Kotha, SureshMajzoubi, Majid2021-10-292021-10-292021Majzoubi_washington_0250E_23458.pdfhttp://hdl.handle.net/1773/47949Thesis (Ph.D.)--University of Washington, 2021A firm’s current strategic position in relation to its past and its peers is a major determinant of how audiences evaluate it. Using three distinctive but related studies, I explore how audience evaluations are influenced by a firm’s positioning: (1) vis-à-vis its past (change in firm identity), (2) in relation to multiple categorical benchmarks, and (3) relative to audiences’ heterogeneous predispositions and idiosyncratic evaluation schemas. I conduct my empirical analysis in the context of security analysts’ coverage decisions and investment recommendations of publicly listed U.S. firms from 1997 to 2018. I apply various text analysis and topic modeling techniques on firms’ 10-K filings to measure a firm’s positioning over time and in relation to other firms.In the first study I examine how change to a firm’s identity claims may affect its legitimacy. I posit that change in identity claims could render a firm ambiguous and uncertain for its audiences and thus result in a loss of legitimacy. I further hypothesize that the negative effects of change in identity claims are moderated by the direction of change and environmental heterogeneity, such that the effect on legitimacy is stronger when, as a result of change, firms become less similar to their peers, and in environments with low degree of heterogeneity. I found empirical support for my hypotheses. In the second study, I explore the effects of similarity to category exemplars for typical and atypical firms. I argue that similarity to a category exemplar enhances a firm’s legitimacy and recognizability by signaling association with a well-known category member. Exemplar similarity, however, also increases the chances of being compared against a high performing firm. Drawing upon the mechanisms of association and comparison, I hypothesize an inverted U-shaped relationship between exemplar similarity and firm market value for typical firms, and a U-shaped relationship for atypical firms. This hypothesis was supported by my empirical analysis. In the third study, I explore optimal positioning strategies in contexts where audiences have heterogeneous predispositions and evaluation schemas. I show that, given the premise of audience heterogeneity, firms can gain an audience composition premium by positioning themselves such that they are evaluated by audiences with a favorable predisposition toward them. I show how a family of machine learning algorithms—i.e., recommender systems—could be utilized for predicting audiences’ individualized predispositions toward different firms and gaining higher audience evaluations through more optimal positioning strategies. My empirical analysis provides support for my hypotheses. This dissertation provides a more dynamic understanding of strategic positioning and its effects on audience evaluations. The first study contributes to research on the intersection of organizational identity and firm legitimacy by incorporating the effects of change in a firm’s identity claims on audiences’ judgments regarding firm legitimacy. The second study contributes to optimal distinctiveness research by introducing the notion of dual benchmark settings and investigating some intricate relationships between firm positioning relative to category prototypes and exemplars and firm performance. The third study contributes to management research on audience evaluations by incorporating the premise of audience heterogeneity and introducing the notion of an audience composition premium as a parsimonious construct referring to the gain that accrues to a firm based on the composition of the audience evaluating it.application/pdfen-USnoneManagementOrganization theoryEntrepreneurshipBusiness administrationThesis