The Edification of Stigma Management in the Small-Dollar Loan Industry
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University of Tennessee, Knoxville TRACE: Tennessee Research and Creative Exchange Doctoral Dissertations Graduate School 8-2019 FROM PREDATOR TO PREY: THE EDIFICATION OF STIGMA MANAGEMENT IN THE SMALL-DOLLAR LOAN INDUSTRY Nick Mmbaga Mmbaga University of Tennessee, [email protected] Follow this and additional works at: https://trace.tennessee.edu/utk_graddiss Recommended Citation Mmbaga, Nick Mmbaga, "FROM PREDATOR TO PREY: THE EDIFICATION OF STIGMA MANAGEMENT IN THE SMALL-DOLLAR LOAN INDUSTRY. " PhD diss., University of Tennessee, 2019. https://trace.tennessee.edu/utk_graddiss/5948 This Dissertation is brought to you for free and open access by the Graduate School at TRACE: Tennessee Research and Creative Exchange. It has been accepted for inclusion in Doctoral Dissertations by an authorized administrator of TRACE: Tennessee Research and Creative Exchange. For more information, please contact [email protected]. To the Graduate Council: I am submitting herewith a dissertation written by Nick Mmbaga Mmbaga entitled "FROM PREDATOR TO PREY: THE EDIFICATION OF STIGMA MANAGEMENT IN THE SMALL-DOLLAR LOAN INDUSTRY." I have examined the final electronic copy of this dissertation for form and content and recommend that it be accepted in partial fulfillment of the equirr ements for the degree of Doctor of Philosophy, with a major in Business Administration. David Williams, Major Professor We have read this dissertation and recommend its acceptance: Melissa Cardon, Kisha Lashley, Timothy Pollock, Matthew Wood Accepted for the Council: Dixie L. Thompson Vice Provost and Dean of the Graduate School (Original signatures are on file with official studentecor r ds.) FROM PREDATOR TO PREY: THE EDIFICATION OF STIGMA MANAGEMENT IN THE SMALL-DOLLAR LOAN INDUSTRY A Dissertation Presented for the Doctor of Philosophy Degree The University of Tennessee, Knoxville Nick A. Mmbaga August 2019 Copyright © 2019 by Nick Mmbaga. “This Page is Optional” Doe All rights reserved. ii DEDICATION This dissertation is dedicated to my lord and savior, my wife and children, my mother and siblings, and all of my supportive friends. To my wife, Dr. Brandy Mmbaga, you have been my foundation and the source of energy that I draw upon to fulfill my mission in life. You are who I confide in, and I could not have done this without your unwavering support and sacrifice. Without your presence, my life is less meaningful. To the future doctors, Karina and Kingston, who are too young to fully understand the journey our family has taken these past four years, I want to thank you for being understanding, brilliant, happy, and loving children. For that, I will always be eternally grateful and a proud father. To my mother, Dr. Margaret Mmbaga, you are the most courageous person that I know, and I cherish the lessons you have taught me and the path you have set. To my siblings, Dr. Natu Mmbaga and Thomas Mmbaga Esq., you are my sources of inspiration. I have always aspired to follow in your footsteps, and this brings me one step closer to achieving that goal. To my family back home, thank you for the support and love throughout the years. To my friends, who helped me leave the office, both physically and mentally, thank you for giving me some much-needed balance. To my friends and cohort, who have helped me stay in the office, thank you for making this work more pleasurable and helping me grow professionally. I dedicate this work to all those who have touched my life but are in a place of rest. To my Bibi, Pauline Nguluma, and Babu, Thomas Nguluma, you are the bedrocks of our family. Our families progress started with your vision. To my uncles, I acknowledge your importance to our family and keep you in my thoughts. To my father, Dr. Alfeo Nikundiwe, I hope I have made you proud. To my cousin Dr. Richard Mgaya (aka. Richie Rich), I would have never pursued a Ph.D. without you. To my fraternity brother, surely heaven is not hard to find, thank you for saving many of us. iii ACKNOWLEDGEMENTS I would like to first acknowledge my Dissertation Chair Dr. David Williams for helping me and many others get through this long and tiring process. You have provided me guidance when I was lost, support when I was off-balance, and encouragement as I struggled through the challenges of completing a dissertation and Ph.D. I want to also acknowledge my committee, Dr. Melissa Cardon, Dr. Kisha Lashley, Dr. Timothy Pollock, and Dr. Matthew Wood for their commitment to this work and my development as a scholar and educator. I would also like to acknowledge colleagues who have helped groom me along the way and provided support. This list includes but is not limited to: Dr. Rhonda Reger, Dr. Anne Smith, Dr. Russell Crook, Dr. David Gras, Dr. Codou Samba, Dr. Roberto Ragozzino, Dr. Timothy Munyon, Dr. Blake Mathias, Dr. Carla Jones, Dr. Nastaran Simarasl, Dr. David Jiang, Dr. Jason Strickland, Dr. Joyce Wang, Dr. Laura Lerman, Dr. Erika Williams, Dr. Daniel White, Dr. Michael Lerman, Justin Yan, Tracy Martin, Trey Lewis, Ace Beorchia, Ashley Roccopriore, and Jaewoo Jung and many other University of Tennessee faculty, students, members of the academy, and Ph.D. Project members. I would also like to thank all the entrepreneurs, employees, and customers I interviewed. You all played a central part in this dissertation. Thank you for your willingness and candidness to discuss a topic that most ignore or feel compelled to avoid. iv ABSTRACT This dissertation shifts the focus of stigma management research from actions that reduce categorical stigma—when an entire class of organizations is discredited—to activities that reinforce it. Using interviews, archival reports, and ethnographic participatory observations, where I adopt the role of a customer in a highly stigmatized industry – the Small-Dollar, or “Payday” Loan industry – I find that, in efforts to manage three sources of categorial stigma, small-dollar lenders enacted stigma on their employees and customers. Different forms of stigma enactment unfolded as lenders established procedures that employees undertook and stigmatized customers. The implications of my findings suggest a paradox and reveal that lenders’ efforts to avoid their stigma also activate forces that reinforce stigma for the entire category. This dissertation contributes to the emerging literature on categorical stigma management by highlighting the importance of cross-level dynamics in stigma management and its effects on a critical audience, customers. Further, it offers several theoretical implications for the literature on categorical stigma, categories, and entrepreneurship in highly contested and uncertain domains. v TABLE OF CONTENTS CHAPTER ONE: INTRODUCTION AND OVERVIEW ............................................................. 1 Expected Contributions ............................................................................................................... 5 Overview of Dissertation Chapters ............................................................................................. 6 CHAPTER TWO: AN OVERVIEW OF STIGMA IN ENTREPRENEURSHIP RESEARCH .... 8 Origins of Stigma ........................................................................................................................ 8 The Functional Aspects of Stigma ............................................................................................ 11 Theoretical Perspective of Stigma ............................................................................................ 15 Sociology and Stigma ............................................................................................... 15 Social-Psychology and Stigma ................................................................................. 17 Organizational Research and Stigma ........................................................................ 19 Organizational Stigma .............................................................................................. 19 Categorical Stigma .................................................................................................... 21 Occupational Stigma ................................................................................................. 23 Legitimacy and Stigma ............................................................................................................. 25 Differentiating Legitimacy from Stigma .................................................................. 26 Stigma and Entrepreneurship .................................................................................................... 29 Source of Stigma in Entrepreneurship ...................................................................................... 32 Stigma Management ................................................................................................................. 37 Micro-Perspectives of Stigma Management ............................................................. 38 Macro-Perspectives of Stigma Management ............................................................ 42 A Need for Cross-level Stigma Management ........................................................... 44 CHAPTER THREE: RESEARCH SETTING AND METHODS ................................................ 47 Changes in the Dissertation ...................................................................................................... 48 Charting the History of Small-Dollar Lending ......................................................................... 50 Small-Dollar Lending Post-Civil War .....................................................................