consistent with research on celebritycreation at the individual level. According tothis literature, the media mix “on-screen” and“off-screen” personalities, fact and fiction, tid-bits about luxurious lifestyles and an emphasison professional achievement, to create a “dra-matized reality” (Rein et al., 1987) out of a celeb-rity’s life story. In the following section we dis-cuss how journalists employ similar tactics increating celebrity firms.


How Dramatic Narratives CreateDramatized Reality

Applied to reporting on firms, the media’s dra-matic narratives organize facts and eventsabout firms according to the principles ofdrama, thereby creating a “dramatized reality”about these firms. As Smiley explains,“Whereas life consists of diverse action, dramais structured action” (1971: 41). Dramatized real-ity therefore refers to the organization of whatmay be otherwise factually accurate informa-tion about firms in ways that stress certain factsand meanings and underplay others. Using dra-matic narratives, journalists are able to “selec-tively distill a complex jumble of otherwiseambiguous and contradictory activities, pro-nouncements, and impressions into a simplifiedand relatively coherent portrait” (Ashforth &Humphrey, 1997: 53), thereby reducing the uncer-tainty associated with the events they report on(Lounsbury & Glynn, 2001).

The creation of a dramatized reality about firmsconstructs firm celebrity because the elements ofdrama convey information in a manner that stim-ulates audience interest, identification, and en-gagement with such firms. For example, dramaticnarratives increase the apparent importance of afirm’s actions by virtue of its centrality in the un-folding plot. Presenting information about firms inthe form of dramatic narratives, therefore, allowsjournalists to both report news and engage theiraudiences morally and emotionally (Aldrich &Fiol, 1994; Lounsbury & Glynn, 2001). We summa-rize the preceding discussion in the followingproposition.

Proposition 1: The use of dramatic nar-ratives in media reporting about afirm increases the likelihood that thefirm will achieve celebrity.

By creating a dramatized reality about a firm,the media affect the likelihood that the firm willachieve celebrity. The extent of this celebrityfurther depends on the use of specific elementsof dramatic narratives. Although a detailedanalysis of the elements of dramatic narrativesand their use in storytelling about firms liesbeyond the scope of this article, below we high-light three elements of drama that are particu-larly germane to constructing firm celebrity: theportrayal of dramatic conflict, use of a firm as a

protagonist, and the development of its “charac-ter” (Bryant & Miron, 2002).7

Portrayal of dramatic conflict. Dramatic nar-ratives usually begin with a disturbance to aseemingly calm or balanced situation. The dis-turbance creates conflict, defined as the set ofcircumstances that present players with changeand adversity (Smiley, 1971). In industries,changes and uncertainties arise from numeroussources, including exogenous shocks, such aschanges in the economic, technological, politi-cal, or cultural environment, as well as from thecompetitive actions of firms inside or outside theindustry. All such changes enable journalists toportray dramatic conflict, because they disruptthe status quo and present both firms and theirstakeholders with new risks and challenges.8

For example, the introduction of a new technol-ogy puts the investments that users and produc-ers have made in older technologies at risk.Deregulation opens the industry to new entrantswho may offer cheaper products, but of unknownquality or safety. Overall, industry change pro-vides the backdrop for the portrayal of dramaticconflict in media accounts. It is therefore one ofthe key conditions that give rise to the construc-tion of firm celebrity. The greater the impact ofthe change on various stakeholders, the greaterthe extent to which it can be portrayed as asource of dramatic conflict, and the greater theextent to which firms can be constructed as ce-lebrities.

Using a firm as a protagonist. Faced withchange, some firms take actions to establish

7 Smiley (1971) suggests that ten elements determine thequality of a dramatic narrative: balance, disturbance, a pro-tagonist, a plan of action, obstacles, complications, substory,crisis, climax, and resolution. Bryant and Miron (2002) stressthe three categories we use. These categories group Smiley’scategories as follows: conflict includes balance, distur-bance, complications, and obstacles; actions to resolve theconflict include plan of action, climax, and resolution; andcharacter development includes protagonists. Substoriesmay be the means for presenting conflict when they point toadditional obstacles or complications or for character devel-opment when they show the protagonist in action underdifferent circumstances.

8 Conditions of change serve as a catalyst for the con-struction of dramatic narratives and provide the basis fordeveloping conflict within the narrative. However, sincechange is largely an exogenous variable in our model, we donot develop propositions about its effects but include it inthe model to represent its impact on the processes we de-scribe.


new competitive positions. Journalists can re-port on these actions and use them to organizethe information about the change they observearound a central character—or protagonist—who takes a principal or “leadership” role inresponding to the change. The protagonist in adrama is the character who makes events hap-pen and propels the dramatic action forward(DiYanni, 1990; Smiley, 1971). When journalistspresent a firm’s strategic actions as efforts toresolve a conflict, the firm becomes a protago-nist in the dramatic narrative. Using a firm as aprotagonist in a dramatic narrative leads tooverattributing industry-level change processesto the actions of the firm, thereby making thefirm appear to be more important in causing thechange, and the outcomes resulting from thechange, than it actually was.9

Journalists, like other individuals, seek to an-swer questions about what has caused out-comes that often have complex and uncertainantecedents. Attribution research shows that in-dividuals tend to give accounts that are bothmore coherent and more extreme than the actualcircumstances warrant when answering attribu-tional questions about what caused an outcome(Andreassen, 1987; Harvey, Harkins, & Kagehiro,1976; Taylor & Fiske, 1978; Tetlock, 1983). Attribu-tion theory would therefore suggest that journal-ists tend to focus on facts that cohere aroundassigning responsibility to a single actor or fac-tor, and tend to ignore or underplay facts thatpoint to alternative explanations.10

Journalists increase the coherence of theiraccounts of change by overattributing responsi-bility for its outcomes to select firms, while un-derattributing responsibility to broader environ-mental or situational factors (Hayward et al.,2004; Ross, 1977). For example, the media por-trayed Apple as overturning the mainframecomputing paradigm, even though the personalcomputer was a product of a long and complexevolution of ideas and technology (Bardini &

Horvath, 1995). Similarly, media accounts cred-ited the Starbucks Coffee Company with “ele-vating the coffee experience” (Reese, 1996: 190),even though many of the cities where it openedits coffee bars already had vibrant coffee shopcultures (Schoenholt, 1996: 34). A third exampleof this phenomenon is Yahoo!, which was por-trayed as “the first” among search engine com-panies to be launched, taken public, and be-come profitable (Himelstein, Green, Siklos, &Yang, 1998), even though Yahoo! went publicafter rivals Excite and Lycos.

To summarize, using the firm as a protagonistenables journalists to provide coherent accountsof the origins and direction of industry-levelchange and to answer the questions of whychange has occurred and who is responsible forits consequences. In turn, selecting a firm as aprotagonist accords greater centrality to its ac-tions in explanations of industry-level change,leading to overattributions of industry-level out-comes to the firm. Overattribution of change-related outcomes to a given firm contributes toits construction as a celebrity, because the attri-butions exaggerate the consequences of its ac-tions, making the firm appear “larger than life,”or at least more proactive and capable than itscompetitors.

Character development. Once journalists se-lect firms as protagonists for their dramatic nar-ratives, they also engage in the “character de-velopment” of these firms (Bryant & Miron, 2002;Chen & Meindl, 1991). According to Smiley, thepurpose of character development in drama is“devising credible agents to execute the action”(1971: 91). Character development—the provi-sion of information about the physical, disposi-tional, motivational, cognitive, and behavioralattributes that characterize a protagonist—alsoenables audiences to like, dislike, or identifywith the protagonist, thereby emotionally en-gaging with the dramatic narrative (Zillmann,1994).

In the case of protagonist firms, by developingtheir character, journalists can enhance thecredibility of their claims that a firm is capableof taking the actions that resolve the uncertaintycreated by the change and, therefore, the dra-matic conflict. One way in which journalists candevelop the character of a firm is by providinginformation about the firm’s culture, identity,and leadership, because these organizationalattributes reveal values, beliefs, and behaviors

9 We discuss the role of firm agency in increasing thelikelihood that journalists will select the firm as a protago-nist in the next section.

10 Attribution theory distinguishes between attributions ofcauses (explanations) and attributions of responsibility(sanctions; Hamilton, 1980). The second type refers to thedegree to which a social actor is viewed as being responsi-ble for a given action so that the action can be sanctioned—punished or rewarded—accordingly.


that are distinctive characteristics of the organi-zation (Albert & Whetten, 1985; Hatch, 1993). Inthe example below, a journalist gives the audi-ence quasi-inside glimpses of Yahoo!’s cultureand work routines:

Despite Yahoo!’s meteoric ascent, Edwards [VP ofmarketing at the time] and her colleagues con-tinue to exude an air of humility. The companyhas moved out of its initial headquarters, a non-descript building that resembled a distributionwarehouse, to a more modern structure. Even bySilicon Valley standards, the office climate atYahoo! is relaxed yet scarily efficient. While Ya-hoo! staffers typically work sweatshop hours, thebuzz of activity resembles a frat house more thanan office building. Visitors tell stories of staffersbusily working at monitors decked out in shortsand T-shirts, and sometimes shoes. Workers typ-ically wear competitors’ T-shirts and decoratetheir work space with their ads, Edwards said.One notorious story is that a senior producer ofthe Yahoo! financial pages tattooed the companylogo on his buttocks to make good on a promisehe made should the stock price hit $50 (Warner,1997: 70).

Providing information about a firm’s identityand leadership affects how stakeholders relateto the firm. First, identity-related information in-fluences how individuals perceive and evaluatethe actions of others, because “people interpretbehavior in terms of an applicable and accessi-ble personality trait, either one provided or onethat comes to mind” (Fiske & Taylor, 1991: 301).Information about an actor’s identity serves asan interpretative frame that facilitates the un-derstanding of an action because it links it to anongoing property of the actor. Second, identity-related information triggers the dynamics of in-terpersonal attraction (Berscheid, 1994) and fa-cilitates individual identification with firms(Scott & Lane, 2000). Thus, information about or-ganizational culture and identity contributes toconstructing firm celebrity because it facilitatesidentification with the firm and generates theattendant positive emotional responses.

Finally, providing information about the firm’sculture, identity, and the personal characteris-tics of its leaders resembles the provision ofsmall, intimate details about a celebrity’s per-sonal life, habits, and tastes. The provision ofsuch details enables audiences to developpseudointimate, vicarious relationships that in-tensify their emotional responses to the celeb-rity (Adler & Adler, 1989; Gamson, 1994; O’Guinn,2000). Armed with details about an organiza-

tion’s culture and identity, stakeholder audi-ences can relate to it in an immediate fashion byremembering and relating to those idiosyncra-sies. All of these processes are likely to generatepositive emotional responses and enhance theextent of a firm’s celebrity.

We summarize these ideas about the role ofvarious elements of drama in constructing afirm’s celebrity in the following proposition.

Proposition 2: The greater the extent towhich the dramatic narratives of themedia portray conditions of changeand uncertainty as conflict; attributeindustry-level change to the actions ofthe firm selected as a protagonist; anddevelop the firm’s character throughprovision of information about its cul-ture, identity, and leadership, thegreater the extent of the firm’s celeb-rity.

In the foregoing we argued that the mediaproduce firm celebrity while performing theirdual roles of purveying news and producing cul-tural products for sale. We also discussed howjournalists socially construct celebrity firms bycreating dramatic narratives that present somefirms as protagonists with attractive organiza-tional cultures and identities, and overattributethem with responsibility for changes in theirindustries. We now turn to the question of howthe strategic behaviors of firms influence thelikelihood that the media cast them as the pro-tagonists in dramatic narratives and constructthem as celebrities.

INVITING FAME: HOW FIRMS ATTRACTMEDIA ATTENTION

Standing Out Through NonconformingStrategic Actions

Competing firms face conflicting pressures tobe different in order to reduce competition forsimilar resources and to conform to norms inorder to be perceived as legitimate (Deephouse,1999). Industry norms are rules and standardsthat define the acceptable or typical range offirm behaviors and actions (Hawkes, 1975;Lounsbury & Glynn, 2001; Scott, 1995). Conse-quently, “a firm which selects strategies outsidethe range of acceptability does so at its ownperil. It is subject to questions and actions chal-


lenging its legitimacy, reliability, and ratio-nality” (Deephouse, 1999: 152).

Yet firms often take novel actions in order toimprove their competitive positions and under-mine those of rivals (Grimm & Smith, 1997;Schumpeter, 1934, 1942). The potential benefits oftaking novel actions are realized only to thedegree that these actions are accepted and ap-preciated by customers (Smith, Ferrier, &Grimm, 2001). Therefore, the processes that leadcustomers and other stakeholders to evaluatenovel, nonconforming actions positively warrantcloser attention.

Research on social deviance offers a usefullens through which to view how society re-sponds to behaviors that deviate from existingnorms. Deviance researchers are divided overwhat constitutes deviant behavior (Heckart &Heckart, 2002). Some researchers have arguedthat the behavior itself and its objective, pos-itive (overconforming), or negative (undercon-forming) difference from an existing norm de-fine its degree of deviance (Hawkes, 1975;Tittle & Paternoster, 2000). Others have arguedthe social milieu’s positive or negative reac-tion to a behavior “labels” it as deviant (e.g.,Becker, 1973). Heckert and Heckert (2002) com-bine these approaches in a two-by-two matrixthat categorizes nonconforming behaviors as(1) “negative deviance” (what researchersmost often refer to when they use the termdeviance), which describes behaviors that un-derconform to norms and are evaluated nega-tively; (2) “rate busting,” which refers to be-haviors that overconform to norms but areevaluated negatively; (3) “deviance admira-tion,” which refers to behaviors that undercon-form to norms but are evaluated positively;and (4) “positive deviance,” which refers tobehaviors that overconform to norms and areevaluated positively. Figure 1 depicts thesecategories of nonconforming behaviors.

Using Heckert and Heckert’s (2002) frameworkas a guide, we suggest that both under- andoverconforming firm behaviors, if positivelyevaluated, lead to the construction of a firm as acelebrity. The reason for this is that nonconform-ing behaviors are more likely to attract mediaattention because they fit the definition of newsas obtrusive events that deviate from expecta-tions (Lippmann, 1922). Further, the media aremore likely to attribute the outcomes of changesto firms that take nonconforming actions, be-

cause attributions of causality are often basedon salience (Fiske & Taylor, 1991), and actionsthat deviate from expectations are more salient(Fiske & Taylor, 1991). As a result, journalists aremore likely to notice such firms and cast them asprotagonists in unfolding dramas.

While all nonconforming actions may attractattention, only positively evaluated actions con-tribute to firm celebrity. To understand whysome nonconforming actions are more likely tobe evaluated positively, we need to recognizethat the nonconforming actions of firms oftencreate value for a subset of stakeholders thatare not currently well served. For example, in1971 Southwest Airlines sought to serve cost-conscious travelers by underconforming to pre-vailing industry norms regarding seat assign-ments, food availability, and flight routing.Conversely, while all hotels compete on somecombination of service, amenities, and price, theRitz-Carlton overconforms to industry norms bysetting up its high-end customers’ rooms to re-flect their personal habits. It accomplishes this“mass customization” by requiring members ofthe housekeeping staff to enter every bit of in-formation they have collected about the per-sonal habits of a guest into a chain-wide data-base.

These companies have enjoyed the enthusias-tic support of the customers who have benefitedfrom their deviations from their industries’norms. Such stakeholder support sends a signalto the media and other market participants thatthe nonconforming behaviors of the firm createvalue, and therefore the firm is likely to emergeas a success story associated with the change.Overall, presented with uncertainty about thecauses and consequences of change that theynonetheless are expected to explain, journalistsare likely to report on firms that they perceive ashaving a greater chance of emerging as winnersand leaders in the new industry environment(Rindova & Fombrun, 1999). Firms that take non-conforming actions and enjoy some degree ofstakeholder support are more likely to fall intothat category. These arguments suggest the fol-lowing proposition.

Proposition 3: The greater the extent towhich a firm engages in nonconform-ing behaviors that enjoy some degreeof stakeholder support, the greater thelikelihood that the firm will be used as


a protagonist in the media’s dramaticnarratives, and the greater the extentof the firm’s celebrity.

Firm Impression Management Efforts

While journalists play a key role in creatingcelebrity firms, we do not wish to downplay theimpact of managerial agency on the process.Rein et al. (1987) have suggested that individual-level celebrity creation is analogous to the mar-keting process for launching a product. In theirview, individuals can deploy the celebrity-making enterprise to create a “celebrity per-sona” that resonates with the audience. Thus,publicists, photographers, scriptwriters, eventplanners, and other experts that create desiredimages and “sell” them to the media play animportant role in the construction of celebrity.

Gamson (1994) has found some evidence thatthe individual celebrity creation process gener-ally follows such a marketing logic, but he alsoshows that this process is animated by conflictand negotiation as the interests of celebrities,their image makers, and the media convergeand diverge. Celebrities and the media have acommon interest in providing audiences withinformation that fuels their continued interest inthe celebrity. Their interests diverge, however,regarding the issue of who should control theinformation provided to audiences.11 Balance inthese competing interests is achieved as celeb-

11 Journalists seek to fulfill their role and provide thepublic with news while maintaining a relationship with thecelebrity and his/her marketers that does not jeopardizefuture access to information. One informant interviewed byGamson (1994) noted that this is accomplished by walking

FIGURE 1A Typology of Deviant Behaviors

Adapted from Heckert and Heckert (2002).


rities and their marketers proactively managethe flow of information to the media, and themedia selectively incorporate such managed in-formation in their narratives.

Firms seeking to become celebrities similarlyrely on carefully designed and targeted commu-nications. Firms, in general, seek to manage theimpressions of stakeholders and to project de-sired images to audiences (Rindova & Fombrun,1999; Scott & Lane, 2000). However, firms thattake nonconforming actions are even more con-cerned with managing the interpretive framesstakeholders use to evaluate their actions, andthey tend to engage in impression managementaggressively (Aldrich & Fiol, 1994; Elsbach, 1994;Elsbach & Sutton, 1992; Lounsbury & Glynn,2001). For example, new firms (Lounsbury &Glynn, 2001; Pollock & Rindova, 2003), organiza-tions with extreme political agendas (Elsbach &Sutton, 1992), and organizations that face stake-holder criticism (Dutton & Dukerich, 1991; Els-bach, 1994; Wade et al., 1997) communicate withstakeholders more extensively. Such organiza-tions aggressively tell stories about themselvesand their actions (Aldrich & Fiol, 1994;Lounsbury & Glynn, 2001), use spokespeople toprovide impression management accounts (Els-bach, 1994; Elsbach & Sutton, 1992), and rely onpress releases to increase the availability ofinformation about themselves (Pollock &Rindova, 2003).

The information communicated by firms be-comes an input for media reporting about thesefirms. According to research on mass communi-cations, public relations experts provide jour-nalists with “information subsidies,” which arevisual and written pieces that are ready for pub-lication or putting on the air. Information subsi-dies save reporters and their employers the in-vestment of time and money necessary to collectthe information and produce the story them-selves (Gamson, 1994; Gandy, 1982). Such pre-packaged stories present information about thefirm and its activities from angles that increaseperceptions of the importance and efficacy ofthe firm. They also provide interesting factsabout the life of the organization that are usefulin presenting an organization with a distinctiveand attractive identity. Therefore, the greater

the extent to which a company’s public relationsarm provides the media with information aboutthe firm, the easier it is for journalists to featurethe company in the dramatic narratives theyconstruct in ways the firm approves of.

Yahoo! provides a good example of a firm thathas effectively managed the flow of informationfrom the firm to the media. Yahoo! employed twoPR firms—one focusing on technology issuesand another specializing in promoting peo-ple—to place stories in the media about the firmand its founders, Dave Filo and Jerry Yang. Italso launched a quirky and humorous advertis-ing campaign with the tag line “Do you Yahoo?”and engaged in “guerrilla marketing,” includingsponsorship of sporting events and rock con-certs. Finally, Yahoo! mobilized its employees toadvocate for the firm through such actions asoffering a free paint job to every employee whowould paint the company logo on his or her car(Stross, 1998). Yahoo!’s various impression man-agement efforts contributed to the presentationof its unique, irreverent character, as media sto-ries discussed Yahoo!’s services, as well as itshumble beginnings in a trailer on the Stanfordcampus, its pun-based name, and intriguing tid-bits of information, such as the story of an em-ployee who tattooed the company’s logo on hisderriere. Through these stories, many small yetpowerfully distinctive details traveled from theprivate life of the firm into the public domain ofits celebrity persona.

Overall, the proactive efforts of firms to dra-matize their own actions and invest resources inglamorizing their activities not only attract me-dia attention but also influence the content ofthe dramatic narratives that produce celebrity.We therefore propose the following.

Proposition 4: The greater the extent towhich a firm channels diverse infor-mation about its activities, leadership,culture, and identity to the media, thegreater the extent to which the mediawill create dramatic narratives aboutthe firm, and the greater the extent ofthe firm’s celebrity.

In the foregoing we examined how the actionsof firms contribute to the construction of theircelebrity. Below we consider how achieving ce-lebrity status reciprocally affects the strategicbehavior of a firm.

what is often an uneasy line between “doing journalism”and “being an outlet” for the celebrity “product.”


The Reciprocal Relationship Between Celebrityand Nonconformity

Like other intangible assets, celebrity is notstatic over time, but coevolves with the firm’sstrategy. In Figure 2 we overlay Heckert andHeckert’s (2002) matrix with a dynamic dimen-sion reflecting how a firm’s position in the ma-trix, and thus its celebrity, may evolve becauseof changes in the strategic behavior of the firmor changes in its environment. We label firmsthat become celebrities by underconforming toexisting norms rebels. Such firms explicitly de-viate from some existing norms, thereby in-creasing their risks of social rejection (Deep-house, 1999), yet they gain positive evaluationand support from some stakeholders who derivevalue from their deviant actions. We label thefirms that achieve celebrity by overconforming

to existing norms market leaders because theylead their industry in behaviors that reflect pre-vailing norms and values. Market leaders are ina relatively stable position, because they canmaintain their celebrity as long as industrynorms do not change and they continue to en-gage in overconforming behaviors. Rebels, how-ever, tend to be in an unstable position, becausetheir actions are not legitimate ex ante.Changes in industry norms or in the firms’ stra-tegic behaviors that reduce the degree of theactions’ nonconformity or their positive evalua-tion can undermine their celebrity. Below wediscuss several ways in which the reciprocalrelationship between celebrity and nonconfor-mity may play out.

A rebel firm may (1) modify its nonconformingbehaviors to be more consistent with prevailing

FIGURE 2Potential Evolutionary Paths of Nonconforming Firms


norms (Path A in Figure 2), (2) be imitated bycompetitors to the degree it effectively changesthe industry norms (Path B in Figure 2), or (3)increase the degree of its nonconformity,thereby deviating further from existing norms(Path C in Figure 2). If a rebel firm follows PathA, it may take advantage of the opportunitiescreated by its celebrity to gain access to re-sources and strengthen its competitive capabil-ities. It can then choose to reduce the nonconfor-mity of its actions once it has become lessdependent on its celebrity status for attractingstakeholder interest and attention. By movingaway from its previous nonconforming behaviorand adopting behaviors that conform to industrynorms, a firm can increase its legitimacy andappeal to a broader market (Deephouse, 1999). Indoing so, the firm may diminish its celebrity, butit can retain positive stakeholder evaluations ifit has used its celebrity to enhance its competi-tive resources and capabilities.

The Starbucks Coffee Company is a case inpoint. The company initially attracted customerswith the explicitly underconforming practices ofroasting its coffee very dark and selling it onlyin its specialty coffee bars. Today, it also sellsits coffee in supermarkets and offers a lighter“Light Notes” roast. Both of these actions aresimilar to the production and distribution prac-tices of Maxwell House and Nestle, the conven-tional coffee makers that Starbucks supposedlyled a “revolution” against in the early 1990s(Rindova & Fombrun, 2001). In changing its ac-tions to be more similar to industry norms, Star-bucks has expanded its market, but it no longergenerates the intense positive emotional re-sponses from customers that it did in its earlierdays.

For the rebel to follow Path B, industry normsmust shift because of competitors’ imitation ofthe rebel’s nonconforming behaviors. The morethe media celebrate a firm and its actions, themore visible and salient these actions becometo competitors (Porac, Thomas, Wilson, Paton, &Kanfer, 1995). Thus, the more the media stress agiven type of behavior in their dramatic narra-tives, the more likely the behaviors are to beimitated and to emerge as a new industry norm(DiMaggio & Powell, 1983).

For example, Nike was a rebel in the athleticshoe industry in the 1970s and 1980s owing to itsintroduction of colorful, avant-garde product de-signs. The National Basketball Association ini-

tially banned Nike’s red and black “Air Jordan”basketball shoe as a breach of the league’sdress code, but differentiation through the intro-duction of new colors and designs is now com-monplace in new product development of bas-ketball shoes (Labich, 1995). Thus, industrynorms regarding acceptable design choices anddimensions along which to compete have shifted.Today, Nike is a well-established firm, retainingits celebrity after evolving from an underconform-ing rebel to an overconforming market leader.

A rebel following Path C may increase theextremity of its nonconforming actions andmove away from the position of a celebratedrebel to one of an infamous “outlaw,” whosebehaviors are evaluated negatively and evenpunished. A rebel may increase the extent of itsnonconforming actions in an effort to maintainits celebrity, since its celebrity derives in partfrom such behaviors. Research has documentedthat celebrity individuals develop “gloriedselves”—perceptions of self as a person offame—that gradually displace their authenticselves (Adler & Adler, 1989).

In Adler and Adler’s (1989) longitudinal ethno-graphic study of the effect of aggrandizement oncelebrity athletes, athletes reported that oncethe media created a celebrity persona for them,they felt compelled to uphold it, often at the costof significant personal discomfort. Similarly, itis conceivable that media attributions of respon-sibility for industry-level change to the firm maycompel its managers to try to live up to this imageby increasing the magnitude of the firm’s noncon-forming actions and choices, thereby reducing thelikelihood that it will continue to be evaluatedpositively and undermining the celebrity the firmis trying to sustain. Enron provides an example ofa rebel turned outlaw, as, over time, the firm tookits nonconformist behaviors in an increasingly ex-treme direction, with devastating results:

“Because Enron believed it was leading a revo-lution, it encouraged flouting the rules. Therewas constant gossip that this rule breaking ex-tended to executives’ personal lives. . . . Enronalso developed a reputation for ruthlessness,both external and internal. . . . [It] had a reputa-tion for taking more risk than other compa-nies. . . .” According to a trader, quoted in thesame report: “Enron swung for the fences”(McLean, 2001: 58).

We summarize these ideas in the followingpropositions.


Proposition 5: Firms that achieve ce-lebrity through overconforming be-haviors are likely to sustain their ce-lebrity longer than firms that achievecelebrity through underconformingbehaviors.

Proposition 6a: Changes in industrynorms that decrease either the degreeof nonconformity in a celebrity firm’sactions or the positive evaluation of itsnonconforming behaviors will reducethe firm’s celebrity.

Proposition 6b: Changes in a celebrityfirm’s actions that decrease either thedegree of nonconformity of its actionsor its positive evaluation will reducethe firm’s celebrity.

Figure 3 summarizes our theoretical model ofthe process through which firm celebrity is con-structed. Our model reflects how, in an effort toaccomplish the media’s dual objectives of pro-

viding the public with news and selling culturalproducts, journalists use dramatic narratives toreport about change and create a “dramatizedreality” that shapes stakeholders’ interpreta-tions of actions and events. Journalists create adramatized reality when they select and castsome firms as protagonists, overattribute themwith responsibility for change, and provideidentity-relevant information about these firms.Firms facilitate this process by engaging in non-conforming behaviors and managing impres-sions about themselves. Because of these ac-tions by firms and the media, some firmsgenerate substantial public attention and posi-tive emotional responses, thereby attaining ce-lebrity. While we do not discuss the relation-ships among industry change, nonconformingfirm behaviors, and firm impression manage-ment in our theory, we view these relationshipsas established by past research (Aldrich & Fiol,1994; Grimm & Smith, 1997) and recognize themthrough bidirectional arrows in the model.

FIGURE 3The Firm Celebrity Creation Process


The socially constructed nature of the celeb-rity creation process suggests that although thecreation of celebrity can be managed, it cannotbe fully fabricated. The diverse interests of theactors involved limit the extent to which any oneactor can control the process. Further, the atten-tion and positive emotional responses from au-diences that define celebrity depend on the sus-tained perception that celebrated firms—atleast to some extent—possess the extraordinaryqualities attributed to them.

DIRECTIONS FOR FUTURE RESEARCHAND PRACTICE

This article introduces the construct of firmcelebrity to explain why and how some firmsgenerate significant stakeholder attention andpositive emotional responses. We have arguedthat celebrity provides a firm with a valuableintangible asset, which is distinct from otherintangible assets based on stakeholder percep-tions, by creating stakeholder attention and ex-citement. Our model is rooted in theoretical andempirical work on the sociology of mass com-munications, in which scholars have examinedthe complex roles of the media (Gans, 1979; Mc-Quail, 1985; Peterson, 1976, 1979). By focusing onthe media as producers of cultural products, ourmodel departs from the predominant perspec-tive adopted in organizational research that themedia are a relatively objective and authorita-tive source of information about firms (Deep-house, 2000; Elsbach, 1994; Lamertz & Baum,1998; Pollock & Rindova, 2003). Instead, wepresent the media as actively constructing im-ages of firms and influencing their standing vis-a-vis stakeholders. Thus, our model opens thedoor for some new and interesting research di-rections.

Understanding the Value of Celebrity As anIntangible Asset

First, our model focuses on the construction ofa new type of intangible asset for the firm—celebrity. Like other intangible assets, such aslegitimacy, status, and reputation, celebrity con-tributes to a firm’s competitive advantage byrendering the firm more identifiable in theminds of stakeholders. Unlike these other intan-gible assets, however, celebrity is producedthrough dramatic narratives that blend fact and

fiction and that exaggerate some aspects offirms and their actions while overlooking others.Therefore, future research should examine howthe “produced” nature of celebrity sets it apartfrom legitimacy, status, and reputation, whichwould presumably all suffer if part of the infor-mation used to create these assets were re-vealed to be exaggerated or fabricated.

A related question that provides an importantdirection for future research is the extent towhich celebrity is a sustainable asset. Socialcognition research offers some evidence that at-tention and positive emotional responses maybe relatively transient states (Fiske & Taylor,1991), suggesting that celebrity may be, by itsvery nature, transitory. Our framework suggeststhat the sustainability of celebrity may varywith (1) the nature of the nonconforming actionsthat serve to generate it and (2) the subsequentchoices of the celebrity firm and its competitors.As discussed, celebrity based on positively eval-uated overconforming actions may be more sus-tainable than celebrity built on positively eval-uated underconforming actions, and changes ineither industry norms or a firm’s strategic be-haviors may undermine a firm’s celebrity.Therefore, our framework suggests that the sus-tainability of the asset will depend on the co-evolution of the behavior of the firm and theindustry’s norms. Future research could empiri-cally test these different arguments by examin-ing the sustainability of celebrity over time.

Another question regarding the value of ce-lebrity as an intangible asset concerns under-standing its effects on firm performance. Futureresearch should examine not only the sustain-ability of the asset as such but also how itsinteractions with other assets and resources ofthe firm (Dierckx & Cool, 1989) influence thefirm’s ability to compete at different stages of itsevolution. Noda and Collis (2001) have arguedthat firm heterogeneity arises from positivefeedback loops that reinforce small differencesin initial conditions. Celebrity could affect theevolutionary trajectories of firms by magnifyingseemingly small and insignificant events thatcan affect the firm’s strategic opportunities andresources. However, it is also possible that ce-lebrity could have the opposite effect, bufferingthe firm by obscuring small, negative events, orcausing stakeholders to rationalize them awayas being part of the firm’s celebrity.


Achieving celebrity may further affect the rateat which firms can accumulate or deplete otherresources. For example, Yahoo!’s celebrity in themid 1990s provided the firm with access to topmanagerial talent and enabled it to recruit ahigh-caliber executive like Tim Koogle, despiteits lack of a clear money-making businessmodel (resulting in lack of legitimacy) or aproven record of performance (resulting in lackof reputation). Therefore, future research shouldexamine how celebrity may affect the long-termperformance of a firm by creating positive feed-back effects that lead to path dependencies inthe evolution of a firm that are difficult for com-petitors to imitate or offset.

Studying Celebrity Empirically

Our model also provides some guidance onhow to operationalize firm celebrity in empiricalresearch. Since our model treats the content ofmedia coverage as an independent variablepredicting the extent of celebrity, analyzing thecontent of newspaper and magazine articles tooperationalize celebrity as a dependent vari-able could confound the measurement of celeb-rity with the measurement of the various ele-ments of dramatic narratives. Our definition ofcelebrity as large-scale public attention withpositive emotional responses, however, pointsto two psychological constructs for which mea-surement instruments exist, or can be designed.Specifically, instruments can be designed tomeasure allocation of attention through stake-holder name recognition and recall of detailsabout the firm. Emotional responses could bemeasured through various scales that captureaffective reactions.

An alternative measure of firm celebrity couldbe derived from published classifications, suchas Fortune’s 25 Cool Companies or The WallStreet Journal/Harris Interactive ReputationQuotient (RQ) survey. The latter explicitly mea-sures the “emotional appeal” of a firm and pro-vides researchers with the opportunity to exam-ine how celebrity and reputation interact. Athird and more unconventional but potentiallyinteresting approach would be to analyze thecontent of relevant internet chat groups in orderto evaluate which firms stakeholder audiences“talk” about, as well as the ways in which theytalk about these firms.

Recognizing the Multiple Roles of the Mediaand Their Implications for Firms

Our model also calls for refining the ways inwhich organizational and strategy researcherstheorize the role the media play in influencingfirm-stakeholder relationships. Despite frequentreferences to the role of the media as a source oflegitimacy for industries and firms (e.g., Baum &Powell, 1995; Lounsbury & Glynn, 2001), the me-dia’s role in shaping public perceptions of firmsremains relatively unexamined and undertheo-rized. Hayward et al. (2004) argue that the mediacreate celebrity CEOs by providing stakeholderaudiences with causal accounts in which theyattribute organizational outcomes to theseCEOs. Our model suggests that similar dynam-ics may operate at the industry level, whereindustry-wide outcomes are attributed to a fewfirms that stand out. Future research should ex-plore the extent to which industry stakeholdersand competitors adopt the causal structure ofevents presented in media accounts. Under-standing this dynamic can be useful in under-standing the diffusion of innovations, develop-ment of standards, and other phenomena whereemergent collective consensus produces stablefeatures of industries (Abrahamson & Fombrun,1994).

In developing our model, we have treated themedia as a more or less monolithic entity andhave not discussed in detail the ways that infor-mation cascades (Pollock & Rindova, 2003; Rao,Greve, & Davis, 2001; Welch, 1992) or bandwagoneffects (Abrahamson & Fairchild, 1999) developamong journalists (Shoemaker & Reese, 1996)and influence the celebrity creation process. Wealso have not discussed how the attention paidto particular firms by opinion leaders amongjournalists (Crouse, 1972) and the pressures jour-nalists face to create “breaking news” stories(Herstgaard, 1988; Schudson, 1986; Shoemaker &Reese, 1996) can also enhance the likelihoodthat a firm will become a celebrity. Future re-search could explore these “intermedia” (Rog-ers, 2002) effects and their implications for thecelebrity creation process.

Finally, our model also stresses that mediaaccounts are cultural products designed to re-tain and expand the size of the audience forthese products. Whereas the idea that the mediaare engaged in cultural production is well es-tablished in the sociology of mass media (see


McQuail, 1985, for a review), few organizationaltheories and models have considered this per-spective or have developed its implications forfirms and markets. Our model provides one ex-ample of how viewing the media as producers ofculture enables scholars to explore the interplaybetween factual content and fictional structure,and between objective reality and constructedreality in media accounts of firms.

In closing, we wish to highlight that the con-cept of firm celebrity has important implicationsfor managerial practice, because it suggeststhat celebrity is an intangible asset that pro-vides firms with distinct benefits that affecttheir competitive positions. Firm celebrity canbe an important tool enabling a company todistinguish itself from competitors in a crowdedfield, especially when performance differencesare small or difficult to evaluate. Thus, pursuingcelebrity status may be a highly rational andbeneficial strategic choice for a firm. At thesame time, we caution managers to treat celeb-rity as a means to an end, and to resist thetemptation to pursue celebrity as an end untoitself.

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Violina P. Rindova is an associate professor of strategy at the Robert H. Smith Schoolof Business, University of Maryland. She received her Ph.D. from the Stern School ofBusiness, New York University. Her research focuses on the social construction ofmarkets and the role of collective cognitions and emotions in the creation of value,intangible assets, and competitive advantage.


Timothy G. Pollock is an associate professor in the Smeal College of Business at ThePennsylvania State University. He received his Ph.D. from the University of Illinois atUrbana-Champaign. His research explores the role social resources such as reputa-tion, celebrity, social capital, legitimacy, and power play in shaping corporate gov-ernance activities, strategic choice, and the IPO market.

Mathew L. A. Hayward is an assistant professor at the Leeds School of Business,University of Colorado at Boulder. He received his Ph.D. from Columbia University. Hestudies the role that confidence and performance play in the decisions that individ-uals and organizations make, together with the consequences of those decisions.


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